BUSINESS.COM GUIDE TO CRM SOFTWARE

CONTENTSOVERVIEW OF CRM SOFTWARE 3

TRENDS 7

CHOOSING A VENDOR 9

FEATURES 11

INTERMEDIATE FEATURES 13

ADVANCED FEATURES 15

CALCULATING COSTS 16

PURCHASING TIPS 17

COMPARISON CHECKLIST 18

GLOSSARY OF TERMS 20

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WHATThe way businesses monitor and manage their relationships with prospects and customers has gone through a dramatic evolution using new technologies. Gone are the days of handwritten address books and Rolodexes filled with business cards.

Today, sales contacts are computerized, and managing those contacts has been automated to a degree not conceivable even a few short years ago.

OVERVIEW OF CRM SOFTWARE

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WHATCRM stands for Customer Relationship Management. The term comprises a wide range of business activities and services, including:

• Sales management

• Marketing management

• Customer service management

• Job tracking

• Productivity enhancement

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HOWFrom simple to sophisticated, CRM software allows you to finely filter customer information resulting in more successful business.

On the simple end, CRM software starts out with spreadsheets and databases. Contacts are added to the database and can be sorted by parameters such as zip code, date entered, or customer type. Lists that help a company market to prospects, track customers, and hunt for new business can be generated from the database.

Those simple CRM solutions are quickly followed by more advanced systems that track more information about each contact, track interactions with contacts, and more carefully monitor the connection between sales opportunities and successes.

Very sophisticated CRM solutions go even further. They often integrate functions such as accounting, payroll management, employee scheduling, inventory management, marketing campaign management, sales force management, contact management, email systems, calendar management, and social networking.

“CONTACTS ARE ADDED TO THE DATABASE AND CAN BE SORTED BY PARAMETERS SUCH AS ZIP CODE, DATE ENTERED, OR CUSTOMER TYPE.”

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WHATThe key to purchasing CRM services & sales software is to have a good idea of the features you want or need, the price you can afford to pay, and the amount of system support you expect users to receive.

This guide will steer you through basic, intermediate, and advanced CRM services, giving you a good idea of what to expect at each level of pricing. We’ll also provide a rundown of features included in most CRM packages. But first, let’s take a look at the trends that are shaping decisions in CRM services & sales software.

“THIS GUIDE WILL STEER YOU THROUGH BASIC, INTERMEDIATE, AND ADVANCED CRM SERVICES, GIVING YOU A GOOD IDEA OF WHAT TO EXPECT.”

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There are several rapidly moving trends that are transforming CRM services and making them more useful all the time.

Software-as-a-Service (SaaS). The first major trend is Software-as-a-Service (SaaS). CRM is now usually purchased as a service, rather than as software. This means that the data and user interface are Web-based and can be accessed by any device connected to the Internet. In previous years, CRM was most often found in the form of sales management software or contact management software that was installed on, and resided upon, a company or user’s computer. Gartner says that sales of CRM as a service have cannibalized sales of stand-alone software. This trend toward SAAS

means that your data will be stored online, where it is actually more secure than on your own computer. It’s less likely for someone to gain unauthorized access to your data when it’s behind a CRM service firewall. Also, it’s less likely for your data to be damaged or destroyed, thanks to the redundant backups maintained by online CRM services. Finally, when you use software as a service, you can be confident that your CRM software is continually updated by your service provider and that you aren’t relying on old software.

TRENDS

“IT’S LESS LIKELY FOR YOUR DATA TO BE DAMAGED OR DESTROYED, THANKS TO THE REDUNDANT BACKUPS MAINTAINED BY ONLINE CRM SERVICES.”

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Social Networking Integration. Another major trend in CRM is social networking integration. In just a few short years, most CRM services & sales software programs have enhanced their offerings with easy social networking connections. Now, your customer service and sales programs dovetail with Facebook, LinkedIn, Twitter, and other major social networks. You can use your social networks as gateways into your sales management/CRM system.

