Small-Business Guide: Owners Assess Customer-Relationship Software

“They were way too complicated for us and did not have a great user interface,” she said. “I need to spend time running my business, not figuring out technology.”

That is the lament of many small-business owners trying to navigate the world of C.R.M. software, which automates sales and marketing functions and acts as a central database, keeping track of everyone who comes in contact with a business. The software enables businesses to communicate quickly and frequently with customers and keep track of their preferences and needs. For example, it automates tasks like sending out shipping confirmation e-mails and surveying customer satisfaction.

Small businesses generally do not need all the bells and whistles many advanced C.R.M. systems offer; instead, they need a program they can put in place quickly and easily, without the help of an information technology department. Many small businesses began using C.R.M. platforms in greater numbers about five years ago, said Amy Larrimore, managing partner at the Empire Builders Group, a technology consulting firm in Philadelphia.

“Technology makes it easier and cheaper to accomplish things,” she said. “And sales and marketing is traditionally a very labor- and cost-intensive part of a business.”

More recently, the platforms have become cheaper and easier to use, making them more of a crucial buy. With so many options available, we asked some small-business owners to tell us about their experiences.

FOR MICROBUSINESSES “Very small companies usually just need something to manage contacts,” said Ms. Larrimore. Her own firm used Batchbook until it reached 17 staff members, then it switched to Sugar C.R.M.

Taylor Aldredge, who heads branding and marketing for Grasshopper, a company in Needham, Mass., that offers a virtual phone system for small businesses, uses Buzzstream, software that helps manage social media marketing campaigns. It costs the company $40 a month for each of three users.

Mr. Aldredge wanted a way to track conversations with prospects, customers, journalists and bloggers. “I needed something that had the ability to track interactions and mentions — whether that is social media, links or press — to see which conversations were worth pursuing,” he said. The company’s customer base has grown 500 percent over the last five years.

Thanx, a San Francisco start-up that offers retail loyalty programs with rewards linked to a customer’s credit card, started with Salesforce. The service had many useful features, said Zach Goldstein, founder and chief executive of the nine-employee company, but needed “a huge amount of customization.” Mr. Goldstein could not afford to hire a consultant and felt frustrated that the system was not being used properly.

In December, he switched to Close.io, a platform that lets Thanx sales representatives make calls by clicking on a page representing a lead, without leaving the application or having to use the phone. It also sends and receives e-mails. “We started using it the day after we installed it,” he said. Thanx tested Close.io free as an early test user and now has five employees on its Lite plan, which costs $59 a month for each user.

FOR MOST SMALL BUSINESSES Scott Gerber, founder of the Young Entrepreneur Council, an invitation-only professional organization for entrepreneurs under 40, has been using C.R.M. software from Infusionsoft for about a year. The organization offers a mentoring program, and Mr. Gerber uses the software to track those who are being mentored as they go through the program and to send them specific learning materials.

“It’s easy to customize content and create the right tracks for where that content needs to go,” said Mr. Gerber, who added that the software had increased his organization’s productivity. “If I have 50 people I e-mail today and want to follow up in a week, I can send a personalized communication by writing the copy once, adding in the variables, and it will be sent out at the exact time I need to the designee of my choice.”

“Within two quarters of using it, we had 10 times the revenue per month,” Mr. Gerber said.

Derek Christian, owner and chief executive of My Maid Service, with 37 employees in its Cincinnati and Dallas offices and about $2 million in revenue, also began using Infusionsoft a year ago. Mr. Christian paid $1,200 upfront along with a $200 a month licensing fee.

He praised the company’s tech support, and also liked the drag-and-drop interface and the ability to build a customized e-mail marketing campaign. Before employing C.R.M. software, he said, a third of his company’s leads were converted to regular customers; now, he said, conversions are up to 40 percent.

Shelly K. Winson, owner of True Choice Benefits, an independent health insurance agency in Chandler, Ariz., uses Sage ACT!, a C.R.M. system owned by Swiftpage. The software is loaded onto two computers in the office and Ms. Winson pays $300 per user. It has helped increase her database of current and potential clients to 5,500 since she started in 2009. She can segment her audience for marketing purposes, and she believes the system has improved her customer service.

