Buying Guide

Before You Buy: CRM Checklist for Enterprise

CRM Buying Guide

CRM Software Purchasing Problems

Avoiding the pitfalls of purchasing CRM software is an old problem; a famous early example is outlined in a Harvard Business Review study from 2002:

When rolled out a customer relationship management (CRM) program in 1998, it was sure it had a new money-making strategy on its hands.

The job-listings company spent over a million dollars on customized software, integrating all its computer systems, for CRM software tools specially developed to allow’s sales representatives instant access to data for prospective customers.

But with all the impressive features, nobody thought to check how it would all work when people from the field actually used it. And the new system turned out to be frighteningly slow — so slow, in fact, that salespeople in the field found themselves unable to download customer information from the central database, as HBR noted:

Every time they tried, their machines froze. Eventually, was forced to rebuild the entire system. It lost millions of dollars along the way, not to mention the goodwill of both customers and employees.

Had sat down and prioritized the reasons why they needed a CRM system, what they needed a business tool to accomplish, they would have identified field access as a priority, made sure they got what they needed, and so much could have been saved.

Unless the reasons why a company’s buying CRM are spelled out in detail, crucial needs, as in the case of, will be overlooked. Because, guaranteed, you will identify needs you didn’t consider before purchasing the system, which you could have fairly easily addressed with another system.

Infusionsoft’s Marketing and Technology Evangelist Ramon Ray, a noted speaker, pundit and author, repeated something well-known amongst those in the CRM business: The biggest reason CRM implementations fail is that companies buy CRM for the wrong reason.

Frequently companies are even more at sea than was: Instead of buying a CRM software to complement an already good sales and marketing process, Ray says, many companies purchase CRM solutions, expecting the CRM solution itself to help boost their revenues or fix sales in some way.

It just doesn’t work that way. Having the right tool means nothing unless you also have the skill and knowledge to use it properly: Buying a 1968 Fender Stratocaster will not turn you into Jimi Hendrix.

If you don’t already have an effective sales or marketing process, buying CRM software isn’t going to give you one out of the box. If you have not identified your primary needs before purchasing a CRM system, the system you get will most assuredly not meet your needs.

CRM doesn’t train your sales or marketing staff. CRM doesn’t discipline your sales process. Buying a CRM system without those in place first is a waste of money.

As Ray says, first understand your sales process and how you will use the CRM tool as part of that process. In other words, know what you need the tool to do before you buy the tool.

CRM can help you track specific activity which in turn can help to generate more sales; such as How many new prospects were called last week? How many existing customers were called? These behaviors can measured and controlled using CRM.

CRM can’t tell you what numbers to measure, but if you know what numbers to measure already, then yes, CRM will be of use in doing so.

You shouldn’t be talking to software vendors until you can show them precisely where you need CRM to function as a tool to help you in clearly defined goals, rather than asking them So, what cool things can your system do?

Knowing precisely why you need CRM software, and making sure that you have your best processes in place BEFORE you pave them over with CRM, is far and away the best advice anybody can give you.

The CRM products themselves are state of the art by now. Any of the top ten vendors will sell you a good system. Just make sure it’s the right system, which means knowing a) why you need it, and b) how you will use it.

In failed CRM implementations, when nobody’s using the CRM system and those who do complain that it’s just a waste of time, inevitably the system itself gets blamed, when the problem is almost always that a good system was bought for the wrong reasons, to do either an undefined job, or a job for which it was not intended — someone needed a wrench and bought a really good hammer instead.

When salespeople use a CRM system not matched to their needs, writes one expert, they waste time working with the CRM, entering data etc., and correspondingly less time selling their products..

1. Identify a Need

So here’s Step #1 for Buying CRM Software: Be able to identify where a CRM system would improve the execution of your existing sales and marketing processes, which are already as good as you can make them.

Because once you can do that, you’re miles ahead when it comes to spending money wisely, instead of buying what everyone else seems to be using, on the rationale that Well, if they’re all using it, must be something good about it.

2. Pitch it to the board

This one neatly dovetails with Step #1: Get C-level buy-in, by demonstrating the specific need for CRM. If you can nail Step #1 and Step #2, you’re almost assured of a good CRM experience, since you’ll have already solved a lot of later problems.

Getting boardroom buy-in doesn’t mean just getting them to sign off on the purchase. It means you have presented a compelling business case for the CRM project to the stakeholders that lays out in clear terms the business case for the CRM purchase, and you have identified for each of them the value that CRM will afford their department.

If you can’t do the above…

Back to the drawing board. If you truly can’t put together a business case for CRM that will show executives the obvious ROI and other benefits, and where the system will benefit all stakeholders, then maybe you should reconsider your need for CRM in the first place. You might be better off with a more modest contact management system.

