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The Panacea and Pitfalls of Hosted CRM Software

Beware of CRM Vendors Who Don't Practice What They Preach

Through repeated teachings and lessons learned from highly publicized implementation failure rates, the buying market has recognized the fundamental principal that CRM (Customer Relationship Management) is a business strategy and process and CRM software solutions are enablers to achieve the CRM vision. Just as most buyers would be skeptical of purchasing an accounting software system from a vendor that couldn’t produce an accurate invoice, so to should buyers be cautious with CRM vendors who fail to achieve CRM strategy with their own customer base.

Although not entirely unexpected for a new technology, SAAS (Software as a Service) vendors are experiencing extremely high customer churn. Churn not only hurts the vendor, but causes great frustration, financial losses and increased risks to the customer that must switch solutions. Interestingly enough, a very high percentage of customers who leave SAAS vendors go to other SAAS vendors, thereby indicating the perceived failure is with the vendor and not with the on-demand or hosted software model.

Evaluating the SAAS provider’s relationship strategy, policies and practices is both a tell-tale of the future customer support quality as well as a strong indicator of the capabilities of the actual software solution. If the SAAS provider is not equipped or fails to identify, understand and anticipate the needs of its customers, it is unlikely the vendor’s solution will empower its customers to do so. Minimum vendor support criteria for evaluation should include designated customer service liaisons, freely available technical support, professional services for project-based engagements and demonstrated relationship strategies.

Designated customer liaisons are typically part of the help desk group and generally provide first tier support as well as act as a coordinator for all other customer requests that escalate or fall outside the liaisons direct responsibility. By having a direct go-to resource, each customer has an inside champion within the vendor’s organization and bypasses the all to common scenario of being passed among several staff and voice mail boxes before finally getting to the right person (assuming the caller doesn’t give up before finally getting there.) In addition to not having to reiterate your system environment with every different customer support representative you ever speak with, the bigger benefit of a designated liaison is that over time, your liaison becomes very familiar with your system usage, actually learns your business and can proactively make meaningful suggestions or recommendations.

Vendors who provide technical support without surcharges, limits, hassles or user perceived penalties increase their user’s likelihood of a successful implementation and post-production user adoption. Vendors who impose usage penalties such as cost, limits or availability are shooting themselves in the feet. Vendors who relegate technical support to e-mail or force the user to self-service are shooting their users in the feet. Anything less than a knowledgeable, live customer support help desk operation provided in conjunction with the software subscription and without artificial constraints is an impediment to CRM implementation and post-production success.

Similar to technical support, SAAS providers whom offer professional services for specialized engagements increase CRM success rates. However, vendor approaches differ greatly in this arena. While some SAAS vendors offer in-house consulting resources directly to the customer, many vendors outsource or refer professional services and consulting projects to third party business partners. The benefits and risks of managing a single partner or multiple partners are no different here than elsewhere. While a single vendor partner increases simplicity, assumes greater accountability and if the partner is the software publisher, is more vested in ensuring the solution succeeds, multiple partners can bring greater quantity and depth of resources. If multiple partners are considered, it is incumbent upon the customer to proactively create the safeguards that mitigate the all too common vendor finger pointing. Also be wary of the bait and switch. Several SAAS vendors begin professional services dialogue referencing their own commitment and resources, and then later find reasons why a third party partner should be used instead.

Finally, evaluate up front whether your SAAS vendor actually practices and succeeds in relationship strategies. Find out if there is anybody at the SAAS provider that actually knows who you are by name? When you call for support, are you actually recognized as a person? Is the person with whom you will be talking empowered to make decisions? Are your product suggestions and enhancements catalogued and taken seriously? Will you ever be proactively called by the vendor and offered suggestions based on your utilization of the system? The answers to these questions both separate the existing SAAS vendors and greatly alter the likelihood of success or failure in CRM implementation and post production operation.

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