Inside Small Business | Small Business & Home Business Marketing

Software as a Service (SAAS)

How does IT in a box sound?

That’s the vision of the latest trend in software development - called Software as a Service (SAAS). For small business owners - this model for technical support is very appealing - if you’re willing to accept the risk.

Software as a Service can be best described as outsourcing an entire business function. Typical SAAS functions are Payroll (Paychex.com), HR (Workday.com), Accounting (Quickbooks.com), Sales (Salesforce.com), and Customer Relationship Management (RightNow.com)

These vendors are part of a growing trend of software providers that allow you to subscribe to the service (typically about $100/month/user - but options vary greatly here). This allows you to run your business with some significant advantage. 1. You don’t have to develop these sorts of applications in-house. 2. You don’t have to have an IT staff to support you. 3. You don’t have to buy a bunch of computer hardware (SAAS vendors have the computers at their site - you just log in via the internet). 4. You don’t have to be an expert in these areas - the SAAS vendors support hundreds of small businesses - and their business model will typically work for you too.

The cost of these applications is typically very reasonable. The drawback is that you give up some of the control that comes with having your own in-house operations. In addition - you have to get over the fact that your Payroll/CRM/Sales/Accounting, information is hosted outside of your business - on your vendor’s website. To counter this concern - I would tell you that the worst thing for a SAAS vendor to have happen is a security breach - and I find that their security infrastructure is better than ANY fortune 500 company I’ve worked with. Security shouldn’t be an issue (although you should question the vendor to make sure you’re comfortable).

One other drawback in having your applications scattered across various vendor websites - is that they aren’t integrated. If you want a Sales order to feed your CRM system - typically you’ll have to re-type the information from Sales into the CRM application. However, web service technology is available to hook all these applications together…and for a bit more investment in some integration services (from great companies like ProCore Resource Group ), you can provide a seamless business process that is automated as well.

In short - if you’re considering some investment in technology to help your business grow - look at SAAS options. It provides state-of-the-market solutions for common business functions at a fraction of the cost it would take if you build it yourself.

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Customer Relationship Management

How much do you know about your customers?

It sounds funny, but you probably don’t know enough. Some of my most recent consulting engagements have been centered on Customer Relationship Management (CRM).

This term has been around for years, and it can’t be defined well. The latest way to define this term is to build a 360 degree view of your customer. This means that you understand all aspects of your customer - and have access to this information as you work with your customer.

CRM 360 degree view includes any orders placed, any problems called in, any invoices sent, and any other information gathered during ANY interaction with the customer.

If you’re not doing so - you should find a way to log every customer touchpoint.

Here’s why: One customer called in with an order. The service agent handling the order managed the transaction, and went about their day.

The customer, however, was dissatisfied with “normal” treatment, and called back. The customer asked to speak to a supervisor, and informed the supervisor that they had purchased over $10,000 in materials in the last 2 weeks. 20% of their ordered materials had been damaged or defective, and they were placing a new order because when they reported the damaged goods, the rep handling the damaged goods claim couldn’t place an order for new goods.

Wow! How different would the phone call have been if the rep handling the order KNEW that this was a top customer, and KNEW that there was a problem with the previous shipment. Perhaps a discount or other relationship enhancement techniques could have been employed. Instead - the customer is left feeling unimportant.

Even if you’re not at a scale where you can afford a CRM system, start logging your customer interactions in a single place (Excel spreadsheet if you must). Bills, inbound calls, outbound telemarketing offers, mail/email solicitations are all contact points…and all of these should help you gain that 360 degree view of your customer.

Use this informaiton to make each one of your customers a special customer. You’ll be glad you did.

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Using channels

I recently had an opportunity to talk to one of the software vendors that I was using on one of my projects. The account manager indicated that they had too much business in their installation backlog, and couldn’t meet all their demand.

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What’s your process?

My bread-and-butter consulting comes from doing business analysis of process. There are about 3 main things to avoid when designing business process - and almost every client I work with has violated these rules…so I thought i’d put these out for you to think about.

1. Don’t replicate something you can reuse. I have a client that supports their products with 2 different processes. One process if you call their call center. A completely different process if you order via the web. The customer experience is VASTLY different, depending on the channel you choose, but the product you receive is the same. It costs the client twice as much to support their product, because they’ve replicated their entire product support infrastructure twice. This also illustrates one of my favorite tenets of the “new” web economy: Putting a traditional business on the web will usually highlight the poor business practices of the business…because now all the internal workings of customer service are now exposed to the customer.

2. Avoid audits & inspections. Any time you have someone checking someone else’s work - this is ALWAYS a waste of time. One client has 80 people performing a check of sales orders - rejecting those orders back to the sales people to correct them. Better process design would be to enforce some edits on the sales people’s order forms so that they can’t make bad selections…that way, you don’t have to check them. While this example isn’t quite so extreme for small business - it should illustrate that good process design will ensure that work gets done right the first time - instead of inspecting it into the back end - at additional cost.

3. Avoid handoffs - collapse the job responsibilities. Your customer is the ONLY focus you should keep as you design your customer service process. If you hand off from an ordering clerk, to an inventory clerk, to a shipping clerk, to a billing clerk as part of your fulfillment process, you run the risk of providing poor customer service. Many times, each department will insist upon the “longest interval” as their agreement to provide service. If each department listed has an “allowed” 72 hour turnaround, there will be a 12 day lag before your customer is served. Better process design would collapse the job responsibilities (with more training) to a “customer service agent” that can handle the transaction from initial order through to billing fulfillment. That way, inefficiencies of handoffs are avoided, and your “customer service agent” can ensure that the customer has been truly served.

A business is nothing but a collection of it’s processes. Make sure yours are designed to take care of your customers - not your internal groups.

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