How to sell the idea to C-level

  1. Present, in language they can understand and in bottom-line terms that interest them, exactly what it is CRM does that benefits them. Do not use general terms. Use specific benefits. Which reports? What numbers? Which analytics? What percentages? How many processes? Remind them what gets measured gets managed.
  2. It helps, a lot, to have gone around to the stakeholders asking “What would you need in a CRM system?” When you present to the C-level, you can point and say “They need it for this reason, they need it for that reason, and we can give them what they need.”
  3. One effective tactic that’s been around for years is to put the executive in the customer’s shoes. Martin Schneider explained how it works years ago: It is surprising just how disconnected upper-level management can be from the customer touch points within their own companies. Sometimes a little wake-up call is needed to show executives the actual pain points inside the contact center or other customer-facing areas… Many executives are amazed to see just how many hand-offs there are, the lack of follow-up, and how long it takes to resolve an issue. If you can explain how CRM can effectively solve these problems, you can really drive home the value proposition.
  4. Calm their fears, don’t just present your case. There’s a lot of fear in those corner offices. Highly experienced CRM consultant Luke Russell writes that The biggest fear I see from C-level is the fear that CRM will not provide a satisfactory return on investment, and therefore be a burden to the company. For instance, Russell says, they won’t want to work with CRM experts for implementation. Show why you need to find the best CRM facilitator you can afford, who can help you with things like defining goals, changing process and adapting culture. They’ll want to only pilot with a few selected users, to determine if the system is feasible or not. Since you’ve done your homework you can show them why you know it’s a feasible system, since you know the business problems you’re solving with it and how CRM will solve them, and for that reason you need as wide a pilot as possible to work out a lot of kinks all at once.
  5. Be frank. Tell them no, we’re not going to show gaudy ROI after six months. Say we’re going to need patience on this, but if we do it right, we can expect a return of ____. Here, of course, you need very specific metrics, ways of measuring them, who’s going to measure them, and what they mean.

You need to identify specific issues, pain points, problems, bottlenecks, and other inefficiencies your company has that a CRM system and only a CRM system will solve. You need to be able to explain to anybody in the organization how a CRM system solves the problems your company is experiencing right now, and to show the ROI numbers to back up your points.

Once you can do that, you start talking to vendors, because now you have a specific list of what you need a system to do. If their system can do these things, great. If it can’t, if it’s made to solve a different set of business problems than the ones you have identified, keep looking.

So, then, the most critical considerations:

  1. How closely does a system fit your business objectives?
    If you’ve adequately assessed your business needs, if you know which features you’re looking for to address the checklist of business needs you have in your hand, you’ll find what you need if you look hard enough.
  2. Is your team cross-functional?
    The idea that CRM is “IT’s deal” is poison. Just the act of forming a cross-functional team gives the project a much greater chance of acceptance across the organization, and gathering first-hand input on what different departments want in CRM is priceless. Any stakeholder in the system needs to be heard, not just sales and marketing.
  3. How much does it cost?
    You should find something acceptable within your price ranges. Again, we can’t emphasize this enough, knowing precisely what you need the technology to do is of inestimable value in being able to determine if a lower-priced system without all the shiny bells and whistles will actually do what you need at an affordable cost.
  4. No, really, how much does it cost?
    You will have to check for hidden and potential costs with an eagle eye. Does your provider charge you for system usage? Some do, and it’s pretty hard to accurately estimate that. What are the storage-based fees? How much does it cost to build custom apps on the system? Exactly what, in writing, does the subscription fee cover — maintenance? Mobile access? The Outlook plug-in? What’s the policy on upcharging for API calls? Here’s where hiring a CRM consultant can save you some real money — good ones know all the tricks, all the weasel words to watch out for in contracts.
  5. On-site or cloud-hosted?
    Cloud hosted. Next question. Seriously, if you’re an operation of any appreciable size, you’ll need a cloud-hosted CRM system. Put it this way: If you’re big enough to need CRM in the first place, you’re big enough to need the mobility and flexibility of cloud hosting. Oh, what about security? All my data’s going to be on someone else’s servers! Glad you asked. Here’s what to do: Call any CRM vendor that offers cloud hosting and ask them what their security processes are. Is your internal on-site security that good? Are you going to keep up on all the security threats updates and licensing and whatnot yourself, or would you rather it be a full-time pro’s job to do all that? Do you want to hire enough in-house IT staff to provide adequate support or would you rather use someone else’s staff who knows the system a whole lot better than your in-house guys do? With cloud you get faster ROI, simpler installation, fewer headaches, instant field updates, the option to scale up and down quickly and plenty of other advantages. So unless you’re the CIA, cloud-hosted is what you want.
  6. Compatibility.
    You want something that works as well as possible with your existing systems.
  7. What’s the fine print?
    Pricing is never as straightforward as a vendor makes it appear, of course. Consider the fee structure: What penalties are listed, how likely are you to qualify at some point and what costs do they incur? What are the early termination or migration fees? Ask for installation to be completed within a timeframe and get it in writing, and avoid a “continuous renewal cycle,” always renew manually. Oh, and of great importance: Make sure it’s specified that you own all data rights if you’re using subscription-model CRM, as well as immediate access to your data at all times. And get all industry-mandated compliance responsibilities on the vendor’s part in writing. In writing.
  8. You’re asking the questions.
    Have a list of specific questions to ask vendors when you sit down with them so you’re in control of the presentation and they’re not just rattling off all the wonderful gee-whiz features you don’t need. Some vendors will offer “free” modules and upgrades to justify higher prices, do you really need them? If you offer to be a reference for the vendor does that get you any better treatment? Service costs are a huge chunk of CRM costs, it’s worth your time to go through those and minimize what you can. Again, having an experienced consultant at the table can be invaluable. A negotiation isn’t a battle, it’s arriving at a mutually-acceptable agreement both sides can live with. It’s creating good relationship parameters, it’s making sure your needs and their needs are taken care of.

Because, ultimately, what you want is the comfort of knowing what you’re going to get for what you pay, and that there aren’t going to be nasty shock surprises or service lacunae. Because your goal is to use the system to embark on better lifetime relationships with customers, start with the vendor, and make sure that the vendor’s interested in a positive long-term relationship with you.