How does a CRM comparison typically work in practice?
If you ask the market companions or managing directors and (potential) users of a CRM system, what is CRM for you? Then you almost always get the answer: It is first and foremost a strategic task and secondly a technical question.
Only in our daily business do we observe that reality unfortunately often looks different. There is unfortunately no simple answer to the question of how CRM is lived. All too often, lip service is paid to the fact that polls like the one conducted by the Muuuh Group produce quite divergent results. With the introduction of a CRM system, there is hope that the leads, the higher turnover and the customer orientation (CRM) will happen by itself. I’m afraid that’s not possible. Although the focus is on the customer (customer), he is usually in the way. As before, companies are organized by function and not by target and customer groups.
In the past, another possibility was to divide it into e.g. strategic CRM, collaborative CRM and analytical CRM. Nevertheless, at the end of the discussion, a CRM system was on the shopping list without first defining the goals, the relevant target groups and customer segments and the measures to be taken.
But let’s assume that CRM works like a textbook. Then, in our experience, the process is divided into two levels:
Level 1 is the predominantly strategic CRM level. Here the direction, the roadmap, training requirements and new personnel are defined. This phase, within the strategic CRM level, includes change management and strategic project management, regular communication within the company and controlling.
Level 2 is the operative CRM level. This is explicitly about the selection of a software (CRM software or MarTech software). We will play this out today using the example of CRM software. The process of a system selection procedure for a marketing automation solution, a fully integrated ERP/CRM complete solution or for special products such as BI, address quality or a configurator is usually very similar.
Level 1: The strategic component when it get’s to a CRM comparison
At the start of the cooperation or project setup, we clarify the way in which we will work together. Who is responsible for what, what roles does who have? Are we project managers or „only“ project companions? What is the composition of the project team? Steering committee participants and meetings as well as reporting are discussed?
Which project management tool do we use? Dates for jour fixe, meetings, workshops, web conferences, steering committee are defined. Which documents do we also use. Is there a special PowerPoint or Word file How do we communicate in regular operation? Via e-mail or tool?
The first picture describes an exemplary process of a strategic approach and way of thinking when it comes to selecting a software.
Before everything else: Check address quality and data quality
After the CRM system project start, our first task is to check the address and data quality. The reason is simple: If, as in many cases, it turns out that the quality is not quite as good, then a cleanup of the addresses and data can easily take 3 to 6 months. This effort is always worthwhile. But time for this is notoriously short. The CRM system should be introduced as soon as possible. Therefore, we start the cleanup as early as possible to be ready in time with tool implementation or earlier.
Reason, very often the following happens: Either the CRM system introduction is delayed because the addresses and data are not yet clean enough. Or you import the bad addresses, then the employees are dissatisfied, even stinky, because the new tool (because of the bad addresses and data) is not usable.
Conclusion: This is not good for your own business. Classic false start and a high risk of a bad investment of the CRM software!
Second strategic task: Clarify vision and create big picture
As a second step, we create the big picture with the management as well as the selected project members. Where should the company’s journey in terms of customer relationship management go? What is the corporate vision? What are already thought up or possible business models and service models? From a technical or CRM software point of view, what course must be set for the long term? How does a CRM system or a CRM solution fit into the current or future landscape? How must the operative CRM implement the strategy? How is the business changing due to general conditions such as competition, technology and foreseeable changes in customer behaviour?
excertion: Before later users work on the requirements definition, we recommend that the project members be trained and sensitized
An important component is the training and sensitization of the later users. We have found that the definition of requirements for a CRM system or CRM solutions are much more precise when the users are trained in advance.
There is training in these things: What can a CRM system do? What do others do? What is possible and what is pragmatic? We are not only concerned here with technology, but very often also with sales and marketing, campaigns or processes. What are the benefits of mobile sales, service or marketing? This view over the edge of the plate improves the later course of the project as well as the acceptance for the selected system enormously.
It is about competence and empowerment and „everyone understands the same thing and talks about the same thing“. At this point, strategic customer relationship management has reached an important part of the employees and users. And we do not want to select a CRM system in your company for yesterday’s requirements, but one for today and tomorrow.
target/actual analysis through workshops and live inspection of the processes
From this CRM training and the input from the big picture, the actual situation or the target situation, the target vision (processes, skills, communication, campaigns and KPIs) for a CRM system are now analysed. Afterwards, a comparison is made between the big picture of the company management and the requirements of the user or users. If there are inequalities in objectives and understanding, these are identified, balanced or refined. Nor do we distinguish here between large and small companies. Especially in small companies, the risk of a CRM software misinvestment usually has an even more dramatic effect.
