How to Choose a CRM

“Choosing the wrong CRM is worse than doing nothing”

There are more approaches to CRM than we can shake a stick at, and more people writing blogs about it than we can ever read.

There are more claims about success than can make sense, given the number of horror stories of project failure.

But, if we’re going to move our business on, increasing sales at lower cost and enhancing customer service without breaking the business, we need to have something and that “something” is being described as a CRM.

How on earth are busy people supposed to choose the right one, and then make it work?

Here are some thoughts that might help clear the muddy water.

Philosophy>Strategy>Solution

* Customer Relationship Management is a philosophy which suggests we organize our business around our customer needs. Payback comes from easier to win business, at better margins, with less competition and lower cost of sale.

* CRM strategies vary from Stickie notes, through Whiteboards, Spreadsheets, Email systems, Desk Top packages etc. all the way to multi million $ implementations of Sieble and SAP. In the middle somewhere is a whole raft of new(ish) SaaS packages released over the last seven years, led by the ubiquitous salesforce.com and closely followed by Sugar CRM, Netsuite etc.

* CRM software solutions all promise to deliver the payback, and certainly can, provided they enable the sales and customer service processes - not get in the way. (Unfortunately that’s easier said than done, because every businesses need is different.)

* CRM software solutions that get in the way invariably fail.

* Choosing the wrong CRM solution is worse than not choosing one at all.

Choosing a solution

Making the right choice from all the solutions available can be difficult. What’s good for one business can be disaster for another.

Those available range from something not much better than a spreadsheet to full blown enterprise applications costing $millions.

Some are little more than address books and others are built to collect and aggregate data for detailed market analysis and product line management.

Some are Sales Force Automation. Others are Outbound Marketing. Still more are integral functions within Operations Management.

Some are focused on Workflow. Some are focused on Pipeline Management. Others are truly focused on Relationship Management - organizing the business operations to fit customer requirements.

Forget the TCO. The first, and biggest, issue is finding the closest fit to your business model, in terms of:

1. Size and scope
2. Technology
3. Processes
4. Features versus Flexibility

Size of Business

* If we’re a solopreneur with one client we’ll probably get by comfortably with Stickie notes and a calendar.

* If wer’e a telco with millions of accounts we’re going to need SAP, or something similar.

* If we’re a solopreneur with 25 clients and 100 prospects we might get by with a combination of Email and spreadsheets, but probably need something more.

* If we’re an outsourcing business with one client, but 10 account managers and 1,000 contacts we’re probably going to need Sieble, or perhaps salesforce.

* If we’re a five to fifty person business with 1000 accounts we’re likely in the range of Microsoft CRM, or Sage ACT, or Netsuite, or one of the many smaller SaaS suites.

The size of our business has a direct impact on the type of CRM we need.

In larger businesses, systems are all about control and reporting up the line. For this stuff to be any use we need some rigid rules about who does what, and which information we keep.

Smaller businesses need something different. They don’t have different departments - everybody does a bit of everything. They need flexibility.

(Perhaps the best example might be SIC codes. Big businesses will want to measure performance of marketing and sales by industry codes, and force users to enter these in their records. To smaller businesses industry codes will be irrelevant. Forcing the user to enter irrelevant data is the fastest route to failed implementation.)

CRM built for big businesses won’t work for smaller businesses, and vice versa. Beware - there’s plenty of desk top software claiming to be built for small businesses, but that’s just technology and price. What it actually does is likely to be closer to the big business model.

Attitude to Technology

Do you think “desk top” or “cloud computing”? Both have their advantages but the single biggest difference is complexity, and complexity means cost. A resident IT team will probably favor a desk top solution with synchronization using something like Sharepoint.

Anybody without a resident IT team should avoid this option like the plague and go for cloud computing. It’s more reliable, and a lot cheaper.

The SaaS model for delivering software can be achieved at a fraction of the costs involved in local software. Development, delivery and maintenance are all orders of magnitude cheaper, and the cost is dropping every day.

Business Activity

1) Workflow focus - Some businesses don’t need relationships. They have vast numbers of potential customers, probably high order volumes and low margins. They’ll typically be product businesses who sell the same thing every time, in the same way. A good example might be a distributor of industrial consumables. For these guys whether the contact is a member of a certain club is irrelevant. Calling her at the right time, and at the lowest cost, is critical. This type of business doesn’t need relationship management. It needs workflow, incorporating contact details and delivering real time reporting.

2) Pipeline Management focus - Other businesses need relationships and pipeline management. Typically these will have multiple sales teams. The relationship dimension helps the sales guys know who to talk to, about what. The pipeline management helps sales managers and directors forecast and deliver revenue. These companies will be larger product businesses with high sales value and margins.

3) Relationships focus - Still more businesses will be “service” businesses. Whilst they need some capability to manage marketing and sales, their primary need is managing the relationship with clients. Having the right information, in the right place, at the right time, so they can offer an individual service to each client is critical. A single view of what the customer wants and how it’ll be delivered is essential.

These companies will include consultants, agents, realtors, designers etc. The critical features are an “end to end” view of the “first call to invoice” process, sharing and collaboration, and minimal administration overhead. They need something to organize, plan, schedule and review. It’s relationship plus flexible workflow plus collaboration, minus administration.

Features versus Flexibility

Some businesses select software because it will make decisions for them, dictating strategy and processes. If they want state of the art workflow, or pipeline management and a set of rules to make everybody work the same way they can choose the one that best fits that objective, and change their business to suit the software.

Other businesses know how they want to work. (After all, their business processes are a competitive advantage). They need to choose something flexible, which will allow them to work “their way” and change when circumstances dictate. They need software that can “bend”.

The first group should concentrate on the established offers - Sieble, salesforce, Netsuite etc.

The second group needs to look a little harder. They need to find something as flexible as the Stickie note, Whiteboard and Spreadsheet but without the problems. (We built Front Office Box for this group.)

Summary

CRM is a very big subject. Later we’ll try to get into the more complex aspects, but for the moment we suggest the following considerations:

1. Does your size of business need a solution, and if so which type? Big company, small company - control and reporting or information and collaboration?
2. Does your attitude to technology dictate local software or cloud computing?
3. Does your business model need Workflow, Pipeline Management or Relationship Management?
4. Does your attitude to software dictate rules to work with, or flexibility?

If this brief discussion generates more questions than answers we make no apology.

At least they’re the right questions.