NOT QUITE ENTERPRISE LEVEL Enterprise C.R.M. systems, like those from SAP or Oracle, can take years, millions of dollars and a parade of consultants to put in place, but they include powerful features. Yet some enterprise-level features are available in nonenterprise systems like Salesforce, Microsoft Dynamics and a few newer platforms.

Mike Wolfe, president of WAM Enterprises, a digital marketing firm in Katonah, N.Y., uses Salesforce. His five-employee firm specializes in generating leads using social media, search-engine optimization and e-mail campaigns. Although some small-business owners say Salesforce is too complex for them, Mr. Wolfe likes the basic edition, Contact Manager, and pays $300 a year ($5 a user each month).

He said he especially liked the mobile app. “With the app, if a client needs to reach us and we weren’t planning on it that day, there’s no reason for anyone on our team to say they didn’t have the information they needed to call back,” he said.

Benjamin L. Luftman, a partner and co-founder of Luftman, Heck & Associates, a law firm in Columbus, Ohio, that has 30 employees and four offices, likes the AppExchange, an online market where vendors sell a variety of business applications that can be integrated with Salesforce. Mr. Luftman uses Salesforce’s Enterprise edition, which costs $125 per user each month, with the Conga Composer app to create packets of forms needed by the courts for each client. “I hit one button and all the fields in these forms are populated with that client’s information,” he said.

Acumen Learning, a training company in Orem, Utah, with 18 employees and $5 million in revenue, uses Insightly because it is flexible, said the company’s marketing director, Mike Wright.

“Big business C.R.M. systems tend to dictate your processes — how you will prospect someone and get them in the system,” he said. With Insightly, Mr. Wright said he can design and modify the processes his company uses. “We wanted to add two additional steps to our sales process, and it was changed overnight,” he said. He uses Insightly’s Advanced package, which costs $49 a month.

At RemoteStylist, Ms. Fallis is now using Capsule and paying $12 a user. She said it integrated easily with other applications, and she could customize data fields and segment customers for marketing initiatives.

“And Capsule’s support team is very responsive,” Ms. Fallis said. “I can’t sit back and wait for an answer when my whole operation is on hold.” 

You're the Boss Blog: Business Owners Confront the Budget Impasse

Portraits of women entrepreneurs.

At the most recent meeting of the She Owns It business group, the conversation focused on the end of the payroll tax holiday, the impact of the federal budget impasse, and the challenges of implementing new technology.

Jessica Johnson, who owns Johnson Security Bureau, said many of her employees didn’t realize their paychecks would be 2 percent smaller when the payroll tax holiday ended in January 2013. As soon as they got their first checks of the year, the complaints began, she said.

“You’re taking my money!” they told her.

“No, we’re not taking your money, we’re withholding the proper payroll taxes according to the federal government,” she responded. “I would love to have a check for all that two percent that I’m withholding.”

“That’s funny, I haven’t had anyone say anything, and I know it affects people,” said Susan Parker, who owns Bari Jay.

Ms. Johnson is also thinking about the March 1 deadline for the federal government to agree on a budget, and how any decisions — or lack thereof — will affect her business. Cuts in government spending are a likely part of any plan, she said. “If the federal government doesn’t have the money,” she said, “then money won’t trickle down to the state level, which will mean that state and other municipal contracts that I have might be impacted.”

Beth Shaw, who owns YogaFit, asked what percentage of Ms. Johnson’s business these contracts represent.

“Less than 50 percent,” Ms. Johnson said.

“So, still significant,” Ms. Shaw said.

“Still significant,” Ms. Johnson agreed. But she added that her greater concern is the way in which cuts to various government programs, such as Section 8, the federally funded housing subsidy program, may affect her employees. “If somebody doesn’t get their Section 8 voucher, then will that mean I have homeless employees? And if you’re homeless, how can I expect you to go to work?” she asked.

“But there’s nothing you can really do about it,” Ms. Parker said. “First of all, you’re speculating as to what’s going to happen.”

“That’s true,” Ms. Johnson said.

“And second of all, even if that is ultimately what happens, what can you do to change it?” Ms. Parker asked.

“That’s a very valid point,” Ms. Johnson said.

“I feel like I’m throwing the towel in, but I don’t know what proactively you could do,” Ms. Parker said.

