1.Consider Software as a Service

By Elizabeth Bennett  |  Posted 2006-12-15 Print this article Print

Midsize companies are replacing sticky notes and spreadsheets with software to analyze customer data. Here are five technology strategies for attracting and retaining customers.

1. Consider Software as a Service

Four years ago, Harris Interactive, a $216 million Rochester, N.Y., market research company, decided to replace a customer tracking system that it was supporting on its own servers, according to Dan Chiazza, director of global sales operations. The Siebel software could only be used from behind the company's firewall, Chiazza says, which meant that salespeople in the field or those working from home had to install software on their PCs and log on to the network.

But as Harris's sales force grew and became increasingly global, Chiazza says the installed software model became inconvenient and too costly to maintain.

Harris replaced the Siebel system with Salesforce.com's customer relationship management software, a browser-based application that Salesforce.com hosts on its servers and is priced according to the number of users. Chiazza says the company saves about $250,000 a year in maintenance and administrative costs with the Salesforce.com software. And now, the global sales team can log on to the system via the Internet with a password from anywhere at any time.

Before, analyzing marketing campaigns in the Siebel system meant uploading response data into spreadsheets and analyzing it there. With the Salesforce.com software, tracking the return on marketing investments is easy, Chiazza says. For instance, a salesperson can quickly compute how many auto industry prospects sent an RSVP to an event invitation, and how many attended and signed up for the company's services. "We can see what the ratio was and what strategies we can use to attack different groups," Chiazza explains.

"There's a big trend toward software as a service, and the mid-market is adopting it most quickly," says Forrester analyst Liz Herbert. Packaged hosted software is low risk, she says, and a popular choice with smaller companies that have few I.T. resources to spare. The systems often include point-and-click "wizards" that require little training and can be used by non-technical employees.

Next page: Don't Rule Out Building Your Own

Senior Writer
Elizabeth has been writing and reporting at Baselinesince its inaugural issue. Most recently, Liz helped Fortune 500 companies with their online strategies as a customer experience analyst at Creative Good. Prior to that, she worked in the organization practice at McKinsey & Co. She holds a B.A. from Vassar College.

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