CRM for Small and Midsize Businesses Benchmark Report

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Download the full report: http://www.gleanster.com/reports/reports/crm-for-small-and-midsize-businesses …

Download the full report: http://www.gleanster.com/reports/reports/crm-for-small-and-midsize-businesses

Over the last decade, Customer Relationship Management (CRM) platforms have matured, and their adoption has become widespread at not only larger enterprise companies but also small and midsize businesses (SMBs). Driving this growth is the fact that CRM platforms are now able to fully automate all types of interactions and transactions, including sales processing and order fulfillment, between companies and their customers.

For Top Performing organizations CRM has become a hub for centralizing customer engagement and outreach. Most CRM solutions integrate with stand-alone solutions like email, marketing automation, or eCommerce. But, over the last 10 years, comprehensive CRM platforms have become more accessible for the small business. These systems are designed to strike just the right balance between simplicity and value; with the understanding that CRM is mainly valuable if it streamlines the sales cycle and lifts sales. Of course successful implementation isn’t just about technology. As this Gleansight benchmark report will show, superior performance is defined by automating relevant engagement with customers and prospects; CRM is the lifeblood of this engagement. In fact, Top Performing small businesses reveal proactive engagement with customers was a top two reason to invest in CRM.

The report includes a comprehensive vendor landscape with vendor rankings based on 4 dimensions – Ease of Deployment, Ease of Use, Features and Functions, & Overall Value. Plus, the vendor rankings are developed using actual customer experiences with vendors.

