Customer Relationship Management (CRM) software has long been a crucial component for the success of medium to large businesses. Increasingly, CRM is becoming necessary for small businesses as well. A well-implemented CRM system leads to enhanced productivity, increased revenue and better customer service, satisfaction and retention as well as centralising all customer data in one place that's accessible to all staff.
In this overview we'll look at seven CRM solutions, compare them and give some recommendations for where each would have the best fit. We'll also look at the CRM market in general — what's changing and what to look for when considering a CRM suite for your business.
Hosted or on–premise?
CRM solutions, spearheaded by the poster child of Software as a Service (SaaS), Salesforce, started the move to cloud computing just over 10 years ago (Salesforce was founded in 1999). When we last looked at CRM suites (The best CRM suite is...), the split between in-house and hosted deployments was probably around 50:50. In today's post-GFC world, SaaS deployments are more popular.
This, then, is the first choice you have to make when planning your CRM implementation: do you want to run one or more in-house servers and databases and hire the necessary IT admin skills to install and maintain such a solution, or do you want to pay a monthly fee per user to someone else to do all that for you?
While on the surface that choice might seem easy, there are other considerations to take into account. If your business is experiencing rapid growth, and you already have a large installation in place, an on-premise solution might scale better (and cheaper) than a cloud solution (if you're starting from scratch, a cloud solution will probably scale better). If yours is a larger business with extensive customisation needs, an on-premise deployment is often necessary to realise the full value of CRM. Hand in hand with customisation is the need for integration with other back-end systems. If you have Enterprise Resource Planning (ERP) systems today and can see the benefits that can be had with true integration across the board, this also might point to an in-house deployment. If your sales people are mostly on the road and you know they'll have internet access wherever they are, a cloud solution could work, but most on-premise deployments come with an offline client where users can make changes wherever they are, and these are seamlessly synced once reconnected.
The benefits of cloud/on-demand CRM include quicker implementations, lower initial costs and accelerated return on investment (ROI). Note, however, that it's probably not an option if your workforce doesn't have constant access online, and if extensive customisation is needed with your implementation.
Another aspect of the cloud to take into account is reliability: if you workforce is completely unable to do work during planned or unplanned downtime, it can be quite frustrating (if not damaging to business) to wait for off-site status updates; whereas, with an on-premise system, your IT staff will often have a clearer idea of what's going on.
Finally, cloud solutions can be a lock-in for your business data. What if your cloud CRM vendor folds, or international events or changes in laws prevent you from accessing your data? If you need to switch from one platform to another, how easy is it to access your data, back it up and prepare it for import to the new platform? Make sure you do your due diligence before committing to a particular solution.
Out of the tested solutions, SAP Business By Design, Salesforce, LeadMaster and Oracle CRM are on-demand only, whilst Microsoft Dynamics CRM, Sage CRM and SugarCRM can be deployed either in-house or rented as a cloud service.
A CRM for your business or your business adapting to the CRM?
This is another challenge with CRM systems: it's not just a matter of buying or signing up for a solution and all your customer relationship issues are solved; a solution needs to be adapted to your business processes and particular needs. To fully realise an ROI with these systems, customisation is required, and they need to be integrated with other existing systems in your business, otherwise your CRM database will end up being just another silo of data.
A trend that is affecting sales and marketing more than any other business area is the proliferation of mobile devices. With a limited need for actual content creation, these departments are turning to tablets (and, to a lesser degree, smartphones), and you'll need to ensure they can access your CRM platform.
Some of the CRM packages we looked at also offer industry vertical customisation/templates. These can be tremendously important and can save a lot of cost and energy in the implementation phase; after all, if your business manufactures machinery for nurseries it's likely that your requirements are similar to other nursery equipment manufacturers.
Security is another consideration when selecting the right package — in a small business with few sales and marketing staff, a tightly locked-down environment is probably overkill. As your business grows, though, it will be crucial to be able to lock down and control access to some information as well as be able to audit who changed what and when. Some of the tested packages offer better support for these types of features than others.
The curve ball — Web 2.0
Another trend that was only in the starting blocks a few years ago when we did our last comparison is the amazing proliferation of social networks. How do Facebook, Twitter and LinkedIn, for example, affect the sales, marketing and customer service stance of your business? More importantly, how can these forces be integrated into your chosen CRM solution to best advantage?
In this rapidly changing landscape, it's important to build a flexible strategy around social networking. Things to consider are whether you're broadcasting (one-to-many communication) or engaging more in one-on-one communications (or if, in fact, you're hoping that one-on-one communication will go on to reach others). A major challenge for many businesses in dealing with social media is being authentic; engaging with customers on this level can be extremely rewarding, but canned marketing responses that are just copied and pasted can quickly kill any trust you may have garnered.
There are a number of ways to leverage these trends for marketing and sales professionals; one is to mine the wealth of customer data in social networks and conversation platforms. Another is to reach out to existing and new customers through these channels. How this can be accomplished without overwhelming staff is the challenge but some solutions do exist, often identified as CRM 2.0 or Social CRM (SCRM).
There are two flavours of CRM 2.0: in one, traditional CRM vendors are offering plug-ins to their existing solutions to integrate the relevant functionality. With the other there are stand-alone platforms that focus exclusively on CRM through social networks. The most well-known of the latter is Jive SBS (Social Business Software). Others are Lithium and BatchBlue.
A social CRM solution should provide brand monitoring (to help you keep abreast of what people are saying about your products and brands) and interfaces to different social platforms (so you can participate in the conversations). There should also be support for analytics (reporting on popular content, navigation paths, search keywords, as well as behavioural tracking to see customer interactions in your online spaces) and community support to let you manage customer communities from within your CRM environment.
A well-implemented social CRM tool should let the sales department mine social media data for more relevant information on leads and customers, while the marketing department should be able to connect with customers earlier in the buying process.
The Giants lock horns
No discussion on CRM platforms can be complete without looking at arguably the two biggest players: Salesforce.com and Microsoft Dynamics CRM. Whilst neither company is very open about the number of subscribers and other data, some information is available. The average Microsoft Dynamics CRM subscriber has double the number of subscribers compared to Salesforce.com, and average company size is about 30 for Salesforce.com customers compared to 50 for Microsoft Dynamics CRM. Both products are growing. Comparing the two functionality-wise there are some point differences: Microsoft Dynamics CRM has better Outlook integration, but is limited to IE as the only usable browser; it can be deployed both in-house and in the cloud. Salesforce.com has Chatter (a collaboration app), broader browser support and a larger add-on market. Overall, they are both very good CRM suites. Microsoft ran an aggressive promotion in the first half of 2011, offering $200 for each user when a company switched from Salesforce.com; that campaign has now been replaced with a $150 cash offer for any business in the US or Canada that signs up at least 50 users for two years. Time will tell if these sorts of marketing approaches will tip businesses towards Microsoft's solution.