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.

Does Your CRM Software Do Too Much?

In an opinion piece for CRM Buyer, Christopher J. Bucholtz warns that "feature shock" can thwart the adoption of CRM systems at most organizations. Bucholtz outlines what he calls the "battle" for CRM adoption within large sales teams, usually pitting managers against sales representatives.

The worst thing about this battle is that highly effective CRM systems often get caught in a tangle between office relationships and career fears. Managers often become attracted to CRM applications because they help the strategic planning process. In good times, data from CRM systems can make managers look like heroes. In bad times, managers can use CRM software to identify weak links in their team.

• Most new features apply to managers. End users can resent a CRM system that feels like it has been tailored to the needs of middle or upper management with little or no concern for line users. CRM software that puts its best foot forward on the sales floor will gain traction faster. Savvy managers will sacrifice some bells and whistles for the sake of team-building, at least during the first stage of CRM adoption.

• Too many new feature rollouts can discourage learning. In organizations where team members are reluctant to learn about new CRM software, frequent feature rollouts can reinforce a desire to "wait" until changes have rolled to end users. If teams believe that the whole system will change anyway in a few months, they have little motivation to learn how to use CRM software.

• Choosing splashy changes over refinements can signal a dissatisfaction with the CRM system. Constantly adding new features and style options to CRM software can make many end users believe that a current system is flawed. While companies should still invest in CRM software overhauls when needed, rolling new features should feel more like an organic evolution.

• Adding features increases cost while creating more potential points of failure. Dumping everything but the kitchen sink into a CRM software rollout only improves the odds of a morale-defeating breakdown or failure. Companies on their first CRM software rollout should keep things simple by focusing on core functionalities instead of on "edge cases."

Keeping these four principles in mind when planning a CRM software rollout can help company owners focus their teams on sales instead of on the debate over tools.

Mobile CRM Systems: Always Where You Are? Or Always Where Your Customer Is?

In a world where 3G and 4G mobile data technology enables us to get to our data anywhere, what does "mobile CRM software" really mean?

Until recently, mobile CRM systems referred to tools that sales professionals used to gather and leverage information while in the field. Real estate professionals and other outside sales veterans pioneered the practice of using laptops and smartphones to access CRM applications remotely. For many organizations, this kind of mobile CRM software allowed sales professionals to spend more time in the field, presumably where they could connect with more customers and close more sales.

Lately, however, many marketing professionals mean something else entirely when they talk about "mobile CRM." To them, the phrase refers to technology that enables customers to feed information back into a company's system from wherever they happen to be.

For some companies, mobile CRM systems involve deploying applications or special websites, accessed by customers on their own phones or laptops. These tools allow prospects to interact with brands, to share preferences with their social networks, or to place orders on the go. Mobile CRM software has the potential to take vendor-customer relationships even father, by relying more on place-specific technology instead of on customers' own gadgets:

• Marriott has deployed a flexible CRM software suite that accounts for the fact that its customers often stay at many different Marriott brands. The CRM software can gather information from each hotel visit, feeding data back into profiles that can be used to customize special offers e-mailed to each guest. As guests redeem the offers, the loop begins again.
• A&P is trying something similar across its own family of brands, by replacing newspaper coupons with customized shopper profiles on their mobile CRM software platform. When shoppers visit a store's website or interact with in-store kiosks, they can respond to offers supplied by manufacturers or by the stores themselves. Effective targeting means that shoppers can earn bigger discounts, since manufacturers need not spend as much on each campaign. The mobility of the data allows store managers to monitor shopper feedback in real time, no matter which store shoppers choose to visit.

In both of these examples, mobile CRM systems allowed companies to automate basic interactions with customers. Humans still provided the core services at both grocery stores and hotels, leaving the marketing aspect of customer relationship management to the automated tools. This allowed both companies to focus on generating great experiences instead of focusing on price or persuasion. With the right deployment of mobile CRM software, marketers can refocus on service while maximizing returns.

Small Business CRM Systems Move from Tracking Solo Customers to Client Groups

In a recent column on CustomerThink, Graham Hill delivers his manifesto for social business. It's an evolution in the way that sales professionals think about their clients and their markets--a societal move that actually implies more than the name suggests. Until now, CRM applications focused on the management of relationships between sales professionals and customers. In an atmosphere of social business, as Hill describes it, CRM software must become capable of so much more:

• Shifting CRM software from personal relationships to group networking. Although nothing will ever replace the direct vendor-client relationship, small business CRM now requires an understanding of maintaining relationship with a prospect's ecosystem, as well. Have a great interaction, and a prospect may become a client. Have a bad interaction, and hundreds of their Twitter followers may hear about it. A new generation of CRM software helps sales professionals maintain transparency, so they can prepare more effectively for interactions and enjoy more productive follow-ups.

• Using CRM applications to understand a customer's real value proposition. As Hill points out, customers don't just expect our products and services to deliver value. They expect our products and services to allow us to co-create even more value by helping us do our jobs more effectively than ever. It's no longer about what's in the box, but what the contents of that box enable us to do. Strong CRM software helps sales professionals measure and celebrate that creation.

• CRM software can help sales professionals respond more intuitively. Whether tracking Twitter streams or reviewing a client's direct e-mail, CRM software can help companies respond more effectively to customer needs. Understanding the real urgency and importance of a situation--even when a customer does not reach out directly--can help vendors maintain customer relationships through challenges and setbacks.

CRM systems will continue to evolve to meet these needs, even as our own needs as customers keep changing. Customer relationship management has little to do with keeping lists of addresses and phone numbers, and everything to do with cataloguing our most important wants.

Does CRM Software Adoption Improve When Employees Use Twitter?

One of the oldest chestnuts in the sales business involves marketing teams that fail to adopt CRM software because they simply cannot get used to the idea of "checking in" with a computer every few minutes. Those old-school sales pros prefer to keep their own checklists on paper or in their head, while their in-person and on-the-phone interactions with clients prevent them from developing CPU-friendly habits.

Unwittingly, social marketers have started to whittle away at that old excuse by encouraging sales professionals to spend more time on Twitter or Facebook. And, while critics of social networking often deride tweets and status updates as banal, there's a growing trend among sales professionals to spend more of their time celebrating accomplishments and calling out great clients on their real-time feeds.

Although some sales leaders have called this kind of usage a form of "social CRM," developers of advanced CRM applications have noticed an interesting correlation between teams that tweet and teams that get more out of their CRM software. Tweeting regularly encourages users to spend more time "checking in" on their computers. It's not a stretch to believe that this tethering gets sales professionals accustomed to checking in on their CRM software at the same time.

Some CRM software developers have encouraged faster adoption of their tools by embedding "tips and tricks" among their official tweets. Twitter streams from notable CRM software programmers and experts can help sales teams feel more at home with the technology, while developing stronger brand loyalty through support, service, and personal relationships between clients and company spokespersons.

