Buying CRM: A 10-Step Guide

Since customer relationship management (CRM) connects to all aspects of an organization, purchasers must know the intricacies of their own businesses as well as the products and vendors available to them. That’s why we divided this guide in two parts: Know Yourself and Know Your Requirements.
I. Know Yourself
Buying CRM starts with the question, “Why do I need a CRM solution?” Many CRM projects fail because that question is never asked. With that in mind, here are four steps that will help you provide an answer and prepare your organization to evaluate CRM solutions.
Step 1. Look At Your Business
Develop a thorough understanding of how your business really works. Not how it should work or how you assume it works. Take this opportunity to map your business processes, their dependencies, and how changes to those processes can affect others. Begin with processes that aren’t working well. These will correlate with areas of your business that can be improved and help you identify
those that can be addressed with CRM. Process mapping will also reveal processes that work well. These processes may not need to be changed, but changes to other processes could affect them.
The evaluation that accompanies process mapping requires total honesty, which can bruise feelings. The objectivity of a third-party consultant can help minimize the dissension this might cause. A consultant can also reduce the internal resources needed to conduct process mapping.
At the end of the process mapping exercise, you should have a list of processes and activities that can be improved with CRM. The mapping exercise could show that your business isn’t ready for CRM or that the problems it faces can’t be solved by CRM. This is valuable information to have. Making the jump to CRM too early or for the wrong reasons will result in frustration and dissatisfaction.
Step 2. Pick The Right People For The Team
In addition to executive leadership and IT, enlist a group of front-line users to participate in the selection process — and listen to them. Not only will this ensure that you understand what users want and think is important, it will help accelerate adoption among their peers once a solution is chosen. Too often decisions are made about CRM applications without input from the people who will use them.
Step 3. Know The Regulatory Environment
It’s also important to take into account how information systems impact your ability to satisfy compliance requirements in your industry. Regulatory bodies vary in the restrictions and procedures they mandate for how data must be stored and managed. Solution delivery methods such as software as a service (SaaS) may not be appropriate in certain industries because they rely on a shared services model.
Step 4. Understand How The CRM Delivery Model Will Impact Your Budget
On-premise CRM software requires companies to own or lease the technology infrastructure — servers, storage, backup and recovery, and networking capabilities — and to provide the personnel who maintain it. There are also software license costs, maintenance fees, and integration expenses. Cloud-based SaaS software uses infrastructure provided by the CRM vendor, and while there may be integration costs, the software licensing expense is paid as a monthly subscription per user.
Certainly, smaller, cash-strapped companies often use the cloud. Likewise, larger companies with IT resources frequently use on-premise. But there are many exceptions to that general rule. More and more large companies employ cloud-based applications because they shift hardware requirements and the installation of patches and updates to the vendor. Conversely, smaller companies in fields where regulation makes the cloud problematic elect on-premise solutions.
Now You Have A Framework
The first four steps give you a framework to make a CRM selection that addresses your problems while creating a minimum of new ones. The framework includes:
* A list of processes and activities you need to improve
* A CRM decision-making team that includes users
* A knowledge of the regulatory constraints that may influence your decision
* An understanding of how the CRM delivery model will affect budgeting
II. Know Your Requirements
What is a good CRM solution? A solution that fits your business. Features are part of the equation, but more important are business considerations such as stakeholder interests, budget, support, integration, and industry demands. You also want a vendor that will work well with your organization over the long haul.
Step 5. Integration Requirements
Whether you plan to use CRM as a departmental solution or across your entire organization, integration can add significant cost and delay to a CRM implementation. So it’s wise to make ease of integration one of your preliminary criteria. Even if you have no immediate plans to integrate, a solution that’s too rudimentary or too complex to integrate with existing systems will almost certainly cause problems eventually — problems that will be expensive to fix.
Step 6. Support Requirements
No matter how adept your staff, they’ll need some degree of help with the CRM product you choose. Knowing their level of sophistication will help you determine how much, which is important since levels and costs of support vary from vendor to vendor.
Use your social network to find peers who have employed support from CRM vendors. They can be a source of unvarnished opinions about this important area. When you’re comparing vendors with similar capabilities, how they stack up in terms of support — cost and responsiveness — can be a deciding factor.
Step 7: Vertical Market Requirements
Are you in an industry that collects unique forms of customer data or in which customers negotiate a specific, non-standard path to buying? If so, there may be CRM solutions tailored to your industry. Purpose-built CRM applications have been created for insurance, real estate, agribusiness, non-profits, and others.
Companies such as resellers or distributors may need to manage tiers of customer relationships with direct customers, partners, and customers who buy from partners. These companies often buy CRM and find it ineffective. A related technology, partner relationship management (PRM), could be a better option for these businesses.
If your market does have unique demands, don’t forego a look at horizontally targeted CRM systems. They’re often more flexible than purpose-built solutions and, with the right customizations, may work better for your organization.
Step 8: Feature Requirements
Good CRM solutions have the same basic features. And features that are rarely used shouldn’t drive purchase decisions.
Feature selection is where the process mapping exercise proves especially valuable. In that exercise, you identified business problems you needed to solve or activities you wanted to improve. Look for features that map to those areas. For example, if you want to incorporate social media into your CRM strategy, look for a solution that can link with social networks to offer an expanded view of the customer relationship.
Listen to your front-line users on the selection team. Allow them to identify things that will make their jobs easier and use those ideas to guide decision-making about features.
Step 9: Financial Requirements
By now, you probably have several solutions in mind. It’s time to decide which of these is most affordable. As stated earlier, costs will vary depending on the delivery model. For example, on-premise software may carry an annual maintenance fee of 22 percent or more. Assess the full initial cost of your CRM candidates and their projected annual costs. Solutions that don’t fit your budget can be scratched from your shortlist.
Step 10: Vendor Requirements
When you think you’ve found the right CRM solution, examine that vendor’s track record — and do it independently. Vendors cherry pick their references so they may not reflect the majority of buyers’ experiences. Again, social media can be useful here. Ask whether a CRM implementation was genuinely transformative and, if so, what role the vendor played in that. You should also learn
something about a vendor’s financial stability. Once you’ve made your selection, you want to be sure the vendor will remain in business to support you in the future.
Getting It Right
The road to buying a CRM solution contains multiple decision points where your business requirements intersect with what the market offers. Take the time to make informed decisions. Even if your company decides against implementing a CRM solution, the evaluation process can improve efficiency and be the catalyst for a more customer-centric approach to business.

