How Different is Small Company CRM?

Continuing with yesterday’s theme of hosted CRM, two more studies have come to my attention:

- Forrester Research (www.forrester.com) published “Comparing The ROI Of SaaS Versus On-Premise Using Forrester's TEI™ Approach” which concluded that SaaS (software as a service) offerings are clearly cheaper for installations with under 100 users, and competitive even up to 500 users. This study looked at several types of software, not just CRM. Click here
for details.

- Access Markets International (AMI) Partners (www.ami-partners.com) published “Mid-Market CRM: Vendor Strategies for a New Frontier”, which found only 35% of mid-sized companies have an existing CRM installation. The study looked at both hosted and on-premise products. Click here for more information.

These studies reinforce the notions I presented yesterday, that (a) smaller firms are more likely to benefit from hosted CRM (b) smaller firms are a big market opportunity and (c) smaller firms have different needs from larger organizations. None of these is a particularly fresh or brilliant insight. But they’re worth repeating because too many people still assume that smaller companies really want the same things as larger companies, just at a lower price.

In fact, I’m starting to think that the hosted firms catering to small and mid-sized businesses are really creating an entirely new category of software. Firms like Eloqua and Vtrenz provide a mix of features—essentially, email and Web campaigns for lead generation and nurturing—that don’t match my usual categories. They are not campaign management or marketing automation or marketing resource management, although they do all of those things to some degree. They are certainly not conventional CRM since they integrate with other sales and service products. If there is on-premise software with a similar mix of functions, I’m not aware of it.

Even though these systems themselves are not CRM products, their presence within an organization would change the boundaries of what CRM is expected to do. This reinforces the notion that hosted CRM in smaller businesses is fundamentally different from CRM in larger companies. I’m not kidding when I say I’m just toying with this idea. It may not make any sense once I think it through. But reconsidering the conventional categories is worthwhile, even if we end up not making any changes.