Choosing a CRM Solution

Choosing a Customer Relationship Management (CRM) technology has often been a daunting task for companies in all industries. Whether in financial services, telecommunications, retail, high tech or any other area, companies know that in order to be successful, they need to better service their customer and partners. How to do this can appear to be a monumental task particularly for Small to Medium-sized businesses. However, the approach for a multi-billon dollar empire or a small startup company just coming into the CRM game should be the same.

Anyone evaluating a CRM technology must consider the same 10 points to make it successful. In determining an approach on the first – Company Goals and Strategy – the others may no longer apply, but if questions remain, considering these 10 points will remove any doubts:

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NetSuite Debuts CRM+

CRM+ includes these all of NetSuite’s latest developments, along with new customer and partner relationship management features. Its customer self-service portal provides a real-time view of customer interactions across multiple channels.

has launched CRM+, a new application package that includes all of the functionality of NetSuite’s existing product line, such as integrated order management, CRM, e-commerce and accounting, as well as new partner relationship management and customer interaction tracking features.

Netsuite CRM+ targets companies that want to go beyond standard CRM functionality. "CRM+ has been designed for those customers that want additional capabilities beyond standard sales and marketing," says Mini Peiris, senior director of product management.

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The Top Five Tips for CRM Strategy

The familiar refrain of CRM failure is a hard one to avoid these days with so many industry watchers pointing to flawed strategies among customers, vendors and consultants as the reasons for an overwhelming lack of success.

Researchers such as Gartner Group and Meta Group have chronicled failure rates of 55-70% for CRM implementations in general, and point to a lack of clear strategy as a key contributor to this dismal industry track record. So, it would seem only rational to turn to these same industry watchers for their answers to the obvious questions that arise out of this: which CRM strategies work, and why?

To find out just what CRM strategies are paying off and why these tactics are the cornerstones to success, SearchCRM tracked down five industry experts for their best advice to the masses. What follows is the first in a three-part series on their top tips for effective CRM strategies.

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Microsoft CRM: Buy Now or Wait?

Microsoft’s announcement that the 2.0 release of its CRM package will be delayed another few months has created a dilemma for many small to mid-size businesses (SMBs).

Some had put off their purchase of CRM software, waiting for Microsoft’s new version. Now, they are wondering whether they should go ahead and buy it or pursue another product.

It all depends on what the company seeks from CRM software, according to Forrester Research’s Liz Herbert. The fact that Microsoft has pushed off the release of version 2.0 does not necessarily mean that companies should avoid it altogether.

First Come, First Served

Companies that already own Microsoft CRM 1.2 will be first in line when 2.0 hits the streets, said Herbert. That may be reason enough to go ahead with a purchase. The new version will include long-awaited reporting improvements that allow users to slice-and-dice CRM data in Microsoft Excel.

In addition, the current version of Microsoft’s CRM application has a very friendly user interface and strong support for Web services, Herbert adds. What makes Microsoft’s other products so easy to use — their interface — means that both front-office and back-office staffers have little trouble learning the package.

Now for the Bad News

The current Microsoft CRM package has "very little marketing functionality," said Ben Holtz, CEO of SMB tech consultancy Green Beacon Solutions. Many of his clients are waiting impatiently for marketing automation to be rolled into the package, and now they must wait a while longer.

Many have been forced to turn to third-party add-on products to support necessary marketing processes, Herbert notes.

In fact, any customization of Microsoft CRM requires substantial involvement from I.T. personnel, Herbert says. That can be prohibitive for smaller companies whose technical employees already are overburdened.

In addition, getting information out of version 1.2 and into other systems — for sophisticated analytics, for example — requires either batch transfer or transaction-triggered export. Microsoft has provided good integration with its own Great Plains business software for SMBs. But it has failed to do so for other frequently used accounting and planning packages.

CRM And Customer Life Cycle

Customer Relationship Management or CRM is a combination of enterprise strategies, business processes and information technologies used to learn more about customers’ needs and behaviors in order to develop stronger relationships with them. CRM software systems automate many customer-related business tasks. CRM applications are traditionally developed as client-server software which incurs higher initial cost of ownership. The proliferation of the Internet and the Web has fueled the rapid growth of Web-based CRM or online CRM applications ( http://www.sysoptima.com/crm/web_based_crm.php ). Web CRM systems are widely deployed for web based call center, contact management, trouble ticket, personal information manager and scheduling.

