Pepsi Trades Super Bowl for Social CRM Campaign

Depending on who you root for, the Super Bowl might be more interesting for the commercials than for the game. But there will be one major advertiser missing from the starting lineup this year: Pepsi. The soft drink giant publicly announced in December that it would be redirecting its normal big game budget to an in-house initiative involving CRM software and social media.

As Martin Schneider pointed out on the CRM Outsiders blog, this revelation is important because it puts CRM applications on the same playing field (literally) as old media. Pepsi is not falling back on CRM software to save money in a down economy. Instead, it is redistributing its whole Super Bowl budget to the interactive initiative. Instead of relying on rates and raw market research to determine the impact of advertising, Pepsi intends to use direct feedback and relationship tracking to build stronger connections to customers.

Pepsi's move has been seen by some observers as a reaction to the backlash it suffered when overhauling its Tropicana orange juice branding in 2009. Brand managers hired a creative agency to reinvent Tropicana's logo and packaging in conjunction with a mainstream media relaunch. Consumers found the new packaging confusing, noting that Tropicana products became less distinct on store shelves. Customer relations managers at Pepsi fielded calls, e-mail, and social media messages demanding the return of the old packaging.

Pepsi recovered from the criticism by acknowledging the campaign's failure to achieve its goals and by switching most of the Tropicana products back to versions of their old packaging. With its new social CRM applications, Pepsi officials hope to use the same kind of direct customer communication to innovate new products with input from consumers. That initiative can benefit the organization all year long, not just at Super Bowl time.

CRM Software Customers Hitting "Perfect Storm" in the Cloud

In my last piece, I wrote about five reasons why CRM software shoppers had created a buyer's market at the start of 2010.

Box.net's Aaron Levie wrote a guest article for TechCrunch this week, outlining some of the reasons why "cloud computing" technology faces a perfect storm for adoption by enterprise in 2010. In it, he reviews how many of the technology's early adopters have helped work out the kinks over the past ten years, ensuring that many popular services have achieved stability. Furthermore, Levie examines how some companies may have little choice but to adopt hosted CRM and other cloud computing services, based on some major trends.

Levie's ideas relate well to the discussions many CIOs are having with their teams right now about hosted CRM systems. For instance:

• Large companies have gotten out of the relocation business. Fluctuations in both the stock and the real estate market have forced companies to look at new solutions for top talent. It's no longer a top priority to help a sales executive sell her existing home and move near a central team. In fact, decentralizing teams through the use of cloud-based CRM software has become an essential component of many companies' survival strategies.
• Prospective CRM software buyers don't want to be "locked in" to major commitments in the event of a future downturn. Depending on whom you ask, the current recession is either already over or just beginning. Hosted CRM solutions allow companies to flex their contracts up and down over time to meet the demands of the prevailing economic climate.
• Recent college grads are "social media literate." It's no big deal for them to update the status on a pending sale using CRM software, since they're already accustomed to doing the same thing with their social status on Twitter and Facebook. CRM software won't face the same resistance it did from teams in the 1990s and 2000s, as long as solutions can keep up with demanding, mobile lifestyles.

While hosted CRM solutions won't always be right for every company, the security features and deployment options available today should be more than sufficient to meet the needs of many companies.

CRM Software Customers Take Control in 2010

According to CRM software industry experts, five major forces have shifted power away from vendors and into the hands of clients:

• Enterprise businesses still see the value in successful CRM software implementation.
• Compared to other initiatives, the cost of new or upgraded CRM software offers far higher potential for return on investment.
• More business users have become comfortable with "cloud applications" in their own home lives, making them much more willing to take a risk on less expensive, hosted CRM solutions.
• Layoffs from major software developers have created a surge of independent web companies offering flexible CRM solutions at significantly lower prices than established vendors.
• Social media networks allow company executives to share information more discreetly about CRM software vendor bids, increasing negotiation and pushing down overall pricing.

Of course, these trends aren't just emerging within the CRM software industry. They're developing in nearly every line of business, which is one of the reasons CRM software has become so attractive in the first place.

To compete in today's global marketplace, the best CRM software vendors have already taken some important steps:

• Merging or forming alliances. Over the past few years, some of the largest database companies and dedicated CRM software vendors teamed up to prepare for tougher battles over customers. Smaller companies have emerged to take on the stalwarts, forming networks of service providers that rely on APIs to pass information between applications. From the customer standpoint, you can choose an all-in-one CRM software solution, or you can push data from cloud to cloud.
• Developing more predictable or transparent pricing strategies. While some companies still work through lengthy bid processes, other CRM vendors now rely on simplified, per-seat or per-company pricing packages that require no negotitation.
• Pushing support into the spotlight. Support and implementation are the two biggest differentiating factors among vendors. CRM software ompanies with clear commitment to support, via in-person training, social media presence, or public forums, have already taken the lead.

In my next post, I'll write about how these processes have merged with even broader societal trends to create a perfect opportunity for CRM software to land in just about any organization.

Don't Sabatoge Your CRM Software in 2010

In the holiday rush, I overlooked CRM Buyer's feature article, "5 Painfully Common Ways Managers Sabotage CRM." Christopher Bucholtz highlights some of the top ways that teams can inadvertently cause CRM software implementation to fail, such as:

• Focusing CRM software on managers instead of rolling it out as a benefit to the entire team.
• Using CRM software solely to call out team members on poor performance, instead of leveraging it as a coaching tool.
• Forcing team members to use every feature within a CRM software suite, even if that results in "premature optimization" of processes.