Mobile Integration. A third trend in CRM services and sales software is integration with mobile devices such as tablet computers and smartphones. Most CRM service providers are mobile-ready, allowing users to access and utilize CRM and sales functions through mobile phones and tablets. They also optimize outgoing messages for mobile delivery.

“MOST CRM SERVICE PROVIDERS ARE MOBILE-READY, ALLOWING USERS TO ACCESS AND UTILIZE CRM AND SALES FUNCTIONS THROUGH MOBILE PHONES AND TABLETS.”

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There are so many different, excellent CRM services & sales software solutions out there that comparing them can be difficult. Use our Business.com checklist (below) to compare the costs and features for different vendors. But first, consider your answers to these five major questions before making a shortlist of vendors who meet your needs.

How many people will be using the system? Most CRM services price their plans based on a charge per user. If you have many employees who will be using the system, the costs can get very high, very quickly. Sales software is usually priced per computer, with a license required for each computer using the software.

How many contacts are in the database? Most CRM services can handle a large number of records in the system. You can usually get one low monthly price for up to 10,000 records. Some offer an unlimited number of records. Other services charge additional amounts based on the number of contacts in your CRM database.

What modules do you want to include in the package? CRM services & sales software can be used for a wide variety of tasks. The more tasks you need the software to handle, the larger the package you need to buy. Decide which of these functions you want the CRM software to handle: contact database, time tracking and billing, customer service management, sales management, marketing management, payroll processing, accounting.

What level of sales automation do you desire? The difference between entry-level CRM and high-end CRM usually has to do with how much analysis and direction the service performs. With entry-level CRM, you get data storage but not much sales automation. With high-

CHOOSING A VENDOR

“THE MORE TASKS YOU NEED THE SOFTWARE TO HANDLE, THE LARGER THE PACKAGE YOU NEED TO BUY.”

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end CRM, you can get very sophisticated analysis leading to recommended activities, some of which can be automated, and all of which can be monitored and tracked. With an entry-level system, you might have to decide when to pay a sales call on a prospect or client. With a heavily automated system, the program itself will suggest whom to contact, when and how to contact them, and what to say based on previous experience. Are you looking for entry-level or high-end CRM?

What level of integration do you need? The last major factor in choosing a CRM solution is to determine which devices and applications the software must integrate

with. CRM solutions can be found that integrate with Windows, Android, Intuit, Outlook, Office, ACT!, other apps—and even mapping programs that show you where your best prospects and customers are clustered. That’s one kind of integration. The other kind is device integration: do you need to connect and operate your CRM solution from a smartphone or tablet computer?

“WITH A HEAVILY AUTOMATED SYSTEM, THE PROGRAM ITSELF WILL SUGGEST WHOM TO CONTACT, WHEN AND HOW TO CONTACT THEM.”

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These are features that you can expect in virtually every CRM software program or service.

Database. Provides storage of basic information on customers, contacts, prospects, and other groups that interact with the company. The more advanced the system, the more custom fields are available for each contact, and the greater the ease of customizing the database.

Importing and Exporting Contact Lists. All CRM services allow you to import contacts in some fashion. Simpler systems allow importing only from text files or CSV files; more advanced systems support imports from vCards and from other CRM programs. If you’re doing a lot of mailing or emailing, you’ll want to be sure

you can easily export contacts to mailing labels, mail merge, and email merge.

Contact Management. While all CRM solutions provide contact management capabilities, some are easier to use than others. Factors that make a system easier to use include the ability to add custom fields to records, and to sort the database by multiple sort criteria—such as date added to the database, zip code, and last name.

FEATURES

“ALL CRM SERVICES ALLOW YOU TO IMPORT CONTACTS IN SOME FASHION.”