The life cycle of CRM consists of three phases – customer acquisition, customer relationship enhancements and customer retention. CRM software streamlines CRM activities at each phase of customer relationship management.

Customer Acquisition

Contact management module and direct marketing module of CRM allow companies to effectively promote and market their products and services to prospects. Those modules help speed up the acquiring processes and reduce the cost of acquiring new customers.

Customer Relationship Enhancements

CRM helps companies better understand existing customers’ needs and behaviors and enhance the profitability from existing customers by cross-selling. They can customize their products and services to individual customers’ needs and preferences.

Customer Retention

Customer service module of CRM system gives the organizations the edge in customer support ( http://www.sysoptima.com/crm/call_center_management_software.php ). They can increase customer satisfaction while reducing the cost of support. Customer retention is critical to the overall profitability of an organization. A customer you spend hundreds of dollars and months to acquire may leave you in seconds as a result of poor customer services.

What is CRM?

CRM stands for Customer Relationship Management. Today, CRM encompasses most of the earlier customer centric practices such as Sales Force Automation, Contact Management, Marketing Automation, and Customer and Field Service. It is typically a suite of software used to manage a customers’ needs and behaviors in order to develop stronger lasting relationships with them. After all, it’s been proven that maintaining good customer relationships are at the heart of today’s business successes. CRM is basically a business process that brings together disparate pieces of information about your customers, sales, marketing efforts, service and market trends. Today we are fortunate enough to have sophisticated software suites that can help us considerably with these processes.

What can CRM do for me?
A properly designed and deployed CRM system will help your business leverage technology and people resources to better manage your sales, marketing and service processes. In doing so, you will gain a consistent picture of your customers and their needs. This translates to value, and allows you to strengthen the relationship you have with each customer to retain them as an asset to your business. Some of the more tangible benefits of a good CRM solution are:

  • Improved customer service
  • Increased pipeline of new leads
  • Increase customer loyalty and satisfaction
  • Decrease lengthy sales cycles
  • Gain efficiencies in call center and help desks
  • Streamline marketing and sales processes
  • And more…

What is involved in deploying CRM?
The success of any CRM solution is largely dependant upon the commitment of your organization. Even more so than the software you choose to deploy.  The benefits described above will not be realized by buying software and installing it. For CRM to be truly effective you must review your current business processes around your sales and service departments. Here it is vital to get “buy-in” from the top down within these teams, and you might as well get the marketing folks involved too. Next you need to decide on the types of customer information you want to collect and what you plan to do with it. For example, many grocery stores keep track of customers’ purchase history in order to market appropriate items likely to fit into their individual diets. Custom coupon packets can be mailed to customers with products specific to their buying habits. This results in increased sales while at the same time giving the customer what they want.

Next, you will need to identify all possible ways new and existing customer information can flow into your system. Where and how this information gets stored, as well as, how it will be used and by whom. Your company, for instance, may interact with customers in a variety of ways including mail campaigns, seminars, trade shows, electronic marketing, Web sites, call centers, help desks and sales forces. Your CRM solution will connect all of these customer “touch points” giving all of your various employees the same view of the data. Powerful analytical tools allow the data to be manipulated and reports generated that can provide a holistic view of customers and prospects. Armed with this customer knowledge allows you to take the necessary steps to keep that customer happy.

Of course, there are many trained specialists available to help with your deployment. Many of these Value Added Resellers (VARs) can sell you the software, help with your business process analysis and refinement, and finally customize and install the software and train your staff. They are often more valuable then the actual software in terms of your ultimate CRM success. You will want to select a VAR who can become a long term partner as your business grows.

How long does it take to implement an average CRM system?
While each CRM solution is in itself unique, you can always be sure that completing your system will definitely take longer than a software sales person is likely to tell you. Off the shelf solutions and those claiming rapid deployment may not be good long term solutions as they often lack the power and deep customer viewing capabilities for real success. Many are just contact managers with a few bells and whistles, which may be just what you need, but far from a full fledged CRM solution.