In which degree of maturity of the customer orientation (CRM) is the company currently ?
Before the selection of CRM software is started, it is important to assess the current status of customer relationship management. What is the level of maturity of the company. To what extent is customer orientation established in the culture and processes. Where does Customer Relationship Management stand? Is the introduction of software the only thing that stands in the foreground? How do users currently think about this topic? What problems does he currently have with the tools? An online survey can be used to clarify the sensitivities, wishes and attitudes towards the CRM system in advance and to isolate pain points.
Workshops on IT framework conditions, IT system analysis and current processes
In the workshops, a process map is first created. Which processes are of more or less importance? Which ones should we do live, so that it is clear where the stumbling blocks, challenges or special features are? How do marketing and sales work together? How can Mobile Solutions support? Or is there still a silo thinking? Does marketing need a marketing automation solution or does sales need one? How deeply should the CRM system be wired into the company? What does the service look like in the technical department or in case of a complaint? What is important for creating value for the customer?
In subsequent IT workshops, we clarify the general conditions and current situation. What else is currently planned? What projects are currently underway? How will possible new projects be integrated into this context?
The whole thing is documented in detail, analysed and prepared for the management as well as the project team and discussed together with everyone. There must be no taboos between management and project team.
We discuss initial findings, conflicting goals, priority or capacity problems or quick wins. What are possible sticking points? Where would you have to drill deeper to get certainty or clarity?
Now the 2nd phase of the strategic level begins.
If not available, a strategic IT roadmap is created from the findings. What should the target system look like? This then results in tasks that are independent of technology. E.g. How are the processes optimized? Who is doing this, until when, with what goal?
Once the IT roadmap or planned IT infrastructure has been defined and communicated, a special selection project can also begin.
Exciting question: CRM comparison: new software or train new software?
We experience quite often that CRM software is not accepted. In the analysis, however, we also find that the CRM software does not fit that badly. So we clarify whether it is already done with a training or continuous training. Because choosing a new software is often more expensive than training the existing one. And another large project places a greater burden on the organisation than training. That will have to be weighed up. If a project can be avoided, this would be a first great quick-win.
Parallel to the other activities, the company is setting up a project controlling system and an internal quality management system is being defined. If ISO certification is important, this topic will become mandatory anyway. How is it documented? What evidence must be provided and by whom? Where are these documents stored?
Often forgotten: New software means new processes and new demands on employees
If, for example, a BI solution is to be introduced, you need employees who can operate the tool. If nobody can do it yet, a search query should be started. Or who is suitable to develop into this position?
Processes also change with the introduction of a CRM system. What new requirements for users will result from this?
Another, unpopular topic: Organizational Development and Change Management
When working on processes, the question also arises as to what new skills the employees need. How do we reposition ourselves? Because if you think CRM consistently, you can no longer keep your functional organization. This company should align its organization with target and customer groups. Sometimes a big step. But it’s worth it. We’re helping.
And without mentioning it, it is clear to every reader: The topic of support in change management naturally plays a major role.
But these 14 points are roughly enumerated the strategic level. Quasi the superstructure or frame. All this is based on the foundations of the corporate vision or corporate strategy.
Level 2: The operative steps when CRM comparison
What topics/questions do we cover in this section?
- How does such a comparison usually work?
- Which questions should I ask the manufacturer?
- Which criteria are to be used for a comparison?
So how do you know if the CRM software fits your company? We help you to get a first, neutral overview of the topic CRM software selection. Also by means of the first German CRM Landscape! Do you already know the other Landscapes about marketing automation, ERP/CRM providers and collaboration tools.
You want more info? Just go to our further information in the box on the right!
You invest a fair amount of money. With a CRM solution, this is between approx. 30 euros and 300 euros per user/license and month. Do the mobile licenses have to be licensed separately? Now you can quickly calculate for yourself how much it costs per month and year. Then hosting may be added. Here the values differ in some cases by 100%. How much adjustment programming or customizing is necessary for the implementation of the CRM system?
This quickly adds up to 500,000 euros or 1 million euros just for license costs or rent.
And are these all the costs that will be incurred in the next 5 years for a CRM system?
Almost. But more on that later.
What are all the cost parameters that play a role in a software selection? This is about the set-up costs for the installation of the system (test and live system), then there are costs for specifications and workshops. Sure, the license costs are the biggest bite. Most of the time. In addition, there are the hosting costs. Does the hosting have to be taken care of. or who does that?
