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How to choose the right CRM software for your organization

Choosing the right CRM software can be daunting for organizations. Follow these five steps and best practices to ensure the search, adoption and deployment processes go smoothly.

When the COVID-19 pandemic pushed B2B and B2C commerce online, customer relationship management software became an indispensable tool.

CRM products were once complex, monolithic systems and have evolved to accommodate changing work habits and IT strategies. CRM technology trends illustrate the importance of CRM strategies and careful evaluation of the software. However, the divided market between software and cloud services complicates how organizations choose the right CRM software. Sprawling feature sets and vertical bundles tailored to specific industries also increase these challenges.

CRM buyers should follow these steps as they shop for CRM software or cloud services.

1. Identify needs and priorities

Organizations can break down product evaluation into three major categories, each with multiple elements: technology and features, vision and roadmap, and deployment and purchasing models. Some criteria may conflict, so organizations should weigh it all to account for requirements and constraints.

Evaluations must start with identifying needs, including the following:

  • overall business processes and how customer outreach fits within them;
  • customer buying and communication preferences, with input from marketing teams;
  • sales teams' processes, pipelines and needs;
  • the importance of sales force and marketing automation to achieve business goals and how organizations document and standardize processes for programmatic execution;
  • how customer service fits into the organization, requirements of customer service representatives and how customer service and support integrate with other business processes;
  • stakeholder expertise on CRM software and UX requirements, and whether stakeholders prefer feature-rich, customizable experiences or simple, streamlined experiences; and
  • the financial and IT strategy regarding tradeoffs between Capex for internal systems and Opex for cloud subscription services.

2. Determine necessary technology and features

Organizations use CRM software through a sales funnel that spans brand and product marketing awareness to generate customer interest. That interest eventually leads to customer action.

CRM software can address milestones that encompass many processes within sales and marketing teams, including the following:

  • lead generation;
  • contact management;
  • marketing campaigns and automation;
  • digital marketing, including email, online advertising and social media;
  • sales data collection, forecasting and analytics;
  • sales force automation and tools, including mobile apps;
  • knowledge and case management; and
  • employee, project and lead tracking.

CRM buyers should identify their needs in each area and assess how products address them. Any product evaluation should also include technical factors that affect implementation, reliability, usability and compatibility with other software. These factors include the following:

  • Product innovation and responsiveness to changing business and customer needs. For example, in 2020, the ability to integrate CRM into a video conferencing system like Google Meet, Microsoft Teams or Zoom offered a competitive advantage.
  • UI and feature integration, as well as overall product usability, including default configurations that let new users work immediately, built-in dashboards, reports and workflows and access to features and customization.
  • Service bundles and configurations customized for specific industries or categories, such as financial services, healthcare, supply chain management, field service or customer support.
  • Global customization, including support for laws, regulations, currencies and financial standards in different countries.

3. Inspect vendor vision, roadmap, viability and support

CRM software is a long-term investment, as it eventually permeates all aspects of sales, marketing and customer support. Thus, buyers must carefully assess CRM vendors' potential benefits, including the following:

  • Product roadmap and vision, including the vendor's CRM market view, position on SaaS versus installable software and how it introduces features in response to customer requests. Buyers should also judge and evaluate a vendor's marketing narrative and product positioning.
  • Financial health, viability as a standalone company and acquisition prospects. After product evaluation and installation, an organization doesn't want a company to acquire and absorb its CRM vendor and disrupt software migration.
  • Product support processes, service-level agreements, responsiveness and available support tools like self-help knowledge bases, online customer forums and debugging tools. Global organizations should also consider a vendor's international presence, such as support available during business hours in all time zones.
  • The regional footprint of SaaS products and how they deliver low-latency service to different geographies.

4. Evaluate deployment and purchasing model

The biggest choice that CRM buyers face is the product's deployment and purchasing model -- namely, the choice between traditional software and SaaS.

SaaS is increasingly popular for CRM, especially due to Salesforce. Salesforce's founders built the company on SaaS, and it has grown into the largest CRM company. Other vendors like Microsoft and SAP have hybrid strategies that offer both cloud services and installable software. Nonetheless, CRM software's future is in cloud environments, as most vendors emphasize their managed offerings.

This decision largely dictates other financial choices, such as a licensing structure, support costs and infrastructure for self-managed software. Thus, the choice between SaaS and software isn't solely a tradeoff between convenience and control. It's about an organization's cash flow outlays for subscriptions, equipment amortization and operations personnel.

5. Put it all together

The best way to consolidate and weigh the criteria is an evaluation matrix with each vendor, factor and its weight.

Below is a sample evaluation scorecard that organizations may use for major purchases. For the vendor rankings, 1 is the highest rating and 4 is the lowest. To calculate the total, multiply the rankings by the weight listed in the left column, then add those totals together for each vendor individually to get their final scores. The vendor with the lowest score has the highest ranking.

Vendor/Factor Vendor A
(Rank: 1-4)
Vendor B
(Rank: 1-4)
Vendor C
(Rank: 1-4)
Vendor D
(Rank: 1-4)
Feature 1
(Weight: 0.2)
Feature 2
(Weight: 0.2)
Feature 3
(Weight: 0.2)
(Weight: 0.1)
Financial stability
(Weight: 0.1)
(Weight: 0.1)
Purchase model
(Weight: 0.1)

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