Should Small business buy a customer database or CRM Solution?

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Over the years I have been asked this question numerous times, and my response has changed. 10 years ago my answer would be customer database purely on the sheer complexity and the poor ROI (return on investment) that CRM offered small business.  Most small business initially rely on word documents, spreadsheets, shared folders, outlook express and paper files. As the business evolves it becomes difficult to access the necessary customer information when required, thus customer service is compromised and growth is limited due to labour intensive business processes. At this stage most small businesses will search for a better solution.

So what options are out there? – Tailor made customer database, off the shelf customer database, in-house CRM and hosted CRM.

Customer databases – are great tools they enable rapid access of customer information but one of the problems is that every business has different information requirements. Meaning you are forced to look at tailor made solutions or expensive off the shelf customisation. Another issue is that most customer databases are limited to storing very basic information, i.e. you can’t store faxes, emails, sms letters, quotes…etc. Even the ones that can, they force you to perform everything manually, wasting valuable human time.  The next major frustration is the data in your database is limited to your database you can’t use it to generate documents, letters or messages and are very limited to interfacing it to other in-house system and other external systems.

CRM the answer to customer database limitations! – CRM solutions are designed to be customised to each individual business, either by the administrator or by external developers (The key is to find a CRM Solution that can be customised by you). They also provide numerous tools to interface to other systems such as accounting, retail and messaging systems. The only issue is the COST; most CRM solutions promote numerous systems and very expensive integration.  The major benefits that some CRM Systems provide are workflow management, business automation and electronic documentation generation. All these tools ultimately enable you to Maximise customer satisfaction, business performance, profitability and customer relationships.

So CRM is better than customer databases? – What about the COST? Some of the initial prohibiting factors where the cost, the cost to buy the multiple systems and integrate. But know there is a new option Web Based CRM! Deemed to be the answer to all our prayers Web Based or Hosted CRM also has its limitations and challenges.

Web Based CRM – is a new form of cost effective CRM delivery. If we consider that CRM Systems are all about centralising all customer data you have to be prepared to upload everything, customer data, faxes, sms, emails, letters, quotes…etc.  What about accounting? Are you prepared to upload your accounting data? Product information cost, margin and profit? I think not. You also need to consider that uploading everything is cumbersome and tremendously slow. What about the difference between web based v Windows based GUI, the quality of windows based user interface are far superior. And most of all differentiation what happens if your biggest competitor has the same capabilities and features. If the product is the same, the service is the same will that only leave price differentiation? Business is all about differentiation demand a system that you can make it your own WITHOUT expensive customisation.

.net to the rescue – with the introduction of .net and the thousands of .net components, the year 2008 is the dawn of a new age. CRM solution providers can now provide all front-end sales systems in a single application delivered at the price of good off the shelf customer database with numerous advantages. A CRM Solution that you own that provides business automation, workflow management integrated messaging plus much more.

Don’t risk the unknown future costs or the unknown business process limitations or the limited differentiation opportunities, speak to a CRM solutions provider that will maximise your business performance while minimising the overall costs.


For further information visit: Next Generation CRM Business Solutions



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