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CRM Software Buyer’s Guide

CRM, or customer relationship management, has existed for as long as businesses have. Now, instead of filling handwritten ledgers with information about each client, or simply being forced to have a great memory, business owners are able to use software to collect all the data they need to analyze their relationship with every unique customer. This data, when presented as a whole picture, isn’t just used for improving individual relationships. It can also be used to help businesses better understand their target audience as a whole.
The term CRM encompasses all of the strategies and technologies that are used to capture, manage, and analyze the relationship between a customer and a business. While business owners before the age of computers only had strategies and basic tools like pen and paper, we now have a wide variety of technology that can be of use. This doesn’t only include CRM software. A business website, social media profile, or mobile app could also be considered part of their CRM.

Why CRM Matters

Keeping up with your customer relationships matters on many levels.

  • Sales Goals: If you have a sales goal that includes a specific number of new leads, it is impossible to track this without collecting data on which sales came from new customers, and which came from repeat customers.
  • Marketing Strategy: The best marketing comes after you know your audience. CRM allows you to become very familiar with what your audience wants, and what tools draw them in the most. Does your audience respond better to flash sales or referral programs? With CRM, you’ll know.
  • Customer Service: Most consumers today say that they are consistently disappointed in the level of customer service offered by businesses. The biggest reason? They feel like a number. In order to keep your customer service focused on people, you need to know them. Even small personal touches, like reaching out with a personalized email after a sale to be sure the customer is happy, can boost your business in the eyes of the cynical consumer.

What CRM Software Does

CRM software tools usually offer companies tools that collect basic contact information, track sales, archive contact between the customer and the business, and often even catalogue preferences based on click-throughs or browsing data. All of this information is catalogued into one database, where you can analyze patterns to get a bigger picture of your audience. The most common things that businesses do with CRM software include:

  • Automating sales force efforts: CRM software can track all contact between a customer and your sales force, ensuring that no efforts are ever duplicated or wasted during the entire process.
  • Automating marketing efforts: Repetitive tasks such as reactive emails or promotional social media posts can be delegated to your software, freeing your time for customer service.
  • Automating location-based efforts: Local sales in your customer’s area can be instantly found and noted with CRM software that includes geographic marketing abilities.
  • Automating call center services: Some basic problems can be solved via software, which cuts down on calls and makes your customer service process much simpler for all involved.
  • Tracking the performance of the business through the many activities that are logged on the software. For example, most software tracks how much revenue was generated in a day, how many new contacts were added to an email list, and so on.
  • Automating workflow: Most CRM software includes basic features such as alerts, calendars, and other productivity tools to keep you or your employees working at the right pace.

CRM in the Social Media World

Many business owners are now looking for CRM software that has a heavy focus on social media connection. Just as reactive emails can be sent when a customer performs a certain action, reactive social posts are also becoming a leading trend in CRM software.
CRM software has other uses in the world of social media as well. For example, software can often be programmed to offer very basic customer service solutions to customers who complain via social media, or can collect data from social media reviews for you to analyze. CRM software has been created to focus on Facebook, Twitter, LinkedIn, Instagram, and other popular networks.
Finally, some CRM software options are using social media to create micro-communities of customers, who come together to share reviews and build a sense of loyalty to the company together. A great example of this is a Facebook Group, or a hashtag that is used by fans of the company on Instagram. These groups then become valuable research pools for the business.

CRM in the Mobile Word

The other big trend in CRM software right now is mobile responsiveness. This is a two-fold trend. The first part is connecting CRM software to mobile features of a business’ mobile marketing efforts – for example, if a business has a voice-activated feature, CRM software can be used to leverage this feature more fully.
The other part is connecting your customer service team to the CRM features via their own mobile devices. For example, a CRM software could connect your sales representatives to customer data when they are in the field.

On-premise CRM vs. SaaS CRM

Large corporations often require on-premises CRM software. This is software hosted on the corporation’s own computers, with no need for an outside database to be accessed or used. This allows the corporation to have full control over every part of the software, and to keep customer data totally private. The company is required to provide all software upkeep, since automatic upgrades wouldn’t be accessible.
SaaS CRM, or “software as a service”, is also called on-demand CRM. This is a cloud-based CRM software that is hosted on an outside server, and accessed by the company via Internet. This allows a smaller business, without their own internal IT department, to have a reliable CRM software that is automatically maintained by the software developer. There are several concerns with this type of CRM software, including:

  • Privacy: Customer data that is kept on the cloud is more susceptible to hacks, losses, corruption, and other issues that could put your customers’ privacy at risk.
  • Cost: SaaS CRM software generally operates on a subscription payment, meaning it is more expensive in the long run than purchasing an on-premises CRM.
  • Longevity: When software is hosted on another server, no matter how reliable, there is always the concern that the data can be lost if the server crashes, if the provider goes out of business, or any number of other issues.

