Siebel Woos Small And Midsize BusinessesSiebel Woos Small And Midsize Businesses

At its annual user conference in October, Siebel Systems Inc. promised it would work more closely with customers to ensure that they have success with the company's customer-relationship-management software. On Tuesday, the vendor started to put its money where its mouth is--at least when in comes to small- and medium-sized-business customers.

Siebel unveiled an expanded strategy for attacking the SMB market, including integrating its direct-sales force and channel partners, developing a more thorough partner program, offering a dedicated SMB version of its on-premises CRM application to go along with its hosted offering, and launching an SMB customer advisory board.

CEO Mike Lawrie said during a press event Tuesday that he expects customers to invest more over the next several years in front-end systems that deliver information to employees than they have traditionally invested in back-end systems such as financials, supply-chain management, and human resources. Modernized back-end systems are now in place, tightly integrated, and enabling static business processes, he said, but "the front end is an entirely different world." Front-end business processes are more dynamic, and "to a large extent, they're nonintegrated," he said. The result, he said, is a huge opportunity for Siebel to make its software the data-integration point, giving employees the information they need to create better customer experiences.

Siebel anticipates these needs at companies of all sizes and estimates that the SMB market's cumulative spending on CRM software will grow to nearly $3.5 billion by 2008 from just under $2 billion in 2004. But taking advantage of that growing market involves significant challenges, such as contending with the sheer number of SMBs and their desire to work with local vendors. That's why Siebel intends to rely heavily on its channel partners to make its SMB strategy work, and it's taking steps to prevent potential channel conflicts. It's assigning SMB territory managers who will manage both the direct-sales teams within their boundaries and relationships with partners and resellers, and it's setting up a partner system in which the fruits of every sale are shared across the program.

It's also pushing the SMB version of its CRM software, which it says addresses the unique business needs of companies with fewer than 100 employees. "You can't just take enterprise products and water them down for this market," said Bruce Cleveland, senior VP and general manager of Siebel's OnDemand and SMB business units.

Siebel also plans to give SMBs a more active role in future product development and strategic direction. An SMB customer advisory board will meet quarterly, providing customers with previews of product updates, workshops, and a direct feedback loop.

Colorado's WestStar Bank recently deployed the SMB version of Siebel's on-premises software and already is seeing an increase in visibility into its sales pipeline, improved sales methodology, and more-efficient deal tracking, all of which is translating to an improved customer experience, says VP Rob Verratti, a customer reference provided by Siebel. "If we can't differentiate based on how we handle our customers, then we'll be forced to come up with a different product."