Project costs must be calculated for the introduction. On the one hand for the service provider and on the other hand for an external consultant. Unless you create a free space of at least one person force. These can be 2 times 50% exempted persons. Or 3 persons each with 30 % to 40 %. It’s the least I can do. Reason: These employees are usually very important for the company. So they are also bound in many projects. Therefore, you should definitely get external help on board for quality assurance and relief.
Then comes the hard to calculate part of the interfaces. Which interfaces do you need? Can the service provider create them all? If not, who helps?
<…I don’t want to be forgotten.
Documentation and training of the CRM system. There are two things to consider when it comes to documentation. One part comes from the service provider. But also the user should keep some documentation for the special features and customizations. This takes time and is very unpopular. This is often the first item on the scratch list. I’m afraid this is a big mistake. The company usually pays twice for this later. Don’t let up with your service provider here, here you are his „customer“. It should be worth it to you.
Tip: Is the help or documentation also available in the mobile applications?
First, because the documentation effort is higher later. Secondly, because your employees had previously spent a lot of time searching, constantly losing know-how and other time-consuming tasks.
Address and data quality measures must be calculated in any case. On the one hand, cleanup and optimization tasks often have to be carried out before implementation. On the other hand, the systems today offer interfaces to data suppliers. In addition, exciting variables can be enriched by automatic addition. From the creditworthiness of an interested party or new customer to micro-geographic variables or in B2B, what size of company (turnover/employee) the company has.
For the purpose of data cleansing alone, a lead time of 6 months and a budget should be provided. Also who does this is always a popular question. In the whole company, nobody wants to do this voluntarily. That’s why we do this a lot. We have over 30 years of experience in this field.
The remaining costs are travel expenses and accommodation, external staff and consultants.
<It’ll all come together in five years.
We always calculate 5 years for the total cost of ownership. Why five years? Because many on-premise solutions or the purchase of licenses after 3 years become cheaper than cloud applications that are rented. Yeah, that’s right.
We combine all costs in detail for 5 years and thus have a comparison. This is combined with user ratings and the impression of the service provider and its team. If important, we also obtain a credit rating from the service provider. Then all the facts for a decision are available.
A cost example from practice:
A company with a turnover of about 50 million made the selection process with us. The comparison of a certainly complex and therefore expensive solution showed the following picture:
Solution 1 (one of the usual suspects) estimated all inclusive for 5 years 6.5 million Euro investments or costs.
Solution 2 (a rather unknown specialist provider) estimated 4.0 million Euro investment or costs for the same requirements all inclusive for 5 years.
That’s a „flabby“ EUR 2.5 million difference. And this after 4 months of project time, after a few workshops, detailed queries and intensive discussions. So the result is a robust estimate with a huge difference.
How does such a comparison work? The start for many CRM projects
The detailed process and requirements analysis usually results in a specification sheet (not a requirements specification, that’s something else).
Many companies use the agile methods to avoid the issue of specifications or requirement specifications.
We don’t take that lightly. Especially if a company has hardly any general experience in project management. Especially when there is little or no experience in agile methods. If then the service provider has even rudimentary knowledge, then please do not. I prefer classic. At least for the launch. Later, when everyone has grooved in, you can switch to agile methods.
So we create a specification sheet for a CRM program based on the information and requirements from the workshops. In addition, there are use cases that emerged from the process analysis. Which use cases are absolutely important (system relevant)?
Our sample specification booklet now comprises about 30 DIN A4 pages. The number of criteria that play a role in evaluating a provider is over 150, and the number of sample use cases – i.e. processes that could be tested in the selection phase – is over 20.
OK, not all of these cases are always used. But this way we guarantee that nothing is forgotten. And the customer has the feeling that he has thought of everything.
What criteria play a role in a CRM software comparison?
We have collected a lot of criteria and CRM functions for this purpose?
For the current status (08.06.2020) we select some of the more than 150 criteria:
functions around the customer service:
e.g. integration of an ACD system possible, service mails are sent via a general or personal e-mail address. How does cross-selling from the CRM system work?
E-Mail integration and e-mail tools:
Which e-mail program can be fully integrated? How well do CRM system and e-mail program harmonize in marketing or sales campaigns? How clever can email marketing be? Personalisation and individualisation should be considered. Are mass e-mails sent via the Outlook Exchange Server, Is the personal e-mail client integrated directly in the CRM or via Outlook? How far can email tracking in CRM be used for campaigns? (If DSGVO or other laws or opt-ins allow this)
Who has multiple connections to email marketing tools? Most CRM providers usually integrate an e-mail program completely. A second or third one usually does not have the full functionalities yet or is only uni-directional and not bi-directional connected.