Overall, however, most small businesses will still choose a SaaS CRM software, because of their lack of internal IT department. Having a dedicated IT service to maintain the software is vital to its operation.
There is a third option that some businesses choose, especially those that employ IT-savvy employees. Open source CRM allows companies to create their own CRM solutions, using a base software as a start. This is perfect for intrepid companies with small budgets who need unique CRM tools that aren’t offered by other software providers. SugarCRM is a very popular open source CRM provider.

What Can CRM Do for You?

If you aren’t currently using a CRM software, chances are you have all of your customer relationship data in several different programs. You may have their contact information in a spreadsheet, all of your appointments in your smartphone calendar, and files scattered in Google Drive or Dropbox. Every time you get new contacts, you have to go through all of these programs to add their information.
Now assume you have come to the end of a financial period, and you want to analyze how well a new responsive email campaign worked. You’ll probably want to compare how many new contacts you added to your email list during the time the campaign ran; how often those contacts ended in sales; how many of those customers initiated contact with customer service; and many other data points.
So, now you have a problem: You have to go through all these different programs and files to collect the data for each customer, narrowing the results down to just those that occurred during your campaign. That will get time consuming very fast.
Now, picture the same scenario if you had been using a CRM software. Not only is all of the information you need in one place, but many CRM software options will also create reports for you. You could immediately see how well your email campaign performed without having to crunch any numbers yourself.

Top 4 CRM Software Vendors

Comparing software vendors can be difficult, because many CRM software solutions are created specifically for certain industries. Not all industries need the same features, and what is a five-star product for one business owner may be useless for another. But these four vendors are generally considered the best providers of CRM solutions across the board.

Salesforce.com

Salesforce.com is the only one of these four that offers a CRM software totally hosted in the cloud, making it the number one choice for small business owners. Salesforce has created a wide range of CRM products, but all include the same core functions: contact management, marketing automation, reporting and analytics, and lead management.
Salesforce does rely on add-ons for industry-specific needs, rather than creating entirely new software for each type of industry. One of their most popular add-ons is call center management, something that many other CRM vendors, such as Infusionsoft and Microsoft Dynamics, don’t offer. Salesforce also offers social media integration add-ons for both Twitter and Facebook.

Oracle

Oracle has been creating CRM solutions since the 1970s (and the founder is actually the creator behind Salesforce as well). This company is mostly focused on larger businesses, creating on-premises CRM software that can be used as a stand-alone product, or bundled with their other Oracle business software systems.
Oracle’s core functions include marketing, sales, social media, price and quoting, and customer service features. Just like Salesforce, it offers extra applications that can be used to make the system more industry-specific. Rather than offering a flat month-to-month subscription, Oracle’s payment system is based on the number of contacts your business has.

SAP

SAP is very similar to Oracle in that its CRM software is designed specifically to work with its other business products. It can also be used as a stand-alone software, though, and it takes a slightly different approach to customizing your CRM software. Instead of offering a core software with add-ons, SAP offers feature modules. Companies can pick and choose which modules they need, and leave behind any they don’t. This makes it easier for companies across all industries to get exactly the CRM features they’ll use and nothing else.
The key feature modules of SAP include lead management, contact management, customer service management, marketing automation, and reporting and analysis. SAP is mostly used by smaller businesses, and users typically love the fact that SAP’s marketing automation module includes the ability to build an email campaign right in the software itself. It also includes a collaboration ability for team members.

Microsoft Dynamics

It would be hard to talk about the top four CRM vendors without mentioning Microsoft, simply because the name is synonymous with computers. The CRM software they’ve created, called Dynamics, is of course meant to integrate very deeply with Microsoft’s operating system. For businesses that rely on Microsoft’s UI and trust the company’s reliability, this is a very popular option.
The core features of Dynamics include lead tracking, sales automation, field service automation, mobile app development, customer service management, financial reporting and analysis, and workflow management. The only real downside for most users is that Dynamics doesn’t offer quite as much in-depth analysis and review as third-party software like Salesforce.

What Problems Do CRM Vendors Face?