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  • 1. Q4 2012 Gleansight CRM for Small and Midsize BusinessesContent Over the last decade, Customer Relationship Management (CRM) platforms have matured, and their adoption has become widespread at notPart 1: Topic Overview only larger enterprise companies but also small and midsize businessesPart 2: Reasons to ImplementPart 3: Value Drivers (SMBs). Driving this growth is the fact that CRM platforms are now ablePart 4: Challenges to fully automate all types of interactions and transactions, including salesPart 5: Performance Metrics processing and order fulfillment, between companies and their customers.Part 6: Success StoryPart 7: Vendor LandscapeSidebarsSurvey StatsBenchmark KPIsIndustry Buzz WordsKeep in MindGleanster NumbersVendor Quick Reference Guide Small and midsize businesses may never have shunned CRM outright, even after hearing the sob stories of large enterprises that purchased CRM software that subsequently performed poorly. However, only a relatively small segment of the SMB marketplace had considered adopting CRM until recent years. That has now changed, and the right technology choices can produce enormous benefits not only for the business adopters but also for their customers. The growing popularity of software-as-a-service offerings and the comprehensiveness of solutions have ultimately made CRM a compelling, low-risk option for small businesses. In the fast paced dynamic small business operation, individual contributors are an army of one, often supporting all facets of customer engagement; from marketing, to sales, to customer service. That demands tools that are both easy to use, but also comprehensive and affordable. For Top Performing organizations CRM has become a hub for centralizing customer engagement and outreach. Most CRM solutions integrate with stand-alone solutions like email, marketing automation, or eCommerce. But, over the last 10 years, comprehensive CRM platforms have become more accessible for the small business. These systems are designed to strike just the right balance between simplicity and value; with the understanding that CRM is mainly valuable if it streamlines the sales cycle and lifts sales. Of course successful implementation isn’t just about technology. As this Gleansight benchmark report will show, superior performance is defined by automating relevant engagement with customers andNote: This document is intended for individual prospects; CRM is the lifeblood of this engagement. In fact, Top Performing smalluse. Electronic distribution via email or by post- businesses reveal proactive engagement with customers was a top two reason toing on a personal website is in violation of theterms of use. invest in CRM.Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  • 2. Gleansight: CRM for Small and Midsize Businesses 2Survey StatsThe research findings featured in this Part 1: Topic OverviewGleansight benchmark report arederived from the Q3 2012 Gleanster Many companies have improved their customer service processes,survey on smal business CRM. marketing forecasting, and returns on marketing spending through the • Total survey responses: 318 use of CRM software. For small and midsize businesses, the tools are continuously evolving through customization options from long-time • Qualified survey responses: 215 solutions providers and new market entries that focus on select verticals. • Company size: <$1M (48%); $1 Initially, commercial CRM tools were system more flexible. That has enabled - 10M (18%); $10-100M (34%) only available as software packages data collection and aggregation across installed on users’ hardware—typically corporate functions because CRM is not • Geography: North America (82%); a centralized database with individual merely a technology but also a business Europe (17%); Other (1%) PC clients. The upfront purchase solution. Now many CRM providers and implementation price required enable user-friendly mobile interfaces • Industries: Consumer Goods C-suite sign-off and significant budget too, so CRM data is a password away (23%); Retail (21%); eCommerce for maintenance and growth, either no matter which device a user has (9%); Manufacturing (6%); Software by in-house staff or outsourced handy. This evolution has kept CRM (6%); Technology (5%) Financial consultants. Where companies tried viable. Had on-premise software Services (4%); Business Services to cut corners, they lost ground, with packages not given way to SaaS, CRM (4%); Non-Profit (4%); Other (12%) data accumulating but poorly used and would be an ill-fitting legacy system at information siloed in the IT, marketing, only the largest corporations rather than • Job levels: CEO / Owner (31%); or customer service function rather than a must-have for most companies. C-level (25%); Director (34%); leveraged enterprise-wide. Manager & Staff (10%) CRM tools have also become more Today CRM platforms have moved to customizable, but customization needs cloud-based delivery systems, giving that develop as an organization absorbsSample survey respondents: even the smallest businesses—even the value and potential of a CRM system sole proprietorships—the ability can convert the previously low-costDirector, Anton Systems to optimize their customer data for on-demand solution to a high-costOwner, The Trainers maximum lifetime value and long-term investment. relationship retention.Manager, Dollar Bank CRM still has a mixed reputation, To expand the market for CRM to small delivering successes as well asDirector, The Maple Group and mid-size businesses, solution stumbling blocks. It may be that the providers offer access to their CRMDirector, Silver Fern Security convenience and affordability of “on demand,” via a hosted model that cloud-based CRM deserves some typically requires no upfront investmentVP, Yellow Admiral of the blame; user engagement can but is paid for by monthly subscription be lacking in the absence of theVP, Helen Brett “per seat.” “Software as a Service” pressure associated with a huge (SaaS) is lumped into cloud-based capital expenditure. Additionally, theOwner, Sign Language LTD computing in which users log into implementation of a CRM solution is a solution on the provider’s server. most successful when the solutionOwner, NorthDoor The CRM client’s database is hosted offsite with the CRM sponsor as well. is integrated with other software The evolution is good business for systems and databases in use at a CRM vendors and good fortune for company—a task easier said than done. companies still making CRM start-up Nevertheless, having a CRM platform decisions. On-demand service gives of some sort has arguably become organizations a low-cost entry point as necessary as having a financial to demonstrate the value of a CRM reporting tool. Sarbanes-Oxley alone investment to management. has moved CRM from a luxury to a vital tool to enable and support broaderNote: This document is intended for individualuse. Electronic distribution via email or by post- This model has not only welcomed growth strategies. The marketinging on a personal website is in violation of the more companies with limited budgets as resource management applications interms of use. CRM adopters, but made access to the CRM systems show particular value.Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  • 3. Gleansight: CRM for Small and Midsize Businesses 3 Part 2: Reasons to ImplementBenchmark KPIs CRM implementations are driven by companies’ desire to improve bothGleanster uses 2-3 key performance business processes and individual performance. In all cases, the key isindicators (KPIs) to distinguish “Top organizing a tremendous amount of ever-changing information acrossPerformers” from all other companies(“Everyone Else”) within a given data thousands or even millions of interactions between the company and itsset, thereby establishing a basis customers or prospects. The expectation is “what you can measure, youfor benchmarking best practices. can manage.” Specifically, companies believe—and many successfulBy definition, Top Performers arecomprised of the top quartile of CRM implementations have proved—that recording, analyzing, andqualified survey respondents (QSRs). more closely managing customer and sales prospect relationships is an effective way to derive more value from these relationships and theThe KPIs used for distinguishingTop Performers focus on effort and resources being expended to build and maintain them.performance metrics that speakto year-over-year improvement in 81% 68% 84% 92% **relevant, measurable areas. Notall KPIs are weighted equally. MostThe KPIs used for this Gleansight are: Compelling • Revenue Growth Reasons to Implement* • Employee Satisfaction with CRM Affect custom targeting for Proactively communicate Establish data-based sales and marketing efforts with customers metrics for marketing/sales effortsTo learn more about Gleanster’s **According to Top Performers, based on 285 Qualified Survey Responses to the Q2 2012 Gleanster survey on WCM CRM based on 215 Qualified Survey Responses to the Q3 2012 Gleanster survey on SMB According to Top Performers,research methodology, please click ** According to Everyone Else, shown only when a notable disparity occurs relative to Top Performershere or email research@gleanster.com. Establish data-based metrics for segment profit. Marketing dollars are marketing/sales efforts. With C-level being redirected from a very generic executives, CFOs in particular, taking approach to marketing mix optimization a greater interest in their organizations’ by channel. investments, pressure for return on investment (ROI) numbers hits the Proactively communicate with usual functions—production, sales, customers. There’s no doubt that human resources, and information marketing is under pressure to technology—and marketing, which is personalize its message to win new being held to more accountability for sales. CRM enables a marketing its spending. Because of this executive evolution—assessment to strategy involvement in decision-making, CRM to select contact based on customer solutions need to show a measurable, if service interactions, recent latency in not quick, ROI. brand engagement, observed or shared preferences, and more. The key metrics in focus—because they’re obvious and they get immediate In the rapid pace of the small business benefits—are customer cross-sell and environment, it’s challenging for upsell; customer retention; customer businesses to stay on top of cusotmer acquisition (how fast, how many, and engagement, particularly with in what segments); channel profit; and ever increasing demands for moreNote: This document is intended for individual personalized customer engagements.use. Electronic distribution via email or by post-ing on a personal website is in violation of theterms of use.Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.
  • 4. Gleansight: CRM for Small and Midsize Businesses 4 42% 55% 62%Industry Buzz Words CompellingHere’s a list of key terms you Reasons toshould know be familiar with inthe context of this research: Implement*Small-to-Midsize Business (SMB).Not all analyst firms and companies Integrate disparate Improve quality of data Streamline/enhance the data sources/enhance efficiency of customerclassify SMB in the same way. For accessibility to data service/communicationsthe purpose of the analysis in this **According to Top Performers, based on 196 Qualified Survey Responses to the Q3 2011 Gleanster survey on WCM CRM According to Top Performers, based on 215 Qualified Survey Responses to the Q3 2012 Gleanster survey on SMBreport, SMB is sub-divided into ** According to Everyone Else, shown only when a notable disparity occurs relative to Top PerformersVery Small (up to $1M annual sales),Small ($1-$10M in annual sales), and CRM can help mitigate some of these data is pertinent came much later. DataMedium / Midsize ($10M - $100M in challenges by centralizing data that exploitation through CRM tools aimsannual sales). Respondents could can be used to automate business to lend a business greater efficiency,also be classified as SMB by the rules or trigger alerts to maximize the encourage smarter spending, increasenumber of employees which ranged timeliness and relevance of customer customer knowledge, and improvefrom 1-750 employees on average. communications. product positioning and development. Ignoring the unnecessary will yieldOn-Premise CRM. On-Premise CRM Enable custom targeting for sales higher quality measures and outcomes.is typcially hosted and maintained and marketing efforts. More flexibleon physical hardware owned and customizable CRM applications Integrate disparate data sources/and maintained by the customer. integrate better into middleware enhance accessibility of data. EffortsOn-Premise CRM is typically a and business process management to make CRM more accessible includedesirable choice when a company hubs and allow the business user uniting customer data across differentwants total control over the data in the to customize the user experience, systems and applications both withinsystem and/or custom integration to improving productivity. Companies are an organization and with its vendors.other ERP or back-office systems. Over realizing that their salesforce and sales Customer data integration and real-timetime, the licensing costs associated channels are strategic competitive analytics make many scowling seniorwith on-premise solutions (especially weapons and that CRM can be used to executives pat themselves on the backwhen licensing is not calculated ona per user basis) can be significantly make them more effective. for approving CRM investments.lower than on-demand fees. Streamline/enhance the efficiency of Set focus on providing solutions customer service/communications. to customer needs rather thanOn-Demand CRM. On-Demand or Targeted communications inspired by selling products / services. CRMSoftware-as-a-Service (SaaS) CRM CRM data and initiated through the implementation creates value for theis accessible over the internet andhosted and maintained by the solution CRM solution’s automated marketing customer by empowering front-lineprovider. SaaS solutions are typically tools can reduce service costs and, salespeople with information onlighter in features, which often aids in best case scenarios, increase customers’ existing relationships within the adoption. Low implementation profitability. For the small business, the business and analytics that predictcosts and speed of implementation revenue is generated through intimate ancillary needs and the products ormake On-Demand CRM a compelling relationships with customers, so a services that can meet those needs.turnkey solution. There are two types centralized system of record for all Representatives can see the connectionof on-demand solutions. The first, customer interactions over time is between a customer’s currentmulti-tenant, represents a single paramount to repeat business. relationships and the products the CRMsoftware instance whereby multiple system recommends selling next. Thisclients (tenants) leverage the same Improve quality of data. Most means they sell more enthusiastically,solution. In a multi-tenant delivery businesses began collecting data in and customers likely engage with newmodel, updates to the software earnest when technology—Microsoft products more readily because they, Excel, legitimate database software, or too, understand the relationship-buildingNote: This document is intended for individual simply email contact lists—made the approach.use. Electronic distribution via email or by post-ing on a personal website is in violation of the previously manual process of recordingterms of use. data easier. Prescriptions as to whatEntire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.