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Customer Service. Almost any CRM program can be configured for customer service use, but some are excellent at it. A good customer service database allows the customer service rep to see rich information about customers’ accounts, including what and how often they buy, how often they need assistance, and a history of customer service interactions. This kind of information empowers customer service reps to become sales reps.

Marketing Communications. How easy is it to use the CRM program for routine marketing communications that are common in all business relationships? That includes thanking someone for making a purchase, responding to routine inquiries for information, reminding customers they have unfinished business with you, sending invoices, sending statements and receipts, and other ordinary types of communication.

Sales Goals & Goal Tracking. Most CRM software allows you to specify sales goals, and the better

programs will track your progress on those goals and send you reminders to complete marketing tasks.

Alerts & Reminders. It would be unusual if your CRM program did not allow you to set alerts and reminders that notify you when actions are supposed to be taken. The better services will offer mobile alerts and reminders to keep you connected when you’re away from your office.

Reports & Analyses. Typical reports generated by even basic CRM systems include sales and activity reports and contact lists. The easier these are to share with other team members, the better. High-end systems use business intelligence to analyze data and generate reports that can help direct your business, such as a prioritized ranking of prospects or an analysis of the productivity of sales representatives.

“TYPICAL REPORTS GENERATED BY EVEN BASIC CRM SYSTEMS INCLUDE SALES AND ACTIVITY REPORTS AND CONTACT LISTS.”

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These features are not standard in all programs. Many providers will offer these services; others will not. Some programs specialize in certain features that are not available from others. Make a note of which features are important to you when evaluating a vendor.

Time Tracking. Many firms require time tracking, time-based billing, or time-plus-materials billing. If your company charges customers based on time, you’ll want to be sure your CRM program allows you to assign account numbers and activity codes to time tracking for better billing practices.

Scheduling. Sales and customer service components of CRM software solutions often include the ability to schedule customer service or sales representatives. On higher-end systems, this scheduling can be integrated with payroll processing and even time clocks to monitor hours worked, calculate commissions earned, and generate paychecks and pay stubs.

Lead Processing. This feature pulls new leads into the system—for example, from people making inquiries at your website—and tracks progress on those leads. Leads can be automatically distributed to sales representatives, and follow-up activities can be tracked.

Assign Sales Territories. Some CRM programs allow the assignment of selling territories, and then automatically handle lead distribution based on those criteria.

INTERMEDIATE FEATURES

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Sales Literature & Price Lists. It’s handy to have all the information you might need at your fingertips when making sales calls. Some CRM programs allow you to store product information, price sheets, and approved discount rates within the system, where they can be quickly accessed on a sales call.

Revenue & Sales Trend Forecasts. Sophisticated CRM programs can analyze data to come up with projections of future sales based on previous patterns. This is very helpful for budgeting, staffing, and pro forma financial statements.

Instant Graphing in Reports. Some CRM programs provide excellent visual summaries of important sales data. In the best programs, these colorful reports are automatically generated and continually updated.

Allows Assigning Teams. For many companies, sales is not a solitary activity, but rather, a team effort. The better CRM programs will allow data and tasks to be shared by a team, and inform team members about actions taken by other members of the team. This avoids having multiple reps working on the same account without knowing that others are also doing so.

Social Media Integration. Most of the better CRM and sales programs have fully integrated social media into their systems. Social media integration allows

you to easily gather information on prospects from social networking sites. It also allows you to use these networks to reach out to prospects—in addition to using phone, email, and direct mail. It enables you to see who your prospects are connected to as a way of finding new prospects and new business.

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At the very high end of CRM services & sales software, companies can create a scientific system for targeting prospects, communicating with customers, and winning back lost business.

Lead Scoring. This is a method for analyzing leads and assigning them a score based on the likelihood of being able to convert the lead into a sale. Many factors are taken into consideration, such as where the lead came from and what can be learned about the identity of the contact.

