CRM Solutions--How Do I Evaluate This Stuff?
Fundamentals of picking the CRM solution that's right for you.
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A few months back, I wrote columns dealing with the issues of budgeting for and cost-justifying CRM systems. When I spoke recently at a strategic planning session that 3M Telecom hosted for their key customers, an executive from one of the firms attending commented that while he found those two articles helpful, he felt I had put the cart before the horse. He pointed out that before a company needs help understanding how to budget for this stuff, or how to cost-justify this stuff, they first need help getting past how to evaluate this stuff.

He made a valid point, as many of the companies we talk to are still struggling with how to evaluate CRM solutions. Over the years I have dealt with this topic at a high level, so this month let me shed some light on the specific criteria we are seeing other firms use to pick the right products and business partners to support their CRM initiative.


The first evaluation criterion you should consider is how specifically does the system you are considering help you solve your company's most pressing marketing, sales or service challenges? A CRM system can have 1,000 features, but if none of them deal with the issues you are trying to solve, then the quantity of bells and whistles means nothing.

Talk to the CRM vendors you are evaluating, share with them the problems you are experiencing with your current customer relationship process, and ask them to demonstrate how their product solves those problems. Do not issue an RFP (request for proposal) but rather an RFS (request for solution).

If they cannot tell you in detail how their system addresses your business challenges, then find someone who does.

Also, don't just assume you have to settle for general-purpose solutions. I have been amazed at the number of vertically oriented CRM solutions that have come to market. Selltis is just focusing on the industrial equipment marketplace, MobilePoint is targeting property and casualty insurance firms, AIT is concentrating on financial services sales forces and ABS is developing systems for the consumer package goods market, for example. So in addition to taking a look at the better-known players, do a little homework and see if there are companies focusing specifically on your marketplace. You may find their functionality a better fit for your needs.


The next thing to consider is how easy will it be to make changes to the system as your business changes. Will the system handle your future growth and scale as you add additional users? You may start your CRM efforts focusing on just one part of your company: call center, marketing, field sales, channel sales or customer support, for example. How easy will it be for you to integrate in other departments over time so you end up with an enterprise-wide system? A single CRM application does not have to do everything by itself, but your vendors should be required to show you how they will integrate with the other products you may want to add over time.

Also, how easy will it be for you to make modifications to your CRM applications? Based on past experience I can promise you that your system will probably look dramatically different in a year or two from where it is today. If you bring in a new vice president of sales, they will want the system to be changed to reflect the strategies and tactics they have put in place. If you make a decision to leverage channels more in your sales efforts, you will also need to make modifications to your CRM system to support that shift in strategy. A new vice president of marketing may want to implement a whole new approach to leveraging the Web to work with customers. Make sure your system can be easily changed to accommodate these types of requirements.


If your vendor passes the functionality and flexibility tests, the next thing you want to consider is what types of support services they offer to help make you successful going forward. Do they have a professional services group that can help provide the expertise you need to get the system up and running? If not, do they have well-established alliances with system integrators or consulting firms who can provide that support? If they are relying on alliances, then check them out. Are they true business partnerships or just press releases?

Next, consider what type of help is available to train your people on the use of the new systems. Does your vendor offer classroom training or computer-based-training courses? Are their user guides easy to understand? Your vendors should be willing to help you get your users productive quickly if they are true business partners. Also, when you do have a problem with the system, who do you call and exactly what are the steps the vendor goes through to help solve the problem?

Company Focus

Another issue you may want to consider is what the makeup of the vendor's current customer base is. If you are a retail firm and the vast majority of the vendor's installed accounts are information technology manufactures, this might raise a yellow flag.

Like all companies, CRM developers do not have unlimited R&D budgets. While they would like to meet all the needs of all of their customers, the realities are that some groups of clients may end up with a greater say in how those R&D dollars are invested and what new features and functions are produced. Make sure your company fits with the strategic direction your vendor is going and that you can enlist the support of other "friends" in the install base to support your future product enhancement requirements.


A final decision criterion I always ask companies to consider is reference checking. The insights you can get from talking to another user firm who is 9 to 12 months ahead of you is invaluable. How easy has it been for them to modify the software? How well has the vendor supported them during this timeframe, and what glitches did they encounter during their implementation and rollout (and how did they handle them)?

CRM is an imperfect science. Since no two companies market, sell and service exactly the same, it is impossible for a CRM vendor to develop the perfect product for everyone. Regardless of which vendor you select, you will run into surprises along the way when implementing their products. In order to minimize those events, get the advice from people who have already been there with the specific products you are installing. And don't just call one or two references but rather call as many as you can get hold of. The free consulting these people can provide you will save you time, resources and money that well justify the effort to contact them.


The one issue not to consider is price. This is a very unusual marketplace.

I have seen companies achieve great successes and spectacular failures implementing both very cheap and very expensive solutions. The key is to find the system that is right for you and determine what your ROI (return on investment) will be when you successfully implement the system that solves your most pressing business challenges. If the ROI is significantly higher than the cost, buy it.

Do not be swayed by discounts. We have seen customers offered deals to buy CRM systems at price cuts as deep as 28 percent of list--not off list, of list. Experience has shown that not the price of the systems but rather the cost of ultimate ownership is the issue. If you buy a system based on price, and not based on how well it solves your problems, you are taking a huge risk. The cost of failure will far exceed any discount any CRM vendor can offer you.

The 401K Test

The last piece of advice I want to leave you with is this: Regardless of who you pick in today's marketplace, your final choice is going to boil down to an issue of trust--do you believe you are picking the right partner to deliver on the promises they have made? To answer that question, think of the vendor in this light. Would you invest your 401K retirement account in this firm? In essence, since the future success of your company may be tied to the decision of which CRM business partner you pick, that is exactly the type of investment you are making.

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