Your CRM Choices

Web-based CRM: evolution or revolution?
As little as a year ago industry analysts were talking about a shakeout in the sales force automation marketplace. They predicted that as the field matured vendors would merge, succeed or die, and customers currently faced with an array of confusing choices would find it easier to make a decision as the playing field thinned out. The survival of the fittest in the process of natural software selection would result in a few good, tried-and-true vendors. They turned out to be, as most predictors of the future are, both right and wrong. There was indeed a shakeout, but the choices, rather than dwindling, have multiplied.

Companies contemplating entry into the brave new world of customer relationship management have stepped into the middle of an evolutionary revolution. The Web, casting its Net over us all, has hooked us in and changed the environment. The dinosaurs are extinct, some vendors have adapted and new life forms, Web-based customer relationship management systems, have arrived to join the fray.

Just within the past year some of the new packages have emerged to enthusiastic reception by analysts. Some are still being developed in a garage somewhere and will be next year’s industry darlings. True, having more to choose from complicates the decision, but the good news for those shopping for CRM systems is that the Web is actually driving costs down and ease of use up. Since the Web requires no software other than a browser, and most people know how to use a browser, systems that used to take weeks or months to deploy at significant cost can be up and running in days with minimal outlay. Best of all, salespeople who are Web-savvy will be more willing to actually use the system.

SFA on $1 a Day
How much is a customer relationship management system worth? If you’re a multinational corporation trading in multiple currencies, you will most likely want to consider the more established enterprise vendors and are probably willing to pay a premium. But if you’re a small to mid-size sales organization for whom overhead is a serious issue, the new Web-based systems offer an exciting, low-cost alternative.

In the days of the dinosaurs, there was client/server software. In 1998, for the top 30 vendors listed in The Guide to Sales, Customer Service and Marketing Automation (ISM, Bethesda, MD, 1999), the average price for the server was $24,300. In 1999, that server component was down to $3,420, a decrease of 85 percent. Why? According to Barton Goldenberg, president of Information Systems Marketing Inc., Web-based software doesn’t require a server, so vendors were forced to discount this piece to make their products competitive. The average user license fee, however, slightly increased from $1,654 per user in 1998 to $1,727 in 1999, an increase of 4.5 percent. These are list prices, which are often discounted between 30 and 70 per cent.

If you’re wary of making a software investment, consider outsourcing your CRM application altogether. Upshot Online, from startup developer Upshot.com, is a CRM system that is actually a hosted service. Priced at $29.95 per user per month, it requires no up front setup charge, no minimum number of users and no minimum rental period. This Web-based bargain includes contact management, opportunity management, time management, forecasting and Web monitoring of late-breaking news events on competitors, prospects and customers. Still not convinced? You can sign up for a free, 30-day, three-user trial. The company claims that the application requires no training for sales users. “I’ve actually seen a team of sixteen people be up and running in less than an hour or so. If they know how to use a browser, they know how to use this,” says president and CEO Keith Raffel. “What Upshot Online is all about is being simple, fast and affordable. I don’t think any of the other solutions is putting a premium on these things. It’s for when you want to have something that’s up and running in minutes or days – and salespeople will actually use it.” Higher-end products may have more features, but at $1 a day, sales managers may decide it’s not worth shopping around.

Focus on the Middle Market
If you are a small to mid-size sales organization on a tight budget, you will be pleased to know that you still have clout. As a matter of fact, your influence is growing. While large organizations (more than $1 billion in revenue) made up 43 percent of CRM customer license revenue in 1997, according to AMR Research, a Boston-based analysis firm specializing in enterprise applications, vendor focus is now turning toward mid-size and small companies, as well as smaller divisions of large corporations. Internet technology is of particular value in automating the indirect sales channel, so you can allow your manufacturer’s reps, business partners and value-added resellers to look at pricing and marketing encyclopedias, develop custom quotes online, receive new leads and use online configuration tools. The CRM system also enables you to track the leads and sales activity you pass on to your indirect channel, instead of letting them fall down a black hole.

The mid-market vendors are integrating Web-based applications into their portfolio of products.

