• May 1, 2014
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

The Physics of CRM

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Despite the attention paid to large-scale CRM applications, and the implementation thereof, it's always been the case that the majority of the addressable market is made up of small businesses. The so-called big leagues get all the press because that's where all the flash is, what with recognizable brand names and large clumps of customers. But research by cloud services provider Parallels indicates that CRM growth is in the SMB range: The cloud services market for SMBs was $15.1 billion in 2013 in the United States alone, plus another $1.6 billion for "nonemployer businesses" (self-employed and sole proprietorships). This year, the total is expected to reach $24.3 billion.

We look at big business and small business differently because they are, in fact, different. This got me to thinking about the forces that act on every business, and how different companies react. Thinking about action and reaction inevitably leads to thoughts of Sir Isaac Newton's observations of physics, at least for space nerds like me, who understood the concept of specific impulse before they learned to tie their own shoelaces.

For example, while it's often useful to think of businesses as composed of diverse people and departments, sometimes it's better to consider them as single discrete objects. Like light, which is composed of either particles or waves, depending on how it's interacted with, you've got to be flexible in your thinking. (Yes, I know wave-particle duality was theorized after Newton was long gone, but cut me some slack; these analogies are hard, and you're still getting an education.)

The bit that really got me going was when I considered businesses as solid objects. Large companies are great big singular objects, floating in a vast sea of smaller objects—SMBs. They have different needs. They react differently. They obey the Laws of Motion, at least in regard to momentum and inertia.

Inertia is a property of matter related to its mass. The more mass an object has, the more force is needed to change its vector. An object at rest tends to stay at rest unless acted upon by an outside force, and you need a whole bunch of force to move a big object—or a big company. Inertia is relatively easy to overcome for a small object/company, because there's less mass to shift. This is why small businesses can pop into existence literally overnight, adjust to market conditions rapidly, and show immediate benefit from investments in technology such as CRM.

Once an object is in motion, we talk about its momentum. It's just another way of looking at inertia—an object in motion tends to stay in motion—but we conceptualize it as something more dynamic. You don't talk about the inertia of a thrown baseball when it whacks you in the head; you talk about its momentum. A pebble hitting you at the same speed would have much less momentum, and would stop cold—possibly without you noticing it. SMBs have to keep adding energy or they risk losing momentum due to simple friction, eventually stopping altogether. Big companies are harder to stop, not because they're immune to those forces but because it takes longer for them to have a noticeable effect.

For small businesses especially, business automation such as CRM keeps momentum high, always adding energy by driving tedious or repetitive processes. Because of lower inertia, constant addition of energy over time means the small company will soon accelerate to fantastic speeds.

Remember that pebble I mentioned a couple of paragraphs back? Well, there's another word for small objects moving at incredible speeds. We call them bullets, and we all know what they can do.

Marshall Lager is the bookish fellow in charge of Third Idea Consulting. While he stands by this article, he does not recommend letting your kids use it in science class. Share theories at www.3rd-idea.com, or www.twitter.com/Lager.

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