CRM Software Call Transcription Features Becoming More Popular

One of the most daunting tasks for sales teams involves entering leads, quotes, sales, and follow-up details into CRM applications. Some CRM software developers hope to speed up or even eliminate the tedious task of manual data entry by integrating call transcription technology directly into users' desktops.

While text-to-speech modules for CRM applications are far from perfect, developers have made significant advances in refining on-the-fly transcription services in the past few years. Some text-to-speech systems even integrate human reviewers, either outsourced through a service or tasked to administrative support staff within an organization, who can verify the accuracy of key phrases and proper names.

CRM applications, when connected to automatic speech recognition tools, can perform some critical tasks, including:

• Entering a text transcript of a phone call or an in-person meeting into the CRM application's database for easy, Google-like searching.
• Measuring the frequency of certain key words or phrases in a voicemail, to measure the urgency or importance of an incoming call.
• Allowing administrative professionals to quickly scan text transcripts of calls to a general inquiries line.
• Ensuring compliance with government or industry guidelines by storing transcripts of each call.

Keep in mind that relying too much on an automated process can take the human element away from the sales cycle, sending your prospects running to a competitor who can provide more direct interaction. However, for situations where sifting through existing voicemail or meeting minutes for CRM application data be exhausting, transcription services for CRM systems offer tremendous competitive opportunities.

Can Your CRM Software Revive Dead Leads?

It's getting pretty close to Halloween, so it's natural for us to start thinking about things that rise from the dead.

While nobody's asking for zombie customers, David Taber's compelling piece in CIO asks whether your CRM software can help sales teams recover business from forgotten leads. Taber notes that as many as 80% of leads written off as "cold" in their first two months go on to make a purchase in the following year. A sales team working in a place of urgency might be so focused on converting fresh prospects that they consider aging leads a waste of time.

The right CRM software can help sales leaders make subtle adjustments to company culture that result in higher closing rates over longer periods of time. Instead of simply measuring close cycles over a week or a month, the latest CRM applications can chart the average life cycle of a typical customer. Some sales pros may want to focus on making that average cycle time shorter. However, by understanding the organic nature of a customer's purchasing cycle, teams can use CRM software to more accurately position buying opportunities through strategic follow-up.

Some of Taber's suggestions for CRM software tweaks that can refresh old leads include:

• Transitioning "dead" leads to other marketing avenues, such as direct mail.
• Implementing a "remarketing" tool within your CRM software that reintroduces customers to the sales cycle after a few months.
• Using CRM software to measure interest in alternative sales avenues, such as seminars or other live events.

Using CRM software to log a customer's urgent purchasing periods, like the end-of-year tax season or at the close of a fiscal year, can also help sales teams pick up unexpected deals. Over time, a team can manage these clients more effectively, instead of worrying about queues forming in the voicemail graveyard.

Are Soviet-Era CRM Applications Holding Your Company Back?

I thought I was being clever when I described a major retailer's point-of-sale and CRM system as being "Soviet-era" on my personal blog. It sounds like the term is creeping up on the collective subconscious, since Phil Wainewright just used it as the headline for his interview with Bob Warfield from HelpStream, a vendor of CRM applications.

Warfield responds to Wainewright's use of the phrase by suggesting older CRM software forces a "central planning" philosophy on both customers and agents. In larger institutions, once considered early adopters by investing in this kind of technology, the system starts to wield control over both processes and people. It's an apt term to playfully describe what can happen when companies let their CRM systems dictate interactions instead of allowing customers and team members to engage in real problem-solving.

The growth of the Internet in the past decade has fueled the need for CRM systems that respond to customer needs, rather than attempt to force those needs into silos. Some examples of CRM applications that break the "Soviet" mold include:

• Health club CRM applications that allow trainers and membership coordinators to understand the specific needs and preferences of their members.
• Grocery store CRM applications that customize coupon and special offer delivery based on a customer's entire purchase history, not just the order on the conveyor belt.
• Unified CRM applications that allow agents to pick up conversations and interactions with customers, eliminating the need to restart relationships with each contact.

"The CRM software doesn't let me do it" is no longer a good enough answer for customer service professionals in a marketplace connected by Twitter, Facebook, and blogs. IT directors willing to embark on their own version of Glasnost can prepare their companies for a new kind of customer relationship.

Critical Questions for Hosted CRM Users

In my last post, I offered a quick view of the recent Danger/Sidekick data loss. It's an event that has hosted CRM users worried for good reason. After all, this kind of data loss can bring Perez Hilton's business to a halt, so what could it do to you if you lost all of your leads and contacts?

For CIOs and other technology leaders, this list of questions can offer peace of mind:

• Where are hosted CRM records stored? "The Cloud" isn't good enough. Careful CIOs should know the location of a vendor's primary data center, along with the security provisions in place to protect data from theft, fire, flood, or other disaster.

• How often are backups of CRM records made, and where are backups stored? CIOs should listen for "at least daily" and "offsite." A backhoe driving into the data backbone of your primary data center shouldn't cause your CRM applications to become inaccessible.

• How quickly can a hosted CRM system be restored from a backup? User error at the data center caused the total erasure of Danger/Microsoft's entire user library. With a solid backup plan in place, users could have been restored within hours.

• How can records be exported from a hosted CRM system, if necessary? Record export isn't just a CRM software feature that lets you migrate platforms. It's an essential tool that allows your team convert raw data into actionable spreadsheets or local databases in the event of a dire emergency at the server farm.

Of course, these are all questions you should ask, even if you intend for your CRM software to be hosted within your own facility. Treat data the same, whether your "cloud" is in your own building or out at a mystery data facility. Otherwise, you could end up like a frustrated Sidekick user.

Danger in the Cloud for CRM Software Users?

I just got back from a week out of the office, and I mostly relied on my smartphone to take care of client requests and to keep on top of the news. Sure enough, the week that I was away from my desk, one of the biggest tech stories of the year broke out:

Danger, the company that created the popular Sidekick smartphone, notified users that all of the data on their servers was mistakenly wiped out, during what should have been a routine system upgrade. Accusations are flying:

• T-Mobile, the U.S. carrier supporting the Sidekick, has offered service credits for customers who choose not to defect. They blame Danger for poor data handling procedures.
• Danger representatives have told users that they blame the vendor hired to manage their storage.
• The storage vendor claims that Danger is their first client that didn't have a comprehensive backup plan for critical user data.

Sidekicks aren't very common in the business world these days, unless you're a celebrity blogger. The hardware, revolutionary when it was released a few years ago, doesn't hold a candle to today's modern smartphones with loads of internal memory. The phones' lack of storage is why so much user data was on a central server in the first place.

