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The CRM for small business battleground heats up



Tech

By Leighton Jenkins

The SMB CRM market has become quite exciting in recent times with some fireworks to come – which means increased competition and better products and prices.

CRM systems are designed for three business functions:

  • Sales
  • Service
  • Marketing

In SMB’s the usual use has been to focus on the Sales functions – the key features are managing contacts, organising sales appointments and managing sales opportunities.

Historically, individuals would utilise Outlook or one of the Sage products, particularly ACT! These systems run on a desktop and as a company grew you buy CRM on a shared server to pull together contacts and sales opportunities into one place.

In the past few years the trend has CRM services moving into the Cloud – with the poster child for business applications in the Cloud being Salesforce.com (adding a massive 800 new customers in Australia last year). Salesforce.com has had this market to itself – having both the brand and resources to attack the market.

But as of this week – the market has changed with Microsoft Dynamics CRM 2011 being launched. This is not just a new release but also means that the Cloud version of Microsoft’s product is now available in Australia. This fundamentally changes the market place:

  • Both companies have great brands
  • Both companies have strong marketing and sales organisations
  • Both companies have good products
  • Both companies have aggressive growth targets

There are some differences that may or may not tilt the balance towards one vendor:

  • Microsoft will offer a product as a Cloud solution and a server option( and the ability to migrate from one to the other)
  • Microsoft will work with you online or through its channel partners
  • Salesforce.com will add features on a rolling basis – currently talking the Spring ’11 release
  • Salesforce.com will promote its Chatter product – an internal communications/social media tool

Pricing

There has been a lot of focus on pricing, with Microsoft having some aggressive launch pricing plans. These are aimed at current Salesforce.com customers to migrate to Microsoft Dynamics.

I am not sure if Salesforce.com will respond on price or just compete harder for your business. What I am sure about is that the published price is not the final price! The important thing about SaaS/Online CRM is that the vendors selling will behave more like a phone company, than they will a traditional software company. So deals will be made based on the number of users and a time commitment e.g. a 2 –year contract will deliver you a discount.

Summary and Next Steps

When do you need a CRM? Typically if a business is running on spreadsheets – when you spend too much time arguing which spreadsheet version is correct, then it’s time for a CRM.

Now you have more choices, as well as Microsoft and Salesforce.com there are a variety of small business CRM vendors that can include Sage, MYOB, SugarCRM and many others.

Probably the best way to approach it is to:

  • Understand your needs and feature sets
  • Take up the 30-day trial offers that vendors are offering to see what works for you best
  • Compare the solutions and see which vendor you would like to work with long term

Are you looking at or already use a small business CRM solution? Microsoft Dynamics? Salesforce.com? Something else? Let us know in the comments below!