SalesLogix, based in Phoenix, AZ, has always targeted the middle market CRM niche and has now added e-commerce to its software suite. CommerceLogix includes eLeadSite, which allows you to collect leads on your Web site and push them to the Commerce Server for automatic follow-up via business and workflow rules. With eOrderSite, you can enable authorized customers, partners or employees to order from an online product or services catalog by clicking on a button and dropping items into a virtual shopping cart. eConfigurationSite allows salespeople, business partners and customers to specify product and service configurations online. The CommerceLogix server is priced at $2,995. Per-user pricing for the SalesLogix Sales Information System is a very reasonable $995 for the first five users.

Another vendor who has traditionally addressed the middle market is On!contact Software Corporation. On!contact is adding eCMS, a Web-based CRM application, to its Client Management Software (CMS) front-office suite. eCMS is 100 percent accessible through a Web browser, with no downloading of software necessary. You can capture prospect, lead and customer service information from your company Web site and automatically route the information to eCMS. Your users have instant access to the CMS customer database from any Internet connection. Pricing for all components in the CMS family is $1,495 per user, with quantity discounts available.

Transforming Customer Service into New Sales Opportunities
As they recognize the value of retaining satisfied customers in addition to acquiring new ones, companies are increasingly transforming their customer service call center operations from passive handling of customer inquiries into opportunities for cross-selling and up-selling products to their customer base.

Several of the leading vendors in Web-based customer service applications are capitalizing on this trend and are expanding their vision to encompass marketing and sales. Silknet Software began shipping Silknet eService in early 1997 and quickly demonstrated the value of its Web-based customer service solution in the market. With its introduction of its new eBusiness System product, the company now provides a complete, Web-based view of customer relationship management. Leads and opportunities coming in from the Web can be dynamically managed through automatic business rules. Companies can tailor Web site interactions and content to the needs and interests of each Web site visitor through real time personalization. Customer profiles and business rules can be used to proactively cross-sell, up-sell and anticipate customer needs. Silknet also supports electronic commerce, including store-creation and management tools, personalized shopping and promotion, order processing and management, and analysis and reporting. Its primary business proposition is to enable integrated, consistent customer management across applications designed and optimized for the Web.

For many companies, providing added value is their number one competitive weapon. These companies are turning their customer service call centers into proactive CRM solutions, expanding beyond the telephone into the Web, electronic mail and facsimile, and striving to differentiate themselves by providing excellent service to their Value Added Resellers (VARs) and business partners.

IMA is a vendor who has provided applications used by call center representatives performing telephone-based support, but has extended its focus to include solutions that help companies provide support through the Web. Its EDGE Applications suite of pre-packaged CRM applications are specifically designed to help organizations adopt a multichannel approach to customer interaction. Companies can also build custom CRM applications by using the EDGE application development environment without purchasing EDGE applications. The front-end user interface for EDGE Internet can be any standard Web browser. According to the Aberdeen Group, linking with other enterprise-wide information technology resources is an increasingly critical CRM requirement. IMA has productized gateways to multiple database management systems, complementary CRM applications and the Internet.

Weaving the Web into your CRM Effort
Even if you’re not ready to select a Web-based CRM system, you can still make use of the Internet in your customer relationship management initiative. Avoid some of the common pitfalls and you will not get caught up in a tangle.

Prospects are most likely turning to the Web as a source for information on your company, as opposed to calling for a brochure and waiting to receive the literature in the mail. You can put your marketing collateral online on your Web site using a tool such as Adobe Acrobat, but make sure that it’s also available in plain old HTML format, in case the browser your prospect is using doesn’t have the correct viewer.

A useful feature appearing in some CRM packages is the ability to access the Internet from a prospect lead, so that you can go directly to the lead’s home page from the contact record. This ability can help you in qualifying the prospect.

Some vendors offer the ability to automatically download leads from the Internet into the CRM package. Caution: the quality of the leads may not be high. Consider filtering the leads through a sales support group before forwarding them to the direct sales force.

Business intelligence obtained through the Web can give your salespeople a leg up on your competition, making them better informed before calling on a customer. Many vendors offer the ability to create or update a marketing encyclopedia using information regularly downloaded from the Internet. Web tools such as BackWeb’s Market Intelligence Manager automatically gather information about competitors, customers and the marketplace from any Internet or intranet location. Software agents continuously monitor the specified information sources and proactively deliver the changes. If you decide to use a business intelligence service, make sure that you’re selective about the information you choose so your salespeople aren’t inundated with email.

Finally, given the growing importance of the Internet and of Web-based CRM, carefully consider how your potential CRM package interfaces now, or will interface, with the Internet and make sure that its direction matches your vision for your company’s future.