However, CRM software users have been shaking in their boots over these events for a few specific reasons:

• Danger was purchased, a few years ago, by Microsoft. Essentially, Microsoft employees are now on record as having failed to back up critical customer data. Microsoft has been trying (and failing) to reposition Danger as a distant subsidiary instead of as a core business unit.
• Many CIOs now wonder whether Microsoft hosted CRM services can be trusted, since a "simple" service like the Sidekick could be so easily purged.
• And just about every CIO wonders how easily this could happen at the hosting provider for their own CRM applications. After all, "if it can happen at Microsoft..."

In my next post, I'll walk through some of the reasons CIOs might use this news to revisit the debate between hosted CRM and locally-installed CRM software...

(Follow this link to Part Two...)

Using CRM Software to Put Customers at the Center of Business

My recent post about making customers the "fourth pillar" of CRM systems generated some interesting mail in my inbox. A commenter voiced their opinion that effective CRM systems put the customer at the center of a hub. Does viewing the customer as a spoke in the wheel of a process that is already supposed to revolve around them make the customer redundant?

Graham Hill explores that idea this week in an essay for CustomerThink. Hill asserts that too much focus on meeting a customer's needs can distract from an organization's true mission: to assist customers in reaching their intended outcomes. Instead of using CRM systems to track customer requests and company responses, Hill challenges business leaders to organize efforts around the net result.

Customers hire products to help them get jobs done more effectively. Think of Ted Levitt’s famous example of the job of drilling a hole in a wall. As Clayton Christensen writes, the customer doesn’t actually want a drill at all, he wants a hole in a wall.

Using Hill's methodology, and combining it with insight from the Lance Bettencourt article he references, prospective CRM software buyers can get a better sense of their own desired outcome. When selecting CRM systems, marketers often ask themselves one of three questions:

• How will this CRM software improve my company's ability to reach its own strategic outcomes?
• How will this CRM software allow us to meet our customers' needs more effectively, and more often?
• How will this CRM software help us become a customer's primary resource to reach their intended outcomes?

It's no surprise, then, that companies asking themselves the third question enjoy the biggest successes when rolling out new CRM systems.

Use CRM Software to "Get Back to Selling"

Software designers railed this month over Intuit's acquisition of personal finance startup Mint. Functionally, Mint fills some gaps in Intuit's product lineup. The maker of Quicken and Quickbooks paid $170 million to acquire both the budget management software and the team that brought it to light. While this might not seem relevant right now to the world of CRM software, the potential impact of Mint's design team taking over Quicken's online services could ripple out to users of hosted CRM tools.

To understand why requires a quick lesson in the challenges of designing effective hosted CRM systems. A few months ago, at the CRM Evolution 2009 conference, Accenture's Kevin Bandy identified five tasks that pull sales professionals away from interacting with customers:

• opportunity management
• pricing/quote management;
• order management;
• contract management; and
• incentive compensation management.

All five of these tasks are crucial, and can be thoroughly automated using CRM systems. However, many professionals find themselves spending more time struggling with these tasks instead of calling on accounts. Truly effective CRM software puts usability on the same plane as task requirements, allowing even novice computer users to get back to the business of developing relationships and closing deals.

Critics of Intuit's current software lineup note that Quickbooks' dominant position in small business CRM and accounting software gives the company little reason to innovate, leaving users few options to increase productivity. In fact, some vocal opponents of the "Mintuit" mashup worry that Intuit bought Mint simply to sideline it. However, as more details emerge about the deal and its implications for Intuit's overall product strategy, some analysts see a window of opportunity for the Mint design team to "infect" Intuit with fresh sensibilities. A hosted CRM platform with the feature set of Quickbooks and the ease of use of Mint.com could be a game changer for small business.

Making Customers the "Fourth Pillar" of CRM Systems

CRM software insiders have been buzzing for a few days about a recent blog post by Bob Warfield from SmoothSpan. Warfield summzrizes some conversations he's had with leaders in the CRM software field about the role that social media can play in the development of new applications and of entirely new ways to approach customer relationship management in the first place.

In some circles, CRM software experts like to talk about the "Three Pillars of CRM," specifically:

• Marketing
• Sales
• Customer Service

Warfield cites a recent post by Esteban Kolsky, in which he posits that "feedback" should become recognized as the "fourth pillar" of customer relationship management. Warfield challenges CRM software experts to go even further, by viewing customers themselves as that fourth pillar. Using that strategy puts customers on the same level as other stakeholders in the enterprise, and it doesn't divorce the customers themselves from their comments.

It's important to ensure that we see customers as human beings, Warfield suggests, because we would otherwise run the risk of settling for crisis management outcomes to "social media emergencies" instead of using CRM systems as sources of accountability. For instance:

• Warfield cites a case in which social CRM software picked up a complaint on Twitter about VistaPrint. A customer's lost order was comped by a helpful representative after a blogger tweeted her frustration.
• Heather Armstrong took Maytag representatives to task on Twitter about a washing machine that failed about a week after delivery. After exhausting normal customer service avenues, she posted notes on Twitter. Not only did Maytag provide a replacement unit, other manufacturers provided the influential blogger with equipment to donate to local shelters.
• I had my own frustrating experience with Sears recently. Problems with the company's CRM software prevented me from getting prompt service or attention with a faulty dishwasher. Once I Tweeted and blogged about my problems, Sears representatives rushed to the rescue.

Warfield's position is that solid CRM systems would prevent these kinds of episodes from happening by measuring negative customer feedback before it goes public. Marketing proponents might note that all three stories involve companies that make things good at the end, but Warfield notes that these are still "bad stories." As social CRM systems evolve, look for opportunities to engage customers in follow-up conversations more closely, rather than waiting for negative tweets and blog posts to hit the web.

"Architects" Help Construct CRM Software Solutions

You're not seeing things.

Those ads in the trade publications looking for CRM software experts really do say "architect." It's a term that's been bubbling up in the CRM software space for a few years now, and consultant Richard Boardman made it the focus of a recent blog post about the role of the architect in the CRM software planning process.

Boardman, and others, believe that large corporations will increasingly turn to CRM architects who can help envision the right combination of features, training, and usability for a successful customer relationship management technology rollout. After all, if you take the metaphor to its logical conclusion, very few companies would attempt to design their own headquarters buildings in-house. Therefore, it makes sense for companies to bring in a professional who can make informed decisions about:

• connecting CRM software to the social media firehose,
• rolling out CRM systems in stages, and
• ensuring that teams get trained in advance of CRM software roll-outs so they don't lock up on launch day.

Unfortunately, even an experienced CRM architect can't solve the root problems that cause some roll-outs to fail. If anything, some CRM architects already report being bossed around by clients, just like the episodes of "Flipping Out" when Jeff Lewis has to work on someone else's house instead of his own.

If the client requests a set of features you can't possibly deliver on time or on budget, do you suck up and take it? Do you try to educate your clients? Or do you walk away from the project altogether? Those are the questions third-party CRM software experts must prepare themselves to face, no matter what their job title.

