Five dirty little secrets of CRM

By Barney Beal, News Writer 16 Sep 2004 | SearchCRM.com

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Everything is not as it seems, particularly in the world of CRM.

With all the well-publicized stories of failure, the vendor-sponsored studies that show the critical importance of the vendor's products and boastful claims about CRM, it can be easy to get misled. SearchCRM.com asked several analysts to weigh in on some of the misconceptions they've seen or heard from clients and vendors. Here are a few of CRM's "dirty secrets."

World-class Web self-service does not necessarily cut call volume

From John Ragsdale, research director with Cambridge, Mass.-based Forrester Research Inc.:

Many organizations implement a Web self-service application in hopes that it will cut the volume of calls to the contact center, only to find that the calls not only don't drop but in some cases increase. Support interactions increase on average 20% year over year so even if self-service siphons off some of these, it won't handle all of them. Additionally, self-service technology that requires Web site registration, user IDs and passwords may increase calls due to problems in those areas. Finally, the faster and easier it is to get information, the more people will call with more complex problems. Great support means customers will continue to contact you because it's easier than figuring out an answer on their own. The alternative is poor customer service.

Hosted CRM has many of the same implementation needs as licensed products

From Denis Pombriant, managing principal with Stoughton, Mass.-based Beagle Research Group:

Aside from delivering a working system on Day 1, modern hosted CRM comes with a lot of dials and switches that the user must use to adjust the behavior of the system. Also, there is the issue of data conversion. Whether you go with a hosted or a traditional CRM solution, converting your data takes the same amount of work.

Hosted CRM's implementation, free updates and low overhead don't save companies as much as vendors claim.

From Paul Greenberg, president of the 56 Group LLC in Manassas, Va:

The costs of hosted CRM are only 25% cheaper after about four years (the useful lifecycle of a standalone application) -- an excellent savings, just not what is claimed by the industry. The subscription costs are often not the only costs involved since customization can be necessary and so can the strategic services that most hosted providers don't support. It's still a sweet deal, just not the only one.

Web self-service won't necessarily turn off your customers and hurt business

From Laura Preslan, research director with Boston-based AMR Research Inc.:

While five years ago it was assumed that consumers would be unwilling to use Web self-service, the trend has shifted to the point where more consumers actually prefer non-agent-assisted service.

Reporting, analytics and pipeline tracking aren't the most important piece of CRM functionality for salespeople.

From Preslan:

Outlook/e-mail integration is the most important piece. Even though sales force automation (SFA) tools are supposed to be the system of record for customer data, very few actual sales contacts are in those systems. One consulting company implemented a social networking tool that spidered corporate content for contact information (resumes, personal contact lists, e-mail contact lists) and found that only 6% of the company's actual relationships were documented in their SFA tool.

With an SFA tool, 75% of the value is achieved by an improved business process and excellent use of Excel, 95% of the value of an SFA implementation can be achieved by a CRM-light tool such as one from Salesforce.com due to its ease of use, high adoption rate, mobility, ease of deployment, ease of integration and customizability.

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