Just over a year ago, if you’d asked me whether I had a firm grasp on the intricacies of the Customer Relationship Management (CRM) software industry, I would have responded with a resounding “yes.” However, as the old adage goes, “The more you know, the more you realize you don’t know,” and this couldn’t be more apt. The CRM software landscape is so vast, with numerous vendors worldwide continuously developing and updating their technologies at breakneck speed. This makes it virtually impossible to claim complete knowledge of the sector.
On top of trying to discern what they need and how it can benefit their business, companies must navigate the constant bombardment of marketing campaigns, each touting the benefits of their new features or functionalities. Therefore, understanding the CRM software industry becomes a challenging feat, especially given the buzz around it, the relatively new concept of web-based CRM, and the sheer number of vendors. Making direct comparisons becomes even trickier due to differing terminologies and feature names used by various vendors.
The journey to understanding the CRM software industry can begin with a simple Google search to grasp the basics. Still, I’d like to shed light on some little-known aspects like hidden costs, potential pitfalls, how CRM can extend beyond mere contact management, and the industry’s future trajectory.
Before migrating to web-based CRM software, a company should devise a strategy outlining how this new implementation will enhance productivity and revenue. The most significant hurdle to achieving a speedy return on investment (ROI) lies in the hidden costs, which are often not explicitly stated on vendors’ websites. In my research comparing major CRM providers like Salesforce, Netsuite, and Salesboom.com, I found that a significant portion of my time was spent on comparing pricing for various platforms, upgrades, implementation, customization, and customer support. Interestingly, only Salesboom had a page clearly outlining their pricing.
Assuming that purchasing a CRM edition is the end of the journey is a misapprehension. It’s merely the starting point for pricing considerations. You must also look into and question storage limits and the cost of additional storage, the maximum number of custom tabs & fields, the maximum number of applications you can add (particularly relevant for Salesforce), and any other limitation that could necessitate an upgrade later.
It’s not uncommon for companies to incur substantial costs when they hit these limitations. An edition upgrade for a company with approximately 750 users could cost an additional 2 million dollars. Such an upgrade inevitably brings more features and functionalities, but they may not enhance your ROI if your company doesn’t require them.
While the warnings and potential pitfalls have been addressed, it’s time to focus on the positives. With the implementation of a new web-based CRM, you essentially break down the barriers between your departments or offices, regardless of geographical location, and you do so in real-time. Your CRM extends well beyond mere contact management software with vendors now integrating front and back office functionalities. Netsuite, Salesforce, and Salesboom.com all offer comprehensive CRM solutions for businesses of all sizes, but the choice between these two generally boils down to cost.
Along with contact management, CRM software offers useful tools for your marketing department, customer service department, back office, and sales force. As the industry evolves, CRM software vendors are introducing Offline and Mobile Editions, providing new ways to stay connected with the office.
The future of web-based CRM software seems bright, especially with advancements in AJAX (Asynchronous JavaScript and XML). This technology allows you to make changes without refreshing your web browser, similar to some social networking sites like Facebook. This functionality leads to more user-friendly customization of your dashboard. The combination of AJAX and faster internet speeds could significantly reduce load times in the future, bringing the performance of web-based CRM software closer to that of on-premise software. I expect the gap between web-based and on-premise CRM software to narrow significantly by the end of 2008, and foresee a trend of businesses transitioning from on-premise to web-based CRM, much like what we observed in 2007.
