The best CRM software is the one that has the right capabilities and features for your objectives. That selection process is harder than it sounds, however, as organizations are faced with an abundance of choices and priorities to consider when determining which customer relationship management (CRM) software can best meet their needs today and into the future.
The CRM journey often begins with a set of circumstances that make the need for better tools abundantly clear, but businesses must carefully evaluate their own requirements, ask serious questions of various vendors and identify the key features of CRM tools that will be most important to their organization before moving forward.
Nadine LeBlanc, research director for CRM at Gartner, says the power of CRM starts with an organization's business strategy. "It seems simple, but a lot of organizations often think of CRM as a technology... but CRM is a business strategy that optimizes a business' capability while promoting customer satisfaction and loyalty," she says.
There is no one-size-fits-all approach to CRM and many companies are already performing some version of CRM without recognizing it as such, according to LeBlanc. Any organization that serves its customers' needs and wishes, or actively requests feedback from customers, has already started the CRM journey, she says.
Those activities will usually spark an interest in CRM solutions and drive a determined effort to find and adopt a vendor that can meet specific needs. Throughout this process it is paramount that companies follow an approach that begins and ends with business goals and customer benefits.
"Without a sound CRM planning process, the strongest participants can hijack CRM, turning a business initiative into a technology organization project, a political land-grab, or a mire of conflicting objectives and feuding special interests," analysts Kate Leggett and John Bruno write in Forrester's "Define Your CRM Plan" report.
Many businesses undervalue the planning that must go into selecting a CRM provider and overlook the importance of defining the capabilities and results that will matter most to their organization. "People will have different definitions of what CRM is and what success looks like, even more small companies," LeBlanc says. "We often see projects where they rush an implementation and then they think about metrics and then they calculate success."
Choosing the right metrics to measure the gains that can be achieved through CRM is one of the most important and difficult tasks for an organization, she adds. "With thousands of things you can do to improve CRM and customer experience, you have to keep it to what's most important."
Sheryl Kingstone, 451 Research's lead analyst for customer experience and commerce, says CRM can add incredible value to ensure a single view of the customer and help automate next best actions. The state of CRM has evolved dramatically over the years, but valuable insights are not guaranteed. "It still takes time and energy to ensure the tool adds value into the daily life of your business. However, there are ways to justify the investment in time from elimination of manual processes, improved contextually relevant conversations and better win rates," she says.
"Think of CRM today as more of an intelligent assistant than just a repository of data," Kingstone says.
How to choose a CRM
Once a business identifies the goals and customer benefits that will drive their CRM strategy, it must define criteria to determine which CRM provider can best meet that objective. "Disappointment with CRM usually stems from poorly conceived strategies that lack a laser focus on improving a specific set of business capabilities to increase revenues or reduce costs," according to Forrester. The firm encourages businesses to "isolate the key people, process, technology and strategy gaps that will be most important to future success but are least developed today. Closing the gaps for these viable scenarios will be the foundation for defining the key strategy options for CRM."
According to LeBlanc, there are sets of top-level criteria that should be present on any variation of CRM technology, and therefore should be considered a requirement for any business. "We often see functional usability and cost requirements in vendor evaluations," she says.
Smaller organizations need to pay close attention to vendor liability, vision, service and technical requirements. "Often these are not defined enough or organizations don't spend enough time defining what these requirements means for them and establishing a priority," LeBlanc says. Other considerations include security and privacy requirements, and the availability of service provider consultants who can be tapped as a resource when needed.
"Look for more modern solutions that offer no-code tools for running as much of the business as possible," Kingstone says. "A key issue to understand is how to digitally enable the business including mobile, voice interfaces, social, analytics, marketing and service in one offering. Can these CRM tools correlate with financials so that marketing and sales data can be used for closed-loop measurement?"
Must-have CRM features
The must-have features of CRM will vary by company, and the functionality of CRM is broad. According to LeBlanc, it falls into five categories: sales, marketing, customer service, field services and digital commerce.
"Organizations need to weigh current and future requirements," LeBlanc says. "It's really important to think about the short term, but also look at the long-term vision for CRM and which category will be their center of gravity. Are they going to be centered around B2C digital commerce, or B2B sales, or are they more aligned to customer service?"
One of the biggest challenges with free CRM solutions in particular is the rapid pace of change with new product offerings, pricing models, and hidden or add-on costs for ultimately necessary features. "[Companies] need to plan the technology roadmap and future expense accordingly," LeBlanc says. "They need to stay abreast of what's available in the market, expand their definition, find their center of gravity and find those vendors who align well with that center of gravity."
As organizations consider their options, there are some important questions to ask (or features to demand of) CRM vendors before implementing a solution. According to Kingstone, businesses need to determine how easy it will be to automate the on-boarding of data, what can be preprocessed and how accurately it can automatically eliminate redundant data entry.
Other considerations include the capabilities and usability of a mobile app, and what data cleansing tools can be used during the onboarding phase and for ongoing data maintenance, Kingstone says.
"Typically when we think about CRM, they most often fall into four areas of strategic objectives: improving and extending your relationship, reducing costs, enhancing brand equity and increasing customer value and satisfaction," LeBlanc says. "So you want features that will translate into customer acquisition, retention as well as giving you a better understanding of your customer lifetime value."