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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Hiring the right resources

I thought I’d write a bit about hiring the right people. I read Mike’s blog entry about hiring, and I wanted to add a few comments on that subject.

Our business is defined by knowing and hiring the right resources always. The best source for quality people is always from the personal network - as most of our best resources come from those we know. Quality people tend to know other quality people, and there’s still no substitute for personal recommendation.

However, when you can’t rely on the network connections for people, I thought I’d pass along some screening tips I learned as a recruiter during my stint in Big 4 consulting.

We had a pre-screen interview (30 minutes or less) and it had 4 questions on it. I think those 4 questions are able to identify the best quality candidates, and here’s why:

Question 1: What does the company do? This question demonstrates that the candidate has at least done some research about your company, and may even demonstrate some surprising understandings based on what they might find out about you. You can judge interest and understanding from this question.

Question 2: What extracurricular leadership activities do you take part in? Everyone has a “day job”. That may be as a student (if you’re doing new hires), or a current position (if you’re hiring an experienced candidate). If someone is willing to devote their time & talent outside of work to something else (in a leadership role), then that person may have leadership qualities you can tap into. If the person is neighborhood garage sale coordinator, soccer coach, youth club leader, or any other leadership activity, this demonstrates two things that are valuable: Leadership, and initiative - both vital qualities in a successful candidate.

Question 3: How many hours do you work in a typical week? For new hires, we determined that a full time student that also held a 20 hour/week job (regardless of the nature of that job), showed the ability to schedule, time manage, and demonstrate responsibility. This question is obviously geared for student recruiting - but the same can be applied to experienced hires as well, just with different frame of reference. Ask those questions that demonstrate the ability to multitask, or hold a disciplined work schedule (ask anyone with kids this question, and you’ll know what I mean).

Question 4: Tell me about a time when you were NOT able to perform a task you were instructed to do. What did you do? This question is one designed to reveal their problem solving ability. You will learn a lot about the person based on the situation they explain to you (can they even explain themselves well?). The solutions to overcoming their difficulty will tell you something about their ability to solve problems for you. Answers like “I got help” or “I researched the problem until I found the answer” are generally good, while “I quit”, “I yelled at the customer because they were stupid”, “I told the boss to deal with it”, (all answers I’ve received in interviews) may not indicate the best person for the position.

These 4 questions typically take about 20 minutes, and can tell you the factors about an employee that have the best indicators of success: Interest & Understanding, Leadership, Initiative, Time Balancing, Scheduling, Responsibility, and Problem Solving ability. You’ll also likely be able to assess if the person would be a good fit with the team that you’ve already got in place, because those same skills you’re interviewing the candidate for, will also be valuable skills for fitting in with your current team.

I’ve seen fancier interview techniques, but these 4 questions seem to be an accurate indicator of success in my field, and I think you’ll see that most of these traits are the ones that are the best indicators of success in any field.

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