Those aren't the only ways that managers sabotage CRM software, however. Baseline Consulting Group's Jill Dyche notes that some teams place emphasis on having a "CRM strategy," even though they lack an overall corporate strategy for customer relationship management. Having a relationship with software is a lot different than developing real relationships with clients. Remember, CRM software is only a means to the end goal of leveraging solid partnerships with customers and among team members.

Of course, some members of your team may actually want to sabotage your CRM software. If you're a manager, it's up to you to develop training and development programs that help your team understand how CRM software enhances their role. Many teams fear the change that a new software platform brings, hoping that new tools don't cast doubt on their previous performance. Instead, you can focus on ways to help your team use CRM tools to shine even brighter. Positioning customer relationship management as an opportunity for personal growth and rewards can demystify the process, eliminating the fear that automation is just another step toward downsizing.

Eating CRM Software Leftovers in the New Year

Very few companies want to spend money on CRM software in 2010. Frankly, very few companies want to spend money on anything in 2010. Ironically, most customer service experts already note that the right CRM systems could actually save a company from the fallout of the global recession.

Still, most systems managers will find themselves with smaller-than-ever budgets for CRM software maintenance and expansion. Here are three strategies for making effective and cheap CRM software decisions over the coming months:

• 2010 may not be the best year to undertake a total CRM software overhaul. However, it could be a great time to invest in middleware tools that can bridge legacy systems with the web or with more modern interfaces. In past years, "putting lipstick on a pig" might not have appealed to CIOs. In today's economic environment, a new interface or a cobbled-together functionality may be just enough to breathe life into an aging CRM application.
• Vendors of existing CRM systems are eager to keep your company's long-term business. Many vendors have announced special pricing packages for upgrades, along with freezing or rolling back seat license fees for 2010. If your CRM software contract is up for renewal this year, you may want to leverage the buyer's market by locking in better rates.
• Layoffs at major software development companies have pushed talented programmers into the role of entrepreneur. A new wave of web-based CRM applications is hitting the market, going beyond the hype of "web 2.0" with heavy duty features at minimal cost. Some companies may have to look past the previous-year dealbreakers of "cloud computing" or "shared data center" to see the real benefits of scrappy, new CRM systems.

Companies can learn to navigate 2010 by being frugal without giving up on their core customer service beliefs. CRM systems and their vendors are changing, too. This could be the year that the overall value of CRM software really shines in your organization.

Open Source CRM Software: "Tricky," Impossible, or Troublesome?

At Inc. Magazine, Bryce McDonnell offers a testimonial of how he uses free, open source CRM software to track leads from Twitter, Facebook, and online advertising. His promotions have been successful enough to generate more than 1,000 leads, requiring a strong CRM software solution for filtering and follow-up.

Open source solutions, like the Fat Free CRM package McDonnell uses, often attract attention for their price tags: "free." However, McDonnell offers a caveat for company leaders hoping to score a big win with free CRM software:

One word of caution: Installing Fat Free is a bit tricky, especially if you're not comfortable with software code. But once the application is installed, you don't have to be a Web developer to use it.

For small office/home office CRM users, this warning can lead to a big money drain. If you're not a professional web developer, free CRM software may require hours of tedious installation on the front end of a launch. A consultant who charges $100 per hour could lose thousands of dollars in opportunity cost on an installation that requires server provisioning and custom installation, especially on low-cost, shared server accounts designed to save money.

At larger organizations, free CRM software that gets tagged on to the responsibilities of web teams can often sour a whole enterprise on the idea. Although the work that open source teams do can be impressive, the challenge of keeping servers secured and code updated against threats often falls to the end user. Marketing teams won't like hearing that a critical website push is being delayed by the maintenance of an internal application. Likewise, users will get frustrated if a CRM system crashes during a time when no dedicated technicians are available to help.

SugarCRM has already shown the market potential for a hosted CRM model based on free software. Understanding that "free" doesn't mean "instant" or "maintenance-free" is the first step toward successfully integrating open source CRM tools into the enterprise.

Is Your CRM System a Hoax?

That's the question Jerome Pineau asked clients of CRM software purchasers in a recent post on his personal blog.

Pineau was reacting to an article by Matt Wallach for Destination CRM Magazine, exploring the blurred distinctions between hosted CRM and on-premise CRM systems. Wallach called out unscrupulous vendors for passing off hardware installations as "SaaS" products, leveraging the hot market for cloud computing in the C-Suite.

Putting aside the ethical debate about how some vendors sell CRM software, Pineau challenges customer service professionals to ask what they want to get from CRM systems in the first place. Business intelligence tools have evolved to the point where they can generate reasonably good insight from the types of data once stored exclusively in CRM systems. What else, Pineau argues, can a company leader learn from CRM software that he or she cannot learn from taking their top five clients out to lunch?

For large companies with a handful of key clients, this might be the case. However, the CRM software market thrives by meeting the needs of small to medium business owners who rely on increasingly distributed sales and service teams to provide consistent client experiences. Companies may not have as simple a choice as abandoning CRM software for BI tools, but they do have the power to implement CRM systems more effectively. As Pineau points out, many failed CRM implementations stem from false hopes about what new software can do for a company's culture. When tools support a team's shared vision, that team can succeed.

Ultimately, the search for the best CRM software comes down to a solution that fits a team, a business, and a collection of customers. No CRM software can completely automate the customer relationship. And, as Pineau argues, a totally automated solution often loses credibility with customers who crave the insight and the empathy that only human agents can provide.