CRM software experts and architects at different stages of their careers will likely give different answers, but the question highlights an ongoing challenge in the CRM field. Clients don't always know exactly what they're looking for, and they sometimes don't even know that they don't know. CRM architects who succeed in their roles are the professionals with the strength of conviction to do what is in the best interests of teams, shareholders, and especially customers, even when confronted with managers and stakeholders that make uninformed requests.

CRM Software Helps Companies Navigate the Expectation Economy

For the past year or so, marketers have buzzed about a phenomenon that the editors of Trendwatching have dubbed "The Expectation Economy." According to their description of the trend, easy access to the Internet has accelerated consumers' expectations of companies, regardless of the size of their purchases or the depth of their relationship. Until recently, CRM software thrived mainly in offices where sales professionals relied on relationship marketing to land "big fish." In the Expectation Economy, CRM software has become essential—even for mom and pop operations.

Consumers are better connected to each other than ever before, and purchasing decisions no longer hinge on the quality of a product alone. The story behind the product and the story about purchasing and using a product have become essential to a consumer's overall experience. Well-informed consumers use magazines, blogs, and bulletin boards to learn as much as possible about what to expect from a vendor before making a purchase. Likewise, the same consumers use blogs, e-mail, and social media to share their experiences with others, helping to set expectations for other prospective customers. Companies that plug their CRM software into this firehose of information can learn how to reshape their offerings to fit the enhanced expectations of informed, highly critical audiences.

Using CRM software to reset expectations goes beyond responding to the kind of product failure that sends customers into an online rampage. Effectively managing customer expectations requires companies to know:

• where they get their information about purchasing decisions,
• how advertising and marketing shape their opinions,
• how past experiences with products and services shape future expectations,
• how likely customers are to share both positive and negative experiences with their social network.

Loyalty programs, feedback surveys, and social media monitoring are just the beginning for companies that commit CRM software and other resources to matching consumers' expectations. While "having conversations with customers" might sound too simplistic, many of today's most successful companies share the ultimate goal of using CRM software to recreate the intimate relationships between buyers and sellers from a century ago.

CRM Systems Thrive with Five Kinds of Data

First-time buyers of CRM systems often wonder what makes customer relationship management software tick. Effective CRM tools go beyond lists of names and addresses. They collect and help teams interpret five critical types of data:

Transactional DataThe most common kind of data found in CRM systems, transactional data includes information about completed sales or service requests. Customers provide personal information willingly during the ordering and shipping process, offering the purest data stream possible. However, this data stream can only be initiated or maintained when customers make regular interactions with customer service teams.

Prospect Data“Warm leads” refers to prospective customers who have specifically requested to learn more about a company’s offerings. These days, most warm leads get into CRM systems from websites, often in exchange for access to special deals or targeted information. Warm leads can also include existing customers who want to make additional purchases or reactive inactive accounts. “Cold leads” refers to prospects whose information has been borrowed, bartered, or bought for import into a CRM system.

Supply Chain DataInformation from warehouses, shippers, and suppliers enters CRM systems more often than ever. Direct fulfillment data matched up to customer orders assures buyers of consistent delivery. Third party service professionals add their own appointment confirmations and discovery details to catalog the results of maintenance or support sessions. CRM software data feeds back into the supply chain, dictating vendor orders and triggering inventory movements at warehouses.

Analytical DataThe most robust CRM software on the market can combine information about customers, prospects, and supply chains to build predictive analysis. For instance, retailers can discover hot neighborhoods for future store locations. Fulfillment managers can learn the most strategic locations for warehouses. Using data from CRM systems, analytical modules can build strong guesses about the success or failure of project proposals.

Social DataIncreasingly, CRM software informs executive decision-making by merging publicly available information with proprietary data. For instance, a marketer can use social data to determine which of its existing customers carries the heaviest online influence. CRM systems that analyze blog posts and social media updates can help companies save money on crisis management by identifying online trends that haven’t yet been tracked by formal call centers.

Of course, gathering and maintaining this data does no business any good without the ability to leverage customer relationships. Strong CRM systems put information into the right context for decision makers and strategy experts.

Can Cash for Clunkers Spur a Boom in the Automotive CRM Software Sector?

Pundits may still be arguing about whether the Obama Administration's "Cash for Clunkers" stimulus program is working too well. However, auto dealers across the country know that the program has brought buyers out to their lots in numbers not seen for years. Savvy car sales managers have prepared for this moment by deploying the next generation of auto industry CRM systems.

Long time dealers know the frustration of seeing poor returns on major media advertising buys. In a down economy, fewer Americans have the disposable income to purchase or lease new vehicles. That makes reducing customer churn the number one concern of sales managers. Automotive CRM systems help retain dealer customers by automating messages and activities that build loyalty and maintain dealers' relationships with customers.

As more customers look for new car deals online, "Internet Sales Departments" have evolved from small desks on the fringe of a dealer office to a central hub for new buyer leads. Sales managers can filter leads cultivated by manufacturer websites, dealer sites, or third-party promotions. Traditional dealers can use web-generated surveys and CRM software profiles to determine the best negotiating strategy. More modern dealerships can track the websites used by prospective buyers to offer no-haggle prices that compete with the best deals found online.

More importantly, CRM software allows dealers to invite customers back for service appointments and for special events. Instead of filling dealerships with prospects during community fundraisers, dealers can preview new models and stage special community events for their most valuable customers. CRM software identifies the drivers most likely to upgrade their vehicles within a specific model year, so marketing teams can pinpoint prospects instead of blasting their budgets on big media buys.

Cash for Clunkers is already driving some of the hardest-to-reach customers back into dealerships, especially Americans who don't purchase new cars as often as average drivers. Dealers hope that their investment in CRM software can pay off by converting those frugal shoppers into regular service bay visitors and referral sources.

What Happens When Your CRM Software Crashes?

If your business depends on Twitter for any part of its customer relationship management strategy, this morning probably felt a little quiet. The popular social networking platform experienced a brief outage today, apparently due to a denial of service attack powered by an army of compromised PCs.

Of course, the same thing can happen to just about any part of your customer communication platform:

• Your e-mail server can crash, backing up incoming and outgoing messages into a queue.
• The trunk line to your call center can get severed, leaving call center agents unable to receive phone calls or connect to networked CRM systems.
• A denial of service attack, like the one targeting Twitter, can hit the servers that host your own CRM applications.

As a customer service professional, I've experienced combinations of all three. (Imagine the horror of a client discovering that a gas company crew has run a backhoe through a phone company data cable on the morning of a huge product launch. I lived that!) That's why your CRM software strategy should include some fallback plans, anticipating some typical worst case scenarios.

