• July 1, 2012
  • By Brent Leary, cofounder and partner, CRM Essentials

SMBs Take to the Cloud

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Small businesses are turning to CRM more than ever, with many focusing on cloud-based platforms. A recent study by Dell Cloud Business Apps and Techsale found that 55 percent of respondents are using a cloud-based CRM solution this year—up 61 percent from 2010.

This year, I organized the inaugural Social Biz Atlanta conference, aimed at helping small businesses transition from being users of social tools to true social businesses. I was hoping for attendance of 100 or so, but ended up with more than twice that.

I saw the same enthusiasm at InfusionCon 2012, InfusionSoft's annual user conference. With its focus on the 25-employee-or-less audience, it was eye-opening to see 1,500 people at the conference. Just four years ago, there were about 200. These scenes have been repeated at other conferences as well this year.

What's driving this growth?

The Era of Customer Over-service

Empowered by social networks and an infatuation with mobile devices, consumers have changed their behaviors, activity levels, and expectations.

Being responsive and consistently engaged are two keys to building relationships with these customers. Jeanne Hopkins, vice president of marketing at Hubspot, presented these numbers at Social Biz Atlanta:

  • Thirty-five to 50 percent of sales go to the vendor who responds first.
  • Two-thirds of buyers indicate consistent and relevant communication is the key influencer in building relationships with vendors.
  • Nurtured leads have a 9 percent bigger average deal size and a 23 percent shorter sales cycle.

Need more? Matt Trifiro, vice president of marketing at Desk.com, shared a story about John Pepper, CEO of the Boloco burrito chain, who created a culture of "over-servicing" customers. While partaking in a burrito giveaway, one customer received a $55 parking ticket. She mentioned this on Twitter. Pepper immediately sent out a tweet, offering to pay the fine. Others retweeted the story, as did five local media outlets that picked it up as well.

From CRM to CRM-ish

Customers expect more service, listening, and quality than ever. They expect to engage with vendors on social channels, on the device most convenient for them. This has made small businesses more demanding regarding the customer engagement tools they need.

Traditional vendors are building social tools into their CRM offerings to attract small businesses. InfusionSoft has always provided marketing automation functionality in its service, but it wasn't the easiest application to use. Its latest release allows the most traditional small businesses to configure all kinds of marketing activities and functions. And SugarCRM's updated interface and functionality received praise during its event.

A number of new players focus on specific aspects of social interaction, like Sprout Social, Nimble, and Desk.com. Or VIP Orbit, which leverages the iOS platform to provide mobile relationship management to those who live on their iPhones and iPads. Radius Intelligence provides sales intelligence on millions of small businesses, enabling more relationship-building opportunities. These companies are not traditional CRM vendors, but they are CRM-ish.

That can also be said of Yahoo!, which recently came out with a marketing dashboard that integrates information from Constant Contact, Orange Soda, Google Analytics, and other sources to provide small businesses with a singular view of the impact their marketing activities are having on lead generation and their online reputation. Or LinkedIn, with its acquisitions of Connected, Rapportive, and SlideShare.net. And the list goes on.

As social and mobile have changed the needs of consumers, the cloud is changing those of small business CRM users. They'll need to be flexible. They'll need to consume large amounts of data and quickly analyze it. And they'll need to do this in a continual, accelerating loop.

The good thing is small businesses are more willing to do this than ever. Vendors are starting to deliver the tools they need to stay in step with consumers.

I can't wait to see what's coming next.

Brent Leary is cofounder of CRM Essentials, an Atlanta-based CRM advisory firm focused on small and midsized businesses. He is also the author of Barack 2.0: Social Media Lessons for Small Businesses.

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