74 percent of businesses used customer relationship management (CRM) software in 2013, making it one of the most ubiquitous types of business software. Put simply, CRM software helps organizations manage their interactions with their customers. CRM software tracks each interaction a sales representative has with a prospective or current customer, and catalogs the interactions in a database. Businesses can use this data to find patterns among customers, or track their progress through the sales funnel. This knowledge often leads to increased ROI, and more personalized customer and lead interactions. It’s even been shown that CRM applications can boost employee productivity by 26.4 percent. This guide was created to not only offer an overview of this technology, but also to aid in prospective buyers' efforts to compare crm software while in the buying process.
Customer relationship management technology has its roots in database marketing and contact management software. Database marketing came about in the 1980s, and utilized pools of customer data to select specific customers for marketing communications. Contact management software, meanwhile, focused on the details of each customer account, such as names, addresses, and phone numbers.
These technologies eventually combined, and by the late 1990s, organizations such as Oracle, Baan, and SAP had entered the CRM market. The decade ended with Salesforce introducing the first Software as a Service (SaaS) CRM, a product that was initially targeted toward smaller businesses but disrupted the entire market.
In 2007, Salesforce again disrupted the market by introducing Force.com, a Platform as a Service (PaaS) that developers could use to make custom applications for the Salesforce CRM. In response, some of the best CRM software applications have become much more modular, and allow businesses to add-on features as needed.
Today, the CRM market shows little sign of slowing down. Most businesses have systems in place, and mainstream platforms now integrate with social media, and business intelligence systems.
New features and applications are constantly being created for customer relationship management software, so functionality varies greatly between platforms. In order properly compare CRM software, you must understand the basics of the features they offer. At their core, every CRM should have several basic functions, which stem from the marriage of contact management software and database marketing over a decade ago.
Contact management creates a profile for each customer or prospect that business users can fill out with basic information such as a phone number, email address, and physical address. CRMs with more advanced contact management features allow users to store documents in each customer profile as well as detailed specifics, such as what stage of the buying process the lead is in, or information about previous deals.
Contact management helps business keep their important account information up to date. This makes sales reps and managers more efficient because they can quickly find and absorb all the pertinent information about each account. They can then structure their pitch and strategy around specific, up to date information.
Although contact management may seem like an online Rolodex, businesses of all sizes see great benefit in keeping their sales process organized and up to date. Today, contact management forms the foundation of nearly all organized sales departments.
Customer Interaction Management
Customer interaction management software tracks each touch-point a sales representative has with a customer or prospect, whether that interaction takes place in person, via phone, or through social media. Customer interaction management creates a detailed history of each customer’s relationship with your business. This helps companies determine which strategies are consistently successful, or where a relationship broke down.
Customer relationship management has continued to expand in terms of power and functionality, resulting in the rise of customer experience management, which is software that utilizes multiple data sources to manage interactions across a huge pool of customers.
Sales force automation, as its name suggests, helps automate a number of sales process tasks. For example, once a user enters an upcoming sales presentation into a contact management platform, SFA will populate the user’s calendar with the details of the meeting, and issue alerts when the meeting time approaches.
Sales force automation often includes sales forecasting functions that predict future sales figures based on historical data, and can identify under-targeted segments in the market, a feature better known as opportunity management. SFA software also pulls data from contact management and customer interaction modules so that users don’t have to manually enter data in multiple places.
By pulling data from customer interaction modules, and tracking each users’ activity on the CRM platform, SFA software can create in-depth productivity reports that detail each sales reps performance. Like contact management software, SFA can come in standalone best-of-breed applications. However, most of the best CRM software providers will feature some type of sales force automation, even if it’s as simple as just automating data entry.
SFA functions can even expand into inventory management, and product knowledge management, which basically stores training material that sales reps can refer to during pitches.
Best-of-Breed versus Integrated
Best-of-breed CRM software refers to specialized tools that excel at specific tasks. Meanwhile integrated CRM suites have a wide range of functionality, albeit in limited form.
Choosing between the two comes down to the needs of your business. Do you find yourself interacting with a huge number of customers, over a large number of territories? A best-of-breed SFA platform is often the best option for managing large amount of clients.
Alternatively, does your business serve fewer clients, but need help with inventory management and help desk automation? A more expansive suite with several integrated functions will likely better serve your needs. To date, market research has shown that sales force automation is the most sought after best-of-breed application, perhaps due to the wide assortment of tools that fall under the SFA umbrella.
Best of breed can also refer to industry-specific software. Certain industries have unique needs and interactions, along with specific key performance indicators. Packaged goods, architecture, engineering, construction (AEC), and field service management companies are all examples. Before moving forward in the buying process you should investigate any a specific to your industry.
