CRM for small business

..why, costs go out of control and benefits are seldom as promised

CRM (Customer Relationship Management) is a much-abused and much-maligned term. I am reminded of the elephant in mythology who was being felt up by 5 blind men and who ended up describing the elephant in as varied terms as “a pillar”, “a rope”, “a wall” and so on.

So, for a time about 5 years back, everyone was “doing” CRM. From the call centre agent to the marcom specialist sending out mailers to customers. Then there were CRM tools vendors; all from the contact management softwares which were little better than a rolodex to the sophiticated office telephony vendors.

So, instead of 5 blind men with their unique experiences, we often had ten or more definitions. I will try and break up the CRM universe in digestible nuggets, especially from the point of view of the small business owners. Even though, my post has more relevance to the B2B customers, I hope the B2C people can benefit as well.

CRM is a process of ensuring that the various ways in which the customers interact with us are logged, tracked, measured and hopefully triggers from this are used as feedback so that we make improvements in our customer interactions.
So, over time, CRM systems have come to mean:
1. The software for logging customer profile, activities, customer contact “campaigns”, “leads” etc.
2. The telephony and connected IT systems.
3. The add-ons: like the campaign execution tools like e-mail engines, the webinar platforms and so on. Linkages to “content management systems” whose prime function is organizing content for your own websites.
4. The “overlays”/ management bits: reporting on “sales funnel”, “active” vs “passive” part of the database.

The problem lies in the scope. Since most CRM projects are initiated by marketing, most CRM systems pay a lot of emphasis on “profiling” both the “account” (customer company) and the “contact” (customer company employee).  So, we log everything; including SIC codes and industry segments and number of employees and company website address. We record the contact “interests” as explicitly stated and their interaction history, as providing clues to what they “really want”.
Not that it mattered. It is a brave marketer indeed, especially in those big MNC “marcom factories” who will confess to not having enough contacts to target for a marketing campaign. So, targeting filters would be “flexed”; boolean operator “OR” will replace “AND” and sufficient targets will be generated for doing yet another “mass-mailer”. And, this is a self-perpetuating cycle; those that are once targeted in campaign, will find themselves in subsequent mailing lists too.
All CRM software sellers know their audience. They know it is marketing which will be most influential in taking a decision on what software to buy. So, they make sure their software is heavy on profiling, campaign management (linkage to execution is optional) and has a lead transfer path. Since Marketing does not like feedback, seldom will you see a CRM system which provides a “back-flow” path for crappy leads.
Everything has a cost. Profiling every customer to death has a cost; in terms of acquiring the data, keeping it updated and so on. In the B2B scenario at least, the front line salesmen are the ones that gather the data and input into the system. Their motivation for this work is low since to them, this has low linkage to how their pay and commission is determined.
What aggravates the problem for a small business running a team of 20 or less salesmen covering 500 or less accounts who interact, engage and purchase with varying frequency, is that most CRM softwares were written for big businesses and have been scaled down for small businesses. Salesforce.com ends up costing anything between for Rs 5000/- to Rs 15,000/- per month, per user. This does not include initial customization cost and porting of data from legacy system and so on. Nor does it include the cost of training for users. While MNCs would happily shell out this money, I think this is way too much for most Indian small businesses. This is definitely a big reason why most Indian small businesses are still managing their customers contacts in Outlook and prospect summaries in Excel.
In my next post (s), I will talk about “just enough specifications” for a CRM system which should work for most small businesses in India.

Tu Sprite pee!

Just a short post on lazy, nay clueless advertisers. And, things are getting worse, not better.

Years back, when Sourav Ganguly was dropped from the Indian cricket team, and it did not look likely that he will ever make it back, he disappeared from all advertisements very soon as well. Much as Ganguly fans would contest this, a player’s visual appeal (ability to move sales stock!) is linked to his playing days.

Why am I reminded of this? Because, Sprite is going against all marketing wisdom, even commonsense; asking folks to open bottles of Sprite in the currently running ad in the hope that they get to meet Shahrukh and the Kolkata Knight Riders team.

There are several things that are wrong with this ad. Firstly, KKR might be a great brand (some study quotes their brand value as the highest among all the teams, inspite of finishing last in IPL), but surely, cricket audiences are not enthused about wanting to meet resounding losers in a competitions; one that is still going on?
And, do they expect KKR to have such strong fan following outside of Kolkata to warrant mass adulation of the kind that is needed for people to be motivated to open Sprite bottles in preference to some other?