Connection of content management systems
Usually, content modules are used for personalization and individualization. I.e. for e-mail campaigns, serial letters or offer modules on the phone (these are shown in the guide during the conversation – depending on the process and response – as information for the agent or inside sales employee.
Content can be text, image, video etc. Documents can also be integrated directly into the Customer Relationship Management system. These are then e-mail templates or letter templates. Each of the CRM tools has its own philosophy here.
ERP and CRM – Who is the leading system?
The ERP software is usually the first to arrive. This often means that CRM must be aligned with the ERP solution. Which is the wrong approach. The ERP system is usually less flexible in the address and data model. For this reason alone, the CRM system is the leader in the field of addresses.
Providers like Zoho CRM or Hubspot CRM have some features (e.g. email marketing tools, email tracking) already integrated, some not. Salesforce or Microsoft Dynamics CRM, the all-in-one solutions, have either modules or apps or add-ons for almost everything.
Sales and Marketing, Service and Support
For sales, the mapping of the sales pipeline or lead pipeline is usually the most important. The more leads, the happier. Is the CRM for the field service a web app or a „real“ app from the app store? How does Mobile CRM work? Are all functionalities available on the Mobile Client? Is it possible to edit all leads on the mobile device? Or what restrictions are there?
What special features does key account management require? Group displays, summations for branch operations. Contracts which, depending on the rule, immediately make the n best price visible when the price is determined.
Marketing wants social CRM to be integrated with social media. Whereby the work within social networks should not be reserved for marketing alone. Sales can also have a lot of fun using the various social media channels. LinkedIn or XING are the best known.
The next step: Which CRM tools will be added to the long list?
On the basis of the requirement criteria, specifications and our market expertise, we now go into our database and check who might be a suitable candidate. We also ask ourselves further questions. FOR EXAMPLE.
Do you need a provider who has sound expertise for your specific industry? Or does an industry-neutral provider cover your requirements? In other words: Which CRM software best addresses both the individual requirements and the processes of your company or your employees? And: How is it also ensured that the CRM software can be implemented without major problems and that it harmonizes both with the technical possibilities and with the other systems? What support does the supplier offer, what support does the service provider offer?
For the first assessment we have created a database with all important manufacturers. Our CRM Landscape provides initial information and classification of the CRM tools: Which solution is more suitable for small companies (TecArt, Wice CRM, Julitec, Act!), which for medium companies (Zoho CRM, Bitrix24, CAS, Adito, Cursor), which for large ones (Hubspot CRM, Microsoft Dynamics, Salesforce, Adobe etc.)?
And in any case very important: Is there a suitable service provider for the software solution ?
Yes, not only the product, but also the right service provider is just as important. Especially the big providers such as Salesforce, Microsoft, SugarCRM, Oracle, Adobe have partners who then implement the product. And in this partner landscape, as everywhere else, there are major differences. differences in size, competence and experience.
We present the long list – usually with 2-3 additional strike candidates – to the client. In this way, he can get an initial assessment of the market and the selected products. The presentation is made transparent on the basis of selected criteria. This enables the customer to understand this proposal.
The special features of the CRM comparison: Why is Salesforce, Microsoft or SAP not included? Keyword Wild Card
Very often we are asked why one or the other large provider is missing in the Long List. These are of course questions that we always answer clearly. From time to time the customer wishes that e.g. SAP is still present. The supervisory or advisory board might ask why Salesforce, Microsoft or SAP is/was not involved. That is why they get a wild card. And 95% of these big players will not reach the final. This is one reason why we often receive logs, because without our research „who can do what“ many companies would not have found the one or other better fitting candidate.
Thereupon the managing directors can then say in good conscience: But big players in customer relationship were there, but were e.g. more expensive, weaker or even better. But, if this chance exists, they are with us from the beginning. Of course.
Therefore, traceability is also important to us in the selection process. It is about the possibility of revision. We are 100% neutral. Everything must be done correctly and with the right things.
1. beauty contest: The presentation of the long list candidates
All long list candidates receive a briefing with tasks for about 1 hour. This 1 h is conducted either as a web conference or personal presentation.
We will present this one hour tightly. Care is taken to ensure that all tasks have been shown and that the project participants can also evaluate them. All Long List participants present one after the other on one day or at most on the following day. This ensures comparability: On the one hand, they all present the same thing, on the other hand, they have all been one after the other – in one piece for evaluation.
