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The Panacea and Pitfalls of Hosted CRM Software

Contact Management is Not CRM

Confusion persists in the tangible differences between contact management programs and CRM (Customer Relationship Management) applications. The two program types are differentiated by scope, objectives, business purpose and utilization.

In determining the scope of a desired solution, users must identify up front whether their goal is to manage contacts or achieve a broader CRM business strategy. Early hosting solutions focused far more on contact management and often retained little more customer information than rolodex cards. CRM software buyers must recognize that basic contact managers offered via the Internet still only provide basic contact management - and generally do not fulfill a CRM business opportunity. Fundamental differences between contact management systems and CRM applications are illustrated below.

Contact Management
Customer Relationship Management
Often referred to as an electronic rolodex. Provides quick access to account names and contact information. Includes more comprehensive and detailed customer information. As opposed to just displaying contact information, CRM applications include a life cycle view of the customer relationship, categorized histories of interactions and correspondence, audit trails of activities, and account information such as the account’s buying hierarchy, procurement history, product inventory or satisfaction surveys.

Supports individuals or small teams.

Generally exists for the benefit of an individual.

Supports team selling, business processes among multiple people or departments, account management across various organizational boundaries and opens up customer information to any one in the organization who can benefit from it or add value to the customer relationship.

The customer relationship exist with the organization, not a just an individual. Activities and tasks can be allocated between team resources and scheduled among team members with follow-ups and reminders. Account progression or customer resolution is visible to anyone whom can influence the account relationship, such as the person who generated the customer lead, the person that’s selling something to the customer or the person who’s assisting the customer with an incident or other resolution. When each team resource is aware of all other customer interactions while speaking with the customer, fewer mistakes are made, fewer toes are stepped on and the organization appears much more organized and customer-centric.

Generally a piece meal system used in conjunction with other business systems. Multiple information systems normally result in overlap, redundant data, duplicate efforts, lack of big picture visibility and multiple versions of the same information. CRM seeks to integrate all customer touch points and customer information repositories. CRM must provide a holistic picture or single 360 degree view of the customer relationship based on activities from across the organization. The most cited CRM tentacles used to provide the whole picture account view include marketing interactions, sales force automation and customer support.

More emphasis on data management and less capable of informational reporting. Information visibility or analysis is minimal. There is typically little to no information roll-up, trending, key performance indicators or customer analysis. Customer data from across the organization is consolidated and packaged in meaningful reports, data warehouses or other analytical tools. Data becomes information which becomes actionable by getting it to the right people at the right time. Sale opportunities automatically roll-up by territory, sales groups or other company structures. Sale pipelines and forecasts are automatically available in real-time without manual intervention or effort. Exception conditions can be detected early and understood by reviewing customer information from multiple perspectives and with easy to read graphical displays.

Standalone systems which generally provide very limited integration capabilities or data exchange with either desktop programs or legacy systems. CRM applications are normally designed with importing, exporting and data integration in mind. Tools should be provided to allow non-technical users to perform imports and exports. Most information can be easily exported to a spreadsheet for manipulation or modeling or a word processor for a mail merge in a few keystrokes. Contacts and activities can be synchronized with e-mail programs in order to provide a consistent picture whether in an e-mail program or the CRM application. Although spreadsheet integration has a place, users often upgrade from contact management systems to CRM applications in order to automate the many activities previously manually performed in spreadsheets. More sophisticated integration needs can be accomplished with API’s (Application Program Interfaces) or loosely coupled Web services.

Hosted contact management systems generally do not support remote connectivity, mobile devices or offline operation. Decentralized organizations, staff who work from home offices and traveling sales professionals fall into the sweet spot of the SAAS value proposition. CRM applications not only provide anytime, anywhere browser access but also provide system availability with or without Internet connectivity and with various mobile and wireless devices such as Pocket PC or Palm.

Possibly the most material difference between contact management programs and CRM applications is the significant difference in feature sets, automation capabilities and information reporting. The acquisition of a customer management application which turns out to be functionally deficient will result in increased manual activities, more difficult user adoption, unplanned software customization and multiple shadow (duplicate) systems.

Functionality reviews should begin with the basics. Functional requirements must address the scope of the solution, business objectives and user productivity. To surpass the limitations of contact management systems and begin the journey toward CRM, buyers are advised to look for more flexible customer information tracking and logical or intuitive information presentation.

CRM applications should exceed the basics of contact management data capture functionality by identifying accounts with segmentation elements such as user-defined account types, account families and account categories. The more flexible systems will permit tree controls or multiple tier hierarchical structures to visually display account types and their relationships as well as recognize that a single account may belong to more than one type, family or category. Other data capture basics which are all too often forgotten include the ability to retain multiple telephone numbers, physical addresses and e-mail addresses for every organization and every contact. When was the last time you communicated with some one who only retained one e-mail address? As organizations decentralize, telecommuting continues to broaden and more and more staff work from home offices, the ability to retain a virtually unlimited number of addresses becomes more critical. Contact management applications that only accommodate a few telephone numbers, a few physical addresses and single e-mail address are generally deficient from the first day.

Once all necessary account information is captured and retained, the information must be presented logically, intuitively and based upon individual or role definitions. Sales professionals, marketing specialists, account managers and customer service representatives (CSRs) all view account information differently. CSR’s may choose to group, view and prioritize accounts by customer size, product type, service level agreement (SLA) type or an incident type. Sales professionals should be able to create various groups of accounts by business development criteria such as territory, revenues, headcount, industry or other user-defined segmentation. Whatever the customer criteria, every user should be able organize and view multiple individual groups of accounts so that they can efficiently proceed through whatever designated accounts or activities are next in priority. It is a big plus if the CRM application can leave the active account or activity work list visible while allowing the user to proceed through their individual account progression. Customer relationship management applications which can present user-defined viewing of accounts, activities, opportunities, campaigns or incidents in grouped subsets and in a sequential work-order fashion greatly facilitate user effectiveness by working through various account groups and activities in an efficient, organized and productive method. CRM system utilization studies show a significant productivity difference between accounts or activities presented in a grouped, sequential or list order fashion versus a larger and seemingly unorganized listing which requires the user to hunt and peck through a global population.

Failed User Adoption Equals a Futile CRM Implementation ...  More CRM Journey

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