• June 7, 2001
  • By Jim Dickie, research fellow, Sales Mastery

Evaluating CRM Solutions: What to Consider

Recently, I wrote columns dealing with the issues of budgeting for and cost-justifying CRM systems (see sidebar). When I spoke at a strategic planning session that 3M Telecom hosted for its 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. Before a company needs help understanding how to cost-justify or budget for CRM, they first need help getting past how to evaluate this stuff.

He made a valid point. Many companies are still struggling with how to evaluate CRM solutions. Since I have dealt with this topic at a high level, let me shed some light on the criteria other firms are using to pick the right products and business partners to support their CRM initiative.


First, 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 offer hundreds of intricate features, but if none of them deal with your own issues, then the extra bells and whistles are useless.

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

Also, don't 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 targets property and casualty insurance firms, and AIT concentrates on financial services sales forces, while ABS is developing systems for the consumer package goods market. 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.


Next, consider 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? And if you start your CRM efforts focusing on just one department--your call center, sales and marketing, or customer support department, for instance--can you easily integrate in other departments over time so you end up with an enterprise-wide system? Your vendors should be required to show you how they will integrate with the other products you may want to add over time.

Also, can you easily make modifications to your CRM applications? Your system will probably look dramatically different in a year or two from where it is today. A new vice president of sales will want to change the system to reflect the strategies and tactics she has put in place. If you decide to leverage channels more in your sales efforts, you will need to modify your CRM system to support that shift in strategy. 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 should 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 make sure they are true business partnerships, not just press releases.

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, whom do you call and exactly what will the vendor do to help solve the problem?

Company Focus

What is the makeup of the vendor's current customer base? 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.

Also, CRM developers do not have unlimited R&D budgets. 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. Does your company fit the profile your vendor's strategic direction? Can you can enlist the support of other "friends" in the install base to support your future product enhancement requirements?


As a final decision criterion, companies should check references. The insights you can get from talking to another user firm who is 9 to 12 months ahead of you are 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. It is impossible for a CRM vendor to develop the perfect product for everyone. With any vendor you will run into surprises when implementing their products. 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.

Companies have achieved great successes and spectacular failures implementing both very cheap and very expensive solutions. Find the system that is right for you and determine what your 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 the cost of ultimate ownership, not the price of the systems, is the issue. If you buy a system based on price alone, you are taking a huge risk. The cost of failure will far exceed any discount any CRM vendor can offer you.

The 401(k) 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 401(k) retirement account in this firm? 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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