• Have "downtime forms" pre-printed on paper that allow customer service agents to collect key information that can be scanned or manually entered into CRM systems once normal service has been restored.
• Maintain a clear communication strategy for emergencies or service outages. Many companies use Twitter to alert customers when phone or website service becomes sluggish or unavailable. If your company relies heavily on e-mail, Twitter, or web forms, have a plan in place to deploy an overflow call center to handle heightened call volume during on Internet interruption.
• If your CRM software integrates with multiple messaging sources, consider automating some common requests using web forms or e-mail. On a normal day, this can help your team serve customers more efficiently. When dealing with a crisis or a partial outage, promoting automated tools can help customers choose the most efficient way to get their needs met.

As Seth Godin recently wrote, there's really no such thing as a "perfect storm" that can excuse a failure to provide customer service. Training your team to manage CRM systems through extraordinary events can communicate to customers that you're there for them when the chips are down.

Pitch Your CRM Software Project in 30 Seconds or Less

Mark Suster posted an excellent summary of his advice for entrepreneurs who want to hone their elevator pitch. THe "pitch" used to be something that screenwriters worried about: explain the movie you want to make to Jeffrey Katzenberg in the time it takes for you to ride the elevator from his office to the garage.

These days, the elevator pitch is essential for all kinds of businesses. You've got to "lay out the pain" and "provide the value." If you've got something you want to sell, you'd better be ready to capture your audience's attention in the moment.

This definitely applies to project managers on CRM software implementation projects. One of the biggest reasons CRM software implementations fail is through a lack of support by stakeholders. The very people you hope to mobilize are often the people who have the most mistrust for your project.

That's why you should treat those stakeholders like internal customers, and get ready with an elevator pitch for your CRM software project that helps them get on board. Along with Mark's advice, here's a shorter, five step process that you would use if I were a stakeholder in your CRM software proposal:

• Tell me what you want. Don't just butter me up. Lead with something strong that directly benefits me: "I'm glad I ran into you. I wanted to take a minute to share some ideas my team came across that might improve customer loyalty in your division by thirty percent."

• Show your passion. Remember Covey's habit: "Win-Win or no sale." Your results are my results, and if I know you really believe that, I'll keep listening.

• Eliminate the jargon. CRM software managers love acronyms. Get away from telling me about the ROI on your hosted CRM system and show me what my team members are going to do with the thing.

• Give me hard data. That "thirty percent" line is critical. It shows me you've done some homework (or you're, at least, attempting to make an educated guess.)

• Ask for the follow-up. Respect my time, but be courageous. Give me a doable time, date, and next step. "I know you're busy and I don't want to keep you. Can I call you Tuesday at ten to discuss this further?"

CRM software implementation leads often complain about not having enough time to get everyone on board. Using this strategy, you can have lots of smaller conversations with key players that are less formal and more effective. By building rapport and by bringing the same principles to your more formal discussions, you can pave the way for successful CRM software launches within your organization.

Hosted CRM vs. Server Virtualization

As the sluggish economy impacts CIOs budget planning for the remainder of the fiscal year (and into the next), some technology advocates have revisited the debate over whether server virtualization initiatives save more money in the long run compared to "cloud-based" CRM applications.

Web-based, hosted CRM applications allow users to connect through any web browser, especially when using "dumb terminals" with little to no configuration. Essentially, a traveling sales agent with a computing mishap can walk into any retailer, purchase a bare-bones netbook or laptop with a supported browser, and reconnect to his or her customer relationship management tools instantly. However, "dumb" clients often lack the tight security demanded by enterprise IT managers.

On the other hand, server virtualization offers CIOs the ability to serve an entire desktop environment to an end user, not just a web application. Popular desktop-based CRM applications can be virtualized, along with other essential office software suites. IT management professionals enjoy the security of knowing that no customer data can live on "dumb terminals" in the field, especially if security measures prevent users from copying or pasting information from an active server session into a local document. However, a field sales professional must still provision equipment for use with a virtualized server environment. Client software and VPN tools must be installed and configured, often requiring direct support from IT teams.

Critics also worry that misconfigured server virtualization projects can cause companies to overspend on hardware, instead of investing budgets into CRM applications with proven ROI. Sales agents accustomed to buying the very best portable hardware might not realize that even a barebones client can enjoy the full power of a remote server. Likewise, conservative system administrators may fail to push rack mounted servers to their full potential, requiring extra backend costs.

As companies continue to develop remote CRM software strategies, hosted CRM solutions maintain an edge in both pricing and functionality. Yet, server virtualization solutions are gaining momentum, especially as end users become more comfortable with remote desktop technology.

Hosted CRM Vendors Debate Multi-Tenancy

If you're a small business thinking about CRM software, isn't it nice to dream about the day that your business grows so large that vendors will start to fight about whether you've outgrown your hosted CRM solution? That's the debate that some CRM software providers have been having both internally and externally. Assuming that nearly all CRM applications will one day be accessed across networks instead of solely on the desktop, experts wonder whether single clients can sustain versions of hosted CRM systems that were intended for thousands of shared users?

Zoli Erdos picks up the debate on the Cloud Ave. blog, where some of his colleagues believe that Software as a Service can only encompass "multi-tenant" development plans. Many SaaS CRM systems make financial sense because significant maintenance, hosting, and security costs on a single server cluster can be shared among thousands of clients. For vendors that outsource storage and processing to cloud systems, like RackSpace or Amazon, servers themselves may not even exist in the forms to which we have become accustomed.

However, some of the biggest potential clients for hosted CRM systems have no real desire to see their data floating "on the cloud." They're happy to pay for secure, in-house hosting and development in exchange for assurances of tighter security and guaranteed uptime. The leveraged power of a SaaS application becomes tougher to manage when a company tries to scale its hosted CRM system to reach 99% uptime and beyond. As a result, some vendors choose to build server "pods" to handle single clients or small clusters of clients. Other vendors have focused instead on powerful computing arrays that leverage CPU time and storage across millions of simultaneous users.

The good news is, regardless of who is "right" in the ongoing debate, strong competition in the CRM software arena makes it easier and more affordable for companies of any size to take advantage of the latest tools and strategies for customer relationship management.

CoTweet Twitter CRM Software Enters Public Beta

Expert marketers understand that responding to customer communications using a customer's preferred platform leads to stronger satisfaction and more positive word of mouth. With the tastemakers who use Twitter at the top of every marketer's mind, finding ways to plug "tweets" into a customer relationship management system has proven both challenging and rewarding. After all, a typical call center environment may house hundreds of service agents. Who in that environment can keep track of a single company Twitter account?

The founders of startup CoTweet hope to answer that question by streamlining Twitter communication across up to six official accounts. Coordinating tweets, replies, and direct messages through a proprietary CRM system, the hosted tool looks familiar to agents who have used comprehensive e-mail and ticket tracking tools. Agents log in to the hosted CRM frontend, review messages relevant to their department or expertise, and create replies that can be broadcast to the entire Internet or simply to a single customer.

