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.

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.

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.

"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.

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.

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.

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.

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.

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?

CRM Software Is Just One Step Toward Powerful Customer Experiences

Colin Beasty at CRM Outsiders picked up on a story about how Dubai tourism officials hope that customer service training for taxi drivers can improve consistency for passengers while enhancing the city's reputation.

Researchers have studied how London's famous "Black Cab" drivers manage to blend high levels of technical skills with the degree of social interaction required to provide passengers with powerful, positive experiences. Brain scans indicate that a skilled London cabbie can use multiple parts of the brain at once, operating a car while navigating complex roads and still engaging in conversation.

Some customer service supervisors believe that purchasing CRM software can automate at least a part of that equation. In reality, customer service agents--especially in call center environments--find themselves operating the office equivalent of a Black Cab. They've got to accurately navigate a CRM application, often while attempting to resolve a concern for a caller.

For instance, your representative can use that time to provide "call narration" to describe how the system works. Instead of denigrating your CRM application, he or she can explain exactly what is happening to a customer in positive terms. If the agent has to enter detailed information into the system, polite questions can reinforce the relationship element of the exchange. For instance:

"Before I can look up your order, I'll want to collect some information. May I ask you a few questions to find your account details?"

That phrase sounds better than: "my system won't let me tell you anything until I put in your name."

Likewise, if there's a lag time while processing complex searches, call center agents can explain a little about how their CRM application works:

"Right now, the system's searching through our database of all the flights available to find the best options for you."

Having a positive conversation about something instead of leaving dead air can keep a customer relationship warm. Over time, more highly skilled call center agents can learn how to engage customers on other topics, building rapport. Even the best CRM application can't generate a great customer relationship without help from a skilled agent's brain.

How CRM Software Can Help Hotels Through Travel Downturn

A few months ago, I wrote about some B&B's that were using CRM software to compete head to head with large hotel chains. With businesses experiencing unprecedented travel budget cutbacks and consumers thinking twice about their vacation plans, even the most successful hotels are thinking about how they can get through 2009.

Hoteliers who can leverage the right CRM software with the right associate training can help their companies survive a recession. That's what InterContinental Hotel Group plans to do. Tom Seddon, the Chief Marketing Officer for the company behind top brands like Holiday Inn and Crowne Plaza, told BrandWeek that his company is banking on help from CRM solutions to grow business.

Hotel operators like Holiday Inn can use CRM software to achieve some important goals, such as:

Building Loyalty. Competition among hotels often keeps rates close for similar properties in a market. By using CRM software to run an effective loyalty rewards program, hoteliers can win more repeat business -- even beating out less expensive competitors.

Recovering Lost Business. Reporting on specific feedback can also win customers back after a hotel stay that didn't meet their needs.

Managing Inventory. By reaching out to regular customers using CRM tools and direct e-mail, hotel managers can minimize the number of unsold rooms on any given night.

Reducing Marketing Expenses. CRM systems can analyze the effectiveness of regular advertising and special promotions. Calculating ROI on a regular basis helps marketers like Seddon eliminate poor performing ads or campaigns.

Hotels may not be able to change the state of the economy, but they can help prospective guests change their minds about heading out on the road this year.

CRM Software #2 Priority for Top CIOs in 2009

That's according to a recent Gartner survey of over 1,500 Chief Information Officers at the very end of 2008. The #1 priority on their collective list is Business Intelligence software. While some folks would argue that CRM software is a subset of BI, it sounds like the survey respondents make the distinction between the overall strategic components of BI tools and the specific sales and service elements inherent in CRM.

Servers, hardware, and infrastructure items all found homes farther down on the priority list, confirming a few of the running themes of our CRM software blog over the past few months:

• Faced with stagnating revenues, company leaders find it easier to invest in hosted CRM software than in fixed hardware.
• It's easy to trace the ROI on CRM software and BI projects, making them less risky for CIOs to approve.
• With the stalled-out launch of Windows Vista and the pending arrival of Windows 7, many CIOs are happy to sit out a year of hardware upgrades, especially with such a wide selection of platform-agnostic CRM applications.

