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A 10 Step CRM Selection Framework

In choosing a Customer Relationship Management (CRM) solution that meets the most important needs of a company, there are multiple factors to be considered. All CRM solutions are not created equal and the challenges facing a small- to medium-sized business (SMB) are far different than meeting the customer demands of a global corporation.

Many businesses fail to consider all the steps that go into selecting a proper CRM solution. This article will help simplify the CRM decision process by outlining a proven CRM software selection framework which includes ten steps to guide a company toward making the best decision.

A Proven Approach to Selecting CRM:

  1. Begin with a Business Case. Evaluating CRM software without first identifying the critical business drivers that will directly impact business performance is a recipe for a failed CRM effort. Customer Relationship Management software supports a company's customer management strategy. It's important to recognize that CRM is business strategy, supported by CRM software, designed to grow mutually beneficial customer relationships.

    To be successful with CRM software, you need to have a clear CRM strategy, with measurable objectives, that CRM software can then enable via data management, process automation, information reporting and more. Don't make the mistake of beginning a CRM software selection before you have a CRM strategy. It's a CRM selection best practice to create a business case that outlines the CRM strategy and identifies specific and measurable objectives that CRM software should facilitate.

    For example, objectives may include improving marketing campaigns by increasing lead acquisition conversions by 5 percent, or improving sales effectiveness by increasing sales win rates by 2 percent, or increasing customer retention by improving first case resolutions or customer satisfaction by 5 percent. There are many possible goals. The critical success factor is to document these goals so that you can then identify the best CRM software system to achieve your objectives.

  2. Executive Sponsorship is a Mandate. Obtaining internal sponsorship is the most important early step a company can take if it decides to move forward with a CRM solution. Internal sponsorship usually comes from the C-suite, however, is often delegated down to become the responsibility of the vice president of sales or marketing. If your CRM solution is intended to improve revenues, it's critical that the executive sponsor have revenue accountability, and preferably own the P&L. An executive sponsor should start by asking good questions such as: How will CRM impact the lives of employees? How will CRM impact productivity? or how will the business be impacted by not doing a further evaluation of CRM?

  3. Assemble the Project Team. Organize a project team for the CRM evaluation process. The project team should include a dedicated Project Manager, an employee from each of the affected departments or locations, and representation from Information Technology (IT). Depending upon the size of your company and scope of your project, you may also create a Steering Committee. The goal of the project team will be to represent all stakeholders and to understand, document and prioritize stakeholder needs so that those needs can be objectively compared to different CRM software systems. There's an old saying that if you need something done, give it to a busy person. This applies to finding the right staff to participate on the project team. Project team participants should have intimate knowledge of business processes, be respected by their peers and be capable of acting as change agents. What you'll inevitably find is that the people with the least time are exactly the people you need to join the CRM selection project team. Make sure you get the right people on the team, and not necessarily the people with available time on their hands.

  4. Begin by Brainstorming. The project team should initially meet with representative employees (most likely select managers and potentially selected employees with a CRM background, most companies have a few people that fit this role) to white board or brainstorm what each department wants in an initial solution wish list. This list should include a full spectrum such as features, automation, reporting and even technical considerations. Don’t worry about a budget at this point as this list can be pared down at a later date once scope is better defined or a budget has been established. Make note of the items that overlap. If you find during your white board sessions that there are redundant or even conflicting wish list items, you'll need to drill down and get more detailed information or make them a priority. For example, the sales team might want sales automation dashboards and a friendly user interface. The customer support team might want automated routing queues and a friendly user interface. The key overlapping feature here is a friendly user interface, which should be prioritized as it will improve the user experience and user adoption for the most affected people.

  5. Evaluate Business Process Improvement Opportunities. The team should thoroughly review existing business processes and keep an open mind to process re-engineering. Focus on not repeating flawed or inefficient processes in the new CRM solution simply because that process is currently in place. Use process mapping software such as Visio or white boarding of both existing and new workflows to identify bottlenecks or process improvement opportunities. This is a chance to start with fresh ideas and processes to improve business.

  6. Consider Delivery Methods. Cloud CRM is experiencing tremendous growth but still represents less than half of new CRM purchases, which means of course that on-premise CRM is still more prevalent. SaaS or cloud delivery can achieve benefits such as the elimination or reduction of up front capital expenditures, accelerated time to value, outsourcing of a non-core competency, on-demand scalability, predictable IT expenditures and even enhanced business agility. However, with it's recurring subscription payment, whether or not it will achieve a lower total cost of ownership (TCO) over the life of the application is something you'll have to calculate. The required investment may be lower or higher for either deployment model based upon various unique customer criterion and therefore has be individually calculated to determine which delivery model actually achieves lower TCO.

  7. Establish Budget. Once the CRM project goals have been established and the system requirements defined and prioritized a budget can be put in place. Reviews of multiple CRM applications have shown that on average the up-front costs make up only a small portion of the overall investment. Cloud CRM systems reduce or remove upfront investments in application software and hardware such as servers, but may or may not cost less over a five year expected life. You'll need to perform a calculation analysis to determine your actual TCO, and be sure to include either the SaaS subscription or on-premise license along with implementation services (installation, data conversion, configuration, training, etc.), system integration, software customization and annual maintenance (for on-premise solutions). If you do the math, you'll generally find that CRM systems with comparable upfront pricing result in very different TCO over their expected lives.

  8. Vendor Selection. Once the decision has been made between a SaaS or on-premise solution, the CRM vendor evaluation process can begin. It's advisable to limit your review to no more than four vendors as each review is comprehensive and taxing. Also recognize that about 70-75% of functionality is common across most enterprise CRM solutions. Therefore, you'll save time if you focus on the unique and difficult items. Also, don’t get caught up in the feature "wow" game. You will mostly like see features that you didn't know existed, and look pretty cool. But in reality most vendors have or will soon have any wow features, and further these features have a way of never actually getting implemented. Instead, remain focused on your most prioritized requirements. Finally, don’t get sucked into the bait and switch version game. Avoid CRM systems that make you continually upgrade to the next (more expensive) level to get features shown during the demos or that you actually need.

  9. Validate Customer Support. There's a significant problem in the industry in that some of the highest growth CRM vendors are unable to keep up with their sales success when it comes to customer support. This can become extremely frustrating for new CRM customers—who need support the most. Be sure to identify your support options before you make a CRM purchase.

  10. Consider Staying Power. The CRM software industry is going through consolidation. It's seldom a good thing if your CRM vendor gets acquired, as support begins a quick decline, prices begin to escalate and you'll likely be pushed to a different product, such as the acquiring vendors flagship product. Consider the strength and viability of any CRM vendor before you make a capital purchase and long-term investment. The last thing you want is to have to change systems prematurely. End


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It's a CRM selection best practice to create a business case that outlines the CRM strategy and identifies specific and measurable objectives that CRM software should facilitate.


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