In the meantime, Ms. Parker is preoccupied with the new software her company has been trying to implement for more than a year. The customized Web-based software will run all of Bari Jay’s operations, including invoicing and order entry. Ms. Parker said she paid the software design firm $36,000 during the early stages of the project, and “tens of thousands on top of that for data conversion.” Additionally, beginning in November, when the software design firm began testing the system with Bari Jay’s live data — like the actual number of dresses it will produce — Ms. Parker has been paying a monthly fee of $2,000.

“It’s so frustrating I don’t even know where to begin,” she said. “I was supposed to be on this software a year and change ago.” The software design firm initially thought the job would take three months. Finally, they are close to “going live,” Ms. Parker said. She thinks that should happen within a month. But, she said, “I know once we’re live, a whole new slew of problems are going to come about.”

Deirdre Lord, who owns the Megawatt Hour, agreed there will be challenges.

“How do you implement something new or make a major change and have the course of business continue?” Ms. Parker asked. “It doesn’t have to be a new software system, it could be any major change.” Further complicating matters, the changeover will now have to take place during her busiest time of year.

“Can you run the two systems in parallel for a period of time?” Ms. Lord asked.

Ms. Parker said the systems were running in parallel now as the new one is tested , but once the new one goes live, the old one will shut down. The group also wondered what, exactly, has caused the delays.

Ms. Parker explained that when she began the process she spoke with multiple software companies — all of which assured her they handled work for garment companies. “But the bridesmaid business is so different from almost any other garment company out there,” she said. For example, her dresses are made to order — a dress may come in three different colors and the customer can choose whichever she wants.

“How many S.K.U.‘s” — or products for sale — “do you have?” asked Ms. Shaw.

“I couldn’t even tell you,” Ms. Parker said. A dress may have three different colors, and a customer might have 30 colors from which to choose, she said. “I mean what’s 30 times 30 times 30?” she asked. And that’s just one style out of hundreds.

Most garment industry software systems run on S.K.U. numbers, Ms. Parker explained. Because Bari Jay has so many, the programs tend to crash. The good news is that her new system hasn’t been crashing while on trial.

But that was just one challenge. Other issues arose from the high level of customization her business required. With the exception of bookkeeping, everything had to be tailored, including accounts payable and accounts receivable.

Ms. Lord said Ms. Parker should prioritize the issues her software company must address, and give it a time frame for each.

Ms. Parker said invoicing, production, and order entry were the most critical functions. If those work, Bari Jay can deal with other issues. At the moment, she said, order entry works, production works, and invoicing “mostly works.”

Again, Ms. Lord said, “You need to create some way of prioritizing problems around the business issues so they can be responsive.”

“I understand what you’re saying,” Ms. Parker said.

“You need almost a service-level agreement that commits them contractually to solving certain problems in a certain priority order,” Ms. Lord said.

“So, if it’s a production or an invoice thing, they have to do it immediately, whereas if it’s something else they can get to it whenever,” Ms. Parker said.

“And then there’s a penalty associated with missing those goals,” Ms. Lord said.

“I actually really like that idea,” Ms. Parker said.

While Ms. Parker can’t rewrite the agreement at this stage, she knows the software company is eager to get her new system up and running. Doing so will enable it to pursue other clients in the bridal industry. “I could say, ‘You want to go live? Well this is what I need from you,’ and I think I might get them to agree to it,” she said.

You can follow Adriana Gardella on Twitter.

You're the Boss Blog: Business Owners Confront the Budget Impasse

Portraits of women entrepreneurs.

At the most recent meeting of the She Owns It business group, the conversation focused on the end of the payroll tax holiday, the impact of the federal budget impasse, and the challenges of implementing new technology.

Jessica Johnson, who owns Johnson Security Bureau, said many of her employees didn’t realize their paychecks would be 2 percent smaller when the payroll tax holiday ended in January 2013. As soon as they got their first checks of the year, the complaints began, she said.

“You’re taking my money!” they told her.

“No, we’re not taking your money, we’re withholding the proper payroll taxes according to the federal government,” she responded. “I would love to have a check for all that two percent that I’m withholding.”

“That’s funny, I haven’t had anyone say anything, and I know it affects people,” said Susan Parker, who owns Bari Jay.

