SCOTTSDALE, AZ -- (MARKET WIRE) -- October 17, 2006 -- Small and mid-sized businesses (SMBs) have
significant opportunities to use CRM to obtain the best value from their
business at an exit, succession or transition according to a new Sage
Software Business Minds survey conducted by Vanson Bourne, an independent
research company, on behalf of Sage Software. With a large number of SMBs
looking to exit in the next few years, Sage warns these businesses need to
find ways to compete more effectively and to differentiate themselves in a
buyer's market.
Having customer data in a single CRM system is a tangible asset according
to 70 percent of respondents with such exit strategies. However, only 35
percent use a CRM solution to help advise on their business strategy. This
problem is further accentuated by poor planning with 65 percent of SMBs not
having or unsure about their exit strategy. The findings by Sage were part
of a global study exploring the relationship between the use of customer
data, business strategies and performance.
Sage believes that many SMBs are not putting customer data to its best use
as a tangible asset when seeking an exit. Having a central record of all
customer relationships is a tangible business and financial asset for
companies seeking an exit, whether that is a trade sale, succession,
venture capitalist or public offering. According to Sage, having a CRM
system provides a strong negotiation tool in which to maximize the value
from the business because it provides any future owner or manager insights
into the customer base and opportunities to hit the ground running, but
also minimizes disruption to customer service. Supporting this position was
the finding that 48 percent of respondents said that CRM would reduce the
risk of losing customers at an exit and would improve the continuity of the
business during such a transition.
Dave Batt, senior vice president and general manager of Global CRM for Sage
Software, said: "We believe SMBs have an opportunity to make the goodwill
locked away in customer data a very tangible and accessible business asset.
In particular, when considering any form of exit strategy customer data can
provide insight into customer buying trends for buyers or investors. The
ability to present customer data in a meaningful way not only helps
negotiations, but provides future leaders of the business with visibility
into the customer base. This ensures relationships are maintained and risks
are reduced when exiting the business. In active markets like today, where
businesses are consolidating to gain competitive strength, we urge SMBs to
develop their exit strategy and ensure that CRM plays a central role in the
planning process and as a negotiation tool."
A CRM system is often seen as a tool to improve marketing, customer
service, segmentation and productivity/efficiency, but is often forgotten
at the point of exit. Many SMBs have failed to plan their exit, which puts
customer service and future opportunities at risk. Only 35 percent of
respondents to the Sage survey have taken steps to plan their ultimate exit
even though 64 percent want to exit within one to ten years. Sage is
concerned that 47 percent of respondents said that they would like to find
more time for business planning and that a further 21 percent were too busy
to plan the business.
Planning the exit at the outset of the business will help organizations
shape and mold the business to that objective. Furthermore, using customer
data will further help to make decisions that will help fulfill the exit
strategy, according to Sage. Today, the market is one of consolidation and
heavy M&A activity, while IPOs have slowed down. According to the survey,
selling to a third party (34%) was seen as the most popular exit strategy
globally with Australia (53%), USA (42%) and UK (39%) making it their clear
choice. In France, it was split evenly (29% each) for family succession,
business partner takeover and dissolving the business, while businesses in
Germany (34%) planned for a family succession. In today's consolidation and
M&A market, it is not surprising that trade sales are high on the exit
agenda but they should not be automatic choices.
Customer relationship management industry analyst, Denis Pombriant of
Beagle Research Group, said: "It is no secret that customer data is crucial
for SMBs that want to maximize their value at exit. A CRM system is a
natural customer information repository and the best way of accessing and
managing customer data. CRM is an important asset when seeking an exit."
"The Sage survey yielded further interesting results," continued Pombriant.
"For example, the majority of SMBs recognize that CRM is a tangible
business asset but few are using it as one. Customers are an important
asset that many SMBs overlook when valuing a company. If organizations
believe that customers are at the heart of business -- which most
undoubtedly will -- then they should consider how to best manage customer
data right through the business lifecycle to an exit."
The Sage research surveyed 800 SMBs of all revenue sizes and industries
across six countries, ranging from zero to 1000 employees, by Web and
telephone during July 2006. The UK and USA provided 200 respondents each,
while Australia, France, Germany and Ireland each had 100 respondents.
ACT! by Sage, Sage CRM, SageCRM.com and Sage CRM SalesLogix comprise Sage
CRM Solutions, the only family of CRM products designed specifically for
the needs of small and mid-sized businesses. For more details, visit
www.sagecrmsolutions.com
About Sage Software
Sage Software supports the needs, challenges, and dreams of more than 2.6
million small and mid-sized business customers in North America through
easy-to-use, scalable and customizable software and services. Our products
support accounting, operations, customer relationship management, human
resources, time tracking, merchant services and the specialized needs of
the construction, distribution, healthcare, manufacturing, nonprofit and
real estate industries. Sage Software is a subsidiary of The Sage Group
plc, a leading international supplier of accounting and business management
software solutions and related products and services for small and midsized
businesses. Formed in 1981, Sage was floated on the London Stock Exchange
in 1989 and the Group now has 5.0 million customers and employs over 10,500
people worldwide. For more information, please visit the Web site at
www.sagesoftware.com/moreinfo or call (866) 308-2378.
© 2006 Sage Software, Inc. All rights reserved. The Sage Software logo
and the Sage Software product and service names mentioned herein are
registered trademarks or trademarks of Sage Software or its affiliated
entities. All other brands are trademarks of their respective companies.
Contact Information: Contact:
Ryan Zuk
Sage Software
480-368-3818
ryan.zuk@sage.com
Shana Keith
Porter Novelli
404-995-4557
shana.keith@porternovelli.com