CoTweet offers powerful direct marketing tools, as well, allowing agents to schedule tweets in advance. This functionality not only allows public relations teams to embargo announcements, it offers service agents the ability to notify customers of new products or offerings at specific times.

During the service's public beta, companies can sign up for CoTweet for free. New media companies that handle nearly all of their customer communication on Twitter can use the service as a standalone CRM application. However, larger organizations may still require middleware or manual cross-posting of conversations between CoTweet and their existing CRM systems. Best of all CoTweet supports active searches of Twitter feeds, enabling companies to proactively reach out to customers who have posted concerns publicly without contacting a company directly. This quick response to emerging trends can help set companies apart from the competition, especially when using CRM systems to respond to emergencies or to handle other crisis communications.

Doorbell Small Business CRM Suite Leaves Beta

Using the tagline, "sales software for non-sales people," Smibs released its small business CRM service Doorbell to the general public this week. The web-based CRM application addresses a few of the hot button issues on the minds of small business software users:

• scalability,
• security, and
• functionality for new users.

As Jason Kincaid points out in his feature on TechCrunch, Doorbell shares a development and marketing mindset with 37signals' Highrise application. Both hosted CRM systems allow users to work from anywhere by leveraging existing e-mail threads to customers and among team members. Using the "bcc:" field and a custom e-mail address allows teams to benefit from the knowledge generated from users that don't fail to log in to their companies' CRM systems. Implementation tends to be easier using platforms like these, since individual users have the ability to customize their own versions of the CRM software without restricting other users' actions.

Like other hosted CRM platforms, Doorbell offers its customers the ability to grow quickly. However, its pricing plans will appeal to small business CRM users more accustomed to paying one-time fees for desktop applications. Many businesses can qualify for pricing tiers under $50 per month, with one-or-two person shops permitted to use the service for free while their organizations grow.

Using a hosted CRM system like Doorbell also reduces some of the risk inherent in running desktop CRM applications. Since customer details are stored "on the cloud," only files on a user's hard drive are susceptible to identity theft in the event of a lost or stolen machine.

End users unaccustomed to CRM software will appreciate Doorbell's simplicity, especially compared to complex, legacy CRM applications. Tasks and events stream down the center of the user's window in a format familiar to Facebook users. Adding new events or attaching details to accounts and opportunities is as simple as sending an e-mail to the system.

As affordable, hosted CRM systems gain even more traction among small business owners, look for heightened competition to keep prices low and functionality high.

CRM Software Managers Can Learn from Sears' Mistakes

CRM systems give marketers unparalleled insight into consumers' decision making process. Used ethically and effectively, CRM software can help sales professionals anticipate ordering opportunities or shorten sales cycles. When blended with targeted research, companies can use CRM applications to identify their most valuable customers over time--even when those customers' spending habits keep them under the radar. However, CRM software's ability to scale with storage and processing power raises concern for privacy advocates, who worry that companies can risk legal action if they learn too much about their customers.

Colin Beasty from CRM Outsiders cites a recent case in which the Federal Trade Commission outed Sears for failing to inform certain customers about how their web surfing habits would be monitored and analyzed against their purchasing history. Although customers willingly signed up for a promotional program, they didn't learn about the extent of the CRM system's tracking details until being alerted by FTC agents. By failing to disclose the extent of the information collected by their CRM software, officials at Sears risked their company's reputation without ever achieving the project's goals.

Beasty and other CRM experts warn companies to begin crafting clear customer privacy and ethics guidelines that can shape the future selection and deployment of CRM applications. CIOs, sales leaders, and other company officials can lay the groundwork now for successful CRM deployments that don't put customer information at risk. Furthermore, a growing number of consumers demand to know how their information will be used by retailers and vendors. A clear CRM systems policy that emphasizes service and security can become a selling point in itself, as well as an effective tool to grow sales.

Can Netbooks Rejuvenate Your Small Business CRM Implementation

When small business CRM implementations fail, it's often because members of a small sales team prefer to use their existing tools instead of switching to collaborative CRM systems. Frequent push-back from sales professionals can include:

• A preference for paper instead of computers.
• The inability to bring computers outside the office.
• Incompatibilities with company mobile phones.

For some sales professionals, a small notebook or a stack of index cards saves space when compared to a laptop. Unfortunately, copying information back into CRM software feels like processing the same data twice. Although many of today's leading CRM applications offer mobile phone versions, a generation of sales professionals who didn't grow up on text messaging often wrestle with chiclet keys and touch screens.

That's why many sales leaders and CIOs have grown so passionate about netbooks. Small, networked notebooks with screen sizes ranging from 7" to about 10" have taken the business world by storm over the past two years. With many models priced between $250 and $500, these systems are robust enough to access web-based CRM applications. Many models run versions of Windows, enabling some CRM software to operate in offline mode. Their light weight and scaled-down keyboards make netbooks less intimidating for sales professionals who prefer not to lug a laptop onto a plane or into the field.

While some technology journalists wonder whether the netbook phenomenon has been overstated, these smaller computers work exceptionally well for low intensity tasks like data collection and quick hosted CRM lookups. While they won't replace the machines on which you prepare proposals and marketing material, they can provide a competitive edge for field sales professionals.

Small Business CRM Advice Roundup

There's lots of great advice for small business CRM users this month:

• First, envision the end result of your small business CRM implementation. As Stephen Covey would say, begin with the end in mind. Are you buying CRM software just because you feel you need to, or are there specific customer challenges that you hope you can solve with technology.

• Second, choose expandable CRM systems. CRM applications designed for enterprise organizations might be too big or too expensive to justify in a small business. Many of today's most popular CRM applications offer modular options, like seat licenses for web-based apps or feature-based pricing that allows you to enable more functionality as needed.

• Third, select CRM applications that invite customers to engage with you on their terms. Lead generation tools that offer interaction on websites as well as through mobile phone applications can cultivate relationships effectively -- even when you're not directly involved.

• Fourth, focus on CRM comparisons that build on the strengths of your current team. Most failed small business CRM implementations involve techniques or technology that existing sales professionals find painful to integrate into their workflows. A fantastic automated funneling lead generator won't do much for your organization if your team has their own way of doing things. Either invest in successful teams -- or build new teams.

• Finally, don't let your small business CRM project hide you from your customer. Many small business owners get so lost in the bells and whistles of new CRM systems that they forget what attracted customers to the relationship in the first place. Small businesses that leverage personal service and prompt attention won't get far if CRM tools get in the way of human interaction.

With more companies rolling out small business CRM products every quarter, entrepreneurs can leverage their size and flexibility to attract clients -- as long as they don't let the wrong CRM software lock them in to an ineffective process.