Lead Nurturing. Nurturing leads involves moving them through a suggested regimen of actions and communications designed to convert prospects into customers. Software automatically analyzes the interactions with a prospect or customer, and recommends the next actions that should be taken to deepen the relationship.

Competitive Analysis. Some CRM platforms are so effective that they can analyze what you’re doing and

compare it with your competitors in the industry. These platforms can do price, volume, and productivity comparisons—calculating how much revenue your sales reps are generating compared with industry averages.

Performance Analysis. High-end sales software systems and CRM services are designed to be used by large, diverse teams of sales representatives. These systems have a variety of metrics they use to gauge the performance of individual sales reps and compare their performance to the others on the team.

Relationship & Connection Mapping. Intelligent CRM software is capable of doing some pretty amazing things, one of which is mapping connections between contacts in a database, and using that analysis to generate referrals to prospects who are more likely to respond to your pitch. Some of these systems are able to cull information from social networks to find hidden connections between contacts in a database.

ADVANCED FEATURES

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CRM & sales software starts at very affordable prices. You can purchase popular programs for as little as $49, but expect to pay $100 per user for an intermediate program, and up to $500 per user for a state-of-the-art program with all the latest advanced features. One advantage of purchasing CRM software instead of a CRM service is that there are no annual fees—just a flat fee for the software, or a flat fee for each user.

CRM services usually price contracts monthly, per user. At the low end, services cost as little as $10 per month, per user. Intermediate systems cost from $20 to $50 per month, per user. For advanced CRM services with all the latest bells and whistles, expect to pay over $100 per month, per user.

Most contracts for CRM services are billed monthly, with discounted rates for longer contracts.

CALCULATING COSTS

“ONE ADVANTAGE OF PURCHASING CRM SOFTWARE INSTEAD OF A CRM SERVICE IS THAT THERE ARE NO ANNUAL FEES—JUST A FLAT FEE FOR THE SOFTWARE.”

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Know which services you need and which you can live without. There are numerous vendors in this space, selling very different packages of features at a wide variety of prices. You should have a good idea of which features you do and do not need so you can quickly narrow the field to the vendors who offer the best packages for your business.

Make use of free trials and free help. Most CRM vendors offer a free trial period. Don’t waste it! Be sure to test the service during the free trial, and ask for as much help as you need. Vendors are always more generous with free support at the beginning of the business relationship.

Insist on employee buy-in on the new CRM program. The biggest problem with CRM systems is getting employees to understand how they work and to use them. The new breed of sales software can dramatically improve productivity—but only if you use it. Many companies fail to train their employees to use the new system. Those companies won’t realize the substantial benefits that come from a more scientific approach to sales.

PURCHASING TIPS

“THE NEW BREED OF SALES SOFTWARE CAN DRAMATICALLY IMPROVE PRODUCTIVITY—BUT ONLY IF YOU USE IT.”

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This checklist will help you quickly assess the best vendor for your needs.

Basic Features

Number of Users

Monthly Charge Per User

Number of Contacts

Monthly Charge Per Thousand Contacts

Total Annual Cost for Basic System

Free Trial Period

Advanced Features

Number of Custom Fields in Database

Able to Generate Mailing Labels

Able to Generate Mail-merge Form Letters

Alerts and Notifications

Time Tracking & Time Billing

Lead Nurturing System

Sales Optimization System

My Needs Vendor 1 Vendor 2 Vendor 3

CRM SOFTWARE CHECKLIST

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This checklist will help you quickly assess the best vendor for your needs.

Integration With Other Systems

Phone Dialing Integrated

Email Integration

Calendar Integration

Payroll Integration

Accounting Integration

Mapping Integration

Social Networking Integration

Manage Program From Mobile Devices

Data Synchronizes Across Devices

Data Synchronizes Across Applications

Support

Live Online Help From CRM Expert

Live Phone Help From CRM Expert

Training Videos Available

My Needs Vendor 1 Vendor 2 Vendor 3

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CRM, or Customer Relationship Management: Software or a service that tracks contacts from the moment they enter the system. Advanced CRM software monitors and analyzes all communications with contacts and can even be programmed to manage communications automatically.