Of course, the complexity of your particular solution and needs will dictate the time it takes for your implementation and customization, and don’t forget that the real work often begins once the system is up and running. Training and a commitment to make the new system work is paramount to success. It is very hard to get people to change the way they have been accustomed to working, especially sales people who need and expect it to be fast and simple. Remain committed to the success of the system and it will work.

How much does CRM cost?
Surveys around the country of companies have indicated that they have budgets for CRM projects of less than $500,000. Not a major investment for many mid to large size companies. There are certainly excellent scaleable solutions that can be had for under $100,000 and well over $1 million. Again, much of the costs will depend on your individual situation and company needs.

How do I ensure a successful CRM implementation?

  • First and foremost, get executive level buy-in and commitment to the project. Make certain that they understand the importance of their role in upholding that commitment and communicate it downwards through the organization.
  • Make the project fun and rewarding. Give all key employees who will be using the system incentives for making it work. Involve them in the early planning and implementation stages. Take their feedback seriously. This will give them ownership in the project.
  • Break the entire project down into smaller manageable pieces with small milestones. Work with all departments to maintain a team methodology.
  • Use a robust database platform. CRM systems collect huge amounts of data very rapidly. Make sure your solution can grow and perform accordingly.
  • Keep in mind that your system is designed around the customer and prospect. Make sure that it is used to its potential in serving them well.

What department should be responsible for CRM?
This question comes up a lot. The simple answer is everyone. What we mean is try to spread project responsibilities across all departments that will have a hand in the success of the solution. While it is usually necessary to appoint a project leader or champion, the rest of the team should be comprised of all other departments. This will ensure consistent buy-in across the organization and enforce team attitudes and ownership. Don’t forget that commitment needs to come from and be supported by the top execs!

Can a CRM system be customized for my vertical?
While there are many similarities across businesses when it comes to basic operations, there are fewer when it comes to sales, marketing and service. Industries such as banking and financial institutions, Telecommunication and retailers have been leading the CRM growth with solutions tailored to their particular way of dealing with customers and prospects. Each of these verticals have very unique needs when it comes to servicing customers and finding new ones. For this reason, many of the more powerful solutions are in fact open enough to allow even the most complex customization that can mold that CRM system to practically any vertical. Systems can easily be customized to work exactly the way your industry needs them to work, yet it will save countless hours of manual labor and frustration in dealing with customers and prospects. Many industry pundits see these custom vertical CRM systems as the real future of the application.

Are Development Communities the Next New Thing for Hosted CRM?

Salesnet is the latest hosted provider to develop a formal platform for developers and customers to exchange information, ideas and prebuilt extensions to further integrate or customize the original offering.

For Salesnet, it was an essential step, given the specific orientation of its application — that is, sales force and related CRM functionality — and the inevitable desire of customers to link it to other applications or databases, said Forrester Research analyst Liz Herbert.

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The vertical CRM challenge: Siebel vs. salesforce.com

In the hot hosted-applications, on-demand, ASP, software-as-a-service CRM area, Siebel Systems has been a laggard. On multiple occasions, the prince of on demand CRM, Salesforce.com CEO Marc Benioff, has called his competitor Tom Siebel’s company "dead" and stated his goal as "putting Siebel out of business."

Bruce Cleveland, who worked with Benioff and many other software-as-a-service pioneers at Oracle and is Siebel’s senior vice president and general manager of OnDemand and SMB business, is out to prove that his company will play Microsoft to Salesforce.com’s Netscape. In this drama, as envisioned by Cleveland, Microsoft (Siebel) eats Netscape’s (Salesforce.com) lunch.

Benioff, NetSuite‘s Zach Nelson, RightNow‘s Greg Gianforte and even little open source startup SugarCRM are working from a different script. But the reality is that software-as-a-service is a huge market and a single company can’t serve the needs of every market segment.

Based on current numbers, Siebel has a lot of catching to do on the hosted side versus on premises. Salesforce.com claims 227,000 subscribers across companies of varying sizes. Cleveland said that Siebel has 28,000 subscribers in larger organizations for its hosted CRM products, which have been available for about year. The company has a base of 3 million users for its on-premises CRM, and Cleveland says the company intends to take every product in the portfolio and deliver it as a service. "We would be dead if we had not responded, but we decided to put millions into [on demand applications] and dedicated a division to build and deliver our products in this way. The drama around it is did Siebel respond early enough, and the coming quarter will tell," Cleveland says. The company has stated that its goal is 30 percent quarter over quarter growth in subscriptions.

