As companies battle to win new customers and keep current ones where customer loyalty is fleeting at best, the demand for Customer Relationship Management (CRM) solutions is at an all-time high. With all of the available solutions, companies wanting to leverage their sales and marketing strategies, strengthen their workforce, and utilize the best tools available are forced to make a CRM software choice. The problem is: Which choice is the right one?

The right CRM solution can raise an organization’s visibility and place them far out in front of their competitors. The wrong choice can set them back thousands of dollars and cause them to lose the ground that they fought so hard to win.

As strange as it may seem, a successful CRM implementation is based more on the “right company” than it is on the “right software”. In fact, a successful implementation and a healthy ROI (Return on Investment) depends 80% upon the company evaluating and using the system and 20% on the software itself.

Let’s use the analogy of a car and a driver to illustrate my point. Driving any car from point “A” to point “B” is more dependent upon your driving skills than anything else. However, choosing the right car for the long term will determine how happy you are driving that car and how long you keep it before trading it in for a new one.

You would be naive to purchase a car without first considering how many miles you drive per year, what type of terrain you drive on, how much city and highway driving you do, and what accessories and features you need to make you comfortable and happy.

The same principle applies when you’re in the market for CRM software. If you search the Internet using the term “CRM Software” you’ll no doubt finds tens of companies each proclaiming their product to be your best choice.

Your next logical step would seem to be comparing the features of each product and then arranging to speak with the representatives for the products on your short list. That might seem to be your next logical step, but it would be a bad move and an utter waste of your time.

Long before you even begin your search, you have to determine your CRM software requirements. What interaction takes place between customers and salespeople? What is your lead tracking strategy? How to you attract new customers and retain existing ones? How to manage a long Sales Cycles or Projects? How to maintain the Sales funnel? The answers to these questions and others are what determine the features that your CRM solution must possess.

Translating Requirements into Features - Needs

Yes, a CRM package can make a real difference in your profitability, but that won’t happen unless the package you choose meets most of your needs. For some companies the required solution can be as simple as a central database that stores all customer information in one place and provides the ability to share customer notes, history and email among all users. These companies don’t really need to perform an in-depth requirements study because they are only looking for a starter system.

Other companies that are looking to not only to centralize their customer data but to ramp up their sales and marketing process, lead generation, sales pipeline management and, to some extent, automate their sales work flow, have a bigger task in front of them before they start reviewing CRM solutions.

So the first question you must answer is this: Do you need a compact car to simply go back and forth to work and drop your kids off at school, or do you need a family car with plenty of cargo space and seating capacity to handle both your current needs and accommodate future family growth?

How to begin the evaluation process

First look inside your organization to see if you have any human resources who have been through the CRM selection process with a previous employer. There’s nothing better than tapping the experience of someone who not only has “been there, done that”, but who also has experience with your company and knows how things get done.

It’s almost always beneficial to combine a seasoned CRM consulting company who has no special ties to any particular CRM solution and who has a track record of working with companies in situation like yours. That way you can be sure that the recommended solutions be unbiased.

Taking a Skills Inventory

Even the best CRM solution in the world will fail if the organization does not have staff with the skills to operate it. Anyone can get behind the wheel of a racecar, but it takes a skilled driver to compete in a race.

If a company’s needs extend beyond the very basic contact management, and they fail to assess their organization’s collective skill level, the chances are good that they’ll end up with a failed implementation.

Sure, you can scale back on the complexity with some customization and fine-tuning, but you can’t loose sight of the need to end up with a system that remains functional and responsive to your needs and objectives.

Vendor training addresses the specific skills of operating the software, but your salespeople and CSR staff still need to possess a degree of basic computer skills in order to understand how to apply that.

Best practices dictate that you involve all stakeholders in the CRM solution vetting process before you sign a contract and accept delivery. Not only does this strategy ensure that all staff members are comfortable with moving to a formal CRM system, but it goes a long way towards getting them emotionally on-board by creating a sense of ownership in the project as well as educating them about the benefits of the proposed system and how it will make their job easier and potentially more profitable.

Finally, users who possess the right skills are the ones who enter the data most accurately and that is often reflected at a later stage when a company pulls meaningful reports from a CRM system.

Determining Your CRM Budget

Now here comes the million-dollar question: How much should you spend on a CRM solution? The right answer is: As much as it takes to procure and implement the optimum solution for your company and not one penny more.

Unfortunately, no CRM solution provider can tell you if their CRM package is worth the price to you. You could buy the most expensive system there is and receive no value in return. I recall selling a system to a small company (5 users) for close to $3000 with software, training and installation etc. The first thing the client did was to execute an email marketing campaign to existing customers who placed over $7,500 worth of orders in the first week. That’s a pretty good ROI from a system that cost less than 3k!

Not too long after that, with proper training and understanding of the system’s capabilities, the CEO of that company was generating reports and tracking information on new leads, follow ups and managing the sales pipeline of his company. Within a month he was able to stop leads from falling through the cracks and customer follow-up increased dramatically. In short the system paid for itself over and over again within the first month.

On the other hand, I have witnessed companies that keep investing thousands of dollars on CRM initiatives without any clear objectives and no methodology to test the ROI. In the end, all they really have is a giant ‘electronic Rolodex’, which leaves them wondering why they ever got involved in CRM technology in the first place.

So, if you’re planning on implementing a CRM solution for your organization, follow the tips and suggestions in this article and you will be on the road to driving the right CRM system.

About the Author: Syed Ali, is the lead CRM consultant for a Toronto based company, CyberQuest Solutions Inc.

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