How CRM Software Can Adapt to a 140-Character World

Rick Cook from Inside CRM posted a primer for "Tweeting with Customers," in which he analyzes the ways that corporate customer service agents will have to adapt their communication to become more direct and relevant for social networking users. For example, Twitter limits communications to 140 characters each. Longer messages require URL shortening services, which can add a layer of complexity for users. Alternately, users can string longer messages across a series of tweets, risking a loss of context for users. With many CRM applications including support for Twitter and Facebook messaging, agents may require a crash course in succinct communication.

CRM software developers have already started to develop solutions that allow customer service teams to respond through a single Twitter account or through a series of individual agent accounts. Company leaders will soon find themselves answering questions about social networking usage, such as:

• When is it appropriate to push service alerts via CRM software through Twitter or Facebook?
• Should CRM software communicate exclusively via social networking tools, or should it alert customers to messages pending on a company's own internal system?
• What risks might connections between CRM software and social networks pose to customer privacy?

CRM systems in most organizations already coordinate communications where an e-mail is typically answered with an e-mail, and a phone call is typically answered with a phone call. Early corporate adopters of social media-enabled CRM systems have enjoyed success by proactively hunting for customers who use Twitter and Facebook to complain about products and services. Now, the challenge will be to determine how to serve customers who expect rapid communication on their preferred platforms.

Gartner: Adopt CRM Systems Now, Or Lose a 1-Year Head Start

Companies that use the economic downturn as an opportunity to invest in CRM systems and other business intelligence tools will enjoy the same long term benefits as getting a one year head start. That's according to a recent Gartner report on CRM applications, focused on the impact of reducing costs and preparing for the end of a financial slump.

The Gartner report highlights the impact of launching new CRM systems during periodic business declines. Learning how to use CRM systems effectively during slow times is a great way to prevent service bottlenecks when call centers get busy. Training on CRM applications during downtime can help team members feel productive, efficient, and ready to take on bigger challenges once customers start buying again.

Tightening up business processes always feels necessary during a recession, since boom times can often mask the effects of inefficient tools and systems. It's easy to write off a problematic software tool when the opportunity cost to fix or replace it is such a low percentage of a company's gross revenues. As revenues shrink, problems like outdated CRM software become more apparent.

However, the Gartner report reminds business owners not to expect sales to snap back to their former levels right away. In some companies, sales may never reach their previous volume for a number of reasons:

• Customers have changed buying habits.
• "Temporary" discounts or price cuts have become permanent, reducing revenues.
• Competitors have leveraged their own strategies to steal market share.

Therefore, investing in CRM systems is just one of the important tactics that companies can use to ride out the recession. Strengthening training, development, and marketing programs are still necessary steps to make sure that customers return once the economy improves.

CRM Software Identifies Which Customers to Lay Off

Despite recent recovery in the global stock markets, many company leaders still worry that they may have to cut expenses and overhead to stay ahead of earnings expectations. Call centers and customer service operations often seem like low hanging fruit for budget-minded managers eager to automate the customer experience and eliminate extra headcount. Fortunately, many savvy companies have turned their call centers and sales operations into sacred cows, especially when CRM software can help streamline operations and steer more revenue into an organization.

Laying off employees may not be the answer, but there are other people that might find themselves getting the ax this year -- customers. Instead of recommending staff reductions, some customer relationship management experts urge company leaders to consider using CRM software to discover which clients they should fire. CRM systems can analyze whether certain clients demand more than their fair share of company resources. For instance, one customer might demand sever discounts on goods or services while spending a significant amount of time with sales or support teams. Consultant Fred Wiersema recommends using CRM systems to the distinction between "stretch customers" and "lagging customers":

• "Stretch customers" challenge teams to identify and serve upcoming markets. They represent the leading edge of a trend and offer opportunities to test new techniques. By definition, they require more time to cultivate, but pay off in the long run.
• "Lagging customers" take up staff time but provide little meaningful revenue and no strategic advantage. Using CRM systems to separate lagging customers from stretch customers can save companies a significant portion of their marketing and support budgets each year.

While company leaders at Best Buy aggravated consumers by attempting a similar strategy at retail, inside sales professionals can use more subtle tactics to gather the data necessary to determine whether a client's worth keeping. CRM software that can assess a customer's strategic value can pay for itself this way, usually within a few sales cycles.

Gen Y's Impact Felt Through Hosted CRM and Smartphones

If you see fewer sales professionals unboxing their laptops in airport security lines, you're not alone. Thanks to hosted CRM applications and a new wave of sophisticated smartphones, more field agents prefer to leave their laptops at the office. The shift has a little to do with technology and a lot to do with the changing demographic of the mobile workforce.

For the past ten to fifteen years, the most serious sales professionals hit the road with ThinkPads and other business laptops. In addition to PowerPoint slides and sales projections, those portable computers often contained sophisticated desktop CRM applications. Long before Wi-Fi became ubiquitous, sales professionals would keep notes and add new customers on their laptops, synchronizing information with the rest of their office by connecting devices to servers upon their return.

However, tales of lost and damaged laptops pervade the IT service space. Without wireless backup, desktop CRM applications are still at the mercy of dropped hard drives, cracked screens, and misplaced laptop bags. Hosted CRM systems solved the problems of lost data after a laptop failure, but replacing equipment can put a strain on company budgets during tight economic times.

Enter the smartphone. Though hard-core IT junkies note that today's fastest smartphone processors only rival laptop chips from a few years ago, today's phones have just enough power to handle many hosted CRM applications. Furthermore, as Generation Y workers join companies in droves, a new wave of sales professionals already comfortable with sleek phones sees no problems using them for CRM as well as for calls and texting.

This shift is good news for CIOs, who have discovered that they can replace many of their field laptops with less expensive and more durable smartphones. Many carriers subsidize the cost of new smartphones, making them even more appealing. Their learning curve tends to be offset by the convenience of having one less bulky item to carry in the field.

Granted, some CRM systems still don't play nice with all smartphones. Internal company systems often fare far worse than hosted CRM applications, since they require middleware or server licenses that can negate other cost savings. Nonetheless, with more companies adopting hosted CRM applications, the transition to smartphone-based CRM should do great things for company budgets, not to mention sales professionals' shoulders.

Positioning Hosted CRM Software as a Network

Software as a Service (SaaN) offerings have grown in popularity among small business owners, especially since web-based services often cost far less per month to maintain than typical boxed small business CRM packages. For instance, a popular accounting and invoicing solution that costs $199 per year to keep current results in a monthly spend of over $16 for a single user. Competing web services that cost $12 or less per seat per month enjoy an advantage, both from a cash flow standpoint as well as from the perspective of delivering overall value to a growing business.

Mike McDerment, the CEO of Toronto-based FreshBooks, has even bigger ideas for his small business CRM suite. In a recent video and blog post, McDerment challenged customers to ask for more from their small business CRM software by integrating more of their business operations into networked web applications. Using FreshBooks as an example, McDerment illustrated how users can enjoy the convenience of invoicing on a hosted CRM platform while receiving invoices and tracking tasks from contractors or vendors from within the same system.

