7 Steps to CRM Selection.

Many CRM projects are reported to fail for very simple reasons, this guide is designed to help you to avoid these pit falls.

1. Have a strategy

It is critical for the success of your project to understand the needs of your business and the objectives for adopting a CRM system. According to Gartner research mid size companies are implementing CRM for the following reasons:

50% - to provide a holistic view of their customers
29% - to provide visibility of the sales cycle and sales activities
10% - to provide greater levels of customer service and support
6% - to integrate sales and other services
5% - to consolidate systems

Ensure that the strategy you use to meet your objectives in congruent with the businesses goals in general. Take care to ensure your choice of CRM supports your objective to produce favourable outcomes such as:
§ Increasing revenue margins
§ Productivity
§ Work flow effectiveness
§ Customer loyalty
§ Reduction in costs

2. Customer focus
The sales cycle is on-going for the lifetime of your customer, it starts with marketing and continues through sales and service interactions which any business will hope will go on for years - the average life span of a customer is a surprising 3 years! The age of the internet is enabling our customers to become more educated which is affecting customer loyalty, giving businesses greater pressure to retain customers.

If the aim of your business is to match the right customer to the right offering at the right time and win their business, it is essential you have a clear understanding of the needs of your customer. Once you have this you will be in a strong position to provide a fast and relevant service. You will also be able to improve your effectiveness and efficiency in dealing with your customers. This, in turn, could have a positive impact on your staff that could result in improvements in areas like less sickness, greater enthusiasm, provide more opportunity to nurture staff and reduce recruitment costs and improve your rate of attrition.

By gathering data that shows your customers preferences, your company will be able to focus your efforts on your customers rather than pushing product. It is a well know fact that it is less costly to retain a customer than to acquire a new one, good CRM will allow you to sell more to your established customer base and help you to retain them for longer.

Some questions to think about
How will the CRM system support the corporate strategy?
Which departments will use the system and who needs to be involved in the system design?
Which processes will need to change and which will be impacted?
Consider a customer satisfaction survey to understand the level and quality of service they expect.

3. Consider the end user
Involving the end users as early as possible will help to manage the overall cultural change such an implementation will create. Take into consideration the need to lead, train and support employees when rolling the solution out.

Questions to think about:
Think about a communication plan to involve employees in the design and roll out.
What are the training requirements to ensure good user adoption?

4. Measurable business benefits
To be able to demonstrate a return on your investment (ROI) you’ll need to put some measures in place. Gartner reports if you monitor and measure the effectiveness of your CRM system against preset targets, a tangible ROI can result.
64% achieved a measured ROI
95% improved efficiency
46% increased revenue
95% improved effectiveness
68% lowered costs
66% found they gained competitive advantage

Questions to think about:
Is there a link between your ROI measures and your corporate objectives?
Have you established key measurables and how you will report on them?
If you decide not to implement a CRM solution what might the long term cost to your business be?

5. Total cost of ownership (TCO)
Analysts commonly set 3 years to calculate the total cost of ownership. It is very likely the majority of the cost will be in the licence fees, services and training, which occur in the first year and ahead of any measurable business benefits. It is common for 60% of the overall project cost to be realised in the first year.

By setting up a TCO analysis along side the strategic expectation at the outset will help you to manage expectations and give the project the long term support required to make it a resounding success.

The following gives a guide to the typical costs during the first year

Software 30 – 38%
Customising 34 – 47%
Maintenance & Support 7 – 10%
Hardware 8 – 18%

In the second and third year the costs are around support and maintenance. Software will remain minimal unless you consider expanding the system.

An industry specific solution could help to reduce the customisation requirement and yield quick results.

Questions to think about:
Are you considering your costs v’s benefits over a 3 year period?
Have you planned to change or grow in this time and considered the impact? Are you considering a quick fix that might need to be replaced in the short term and could end up costing you more in the long run?
Have you considered data security?
Does an industry specific solution make sense for you?

6 Your selection criteria
Generally, CRM is used by companies to connect data, people and processes in their front office, typically this would be in sales, marketing and service departments.

The following 7 criteria was consistently identified in a Gartner research study with a group of mid-sized companies:

Features
Ease of implementation
Ease of customisation
Price
Ease of use
TCO
Ease of integration with the back office.

Taking your understanding of your overall business objectives, growth plans, workflows, ROI requirement, financial resources and time to implement will enable you to weight each of the above to help you identify the appropriate systems for your company.

Questions to think about:
Can you identify the factors that will help you to achieve your business objective?
Do the suppliers have the features required to support your business processes?
Will the solution integrate with your existing systems?