Contact Database: A database of persons who have a relationship with an organization. Contacts could be prospects, customers, employees, journalists, or others an organization interacts with. Contact databases have largely replaced old-fashioned ways of tracking contacts, such as business card files and Rolodexes.

Time Tracking: In CRM, time tracking usually refers to the need of employees to record the amount of time they spend working on various projects. Time tracking is used by companies that bill services by the hour. It’s also used by companies to monitor the productivity of employees or to estimate labor costs associated with various projects.

Customer Service Management: This is one specialized function of CRM services & sales software. A CRM solution for customer service management might allow customer service representatives to access a complete history of purchases, complaints, and other interactions with a customer in order to provide better service.

Lead Management or Lead Nurturing: Lead management and lead nurturing are methods for processing a lead in a way that turns a prospect into a customer, and keeps customers coming back. High-end CRM software and services facilitate lead nurturing by automating many of the routine communications that can turn a browser into a buyer.

GLOSSARY OF TERMS

“LEAD MANAGEMENT AND LEAD NURTURING ARE METHODS FOR PROCESSING A LEAD IN A WAY THAT TURNS A PROSPECT INTO A CUSTOMER.”

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Sales Force Management: This is a specialized function of many CRM programs that provides tools for sales teams. Research shows that sales teams empowered with quality CRM software are able to generate significantly more sales than those who do not take advantage of these technologies. Sales-force management features often include lead rating, lead nurturing, goal setting, alerts, sales literature, invoicing, effectiveness analysis, and results measurement.

Custom Fields: A database is made up of records, with one record for each contact in the database. Inside the record for each contact are fields with information about the contact, such as first name, last name, email address, etc. Most CRM solutions include custom fields in a record that an organization can use to track various metrics important to the organization, such as the average amount of time between purchases. The number and flexibility of custom fields is often an indication of the versatility of the CRM program.

Social Integration: In CRM, social integration is the ability to integrate the database with a variety of social networking sites. Being able to locate contacts on Facebook, LinkedIn, Twitter, and other services provides sales representatives with multiple ways to approach and engage prospects. Social integration is new to CRM; most low-priced CRM systems still do not accommodate social marketing.

Sales Optimization: This is a systematic process for maximizing the lifetime profits from a contact through smart communications. High-end CRM services are able to analyze a vast amount of information about prospects and customers, and use that analysis to suggest and send communications that are designed to win back lapsed customers while sustaining and growing existing customers.

Software-as-a-Service (SaaS): This refers to the fact that CRM software is increasingly sold as a service, rather than as a program. While stand-alone software is still in use in many organizations, the trend is for that software to live in the cloud, not on your computer, and for you to be charged to access the service rather than own the software. Benefits of SaaS include software that is continually updated, access to the system from anywhere using a variety of devices, and usually better back-up systems for the data.

CSV Files: CSV stands for Comma Separated Values. It’s a widely used standard used for exporting or importing databases. Each field in a record is stored with a comma dividing one field from the next, so that the file can be easily imported into a different software program.

vCards or VCF Files: A vCard or VCF file is like a digital business card. It contains standard information about a contact in a standard format. Most CRM programs are

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able to easily import vCards or VCF files, and most also export data into that format.

Mail Merge or Email Merge: A process for integrating a list of contacts with a form letter. On a simple level, mail merge will address an email to each person in a database at the press of a button. On a more sophisticated level, CRM software will not only address the message, but will also customize it based on what is known about the contact.

Business Intelligence: This refers to the ability of an organization to gather, analyze, and use information about itself. CRM software & services are at the center of business intelligence and may be the only form of computerized business intelligence used by many firms. With CRM’s ability to track and analyze sales, it can provide some of the most useful information available to guide an organization.