Basically, Siebel and Salesforce.com have two different approaches to the same problem. Siebel is focused on delivering prepackaged applications targeting different industry verticals. "We’re committed to delivering companies at least 80 percent of the functionality customers need, and then provide them with the ability to configure those applications to make up the last 20 percent," Cleveland said.

In January of this year, Siebel introduced pre-built, hosted industry vertical CRM editions: Financial Services Edition: Wealth Management/ Insurance Edition; High Tech Edition; Life Sciences Edition: Medical Edition; and Automotive Edition. Siebel CRM OnDemand is offered at $70 per user per month. Siebel Systems’ industry-specific solutions are priced at $100 per user per month. Yesterday, Siebel launched CRM OnDemand Release 7, which Cleveland describes as the first and only hosted contact center solution available as a prebuilt option within hosted CRM. The Siebel CRM and Contact OnDemand (view screen shot) bundle starts at $150 a month per user, not including additional usage-based phone charges. The vertical industry CRM editions bundled with Contact OnDemand is $175 per user per month. Without Contact OnDemand, the industry-specific editions cost $100 per user per month.

In contrast to its hosted CRM competitors, Siebel believes in building its own industry verticals, providing customers with the relevant modules on top of the core CRM foundation and data model. Salesforce.com and NetSuite, on the other hand, are committed to creating a development platform and ecosystem that allows customers and partners to build vertical applications on their platforms.

As an example of the difference, Siebel has a pre-built vertical edition for wealth management (Financial Services Edition: Wealth Management/ Insurance Edition), while Salesforce.com partnered with Thompson Financial to create a co-branded edition of its CRM service as part of its Thomson ONE desktop solution for Wealth Management. Similarly, CRM OnDemand Release 7 includes pre-built computer telephone integration (CTI), while Salesforce.com’s Supportforce gives customers the option of integrating call-center capabilities via sforce from telecom providers such as Cisco, Avaya, Alcatel, Aspect and Genesys.

"We have a difference of opinion on who should pay for [customization]. We do 80 percent for industry-specific editions. Salesforce has a toolkit and lets customers customize on their own. We reach the same endpoint," Cleveland told me. "Marc’s [Benioff] approach might work for smaller companies or accounts with fewer requirements, but we didn’t create 22 vertical editions for altruistic reasons. We got our teeth kicked in walking into enterprises that wanted 80 percent [solutions] and not having to pay us to do the work to sell into their industry. When you walk into an Ingersoll-Rand, they want you to have figured out the [industry specific] customization and do it for them. They want to tweak and change things, but not wholesale reengineering. Marc will find this out when he is selling upstream."

Cleveland attributes Salesforce.com’s focus on developing an ecosystem in which customers create their own vertical editions to a lack of engineering resources and its economic model. "Marc outsources engineering work to customers to create industry verticals. He only has 50 engineers–we have 1,000 engineers," Cleveland says.

Phill Robinson, senior vice president of global marketing at Salesforce.com, counters: "We have a very different strategy than Siebel. We give customers the ability to use Customforce to make our product unique to the way their businesses work. Customforce takes hours, not days and months or years [to implement]. Siebel has cookie cutter vertical editions that won’t be specific enough to meet customer needs. They are stuck with the old client-server way of customization, which is expensive and difficult."

CEO Benioff expanded on Robinson’s comments in an e-mail: "Let me give you an example about customization: Dow Jones, AOL, CNET, Tribune, Newsweek, Washington Post, Wall Street Journal, and many other media companies have chosen Salesforce.com for their CRM. But, they didn’t choose our "media vertical." Instead, they were each able to rapidly tailor the system exactly for them, so that Dow Jones has DowJonesForce, AOL has AOLForce, Tribune has Tribuneforce, etc. Each of these media companies has unique needs and requirements. To say they need the same industry vertical is just simply wrong. Siebel is trying to shove everyone into nicely shaped Siebel boxes that the customer is trapped in. That fact is you can’t even create a unique custom tab with Siebel — so their only answer is a vertical solution that just won’t work.