For small business CRM users, the power to integrate accounts payable into the same systems can unlock many of the same benefits as enterprise-level business intelligence software. Users can make more accurate cost projections, while enjoying more visibility into contractors' task progress. Integrated credit card processing improves cash flow, since users who rebill subcontractor work can connect invoices to specific tasks and jobs. A networked small business CRM solution can also evolve into a job referral platform, since users become more likely to select vendors already using the same hosted CRM tools.

McDerment calls this new way of thinking about hosted CRM a move toward "Software as a Network." Instead of viewing CRM applications and other web tools as silos, he uses Facebook as a model for what can happen when multiple software tools within the same shared destination site. While comments at TechCrunch and other blogs suggest that SaaN may not replace SaaS as a buzzword anytime soon, users of competing hosted CRM applications may find themselves craving the same kind of streamlined functionality as FreshBooks integrated business management suite.

Sugar Express Raises Questions About Hosted CRM and Open Source

If your company develops open source CRM software, what's the incentive for users to pay for it? That's the question most business owners new to CRM systems ask when they first encounter SugarCRM. Developers like to bundle SugarCRM as "free software" for their clients, but companies without server-savvy professionals on staff soon fall victim to the chores of maintaining the right hardware to keep their CRM systems secure and stable.

In the case of SugarCRM, "open source" may mean that you can download and install the software for free, but that you will almost certainly invest resources into equipment and IT staff. That's one reason why the SugarCRM team launched Sugar Express, a hosted CRM platform using SugarCRM at its core.

Pricing for SugarCRM, which includes an initial base of five users and scales to a maximum of ten users, reminds many industry analysts more of Zoho's low-cost hosted CRM offering than many of the service's premium competitors.

For small shops struggling with their current SugarCRM implementation, the hosted CRM option also features paid data migration services. End users experience the same CRM applications they already know, just hosted on SugarCRM's servers instead of their own.

For prospective SMBs and enterprise customers, Sugar Express represents a gateway from hosted CRM to a full-blown internal implementation. By getting users to start with a ten-seat license of Sugar Express, the company hopes to grow the kinds of clients that will more easily migrate to the professional server editions of SugarCRM.

A Fresh Look at CRM Software Failure Rates

Rick Cook notes that failure rates for new CRM software implementations remain at about 50-70%, even though companies and leaders have grown more savvy about training and developing new generations of customer service professionals. He outlines three important reasons why CRM applications often fail to deliver results:

Failing to put the customer first. Deep down, in your heart of hearts, does your company really put your customer first? Are you implementing new CRM software so you can speed up the ordering process for your customer, or are you hoping to shave a few cents off the cost of maintaining your call center. It doesn't mean that you can't do both, but if your motives for a new CRM system are solely based on the cost benefit, you'll find yourself in the pleasant company of business owners who have tried and failed to install new CRM applications.

Failing to secure buy-in. Cook cites a Gartner Group report that illustrates how a lack of motivation among team members can result in a failed or an incomplete CRM software implementation. If your organization doesn't track the results of your new initiative, team members may not be motivated to comply. In fact, a few of them may use the cover of ignorance to openly attack your project. Selling new CRM software to your internal customers is equally as important as selling it to your company's clients.

Assuming that technology will solve all of your company's problems. CRM applications can do remarkable things, but they can't drive new leads to your door or automatically turn around lost sales. Understanding the role of CRM software in your overall sales strategy will prevent you from overspending or under-training in critical areas.

As customer relationship management professionals, it seems like we have to revisit these themes frequently. The statistics speak for themselves, however. Until we can drive overall success of CRM software implementation above 50%, we'll continue to have these kinds of conversations with our teams.

Lessons of Open Source CRM Applications from the Nonprofit World

Few industry segments have embraced CRM applications in the way that charities have. Nonprofit organizations were among the first to automate customer relationship management (often called DRM, or donor relationship management systems).

With a head start on integrating advanced technology into their operations, nonprofits can actually teach for-profit corporations a few things about using CRM software to build loyalty. Cynthia Edwards posted a few of her own top tips from charities using CRM applications:

• Keep donors (customers) supplied with rich content that adds meaning to their lives. Strong storytelling reinforces your position in a customer's life. From a practical perspective, it also makes sure that they will open your e-mail.
• Use e-mail as a personalized orientation to kick start new relationships. The few moments after a new customer has completed a form or made a purchase represent the biggest chance to make a lasting impact.
• Offer strong incentives to share personal information. A relationship can't start until a prospect takes the step of signing up for a newsletter, creating a comment profile, or making a donation (or purchase).

Likewise, non-profits have had more time to deal with the relative explosion of CRM application vendors vying for their business. Common suggestions include:

• Learn the difference between "free CRM software" and "open source CRM software." Budget-conscious charities gravitate toward free or cheap solutions. However, many "free" CRM applications require setup and ongoing maintenance from expensive consultants or vendors.
• Emphasize the need to track referrals and personal relationships when selecting CRM software. Donors often recommend each other, as do customers. Rewarding those introductions plays a pivotal role in developing trust.

Finally, long-time advocates of CRM software in the nonprofit sector often like to remind their for-profit cousins that being not-for-profit doesn't always mean that they don't know how to grow revenue. They simply reinvest it more quickly, directly into mission-based activities, instead of distributing profit to shareholders. Smart marketers can learn a lot from experienced non-profit relationship experts.

CRM Software Developers Note: Twitter Boosted by 25-54 Year-Olds

Posts about so-called social CRM applications have popped up here and elsewhere over the past few months, especially as the instant-status service has experienced hockey-stick growth.

If you still don't know what Twitter is, take a look at this brief explanation from the folks at SuperNews:

All kidding aside, Twitter has tapped in to our delight in sharing ideas with each other -- even when those ideas are a little mundane. Marketers love Twitter because it can allow honest opinions about their products and services spread like wildfire.

Spammers have tried to game the system, but the built-in whitelisting process makes it hard to see unsolicited tweets from parties you don't already know.

CRM software developers like Twitter for two more reasons:

• Developers like to crow about their achievements on the service.
• The prime demographic targets for most American products and services have adopted Twitter far more quickly than they have other types of "social media."

Americans aged 25-54 make up the fastest growing group of Twitter users, according to ComScore. Teens and young adults are using the service, too, though they tend to accomplish the same thing by text messaging their friends directly. Older Americans still prefer to use e-mail and instant messaging services, leaving Twitter to some of the most desirable market segments in the country.

CRM software that integrates Twitter, along with other social media tools, will continue to give marketers a leg up when it comes to building relationships with a growing market segment that prefers to use the phone less and less.

Previous posts about Twitter-focused CRM Software:

• Companies Test Twitter Inside CRM Applications
• Will Social CRM Systems Let You Be More Than Facebook Friends With Your Customers?