"When you're ringing hundreds of people you can't remember each conversation," says Sonia Rabone, marketing manager at Derby-based Fast React Systems, a small business that supplies planning software to the textile industry. "You need some way of recording when you spoke, when you agreed to speak next and what the conversation was about."
What she is describing is part of customer relationship management, or CRM, the art and science of finding customers, keeping them, and then nurturing the relationship. CRM is about leads, opportunities, marketing campaigns and customer follow-up, managed methodically so that contacts are neither bombarded with repeat sales calls, nor ignored so that they place their business elsewhere.
Although you can do CRM without specialist software, it is an obvious candidate for automation. "I'd advocate investing in a CRM system whatever your company," says Rabone, pointing out the advantages of a tool that understands the sales process. Fast React uses Goldmine, from FrontRange Solutions. One of the main CRM benefits is communication across a team, even a small one. "It is well ordered in terms of what has happened on an account and what needs to happen next."
The free ride
The most basic form of CRM software is something like the Business Contact Manager (BCM) that comes free with some editions of Microsoft Office, such as the Small Business Edition. This works with the Outlook email and diary software, and lets you track communication history and share it in a team. How big does a company have to be before BCM is no longer good enough? "If you've got less than five or ten people, your requirement to automate your processes is much less. If you're two people, you can probably just shout across the desk," says Jason Nash, the UK product manager for Microsoft CRM.
In the Microsoft world, the next step after BCM is the full Microsoft Dynamics CRM, which runs on a server and manages the workflow of sales campaigns as well as contact information. Nash suggests small businesses approach a provider of hosted CRM, where everything runs from the internet, while beyond around 25 users, it might pay to deploy the software on your own network. Technically there is little difference. "It's exactly the same software," he says. "It doesn't matter whether the server is in a cupboard or with a hosting provider." Microsoft CRM is a web application, but with an Outlook add-in that means users do not have to use a web browser.
"You can have all sorts of things totally automated," says Nash. "When you close the sale, it automatically creates a customer retention workflow that might send an automatic thankyou email, it might schedule a follow-up telephone call, it might send an invite to an event 30 days later."
George Bliss is marketing director at Increase CRM, which hosts Microsoft CRM for small businesses at a cost of £45 per user per month. "Lots of people are actually linking CRM into their web sites now," he says. "All new web enquiries link through directly, and then use workflow to trigger responses and follow-up activities."
Closed architecture
The strength and weakness of Microsoft's approach is that it hooks into Microsoft Office. There is a web client, but it only works properly with Internet Explorer, effectively cutting out Mac users.
Another puzzle is the range of deployment options, which includes using your own server, or a hosting provider, or — coming soon — the option to host with Microsoft itself, which is building a data centre in Dublin for the purpose. This last option may threaten its partners, although Bliss says he is not worried. "Anything that attracts attention to the Microsoft product is going to lead prospects to us."
Salesforce.com offers an alternative CRM product that is purely web-based. "You just need a browser," says Fergus Gloster, vice president of corporate sales. Nor are there quibbles about the size of the customer's business. "You can use Salesforce.com group edition for one user and up," he says.
A strong feature of Salesforce is its extensibility, via add-ins or custom programming, which makes it a flexible platform. David Norris is chief operating officer of London-based Livebookings Network, which runs an online reservation service for restaurants and uses Salesforce for document collaboration as well as CRM. "Everybody in the company has an account," he says. "There's a feature called Salesforce Content, which allows you to store all your documents between the different offices and teams. As our marketing team update the materials, people can be alerted. We can add updated versions but still refer back to the old version; we can also add comments. It's like an intranet without having to build an intranet."
Practical applications
How else does Livebookings use Salesforce? "We start out with prospects," says Norris. "We upload those into Salesforce and create them as leads. Leads are assigned to salespeople. As they convert to accounts they are transferred to our customer service team. We store all the billing information in Salesforce, then export the information to our own home-grown program that converts it into a PDF invoice."
Another Salesforce customer is CHKS, a healthcare consultancy. It migrated to Salesforce from ad hoc CRM in January this year. "It's improved the transparency of our client relationships," says Matt Murphy, Marketing Director. "We've got a better understanding of how well we interact with our clients. There's more control." Despite the benefits, the system has proved expensive, and Murphy says this is especially true for small businesses like CHKS, with around 100 employees and 43 Salesforce users. "We're talking about £35,000 to £40,000 a year. It does focus everybody's attention on making sure we derive value for money from the system."
Salesforce.com Professional costs £45 a month per user, but costs can go higher with add-ons and premium support.
The CHKS experience shows that cloud services (internet-based and therefore accessible everywhere) such as those from Salesforce.com or Increase CRM are not necessarily cheaper than on-premise solutions. However, they do offer predictable costs, as the provider is responsible for all the maintenance and infrastructure.
According to the Gartner consultancy, CRM delivered in this way is growing by around 25% per year. It does mean trusting a third party for security and reliability, but if you can get past that obstacle, the pull of the cloud is hard to resist.
