Potential pitfalls of small business CRM software

When a small business decides it needs CRM software, what are the potential pitfalls?

One day in 1999, Chester Hull decided enough was enough.

Hull had suffered through annoyingly long wait times and equally irritating hold music when he was calling companies for support, to ask a question or to get important product information.

He just wanted to talk to a real person, and he was pretty sure that millions of other customers around the world felt the same way. It was a problem that needed solving, and he figured he was just the guy to do it.

Hull started Prosound, a consulting company that provides other firms with turnkey systems to transform the consumer's experience when calling a customer service line. Prosound's services include writing automated phone messages and recording them, then ensuring that a CRM system installation works according to a company's specifications.

Hull's goal was to help companies offer an improved customer phone experience. For the first seven years or so, the Ruckersville, Va.-based company used spreadsheets and database programs to track customers. "But trying to manage clients -- when changes are made, what equipment they have -- as well as managing how to connect with prospects through a spreadsheet was quite a laborious process," he said. "Inevitably, the spreadsheet wouldn't get updated, or a field wouldn't get changed when a contact happened. Sorting spreadsheets by columns was just a messy way to handle clients."

Hull realized that if he wanted to take Prosound to the next level, he needed something more robust, like a full-blown CRM system with mobile integration. When many companies start out, they handle sales informally, similarly to Prosound, said Frank Scavo, president of Computer Economics, an IT research firm in Irvine, Calif. "It's typically done by the owner and maybe one other associate, many times a family member," he said. As the business grows, the owner then hires one or two salespeople, but because he's still handling things informally, he allows the sales reps to handle their own information.

"But that contact list, or that customer list is very, very valuable to the business, and if those reps leave, that list walks out the door," Scavo said. It's in the business owner's best interest to have systems in place that allow him not only to support the sales team but to ensure that the information is captured for posterity. Additionally, small business CRM software can help provide better customer service, as well as capture data from digital marketing efforts to provide to sales teams.

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Rebecca Wettemann, vice president of research at Nucleus Research, agreed. Small companies look to CRM for one of two reasons: They see that they need it to grow, or they see that they need it to manage leads and contacts more systematically, beyond just a contact database, Wettemann said.

As with any type of system implementation, companies need to start by looking at their requirements, Computer Economics' Scavo said. "It's wise for the business owner to sit down and think short-term and long-term," he said. "Is the business owner concerned about sales, customer service and marketing, or is it a very limited need that he has? They should ask if the business generates a lot of leads through its website, and determine if that needs to integrate with the CRM system." He had other considerations to suggest as well: for example, asking whether the business does substantial email marketing or whether it should do more, and asking whether an organization needs the ability to integrate with an email marketing system or mobile support.

In the case of Prosound, it used this kind of scrutiny to evaluate their product. "We knew there had to be a better way … as we grew, the way we were doing things became less and less effective," Hull said. "At the time, we were also looking at disaster recovery for business and continuation plans. One of our requirements was that it must be a hosted, in-the-cloud product or service so it would fit our business continuation model."

Before courting vendors, Hull and his team mapped out their selection criteria: Prosound needed a CRM product that could be deployed without much effort, was inexpensive and customizable, could sync with email management software, and was mobile.

After evaluating several small business CRM software systems, Hull selected Zoho CRM as the best fit for his company. "Here's a way to jump into robust business software that's going to improve efficiency and customer contact with zero up-front cost. And as you grow, you can add on modules. So for us, it was a great way to get started," said Hull about his choice.

Nucleus Research's Wettemann says that with small business CRM software, the ability to customize the system is particularly important. "Probably the biggest mistake small companies make is assuming that putting in a CRM system is going to drive sales behaviors that improve either opportunities for growth or those processes," she said. "For small firms, it's especially important to recognize that CRM is going to be iterative." An organization's needs will change, and the technology should be flexible enough to accommodate that: "It's good to look to a solution that you're going to be able to make changes to yourself within the work environment."

This was first published in September 2013

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