CRM for the SMB

Customer loyalty is the single most important asset of the SMB. The success of a small enterprise has always been squarely dependent upon its superior knowledge of its customers and ability to offer highly tailored merchandise and service to a discriminating clientele.

In general, small business seems to be leveraging this strength. A recent study commissioned by American Express revealed that 85 percent of small businesses are planning for growth opportunities over the next six months, which represents a big jump in optimism compared to 2004 and 2003. Yet the CRM programs of many SMBs are not set up from a cultural or technology standpoint to accommodate this growth.

Many SMBs have fostered company cultures and built siloed IT systems that do not support or reinforce an integrated, company-wide approach to CRM. Particularly in instances where companies have multiple lines of businesses and customer-support channels, SMBs are woefully unprepared to put forth a consistent front to the customer. By bridging this cultural and technical divide, SMBs can turbo-charge their unique knowledge of their customers to generate repeat business, strengthen loyalty, and attract new customers.

CRM Culture Clash
When planning for increased growth and sales, people and policy issues often overshadow technology and operational issues especially for the SMB. In many organizations, performance management and incentive plans are focused on individual performance, and often overlook group or company performance. The result is an environment in which individuals protect their own relationships with customers and prospects and don't share the information throughout the organization.

How many of your salespeople keep their own private "databases" of customer and prospect information? Such databases often include personal information, buying preferences, and notes of conversations. However, if the customer calls the call center with a question, the representative cannot take advantage of this knowledge to improve the customer experience and expand opportunities for cross- and upselling. If, however, the salesperson was compensated for sales by the call center and measured on overall customer satisfaction, the cultural divides would begin to break down.

Building a customer-centric focus into business processes also breaks down cultural divides and allows SMBs to leverage their two key points of differentiation from the big guys--their knowledge and personal relationship with the customer. For example, think of a small-to-midsize online retailer. Clearly, the small retailer cannot compete with Macy's on visibility and convenience or with Wal-Mart on price, so it must compete on service. Currently SMBs leverage their unique insight into their customers' needs and buying preferences at the sales level but don't extend this knowledge to inform end-to-end business processes. The retailer that can set up all processes, including sales, customer support, and delivery, in such a way that leverages its insight into customer needs and buying preferences has the competitive edge.

It's not enough for the call center representative to be able to suggest accessories to match a skirt ordered by a customer based on access to past order history. The person in delivery must also have access to this history and know, for example, whether or not the customer typically orders in high volume. Delivery needs to be able to identify important customers and potentially provide preferential treatment by expediting order status. In the end-to-end model, all of this information is communicated back to customer support. Now, when the customer calls with a question, all information and correspondence across departments is at the fingertips of the customer service rep.

Integration Imperative
Once an SMB commits to aligning its culture and business processes in a customer-centric manner, it can then turn its attention to how technology investments can support an integrated and consistent CRM program.

Today, more than ever, affordable technology options have enabled the SMB to reach the customer by means that were once cost prohibitive to all but the largest companies. Through call centers and e-commerce-enabled Web sites, SMBs can reach their customers and demonstrate intimate knowledge of their needs better than ever before. However, often these customer-facing systems have been implemented independently of back-office systems, creating islands of information throughout the organization.

Companies should look to replace these outdated, piecemeal CRM solutions with integrated enterprise-class technology systems. Many ERP technology vendors now offer specialized versions of their software tailored to the needs, challenges, price points, and even various vertical markets within the SMB ecosystem.

But CRM-to-back-office integration by itself is not enough to bridge this technology divide. SMBs should consider an ERP suite that offers comprehensive integrated Web capabilities. Web-based self-service portals give all constituents in the organization anytime, anywhere insight into customer information in a view that makes the most sense for their needs and day-to-day tasks.

Deploying an integrated Web-based portal is an important step in streamlining customer service and integrating operations across the entire enterprise. Portals should be customized for each business unit but access a single repository for all customer information. As a result, information is easily shared across departments and throughout the supply chain, and every business unit is working off, and basing decisions on, the same data.

The best-run organizations also extend these self-service capabilities and customized views to customers. Allowing customers to view historical information about their orders, invoices, and shipping details has proven to both increase customer satisfaction and drive down costs, resulting in enhanced bottom-line profitability.


Charles Riess and Eric Worth are managing directors at American Express Tax and Business Services Inc. They can be reached at and

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