Shahrukh does have a multicity appeal and so does Sourav. But both of them have done much in the last 30 days to dissipate their appeal. Shahrukh will gain it back with his next hit, whenever it is. But, KKR is still at least a year away from being a winning brand.
Meeting KKR? Huh! Show me the money!

Here’s what must have happened. Some brand manager spent six months coming up with a message and haggled with many teams, owners and players to finally rope in KKR/ Shahrukh as the star-cast.
Then he and his agency took eons to find dates on Shahrukh’s calendar, shot the ad at enormous expense and  by the time they were done, KKR were on their way home.
Perhaps this was planned. Perhaps they honestly believed that KKR would reach the semis, perhaps go all the way. So, they booked media space and planned their blitzkrieg  to co-incide with the fag-end of the IPL. Alas.

Till such time, you can put this down to laziness; maybe even bad luck. Lots of us shared their optimism regarding KKR’s progress in the torunament. But, to continue to run the same ads, when they clearly are counterproductive – “what a bunch of losers” – is inexplicable. If the media slots can’t be cancelled, whu not run one of several canned advertisements they surely have?

The marketing mission: Borrow

Borrowing attracts less comments, less attention and invites less retribution than stealing. This is as true in your everyday life as in marketing. So, find a way to borrow. Share space with channel or even competitors.

If you are a small company struggling to make an impression in a market dominated by established competitors, try to “borrow”. Create some complementary product or solution offering or find a niche where the big company is not as focused or has profitability pressures. Then “take the pain off” the big company by completing their product offering to the market that they are present but not too keen on. Very soon, you will gain market acceptance and do so without inviting retribution from your competitors.

Here’s a “big-company” secret. The big company product manager has a vested interest in ignoring the existence of small competition. His market share model, is programmed to show small but profitable growth year after year. The trick lies in how he defines his market. Do not take him on frontally and he will ignore you! Give him a reason to say that “Yes, ABC  is a good product but they are in an adjacent space to our XYZ”.
Sometimes this denial-game carries on till ABC becomes really big. This is particularly true in the high tech B2B product markets, where if you really insist, all products are same or very different depending on how you define the target market and product-fit. The tendency in this market is to define markets under the product name headline; as in multimeter market or oscilloscope market. You would think that would at least make market share numbers easy to compute, but by ignoring upstarts, “too cheap”, “only local” or basically anyone that does not belong to the “club”, the product manager manages to hold on to his market share number.

Agilent Technologies woke up to the danger of National Instruments after many years of being in collective denial. NI was happy to play the game as it suited them. Generations of Agilent product managers kept pretending that NI makes only Data Acq Cards and some software which is not “quite the same thing” as measuring instruments. Classic case of headlining a market by a product name. NI did not make the mistake, it kept focusing on the market while being careful to not frontally attack Agilent till they became big enough to do so. Today, NI is bigger than 2 of the 3 business units Agilent has in terms of revenue. 

So, focus on the market and solving the customer need in niches lying ignored by a big established competitor. Chances are, you will not be noticed by the competitor till fairly late.

Back to content

I keep emphasizing on the need for high-value content. Value to the recipient, that is.

Each communication is a means of cementing a relationship or creating/ acquiring an additional one. Over tens or even hundreds of newsletter mailings, you create/ shape your audience profile. As you add topics, probe depths or flirt with boundaries, your audience profile ebbs and flows and mirrors your current content profile.

This is more complex than it sounds, even! Let us say  someone “opted-in” to receive your newsletter months ago on the premise that he will get weekly educative information on personal finance strategies. Now, as your newsletter becomes richer (broader in scope) in content and starts covering stock markets in greater depth, has more coverage on real-estate market or bullion trading two things will happen. Your could add new readership, for sure. But, you may even lose some of your core readership who joined your fold to get sound advice with how to manage their small savings, for example.

Each content area potentially is a micromarket. It is a content play for attention in each of those micromarkets. Your attention paid to each micromarket should reflect a conscious decision to influence these markets. If you are allowing shifting audience priorities to dictate your content, there is nothing wrong with that. But, let that be your choice. As with any choice you make, you live with the consequences and compromises.

As  content tag shows up as a cloud of words in my blog, if only we could capture the expectations of our audience as tags! Over a period of shifting timelines, this will be instructive to see how that changes.