Are you ready to buy a new CRM system? Take our test to find out

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Think you’re ready to pull the trigger on a CRM implementation? Think again!

A new CRM system represents a significant investment of time and resources for enterprises, and failure can be very costly, so you can’t be too prepared.

Take part in our CRM checklist and see if you can tick off all the requirements advised by our panel of experts. Remember, if you can’t check all of these off, then you may not be as prepared as you think.

Do you know why you are in the market for a CRM solution?

“Organisations should consider: ‘Why do we think we need CRM? What are we doing right now that we could be doing better? And what are our customers telling us that we need to do?’,” says Jamie Anderson, senior vice president and chief marketing officer of SAP Hybris.

“It’s important for companies to think about what they're trying to solve. What's the big thing that's driving their challenge? These discussions usually anchor around a need for change, so practitioners need to ask themselves these types of big picture of questions.”

Larry Augustin, CEO of SugarCRM, adds: “There has to be a clear understanding of your goals and what you're trying to accomplish. So you should ask yourself ‘what are my goals?’; ‘what am I trying to get to in a quantifiable way - is it customer satisfaction and how do I measure that?’ Asking yourself how you’re going to measure the impact of this is very important. That will cause you to focus on the problem you're really trying to solve.

“So at the beginning, if you say ‘here’s my world today; here’s what I want my world to look like for the future; and how can I quantifiably measure that difference’ then that quantifiable metric will guide you. For instance, in customer satisfaction, is it Net Promoter Score, is it customer retention or is it length of sales cycle? That quantifiable metric will help guide the process.”

Have you thought about what’s wrong with your current CRM system?

“Let’s face it - all mid to enterprise level businesses most likely already have a CRM system in place. If they are looking for a new CRM solution, it means they are not happy with what they’ve got,” notes Michael Rooney, Senior Vice President and General Manager at bpm’online.

“However, before jumping directly into cold water, it’s good to remember that just switching to a new system without a focused plan to drive and sustain the new initiative might yield the same level of dis-satisfaction. Do your homework evaluating your previous experience. Decide what worked, what didn’t and what strategies will lead to the best results the second time around.”

Have you got buy-in from those holding the purse strings?

“It's essential to pin down the investments required for a CRM system deployment and the benefits that are expected,” says Rooney. “Thus, it’s important to know how you'll measure actual results versus planned results after the investment is made. In order to convince the CFO of the necessity of the investment in this kind of technology, you must have a clear vision of the end-state of your CRM and its business goals. What role can CRM play to get you there? Without a business case to show the ROI resulting from your CRM investment, it will be difficult to quantify the success of your project.

“Creating value for customers is a great benefit of CRM. At the same time, it’s very important to balance value to the customer with value from the customer. To gain CFO support, link your CRM initiative to the strategic direction of the organisation, and be sure to have a solid CRM business plan, complete with metrics that are forecasted and matched quarterly over the life of the CRM initiative.”

You must make the business case based on a quantifiable outcome.

Augustin adds: “You must make the business case based on a quantifiable outcome. So if you go to the CFO and ask for money, he/she will ask what the outcome will be from spending that money. You can, for example, say that you want your Net Promoter Score to increase and that the ROI is an improvement in customer retention. Retention is a huge one.

“If you’re a business that has an ongoing revenue model of the customer - whether it's ongoing services model or subscription model, or an ongoing purchasing model - retention is massive because of the compounding effect of interest rates. If you improve a retention number by one point per year, that adds up significantly over the lifetime of a customer. So a small swing in customer satisfaction resulting in a small improvement to retention can have a very big financial impact.”

Do you understand the CRM market well enough?

“There has never been more solutions on the market than there are today,” notes Anderson. “CRM itself is a combination of solutions to manage sales and sales people, solutions to manage customer-facing sales process, solutions for customer service, and solutions for marketing and commerce. That's traditional CRM. But, in the marketing technology landscape alone, there are nearly 4,000 different solutions and solution providers out there. 4,000 - that's insane.”

“Even though the CRM vendor space is mature, it is constantly evolving,” says Rooney. “Vendors offer more features and more sophisticated solutions. However, more is not always better in the CRM market. CRM buyers have to understand the market segmentation in order to focus on the right category of vendor that offers just the right solution for their organisation.”

There are hundreds if not thousands of companies that serve across those ecosystems. Understanding where you fit is very important.

Augustin adds: “One of the complexities of the market is the very large problem set that people are solving, and that’s why understanding your use cases, your metrics, and what you're trying to accomplish, is so important. You can go to an analyst firm – for instance, Gartner – and they are going to give you a huge definition of all the different areas that fall under CRM. There are hundreds if not thousands of companies that serve across those ecosystems. Understanding where you fit is very important in that selection process.”

Are you clear about the requirements and scenarios that will be used to compare vendors?

“The degree to which you can give the vendor visibility into your business goals, not just a technical specification, is very important,” says Augustin. “During the vendor selection process, some businesses build requirements and do a request for proposal (RFP) that is overly constrained to tactical or feature-level comparison. Sometimes you see RFPs that have 10 pages of feature comparison check boxes. The business doesn’t care about feature comparisons – they’re trying to do something like increase retention.

“The good vendors will have a lot of experience, and can provide a lot of best practices, and help to optimise use cases and work flows and support business and sales transformation. Give the vendors a chance to help you solve your business problem. A good vendor sees a lot of business problems and the odds are they’ve seen your scenario before. You've got to be open and give the vendor a chance to be part of the brainstorming process. If you try and run this really strict RFP feature comparison, you're not going to get a strategic relationship. And you want someone who's going to be a business partner.”

“It is also very important to remember about “the people” component of the CRM initiative and correlate company culture with the business values of the vendor as well as match the sizing,” adds Rooney. “If you are a midsized business, look for a solution that tends to serve medium sized companies. They understand your needs better thus can provide better-fitting solution.”

About Neil Davey

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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.

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