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Social CRM Strategy: A Five-Step Guide

The five steps to developing a social CRM (SCRM) strategy are oriented toward the specifics of the social media ecosystem you’ll be working in and the customers you’ll be working with. Your strategy should also fit the time and resources you have. Take an inventory of your staff resources and the budget you have for sentiment monitoring and listening tools.

Step 1: Find Your Customers
You need to learn how your customers relate to social media. Many people connect to the major social media sites, which have broad appeal and large user communities. Facebook, for example, has 750 million users. In 2011, the site’s fastest growing age segment was 55+.
A second class of sites attracts people based on their interests. There are social networking sites for all kinds of people, from schoolteachers and sports fans to parents and programmers. A simple Web search reveals many of these sites.

You also need to keep an eye on sites that might have a peripheral connection to your products and services. For example, the customers of an outdoor equipment company may frequent a site dedicated to adventure travel. You want to be where your customers are and when it comes to social media that means following their interests not just their buying habits.

Step 2: Learn the Language
Once you’ve located the places where customers are either talking about you or about things that relate to your business, don’t jump in right away. Spend some time observing how the group works, who its leaders are, and the kind of language and tone the members use with each other. Your first step is to behave like you deserve to be part of the conversation. Take Mark Twain’s advice, “It is better to remain silent and be thought a fool than it is to speak and remove all doubt.”

Step 3: Listen
Once you’ve located the sites where your customers congregate and spent some time getting a general idea of how they talk with each other, dig a little deeper. If there are subjects that you want to follow and the site has search capability, take a look at what’s been said in the past about those topics. This is listening in the social media world; it should precede participation.

Since you’ve probably identified multiple social media channels to track. How do you listen in on all of these conversations? If you have the resources, consider a staff member dedicated to social media. That person can keep track of the sites you’ve chosen, coordinate responses to conversations, and incorporate data from conversations into your CRM system. Don’t engage in more channels than you can monitor effectively.

Listening is made easier by social media monitoring and sentiment measuring tools. Listening tools can tell you what’s being said and where; sentiment tools can gauge the general tone of the conversations that mention you. Both can increase your social media productivity.
Your company also has great monitoring tools already in place–your employees. Many will use social media outside of work, and they may run across topics that pertain to your business. Employees should be encouraged to report anything they learn to the person you’ve designated to monitor social media.
Step 4: Engage
When your business is ready to engage with customers in a social media conversation, establish clear rules about who does the talking and where they do it. Someone from service could participate in conversations on a site where service issues are discussed. An engineer would be appropriate on a site geared toward developers.

Look for places to engage that will have an impact. If you see the opportunity to make a difference in a conversation, jump in–even if it’s only to say that you don’t know the answer to a question but can find someone who does. Then be sure to follow up. That level of authenticity coupled with tangible assistance builds loyalty with the person you helped. It also establishes you as a reliable participant in the community.

You can also start your own conversations. You could begin with a legitimate question about your customers and what they’re thinking. This approach can deliver actionable intelligence more quickly and inexpensively than a formal survey. Don’t make these the only conversations in which you participate. You’re there to participate as a peer not an interrogator.

Step 5: Make Use Of What You Learn
You can use two types of social media information: the data you uncover in conversations and the data that your customers and potential customers volunteer in setting up their profiles. Don’t focus only on the latter. It ignores the truly social aspects of social media and the richer information that conversations can bring to your attention. It’s also a source that’s likely to diminish as social media users become more sophisticated in their use of privacy controls.

There is no technology that can automatically detect the social media data relevant to your business and sort it by your customers or accounts. People engaged in conversations and monitoring social media sources will need to manually incorporate important information into customer records.
But the use of social media information doesn’t stop there. It also involves careful process design. For example, since a call for help in social media is heard by many people, the transfer of responsibility from social media monitor to designated service contact to the service personnel who can respond is vitally important. The same is true for sales, marketing, and product development.

Finally, make sure your employees know that social CRM can be an all-hands exercise that benefits the entire company, just like traditional CRM.