CRM can be a very powerful tool. However, CRM software can also become yet another useless database if the software isn’t managed or used properly. If the data is stored, it does nothing. The right action has to be taken to distribute, organize, analyze, and connect the information.
Because so much data is collected and streamlined for a “big picture” view of your marketing efforts, customer service efforts, etc., it is often difficult for a CRM software to focus on an individual customer. Here’s why this can become a problem:
Most businesses organize their customer contact information into separate groups. Groups receive promotional emails or targeted ads based on their biggest interests, as indicated by their shopping history. Amazon is the perfect example of this, sending emails with recommended products based on your past purchases. But when your CRM software can’t differentiate between one individual and another, how will it catch if a customer gets sorted into two groups? Now that customer is receiving duplicate contact, is bombarded with emails or advertisements, and is more likely to unsubscribe. If this happened to one person, you can bet that it will happen to others in your system.
The only way to ensure that this issue does not become a problem for your company is to carefully manage the database. Duplicate contact must be caught and deleted by a human eye, for now.
CRM software is very good at analyzing past behavior, which can then be interpreted by you to predict future behavior. However, CRM software is not very good at predicting negative customer behavior. Certain dedicated analytic software, for example, can see the signs of a dissatisfied customer long before the angry emails start rolling in. This can help you predict “churn” (business turnover, basically), and take action accordingly. CRM really cannot see these patterns until an obvious issue, like an angry email, comes in. At that point, it may be too late to stop the churn.

The Future of CRM

The future of CRM is largely focused on better mobile and social media integration. These two points of contact, more than any other, are where businesses are seeing the most growth in their sales. It only makes sense that CRM software must follow these trends.
Integration with other business software is also a trend on the horizon. Oracle, Microsoft, and Salesforce are already showing how this model is the most successful over all. By integrating a CRM product with other business software, companies have a more streamlined work flow, and are able to be far more productive.
Privacy concerns continue to be addressed, both now and in the future. While cloud security grows stronger, and more CRM solutions move away from on-premises software, customers are still feeling vulnerable to data breaches. At this point, it is still on the company’s shoulders to make the customer feel safe giving their personal information – but in the future, CRM software vendors may come up with new solutions to address this issue.
Data cleansing is another big trend that is working its way up the list of hottest new features in CRM. The problems that can result from duplicate content, incorrectly sorted content, and more, can create huge workloads for employees at every level of a business. CRM software that includes powerful data cleansing tools are likely to become the most popular choices in the future.

How to Choose the Best CRM Software

With all of these facts in mind, choosing the right CRM software for your business takes careful consideration. There are many other vendors beyond the top four that can be explored, particularly if you are interested in open source CRM software. Here are some questions to consider:

  • What is your budget? Most small businesses will need to stick with SaaS CRM software, so be sure to consider the annual price of the monthly subscription model, rather than just the monthly cost. Some CRM software vendors charge by the user, some by contacts, and some are simply a flat fee per month. Be sure to factor in set-up costs and maintenance fees, as well.
  • How will your business use CRM? Do you need a great customer service workflow with in-depth analytics, or are you more concerned with lead management? This can help you compare software options.
  • Why do you want to use CRM? If your end goal with CRM is to improve your marketing campaigns, you may want something different from the business whose end goal with CRM is to improve productivity in their call center.
  • Do you even need CRM? In general, if you have a large contact list, if you want to boost your sales without adding more time at the office, or if you want to offer a better customer support experience, then you need a CRM software solution.

Beyond looking for the core features that you’ll need in a CRM, consider things such as:

  • How easy is it to use? Will your least computer-savvy employee be comfortable with this software?
  • Is it customizable? Can you turn a basic CRM software into something that is exactly what your business needs and nothing else? Some CRM vendors offer add-on features, while others have modules that can be used to build customized software from the ground-up.
  • Can the software integrate with your other tools? This can help you keep all areas of your business streamlined and up-to-date. It eliminates busy work and saves you time.
  • How secure is this CRM software? Privacy is still a major concern for cloud-based CRM software, so be sure to consider what steps the vendor took to provide a secure system.
  • What type of customer service does the vendor offer? When you need help with your CRM software, where will you turn? With your customer experience depending on this software working correctly, you’ll need to ensure the fastest turnaround any time there is an issue.

Choosing the right CRM software may take a few trials with various products before you find the perfect solution. Once you do find the product that works best for you, be sure to take full advantage of the many ways in which CRM can connect you to leads, manage your brand image, and help you turn your current customers into life-long fans.

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