Ms. Johnson is also thinking about the March 1 deadline for the federal government to agree on a budget, and how any decisions — or lack thereof — will affect her business. Cuts in government spending are a likely part of any plan, she said. “If the federal government doesn’t have the money,” she said, “then money won’t trickle down to the state level, which will mean that state and other municipal contracts that I have might be impacted.”

Beth Shaw, who owns YogaFit, asked what percentage of Ms. Johnson’s business these contracts represent.

“Less than 50 percent,” Ms. Johnson said.

“So, still significant,” Ms. Shaw said.

“Still significant,” Ms. Johnson agreed. But she added that her greater concern is the way in which cuts to various government programs, such as Section 8, the federally funded housing subsidy program, may affect her employees. “If somebody doesn’t get their Section 8 voucher, then will that mean I have homeless employees? And if you’re homeless, how can I expect you to go to work?” she asked.

“But there’s nothing you can really do about it,” Ms. Parker said. “First of all, you’re speculating as to what’s going to happen.”

“That’s true,” Ms. Johnson said.

“And second of all, even if that is ultimately what happens, what can you do to change it?” Ms. Parker asked.

“That’s a very valid point,” Ms. Johnson said.

“I feel like I’m throwing the towel in, but I don’t know what proactively you could do,” Ms. Parker said.

In the meantime, Ms. Parker is preoccupied with the new software her company has been trying to implement for more than a year. The customized Web-based software will run all of Bari Jay’s operations, including invoicing and order entry. Ms. Parker said she paid the software design firm $36,000 during the early stages of the project, and “tens of thousands on top of that for data conversion.” Additionally, beginning in November, when the software design firm began testing the system with Bari Jay’s live data — like the actual number of dresses it will produce — Ms. Parker has been paying a monthly fee of $2,000.

“It’s so frustrating I don’t even know where to begin,” she said. “I was supposed to be on this software a year and change ago.” The software design firm initially thought the job would take three months. Finally, they are close to “going live,” Ms. Parker said. She thinks that should happen within a month. But, she said, “I know once we’re live, a whole new slew of problems are going to come about.”

Deirdre Lord, who owns the Megawatt Hour, agreed there will be challenges.

“How do you implement something new or make a major change and have the course of business continue?” Ms. Parker asked. “It doesn’t have to be a new software system, it could be any major change.” Further complicating matters, the changeover will now have to take place during her busiest time of year.

“Can you run the two systems in parallel for a period of time?” Ms. Lord asked.

Ms. Parker said the systems were running in parallel now as the new one is tested , but once the new one goes live, the old one will shut down. The group also wondered what, exactly, has caused the delays.

Ms. Parker explained that when she began the process she spoke with multiple software companies — all of which assured her they handled work for garment companies. “But the bridesmaid business is so different from almost any other garment company out there,” she said. For example, her dresses are made to order — a dress may come in three different colors and the customer can choose whichever she wants.

“How many S.K.U.‘s” — or products for sale — “do you have?” asked Ms. Shaw.

“I couldn’t even tell you,” Ms. Parker said. A dress may have three different colors, and a customer might have 30 colors from which to choose, she said. “I mean what’s 30 times 30 times 30?” she asked. And that’s just one style out of hundreds.

Most garment industry software systems run on S.K.U. numbers, Ms. Parker explained. Because Bari Jay has so many, the programs tend to crash. The good news is that her new system hasn’t been crashing while on trial.

But that was just one challenge. Other issues arose from the high level of customization her business required. With the exception of bookkeeping, everything had to be tailored, including accounts payable and accounts receivable.

Ms. Lord said Ms. Parker should prioritize the issues her software company must address, and give it a time frame for each.

Ms. Parker said invoicing, production, and order entry were the most critical functions. If those work, Bari Jay can deal with other issues. At the moment, she said, order entry works, production works, and invoicing “mostly works.”

Again, Ms. Lord said, “You need to create some way of prioritizing problems around the business issues so they can be responsive.”

“I understand what you’re saying,” Ms. Parker said.

“You need almost a service-level agreement that commits them contractually to solving certain problems in a certain priority order,” Ms. Lord said.

“So, if it’s a production or an invoice thing, they have to do it immediately, whereas if it’s something else they can get to it whenever,” Ms. Parker said.

“And then there’s a penalty associated with missing those goals,” Ms. Lord said.

“I actually really like that idea,” Ms. Parker said.

