May 2003

By Sean O'Connell, Genesys Telecommunications Laboratories, Inc. 

Personal and attentive customer service has long been a proven way for small and medium-sized businesses (SMBs) to differentiate themselves from their larger competitors. The reward for knowing a customer's name, as well as their buying and service preferences, is winning the business without having to match lower prices offered by larger competitors. It's why some consumers prefer to shop at the local neighborhood store instead of the national chain. Sometimes, price just doesn't matter as much. It's service that counts whether in the store or communicating with agents in a contact center.

However, now that large enterprises are reaping the benefits of their advanced contact center implementations ' reduced hold times, automatic delivery of customer histories and preferences to customer service agents ' big companies are becoming just as friendly and efficient as their smaller counterparts. The emergence of new communication channels, such as e-mail, chat and other Web-based communications, is also changing customer expectations for businesses of all sizes. A higher standard for service is in force across the board and small and medium-sized companies may suddenly find themselves at a disadvantage because they haven't invested in the technology to effectively manage customer interactions.

Customer service strategies must be adapted to meet the demands of an increasingly sophisticated customer base, one that can and does easily defect to the competition. No matter what the size of the business, companies need to implement more business-driven customer service strategies that automatically identify callers and incorporate customer segmentation to deliver business value for both inbound and outbound customer communications. 

Fortunately for small and medium-sized businesses, changing market conditions are making it easier and less cost-prohibitive to implement advanced customer service capabilities. First, the weakened economy and its negative effect on IT spending at large corporations are motivating vendors to court smaller companies. Everyone from Siebel and PeopleSoft to Microsoft and J.D. Edwards has set their sights on the SMB market. Second, the emergence of open, industry-standard platforms is playing a part in lowering application development and support costs while increasing interoperability. This open technology strategy allows small and medium-sized businesses to connect to other systems more efficiently and cheaply. However, these same trends also can make the buying decisions confusing and difficult for smaller companies that lack expertise in the technological aspects of customer service initiatives.

The chance for small and medium-sized businesses to level the playing field has never been better. Not only is competition placing downward pressure on vendor prices, it's also driving the creation of solutions that specifically meet the needs of smaller organizations. Some contact center vendors are now offering 'ready-to-run' technology packages that can be deployed in days instead of months. These solutions, while still providing the functionality and customization smaller businesses need, shorten implementation times, reduce risks and lower the cost of building overall CRM solutions. As a result, SMBs should focus on choosing a solutions provider that is experienced in contact centers and can deliver customer service 'best practices' that are built into product offerings.

A Growing Market
By 2007, Datamonitor predicts spending by companies with 10 to 100 contact center agents will increase from 43 to 48 percent of the total market for contact center technology ($4.71 billion). According to a recent survey by AMR Research, '71 percent of mid-market companies stated they are planning to invest in contact center and/or e-mail management applications within the next two years. Much of this spending is still on the basics of customer service, such as shortening call hold times and/or maintaining historic information about previous customer interactions.'

AMR Research divides the CRM needs of small and medium-sized businesses into three categories: 1) automating existing business processes to increase customer satisfaction and retention; 2) providing external access to back-office functions to increase business with existing customers and identify new prospects; 3) implementing smaller scale CRM initiatives that will serve as the foundation for broader CRM strategies as the company builds market share and acquires new customers.

According to AMR, the customer service applications most commonly sought by SMBs today include inbound e-mail management and computer telephony integration/data screen-pop to the agent desktop. Specific requirements vary by industry.

What Do SMBs Need Most From A Customer Service Solution?
Although SMBs are feeling the same economic crunch as enterprises, they are becoming increasingly aware that a long-term customer service strategy is absolutely critical if they are to position themselves for growth when the economy recovers. The vendors that will be successful in getting a piece of this market will be those that understand the business and technology trends driving small and medium-sized businesses to invest in CRM technology. Instead of offering enterprise solutions with less features and lower price points, vendors should design and price products that meet the unique needs of smaller companies.

What do SMBs want from a vendor? While mid-market contact centers require the same highly functional technical environment found in enterprise contact centers, their initial focus is typically on managing voice and e-mail communications. There is a clear need for a simplified out-of-the-box integrated approach that streamlines implementation and configuration, while providing a seamless path for ongoing changes and upgrades. 

Ease-of-Use And Flexibility
An easy-to-learn intuitive interface, flexible architecture and easy-to-use customization tools top the list of requirements from mid-market contact center managers. SMBs want solutions that support the way they do business; they don't want to change their unique business processes or do a lot of expensive re-engineering in order to make a CRM solution work. Configurable solutions that can be tailored without a lot of costly programming are the most desirable. An open architecture that will support the integration of customer service solutions with existing applications, databases and legacy systems is also desirable, as it will reduce the up-front investment and position the company to take greater advantage of advancing technologies.

Since functionality requirements vary by vertical industry, many SMBs are attracted to pre-configured industry-specific solutions that closely align with their business processes and lessen the need for customization. More vendors are recognizing this need and creating distinct vertical application suites that feature the appropriate functionality for a particular market segment (financial services, manufacturing, and so on). 

A Unified View Of Customers
Support for multiple channels is also a must as customers demand the ability to communicate in any manner they please (telephone, e-mail and Web), with no effect on the quality of service. A good contact center solution will enable businesses to intelligently route customer interactions across all communications channels to the appropriate agent or company resource based on business drivers such as service levels, revenue goals, customer value and demographic information, agent skill sets and company-wide business processes.

Although SMBs have been wary of biting off more than they can chew, they are now becoming cognizant of the fact that a solid CRM strategy should integrate customer-facing activities with back-office applications. Front-office to back-office application integration allows information from across the enterprise to be delivered to various customer interaction points where it can be used to enhance customer service. Emerging technologies such as XML are making it easier and less expensive to do this.

Obtaining Measurable Benefits
With time, money and resources at a premium, SMBs demand fast results. GartnerGroup estimates that through 2006, 75 percent of SMB CRM initiatives will fail to meet measurable benefit objectives or positively affect return on investment, due to a lack of business processes for conducting ongoing measurements. Fortunately, the integrated product suites that are now available can be rapidly deployed, allowing companies to achieve the benefits of improved customer service much faster than in the past.

Solutions that offer the ability to fully integrate sales, marketing and customer service functionality reduce implementation time and costs. Pre-packaged solutions provide 'out-of-the-box' functionality that accelerates implementation time and reduces the total cost of ownership. An integrated product suite eliminates the need to work with individual product installation or configuration issues, freeing the company's resources to focus on business requirements.

To determine how successful a CRM implementation is, companies need to develop a roadmap for CRM and metrics that can be measured and tracked over a period of time. These metrics may range from tactical initiatives such as the percentage of customer service calls handled successfully during the first contact, to more strategic measurements such as increased revenue and reduced costs. 

In the end, small companies want the same respect and attention CRM vendors bestow on large enterprises. They deserve someone that understands and wants their business. The good news is that customer service technologies are available today to put SMBs on par with their larger enterprise competitors.

Sean O'Connell is senior manager, Mid-Market Programs, for Genesys Telecommunications Laboratories, Inc. Genesys, a subsidiary of Alcatel, provides open software applications designed specifically to optimize customer contact in the contact center and across the enterprise.