How small is Too small for CRM?
I may get a little heat for this, but here goes. The beauty of SaaS is that very small businesses, down to one-person operations, can now gain access to what was heretofore unaffordable. Take Dynamics CRM for example, until just a few years ago, large customers were the only ones who could really afford to deploy this expensive on-premise solution.
Enter the Microsoft Cloud. When Microsoft first launched Dynamics CRM Online, essentially a hosted version of their 2011 on-premise product, a single user could buy a license, and have access to the same power of the big boys. This seemed like a great idea at the time.
As a result of spinning up tons of instances for micro companies, only to have them cancel shortly thereafter (this is called Churn), Microsoft came out with a 5 user minimum. The idea being that if you don’t have at least 5 users, you are probably not big enough for CRM. With the advent of CSP (which I wrote about here), there is a renewed call for lowering this 5 user minimum. I am actually advocating for the opposite, a higher minimum, like 10 users. My rationale follows.
The number one issue for Microsoft with the SMB CRM customer is churn. Meaning they are not getting CRM off the ground, and after a month or two of paying for a service they can’t use, they cancel it. This is actually a huge problem that is only exacerbated by even smaller companies. Are there outliers? Sure, there is the rare case where a two-person company has such a high need and value for CRM that they will take the proper steps to get it launched, but those are rare. And what exactly are those “Steps”, well, spending some money is the primary one. Too many of these small operators want to buy the licenses and spend no money on deployment of any kind. They should skip it entirely as they have just set themselves on a path to Churn and a waste of their time. “But Steve, what about these small companies who cannot afford deployment help, should they be denied CRM?” Yes, and we would be doing them a favor. If they can’t afford help, then they probably can’t afford to waste two months of their own time either.
We developed our RapidStart CRM solution to provide the lowest cost method to achieve CRM Deployment and Adoption as possible, but it’s still not cheap enough for the smallest of the small. If they can’t afford our solution, then they definitely can’t afford the 4x-5x that a CRM Partner would charge them, so they will attempt to do it on their own. They will fail 100% of the time. Okay, 99.99% of the time, to allow for outliers. Microsoft does not even provide the information to partners on how to address this segment, much less to the end users. They will fail, and at least we can hope they will fail fast.
So what is the least a micro business should expect to budget for getting CRM off the ground? The number at which, if they cannot justify spending, they should skip the effort entirely and stick with their spreadsheets or post-it notes? Well, that’s hard to say, but it’s certainly not less than a few grand; and even that will probably only get them a CRM hack. $5K to $10K is probably more realistic, and I am sure the CRM Partners are shuddering at even that. Outliers excepting, I think about 10 seats is where you start seeing a genuine business need worthy of that expense. Can you make a “mainstream” case for smaller businesses? I would like to hear it in the comments below.
[info type=”info”]Non-Confidential Information Notice. This post was written by Steve Mordue who is a member of multiple Partner Advisory Councils and is therefore subject to an Enhanced Microsoft Non-Disclosure Agreement regarding information conveyed to PAC Members. All opinions expressed are solely those of Steve Mordue, and no information provided herein is subject to the NDA. Basically, Steve knows a lot more than he let’s on; He’d tell ya, but then he’d have to kill ya.[/info]