In the breaks between the presentations the evaluation forms are filled in. In the end, the project team selects its short list. This is then usually 3 or 4 candidates.
2. beauty contest: The presentation of the Short List candidates
Before the short list candidates compete in the next Beauty Contest, they will receive a detailed briefing. Included in this are specifications for the evaluation of the requirements, the use cases, which should be shown live in the CRM tools. And a form for an initial 5-year cost estimate.
The 2 to 3-hour presentation will again follow a previously agreed pattern. After all, comparability should again be guaranteed. We moderate the time slots tightly. Small pauses for discussion and follow-up are always built in. The general information on a provider is submitted in advance or made available afterwards. The „blah, blah, blah“ only takes time.
Participants also receive regular feedback on the evaluation. So that at the end of the 2-3 h the evaluation forms are collected again.
Subsequently, we receive the feedback from the specifications as well as the cost estimates of the suppliers.
We analyse these and ask questions so that unclear information does not affect comparability. We bring this cost estimate into a standardized overview. This makes it clear for which of the 10 cost blocks which provider/service provider is more expensive/cheaper than the others.
Who gets to the finals? Two of the four are the lucky ones.
Both the cost overview and the functional evaluation are used to select the finalists. An assessment through reference discussions or evaluation of the service provider completes the picture.
If the two winners do not exactly exceed the cost framework after functional evaluation, then the functional evaluation takes precedence. Because a good product may also cost a little more.
We will inform the finalists. The finalists may be available for another day for topics of all kinds, depending on the client’s wishes. A further half to full day is planned for questions about technology and interfaces.
The cost notes and specifications will be updated. The assessment complements and updates the existing one.
Another method of selecting the winner has proven to be successful.
In the last few years we introduced – because of the agile methods – an alternative: Instead of the two days for the heart&kidney as well as the technique exams, we did a proof of concept program for 3-4 days.
Each supplier and the team sit together in a laboratory room. On the first day provider 1 is in the morning, provider 2 in the afternoon, the next day vice versa, etc. Then the use cases are implemented „live and in colour“ with the participants in the test system. At the same time, IT and data center specialists clarify the technical issues.
Also from this phase there is an evaluation as well as an update of the cost estimate.
We then sit down with the management and the project team presents the pros and cons, the advantages and disadvantages and the costs in comparison. And then the winner is usually chosen very quickly. The team gets the desired CRM system, a good CRM system
The question „cloud“ or „not cloud“ hardly ever comes up anymore.
When I started my own company 17 years ago, the topic of cloud was still in its infancy. Salesforce advertised with the slogan „No Software“ on posters, stickers, and trade shows. Salesforce began its triumphant advance in the USA with Cloud CRM. Only much later did the wave spill over to Europe. The medium-sized companies and large enterprises had all invested in expensive data centers. They were also afraid of the cloud. Your own data is not in „my data center“, but with strangers. Will that work?
12 to 15 years later, the triumphant advance of the cloud began. Today, this type of storage and data use is indispensable. A SaaS solution from the cloud made it easy for users. One logged on in the browser and immediately had a fully functional CRM solution.
Almost every CRM provider favors cloud computing. The advantages for the provider are obvious. He has a current income at a stable level. The monthly rent is much easier to calculate for cash flow than when selling a bundle of licenses.
Open Source CRM or Proprietary CRM Software
An old argument, what’s better. On Wikipedia you can read a study from 2015 or 2016 that the market for Open Source in the area of CRM does not seem to be very big. In the ERP sector it is even smaller.
There are, however, some success stories for open source software in the CRM field: SugarCRM started as an open source solution (today the open source base v.6X is an independent product within Suite CRM), Wice CRM and vTiger (also a spin-off of SugarCRM) or products from Acquia (here e.g. Mautic) are also open source.
How many licenses do you need and what are the prices:
Whether licenses should be available in a defined or unlimited number is best clarified in the contract negotiations. We have dedicated a separate chapter to this. Whether you compare prices in Euros or US dollars, it does not matter. The main thing is that they know the daily exchange rate from the US dollar to the euro. It must also be clarified whether future settlements will be in dollars or euros.
Tip: Far too often you order too many licenses. Restacking is easier than rewinding. Special offers entitled Enterprise suggest that the licenses are available in unlimited numbers? Be careful if you need Microsoft licenses for the virtual server in a data center cloud. You should urgently clarify this beforehand.