Optimal CRM Solutions
By Brad Connard
My brother-in-law the neurologist—it sounds more like the start of a great joke than a discussion about selecting the optimal outsourced CRM solution. That said, my brother-in-law has significantly contributed to my thinking about CRM solutions. He insists that the most challenging part of his job is developing an accurate diagnosis. If done correctly, the cure is frequently the easier part.
As I've reflected on my experience in both obtaining and providing CRM solutions, the most challenging aspect also is with the diagnosis. If we don't fully understand the problem, how can we develop the CRM cure? Accordingly, the first step in selecting an outsourced CRM solution is thoroughly defining the business problem at hand.
Diagnosis is the first of three core steps to curing the CRM business blues through an appropriate outsourced solution.
1) Diagnosis. Identify the problem.
2) Solution prescription. Determine the correct way to fix it.
3) Outsourcer evaluation and selection. Pick the best outsource partner.
I've seen too many CRM solutions fail due to misidentification of both the business objectives and the underlying root business problem(s). Business objectives for outsourcing can include cost management, acquiring new technology capabilities without capital investment, or acquiring new CRM capabilities without adding new headcount. Knowing the business objective and the business problems (customer acquisition, retention, customer profitability, etc.) will drive the correct criteria for evaluating CRM outsource alternatives.
A valuable tool in supporting the diagnosis is the business case. The business case quantifies the magnitude of the problem, prioritizes the relative importance of investing in a solution and helps to obtain corporate buy-in to the outsourcing decision.
Developing a correct diagnosis requires the proper vision. Sometimes those charged with obtaining the CRM solution may be too close to a situation to objectively assess it, or they may not be familiar enough with the issues to know all the questions to ask. A team approach, supplemented by an objective and experienced third party, is a great way to obtain an accurate diagnosis.
Once the diagnosis has been made, you're ready to determine the correct solution. Many CRM providers can dispense a partial solution, but which provider has your total solution? For example, if there is a retention problem, it possibly could be improved with any number of solutions:
Better customer information (a data issue);
Better customer service (a training or process issue);
Better customer management systems (a technology issue);
Better anticipation of customer issues (an analytics issue); or
Better products/services (a marketing issue).
The optimal solution, however, might combine data, technology and process. Vendor solutions have different strengths and weaknesses and it's critical to align vendor strengths with realistic CRM needs.
Design the optimal solution before potential vendors are identified and evaluated. What would the perfect CRM solution look like? Once this mental model is complete, you have a benchmark for evaluating potential vendor solutions.
Evaluation and Selection
The final step in the process is selecting the correct outsource partner. This also is a critical piece of the process since you most likely will be making an appreciable investment in time, resources and dollars. There are many criteria that need to be evaluated to ensure the optimal selection.
Functional Capability. The outsourced CRM solution must meet the majority of the CRM business needs you've identified.
Technology Compatibility. If there is technology involved (e.g., databases, networking, data transfer), is it compatible with your existing technology, and do additional investments need to be made?
"It's just a matter of a little programming" is not an encouraging vendor response. Technical issues can cost money, time and aggravation.
Core Competence. If you want the best CRM solution, it should be a key part of the vendor's business. Is the CRM solution a core competence and central to the vendor's business? If not, then it may not be a well-supported solution, or an area for technology investment by the vendor. Worst case, it could be a part of the business that was sold or discontinued.
Price. Price shouldn't be the sole determinant, or even the most important, but often it is critical. Think both of start-up price and ongoing costs. We like to think of "value" versus price—will one vendor partner provide greater value?
Chemistry. What is the personality of the vendor company, is it consistent with your company? Who are the account managers, and are they a good fit for your liaison person and your company?
Flexibility. Typically, no vendor will have a solution that is exactly what you need, so it may be critical to make modifications. Is the vendor willing to customize the solution for you without charging a small ransom? Will the outsourcer collaborate with you to meet aggressive timeliness?
Financial Stability. A great outsourced solution is not so great if the vendor goes out of business. Is it financially viable; does it have a strong client list; is its business growing; and does it have a strong management team?
Security. Most outsourced CRM solutions will involve your customer data— a valuable corporate asset that needs to be protected. Does it have good physical and network security? Are there sufficient back-ups and system fail solutions?
A comparative matrix with criteria weightings is a very useful tool in guiding the decision process. The ultimate decision also should be shared with those in your company who are responsible for supporting the CRM solution and extracting value from it. Cross-functional support, at all levels of the organization, also is critical for success.
Following theses guidelines, performing thorough due diligence, and asking questions will help you obtain a successful outsourced CRM solution.
Brad Connard is executive vice president, client relations for Quaero, a leading CRM services provider. He can be reached by e-mail at email@example.com