While Ms. Parker can’t rewrite the agreement at this stage, she knows the software company is eager to get her new system up and running. Doing so will enable it to pursue other clients in the bridal industry. “I could say, ‘You want to go live? Well this is what I need from you,’ and I think I might get them to agree to it,” she said.

You can follow Adriana Gardella on Twitter.

Small-Business Guide: Tips for Small-Business Owners to Avoid Employee Lawsuits

Monica Almeida/The New York TimesJeffrey Herold, who owns West Coast Trends in Huntington Beach, Calif., persuaded a former employee to apologize for suing.

Many small-business owners respond to employee lawsuits with grudging acceptance that, regardless of whether the company broke any laws, the sooner it pays a plaintiff to go away, the better. As repugnant as this may sound, it is a cost of doing business. That, at least, is one approach.

Do you settle and move on? Or do you fight?

Liability insurance isn’t cheap, but neither is defending a lawsuit.

If you buy insurance, be sure to retain the right to hire a lawyer of your choice.

And make sure the insurance company cannot settle without your consent.

This article from Score details practices that are likely to bring lawsuits.

This article from USA Today explains why many employees sue for overtime pay.

And here’s an article from Bright Hub that explains why employees are suing more frequently.

Jeffrey Herold, who owns West Coast Trends in Huntington Beach, Calif., does not subscribe to this belief. His company, which makes golf bags, luggage and related accessories, and averages $10 million to $15 million in annual sales, has faced three employee lawsuits alleging wrongful termination since Mr. Herold founded it in 1990. Confidentiality agreements preclude him from discussing the first two.

When the third suit was filed in 2010, he said, he was wiser. He vowed to fight all the way to trial, if necessary. “It didn’t make good business sense to settle,” he said. “We did nothing wrong.”

The litigation followed a period in 2008 when West Coast, like many small businesses, was forced to downsize as the recession deepened. Mr. Herold said annual sales had dipped 35 to 40 percent. To keep the company afloat, he laid off 14 people, about 30 percent of his staff, including one of two national sales managers, John Keller.

In court documents, West Coast stated that Mr. Keller’s performance had declined before his termination. As a result, Mr. Herold said, he reduced Mr. Keller’s sales commission by 25 percent the month before his termination. Before that, Mr. Herold said, Mr. Keller was warned about his productivity and Internet use.

Two years after his termination, and following unsuccessful attempts to obtain a settlement from Mr. Herold, Mr. Keller filed a lawsuit against West Coast and three of its employees.

Mr. Keller’s complaint included an allegation that, in terminating him, West Coast had breached an “implied” employment contract providing that he could be terminated only for “good cause.” But most of his case rested on “a mere convenient coincidence,” West Coast said in court papers.

Days before his scheduled termination, West Coast said, Mr. Keller had placed a call, an apparent “pocket dial,” from his cellphone to West Coast’s other sales manager, Josh Miller. In his complaint, Mr. Keller asserted that Mr. Miller had initiated the call and that it had been connected accidentally by Mr. Keller’s phone. In either case, once the line was open, Mr. Miller heard Mr. Keller in mid-tirade against West Coast and its employees. As Mr. Keller went on, Mr. Miller pulled West Coast’s chief operating officer into the room. He, in turn, had an assistant join them to take notes.

In his complaint, Mr. Keller claimed that his overheard comments, not his performance or the economy, had led to his termination. He asserted that West Coast and its employees had invaded his privacy by eavesdropping on his conversation and used what they heard improperly. He sought damages of more than $1.2 million, including compensation for lost earnings and statutory violations regarding the eavesdropping counts, as well as an unspecified amount in punitive damages.

After depositions revealed the nature of Mr. Keller’s eavesdropping claims, which Mr. Herold called “comical,” Mr. Herold remained determined not to settle. Having employment practices liability insurance that covered his legal expenses strengthened his resolve.

The case went to trial in early 2012 and got as far as jury selection. Eventually, however, Mr. Keller indicated a willingness to accept a statutory settlement offer of $25,000 that West Coast had extended before the trial, even though the settlement’s 30-day expiration date had passed. After Mr. Herold responded that the offer had indeed expired, Mr. Keller began to drop his settlement demands incrementally until they reached $10,000. At that point, the judge urged the parties to settle, for efficiency’s sake.