Signing the Contract for Hosted CRM

So, you've decided to make the move to a hosted CRM solution. If you're like most companies, you've spent the bulk of your evaluation on features and benefits, and rightly so. But as important as those are, I strongly suggest you carefully review the agreement you'll need to sign, and look for a few missing elements that can greatly impact your ability to access your own company data, secure reimbursement in the event of a service interruption, and ensure adequate data back-up. To assist in getting the best service after the sale, here are four critical questions you should ask your prospective hosted providers about before signing a long-term contract. 1) Does the provider offer month-to-month options? Many hosted CRM providers entice customers with a "free trial" and then look to move them as quickly as possible to a long-term contract. With a company now locked into a long-term agreement, many requiring full payment to be made up-front, what motivation does the vendor have to take care of you compared to closing the next deal? What you should look for: CRM vendors that are willing to earn your business every month have the ultimate incentive to offer outstanding service at a reasonable price. Long-term contracts still may be a great idea because of the mutual commitment they show and the discounts a customer may receive, but this should be your
choice. 2) Does the vendor explicitly offer service-level standards in writing for all customers? When you choose a hosted option, you are also choosing to hand over your most valuable asset- your customer data. But the service-level standards offered by each vendor vary dramatically, and some of the largest vendors don't offer any Service Level Standards at all. They're asking you to trust them with your data, so you deserve to see their responsibilities to you- in writing. Most hosted providers protect themselves from legal liability and indemnity from damage claims resulting from interruptions - that's fair. No one can control a blackout or a natural disaster. What you should look for: Hosted CRM companies with written service-level standard that covers all customers-at no extra charge. A service-level standard with a guarantee of a minimum of 99.5 percent "uptime" and refunds, rebates, or other financial consideration if that standard is not met. 3) What is your standard, free level of customer support? Just about every industry-except software, that is-provides customer support at no extra charge. Hosted solutions tend to follow the software route, offering a minimal level of "free" support, but then promote pricey service or support packages after you sign a contract to "ensure you get the level of support you require." In some cases, these extras jack your bill up by nearly 50 percent. What you should look for: A provider that services all your users, all the time, because it values the relationship-not because you pay it to take your calls. If a provider offers service "packages" like standard (usually the free one), silver, and gold, that's a sure sign it is looking to make money off of servicing you at some point in your relationship with it. 4) Can I Have A Full Export Of My Data Whenever I Need It? What would happen if you decided to switch banks, and you went to withdraw your money and the teller said "Sorry, I can't get the money in your account to you for a few weeks, and it will have to be all in pennies." You'd blow a gasket-and rightfully so. Believe it or not, hundreds of companies have similar experiences trying to export data from the servers of hosted providers. Some may hold onto data until all billing issues are settled. But in many cases, it's standard procedure to take a few weeks to extract and export data (for the convenience of the provider, naturally), and sometimes the format it's returned in is difficult to port into any other solution. What you should look for: It's best to get this out in the open before you sign a contract. If a provider won't guarantee immediate and full export of data on demand for next to nothing, you've got the wrong provider. Also, make sure you know what format you will get your data back in. Do your homework - after all, it's more than just your data-it's your business at risk. Ask tough questions There are many benefits of going the hosted route for CRM. But before you choose, ask the tough questions about what happens after the sale. It's the best way to make sure the vendor doesn't let you down at the most inopportune time-or stick you with an unforeseen support bill down the road. About the Author Natalee Roan Natalee Roan is Chief Marketing Officer at Entellium. She has multidiscipline experience in marketing, sales and distribution, finance, and operations in various positions at the strategic and tactical levels in companies that have gone from prerevenue to multibillion-dollar companies. A wireless industry veteran, Natalee was instrumental in creating the launch programs for Sprint PCS, Nextel Communications and GTE Wireless. She holds a BA in business administration from Baruch College of the City University of New York, and an MS industrial psychology from the University of California at Berkeley. She can be reached at 206-245-2345 and Please visit
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