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Source : Oncontact Software
CRM: Big is Not Always the Best
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CRM Software Destination.
Outline:
- You’re looking for a CRM system: Where should you start?
- There are a lot of choices
- Making your checklist
- What’s a better deal, buying or renting?
- Your Next Steps
When you begin your search to find the right CRM
solution for your company, you may find yourself
wondering where to start. There are a lot of companies
out there that want to pitch their CRM solution to you;
however, you are probably already finding out that
these CRM solutions come in all flavors, sizes, and
at varying costs. There are solutions out there that
range from simple contact managers that you can get
for a few hundred dollars to extremely complex multimillion
dollar enterprise applications that take years to
implement.
Over-buying a CRM system can be one of the most
costly mistakes a company can make. We hope
to provide some valuable information for you and
your company to assist your research in finding the
appropriate CRM system for your company.
You’re looking for a CRM system: Where
should you start?
As you have started your research for the appropriate
CRM solution for your company you may have come
across many different options from CRM vendors.
Whether you have found out about various CRM
options from referrals, consultants, internet research,
or through various publications – you have probably
found many CRM solutions that reach across all types
and sizes of companies.
One of the key areas you may want to focus upon when
you begin your CRM research is vendors that are
specifically concentrated on companies that are your
size. There are many CRM vendors that are generalists
that try to be everything to everyone and sell their
wares to whoever will look at it. There are also some
CRM vendors that stay very focused on certain market
segments. There are vendors known in the CRM
market that focus on companies based upon their size.
There are a number of vendors that focus on the small
business segment with simple contact management
solutions as well as enterprise vendors that focus on very complex CRM solutions that generally take six to
eighteen months to implement for large companies.
There are also a few vendors that are exclusively
focused on the mid-market segment. As you undertake
your research you will begin to uncover vendors that
focus on companies your size.
There are a lot of choices
The CRM market is made up not only of companies
that focus on business’s of varying sizes, but also
how the solutions are delivered. CRM Solutions can
either be delivered as an on-premise application
that the customer licenses outright or as hosted
rental solutions. There can be varied costs to these
approaches. With an on-premise CRM solution, the
company typically pays a one-time license fee and has
rights to the software forever. With a hosted, rental
solution, a company typically pays a monthly rental fee,
but will need to pay this monthly fee as long as it wants
to utilize the software. Although hosted rental systems
can appear at first to be less costly than on-premise
systems, once a comparison is done at the hard costs
– these rental systems can become far more expensive.
As discussed before, there are CRM vendors that focus
on small, mid-market, and large companies. Most
vendors that focus on small businesses offer simple
contact management systems that primarily focuses
on account management features and is meant for
single users or a small networked group of users.
Typically, these systems are fairly inexpensive
but provide a simple feature set with limited
customization capabilities.
Many mid-market companies are looking for more
sophisticated systems that offer greater breadth of
functionality, run on relational database technology,
can be easily customized according to a company’s
requirements, and are easy to use. Mid-market
companies are looking for appropriate features but do
not want to over-buy a CRM system which could be a
costly mistake.
Large companies often times may indeed be looking
for very sophisticated CRM solutions that cover the
sales, marketing, and customer service areas of an
organization. Again, these companies are looking
for solutions with an excellent feature set, high
customizability options, the ability to integrate the
CRM solution to third party applications, etc. Large
companies as well are looking for an appropriate
solution but often are concerned about over-buying.
For large companies as well, this can be an extremely
costly mistake.
Making your checklist
When you’re researching what vendors will be the best
fit for your company there is a significant amount of
criteria to consider. Your checklist should certainly
outline the most critical and important priorities your
company has to properly automate the CRM areas
for your company. However, one critical mistake
many companies make is allowing for “scope creep”
to settle in on their CRM evaluation. “Scope creep”
refers to CRM evaluations and implementations where
companies believe they need to over-automate and
include many unneeded features in their CRM system
that users will rarely take advantage of. This can
certainly lead to companies over-buying their CRM
system, picking the wrong solution, and implementing
a system that will take far longer to implement and not
meet their budgetary guidelines.
Some of the key components that we suggest in your
checklist are the following:
- a. Selecting a CRM vendor that meets a realistic
feature set
- b. Selecting a CRM vendor that focuses their Research
and Development on ease of use. If the software isn’t
easy to use, it won’t be used.
- c. Selecting a CRM system that is extremely
customizable according to the specific needs of your
company
- d. Selecting a CRM system that can be implemented in
a short amount of time. Typically thirty to
ninety days
- e. Selecting a CRM system that is affordable. After all,
a CRM system is supposed to save you money and
give you a good return for your investment.
What’s a better deal, buying or renting?
Some of our previous discussions focused around
hosted versus on-premise CRM solutions. In your
research you may be asking yourself, what’s a better
deal? Many of the hosted CRM vendors will try to
convince you that a hosted solution is a far better deal
than owning the software yourself. An easy comparison
is renting an apartment versus buying a house – what’s
better for you? Common sense tells you that owning is
always a better deal in the long run.
Whatever solution you go with, you will want your CRM system to be a long-term solution that your company
will use for many years in the future. We suggest you
perform a multi-year comparison so you can clearly
understand the short term and long term costs of a
CRM system for your company.
With a hosted CRM system, you will face monthly rental
costs for as long as you want to utilize and rent the
CRM system. Further, you will need to keep in mind
implementation, customization, and training costs.
The biggest downfall of a hosted system is that the
rental fees can reach exorbitant proportions over time.
Typically, if you compare the rental fees over a two to
three year period – for the same price you could have
purchased an on-premise system and own it alright
with no future payments due. Most vendors in the
hosted space charge anywhere from sixty dollars per
user per month to one-hundred and fifty dollars per
user per month. This can get very expensive over time.
With an on-premise CRM system, you typically pay once
for the software and you own the license outright with
no future payments due. Also, many CRM vendors have
a lease to own program where you can pay by the month
for thirty-six months but then you own the license
outright with no future payments due.
Your Next Steps
As you can see, overbuying a CRM system can be a
costly mistake. There are a wide range of CRM products
in the market that focus on companies of all different
shapes and sizes. From CRM systems that focus on the
small business to mega CRM systems that cost millions
of dollars that focus on the largest of companies – there
is something out there for just about every company.
We suggest you perform extremely diligent research to
ensure the CRM system your company needs is properly
evaluated to fit the unique needs of your company.
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