Robinson’s and Benioff’s assessment of Siebel’s hosted CRM products makes it sound like Siebel lacks customization for basic configuration and simple modifications like adding fields, and that connecting to legacy systems is highly complex and costly.

According to Ken Rudin, Siebel OnDemand CRM vice president, Siebel offers similar customization capabilities to Salesforce.com, including basic configuration and Web services APIs, as well as pre-built connectors to enterprise systems and programmatic access to applications, business logic and data services. "We provide equivalent set of tools for no-code customization and for building objects. There are some areas where they are different from us, because they have focused so much on customization. But if a financial service has a concept of a portfolio, why force someone to go out and build it. We also let customers modify those objects customize workflow around sales processes."

In reference to Benioff’s point that Siebel’s software cannot create a unique custom tab, Rudin responded in an e-mail that the approaches for creating custom tabs are different.

"With Salesforce.com, you start with a blank tab and do what you want with it; while with Siebel CRM OnDemand, you start with an existing tab and can modify it as necessary to fit your needs, even to the point of completely changing the purpose of the tab if you like (e.g. you could even take a ‘vehicles’ tab and turn it into a ‘travel expenses’ tab). There is certainly some value in being able to customize tabs, but the real value comes with the functionality and business processes involving that tab. This is when Siebel’s industry editions become so powerful. For example, a financial services company could create a tab called ‘Total Household Assets’ in Salesforce, but that field would not ‘know’ to aggregate the total assets under management of each family member without additional programming. In contrast, with Siebel CRM OnDemand Industry Editions, these common workflow functionalities are built in, yet modifiable, and require no coding from the customer."

The two companies clearly have different philosophies and legacies. Cleveland is catering to Siebel’s traditional large enterprise market, hoping to convert millions of its on-premises users to the canonical hosted verticals if they choose to make the move and to slow down the momentum of Salesforce.com, which is targeting his customers. His view is that Salesforce.com puts the burden and some of the risk of customization and integration on the customer, while Siebel does most of the heavy lifting.

Cleveland also knows that Siebel is a latecomer but notes that being first to market (think Netscape) is not a harbinger of ultimate success. "I’ve got hundreds of people focused on taking our entire product line and delivering it as hosted platform. We had about a five-year catch up to do versus Salesforce.com, but now we are delivering products. This is our seventh product release this year."

Benioff is on his 17th product release and wants tens of thousands of editions of his software to bloom, and believes that Salesforce.com no-code customization, Web service APIs and evolving ecosystem will prevail–and out innovate–the more prepackaged Siebel hosted CRM. Whereas Benioff views his product as an extensible applications platform, Cleveland views his offspring as applications to serve a few dozen industry and market niches.

Over time Salesforce.com and members of its ecosystem will develop more vertical editions, composite applications built on the company’s platform that capture the best practices and components for a particular industry or market niche. It’s a natural facet of ecosystem evolution for the more robust combinations of elements, like cellular automata, to prevail for a time and satisfy a mature market need. Then, a new disruptive element–such as the software-as-a-service model at the end of the last decade–shakes up the ecosystem and the participants must adapt to the changes.

Siebel finally caught the wave and has begun the process of adapting its CRM applications to a software service model. Cleveland touts the 1,000 developers crafting Siebel applications, but the 50 or so developers on the Salesforce.com payroll is just a fraction of total possible developer community that can sustain a platform. Unleashing thousands developers to innovate, as the open source community has proven, is a powerful force, and Salesforce.com is trying to tap into that vein with its proprietary system, a la Microsoft. SAP is also trying to build more of an ecosystem around NetWeaver by publishing a software development kit to help outside application providers tap into its products.

Siebel can certainly mine its current customer base, but it’s a substitution, not a growth strategy. Cleveland’s script with Siebel playing the Microsoft role and Salesforce.com the Netscape in the quest for hosted CRM dominance role is somewhat myopic. Substitute Netscape with Firefox and you have a different picture of how the software industry is evolving. Siebel’s 80-percent vertical applications deliver a good value proposition to customers, but without a focus on becoming a platform and empowering a developer community to augment and supplement what it delivers to the customers, Siebel could end up as the next Netscape.