Five Ways To Win CRM CustomersBy David Myron | Print
Almost half of all mid-sized companies are evaluating CRM systems. Here are five things you can do to win a piece of that business.
CRM is rebounding. Despite reports of high failure rates (as high as 50 to 80 percent, according to Gartner Group and MetaGroup) almost half of all mid-sized companies are evaluating CRM systems. In fact, AMR Research Inc. suggests as much as 48 percent of mid-sized companies (organizations with revenues of less than $1 billion) are evaluating CRM solutions and 35 percent will have implemented one by the end of this year.
The resurgence of CRM's popularity is largely due to an increase in CRM's success rate thanks to lessons learned from past mistakes. To avoid making the same CRM-related mistakes, read the following five necessary tips to ensure successful CRM installations.
How can you prove the success of a CRM system if you don't set goals prior to the implementation? You can't, CRM consultants argue. That's why Sue Handman, CRM solutions director at RCG Information Technology, a consulting firm based in Edison, NJ, says organizations must set in place a predefined set of mutually agreed upon metrics. "Everyone, including IT, sales people, customers, the software vendor, and integrators, have to agree on what the expectations are, how the project will be implemented, and over what time frame," she said.
Tackle Bite-Sized Projects
If there is one thing small-and medium-sized businesses (SMBs) can learn from their larger competitors, it is the wisdom of implementing the CRM system in small, more manageable chunks. Smaller projects yield faster returns on a company's CRM investment, which instills confidence and support from the customer company's upper management. For instance, Chicago-based Inforte Corp., a mid-market consulting company that Forbes magazine recently named among the best 200 small companies of 2003, has set up a time line for success. Implementation success should be between 8 to 10 weeks, user adoption rate in 10-14 weeks, operational success (supporting business processes) in 10-14 weeks, and financial success (change in sales) in 14-24 weeks, said Douglas Turk, executive vice president and general manager at Inforte.
Compete on Price
Unlike large enterprises, SMBs are on stricter financial diets. In addition to weighty software costs, some mid-market companies are blindsided by hefty implementation and maintenance costs. "The average billing rate in the industry is $175 per hour," said Benjamin Holtz, president and chief executive of Green Beacon Solutions, a mid-market CRM consultant in Watertown, MA. To stay competitive, Holtz charges $125 per hour and offers payment options such as weekly contracts at discounted rates for unlimited 24x7 support, so maintenance charges for large projects are kept in check.
Train the Brain
To keep costs to a minimum, customer companies are going to look for consultants that offer onsite training so they won't have to call for a consultant every time they need to customize or maintain the system, Inforte's Turk said. "Companies should have people who are power users and who can do some of the embedded capabilities in terms of reporting and configuration. The complexity is in integration requirements, such as pulling data from one source to another. But in terms of business functions [customer companies] should have the capabilities on staff," he said. He added a $2,000 training class could train an employee to do 70 percent of the reporting work.
Expand Your Reach
Don't let remote locations prevent you from sealing the deal. Customer may not want to pay for your travel costs, such as airfare and hotel. To prevent customers from choosing another consultant with national coverage, align yourself with partners, or subcontractors near major metropolitan areas. "We have seen some [companies] that have consultants work all over the country, so you don't have to pay as much to move them around," said Scott Nelson, vice president and research area director at Gartner Inc.
With these tips you can help your clients contribute to the 35 percent CRM mid-market adoption rate as well as continue to decrease the CRM failure rates.