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.