Reviewing the list of the same CIOs' most pressing business priorities, it's easy to see why so many survey respondents are ready to write checks for stronger Business Intelligence and Customer Relationship Management tools. "Business process improvement" topped the priority list, along with "reducing enterprise costs." Shifts to seat-licensed software tools can certainly address both of those needs. Other top priorities include:

• Attracting and retaining new customers
• Targeting customers more effectively
• Expanding current customer relationships
• Expanding into new markets

Many CRM software implementation teams hope that such high priorities for their specialty will lead to renewed training and development for previously resistant sales and service professionals.

Cash-Strapped Sales Managers Embrace CRM Applications

Across the United States, sales managers are trying to figure out how to close more deals with fewer resources. Lavish corporate expense accounts are suddenly passe. You can't fly on the company jet anymore, especially if you're taking any federal bailout money. And you'd better not let anybody see you trying to entertain your clients at a company sponsored sporting event.

In this environment, smart sales managers have decided to get even smarter by deploying CRM systems. Yes, even those sales managers who have resisted CRM software implementations for the past few years have rethought their positions. The monthly seat license fee for a hosted CRM application is a fraction of what it used to cost to foot the bill for a three-martini lunch with a customer.

For IT managers and other implementation leaders, this sudden embrace of CRM applications comes at a cost. The pressure's on to deliver solid improvements in sales and service metrics, just on a shorter time table than typical installations. In-house users still require training, and still present the kind of resistance that CRM developers hope to overcome.

New CRM software modules have been designed with today's power users in mind. Chat systems that integrate with public websites can be used to manage more incoming communications at once than current call centers can handle. Stronger e-mail tools can filter inbound messages into quality leads and follow-ups. And task lists tied more tightly into customer time tables help sales professionals understand who to call, when, and why.

The market's only getting tighter, and it's up to company leaders to get behind CRM software -- not just look to it as the Hail Mary pass that can preserve this quarter's profit margin.

Managing Customer Privacy with CRM Software

From today's tweets...

For the past three decades, if not longer, privacy advocates have been worried about the possibility that large corporations could use CRM software to build dossiers on customers that rival J. Edgar Hoover's background files. What happens to the knowledge that a hotel clerk adds to your frequent stay membership files? Can a credit card company hope to derive insight from the unique combination of shops that you visit? Most importantly, will companies make assumptions about you based on coincidences, or can profiles really help marketers understand their prospects?

The latter question is what concerns critics of "social marketing," a practice that uses CRM software and the latest social media to reach new customers. On my Facebook profile, I may list myself as a "fan" of a certain hoagie shop. What I don't know is whether that hoagie shop will use my image to market to my friends. It's already happening on Facebook, and some marketers are experimenting with reaching out through text messages and Twitter. Americans may love to share a little too much personal information on their social networks, but they hate it when third parties use that information against them.

According to some experts, using social media ineffectively generates privacy concerns because data is incomplete or inaccurate. When customers and prospects self-select information, marketers can end up chasing leads that have no interest at all in their products and services. It's just as bad as the classic technique of forcing customers to write down the names of five friends as referrals -- with incomplete or unrefined data, customers will often choose the first people they can think of instead of the likeliest candidates for sales calls. Likewise, social CRM software that doesn't distinguish between deep and casual relationships can shotgun ads to confused acquaintances, hurting brand perception.

Instead, marketing professionals recommend using CRM systems at the hub of campaigns to cultivate customer loyalty. By allowing customers to reach out directly, social marketing programs give customers control over their own privacy. In addition, when customers are more highly motivated to talk about a product or service, their recommendations are perceived as being genuine and valid. Instead of worrying about buying CRM software that can automate "viral" campaigns, marketers should look for CRM systems that moderate social discussion and referrals.

How does your CRM software connect people?

I've been seeing this re-tweeted a lot today, and it dovetails with a lot of the issues I've been thinking about related to CRM software over the past few weeks.

When I encounter sales managers who think that CRM software will be the magic bullet that turns an underperforming team into super-achievers, I get worried for them. And, often, a little scared. When you're placing so much hope on a piece of technology, no matter how impressive, it's often in place of the attention you may need to lavish on your team.

Not all of that attention needs to be good attention, either. Even the best CRM software on the market won't help a team member who doesn't understand how to close a sale, or how to take detailed notes on a call. Automating direct marketing mailings and outbound phone calls won't help when team members don't know how to speak courteously to customers.

The best sales professionals always put the customer first, using technology as a tool to support their personal relationships. The better a CRM application is at cataloguing the evolution of a personal relationship, the better equipped a team can become when it's time to collect orders.