As the CRM industry blossomed throughout the first decade of the 2000s, numerous studies surfaced detailing low adoption rates among companies attempting to implement this new software. Given the heavy investment implementing a CRM platform entails, businesses must pay attention to such categorically low adoption rates. Low adoption rates not only undermine your investment, they hamper the productivity of your workers, which negatively affects your bottom line. Naturally, it's imperative to gain an understanding of the underlying causes of low adoption rates and move to address them as swiftly as possible.
The factors are three-fold:
Despite significant progress in user experience and interface design, CRMs are still not the most intuitive platforms to use, and they require sales representatives or business users to invest a considerable amount of time becoming competent with the program.
Setting aside time to train employees on CRM use is critical. This software can return tremendous benefit to your organization, but your employees have to know how to use it. Investing heavily in training at the launch of the CRM will pay off in the long haul, even if you have to create that training program internally.
Businesses often develop unrealistic benchmarks for adoption and usage without properly assessing the how much time it will take to achieve those results. Often, this isn’t solely a mistake of IT buyers, but rather stems from inflated sales pitches from CRM vendors. Something to watch out for when comparing CRM software providers.
To avoid setting unachievable goals, do the proper research on the front end, and vet each solution carefully. If a promise in the sales pitch seems too good to be true, it likely is. Remember the cost, human capital, and time commitment that implementing a CRM will require, and apply the proper amount of skepticism to promises made by sales reps.
While it’s tempting to choose a CRM with hundreds of bells-and-whistles, the truth is that your employees won’t use what they don’t need. In fact, overwhelming them with features can lead to them not using the software at all. Some CRMs rival enterprise resource planning software in functionality. Choosing such a massive program just for your sales department will naturally result in low rates of adoption.
Most CRMs feature module designs that allow businesses to pick and choose which functions they want, while opting-out of features they don’t need. The greatest benefit of modular design is that no decision has to be final. If your business undergoes a substantial change – such as significant growth – you can choose to activate additional features you didn’t previously need.
Think in terms of your most immediate business priorities and configure your CRM around those needs. After you’ve had time to assess the successes and failures of deployment, revisit your configuration and make more informed decisions about functionality.
As SaaS CRM software has become more popular, mobile functionality is becoming an expected feature. Mobile CRM applications equip sales teams in the field with the same information that sales representatives leverage in the office to create better customer relationships.
It’s predicted that the number of mobile CRM apps will surpass 1,200 this year, as demand for on-the-go information continues to rise.
Customer Experience Management
While some view it as a separate category, customer experience management (CEM) software is better thought of as the next step in the evolution of CRMs. Where CRM evolved by digitizing customer information and combining it with historical data, CEM adds to that by integrating information such as customer’s online buying behavior, and in-store purchases.
Like CRM, CEM programs include a wide range of functionality, such as social media interaction tools, and business intelligence modules that display personalized online offers to consumers based off their historical data.
CRM software helps businesses maintain contact details, as well as past deals they’ve closed. CEM helps businesses utilize such data in order to better understand customer behavior. Though the terminology is different, the core functionality and purpose is very similar. CEM is likely the next software that businesses will use to manage their customer relationships, which really just makes it the latest version of CRM technology.
At TechnologyAdvice, our goal is to guide you through the software selection process and do as much of the heavy lifting as we can. The CRM Market Index represents a thorough, unbiased analysis of leading CRM solutions. Leaders are distinguished by outperforming their competitors in areas such as customer satisfaction and support, market presence, and overall utility. Only the top 15 products are shown below. To see more CRM solutions, use our Product Selection Tool above or download the full report to see our complete rankings.
The CRMs below are plotted based on their customer service and support score (the y axis) and their feature score (the x axis). The size of each company's circle corresponds to their overall market share, company size, and media presence.
We started by considering over 100 different CRM products of every shape and size, then narrowed the list to 24 contenders with a set of parameters based on current industry standards. Finally, we conducted an in-depth analysis of these 24 contenders on the basis of estimated market presence, overall utility, and customer support and satisfaction.
1. Market Presence: Estimated percentage of the overall CRM market that a particular vendor controls. Our analysis goes beyond simple market share calculations, by including:
2. Utility Score: A quantitative assessment of a product’s ability to meet most or all business needs within the customer relationship management discipline; calculated by measuring:
3. Service Score: The service score reflects user sentiment about particular products and the vendors’ ability to deliver effective, reliable customer support. Total scores fall between 0 and 22, measured according to:
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