CRM Selection in 4 (Huge) Steps

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CRM Selection Process
If you are looking to implement a CRM system for the first time, or replace your existing CRM system the process is the same. However, the process is very different from the purchase of any other software system in your organization, so throw away your template for an RFQ and roll-up your sleeves, since this will take some effort on your part.
Implementing CRM is not the same as implementing an accounting package or an email system. An accounting system is used for tracking financial information for internal and legal reporting purposes. The number of users is generally limited to those who understand accounting practices, and generally accepted accounting principles (GAAP) are the foundation for the implementation. Email on the other hand is a communication tool, and also adheres to standards. CRM, on the other hand, is the wild-wild west of implementations. While there are some standards in the CRM industry, most of a CRM strategy is custom to the company implementing CRM. This makes buying a CRM system a custom process.

The first thing I tell my customers is this, “don’t implement a CRM system, if you don’t have a plan and honest, straight-forward goals for CRM.” Why? It will be a huge waste of time and money, since CRM is so much more than an address book or a quote tracking tool.



If you are looking to implement a CRM system for the first time, or replace your existing CRM system the process is the same. However, the process is very different from the purchase of any other software system in your organization, so throw away your template for an RFQ and roll-up your sleeves, since this will take some effort on your part.

At a high level, the process is simply this: CRM selection starts with defining a CRM strategy, that strategy is used to develop a demo script, which is used throughout the demo review/software selection process.  Each of the steps is critical for the successful selection and implementation of a CRM system.

In my next couple of blog posts, I will cover each of the four steps in more detail, but below I will give you an understanding of each of the steps:

Step 1: CRM Strategy

By strategy I don’t mean what features and functions you want. I’m not talking about nice-to-haves. CRM strategy defines the core belief system of your organization.  The ultimate goal is for CRM to be the company culture related to customers and prospects. This strategy looks at your company mission, goals, culture, processes and people. It concludes with a definition of how a CRM system will be used.

Step 2: Demo Script

Rather than issuing an RFQ with hundreds of questions, all of which will most likely be answered “yes,” ask potential vendors to perform demos based upon a script.  This script helps to ensure that each vendor and CRM system you demo is being compared equally.  Since this script is unique to your specific needs, it starts with providing a high-level overview of your company’s CRM strategy. This script starts with the strategy and then drills down into the details of how to accomplish given tasks in the CRM system.



Step 3: CRM Demos/Software Selection

Now that your strategy is secure, your script is created, and your vendors are lined up, it is time to review CRM systems. You will have done everything up to this point to ensure that you are comparing apples to apples, so during this process you will be watching and asking questions related to your process, culture and goals. A CRM demo should not be a review of wiz-bang features and functions, but a demonstration of the CRM systems ability to align with your process and goals.

The key thing is how closely each CRM Demo follows your script. If the script isn’t followed, is there something wrong with the software or the vendor’s understanding of your needs?

Step 4: Investment Review

Finally, it’s time to review investment options. While we may not ask every vendor/CRM system for a quote, the final two or three will be required to provide investment information. The goal of this process is to compare apples to apples again. Each quote will be unique, and it is critical that you understand all associated costs from the upfront investment to all associated and recurring costs. Ultimately you will want to compare the investment options for each CRM system side-by-side detailing all costs by category and with a 3 to 5 year cost outlay comparison.

Not for the Faint of Heart

This is a process that will take more than a week.  In fact, just the CRM strategy step can take months, but it is months of work well spent. Because if you know where you are going and what you want, you will vastly increase your odds of success in selecting and implementing a CRM system. There is a saying in Nicaragua which applies here; roughly translated it is “beginning cheap will end expensive.” The investment you make in time and resources prior to the software demo process will determine success.



As I said earlier, I will break down each of the four steps in greater detail in the coming weeks. In the meantime, please comment with questions or observations that you may have related to your CRM software selection, or send me an email to schedule a call to discuss your unique situation.

6 COMMENTS

  1. Best point I’ve seen about CRM systems in a while.

    Step 1: CRM Strategy
    By strategy I don’t mean what features and functions you want. I’m not talking about nice-to-haves. CRM strategy defines the core belief system of your organization. The ultimate goal is for CRM to be the company culture related to customers and prospects. This strategy looks at your company mission, goals, culture, processes and people. It concludes with a definition of how a CRM system will be used.

  2. Hi Luke

    Having been involved in implementing CRM systems since their modern incarnation in the early 1990s, I can say without fear of contradiction that the vast majority of CRM systems have been selected, implemented and operated without the benefit of a coherent CRM strategy to guide them. And many of them have been very highly successful, in spite of the lack of a CRM strategy.

    It does rather raise the question. Do we really need a CRM strategy to make a success of what is usually an operational CRM system? The evidence would suggest not.

    Graham Hill
    @grahamhill

    PS. You still need detailed requirements specifications in addition to use cases, because they will inevitably become the basis of the legal contract and of the subsequent change control as vendors try to wriggle out of their commitments afterwards.

  3. Graham, I wonder if what you mean by “CRM strategy” is the same as how Luke defined it.

    In Luke’s opening there is a technology slant: “CRM selection starts with defining a CRM strategy, that strategy is used to develop a demo script, which is used throughout the demo review/software selection process. Each of the steps is critical for the successful selection and implementation of a CRM system.”

    This implies the “strategy” is mainly concerned with what the system will do. So I agree with Luke that if that’s done, the organization has a better chance of success — getting the system to do what it was supposed to do.

    Without such a definition, there’s no way to really measure success or failure.

    Quite a few years ago, when everyone was saying “CRM is failing” we (Dick Lee, David Mangen, and I) did a survey which found that about 2/3 of companies *were* successful with their CRM initiatives, whether measured by tangible results or perception.

    But the problem was (and I think still is) that being successful had little to do with strategic goals like increasing customer loyalty or increasing competitive differentiation. Companies proclaimed these were very important (just as they continue to do today under the CX banner) yet very few could report any success.

    Therein lies the problem, I believe. Does the CRM strategy includes what Luke wrote later: “This strategy looks at your company mission, goals, culture, processes and people.” Probably not.

    I do agree with you that it’s possible to get benefits from CRM-based automation, regardless of whether there is a robust strategy defined. Automation is good at generating tactical benefits like process improvement, cost savings, and improved decision-making, which our past research found were the most common CRM benefits.

    Like the CRM of old, the pattern is being repeated with CX today. Inspiring talk about better experiences and loyalty, but little strategy beyond gathering feedback and fixing obvious problems. Just like CRM, good for generating short-term benefits and some manner of “success.”

    For some companies that may be good enough. For the 80% or so of companies that say they want to be industry leaders, probably not — unless all their competitors are failing to get the basics right.

    “Strategy” is a term that is used and abused so much that is meaningless unless defined in some detail. Otherwise, there is no way to know if the “CRM strategy” is merely an tech implementation plan, or something more robust.

  4. Grahm,

    Success is also an ambiguous term. How one company defines CRM success is completely different than how another defines success. To one company, success is having “accurate” opportunity data. To another it’s saving employees time in looking up customer system information. Still to another success may simply be implementing the system.

    A solid CRM strategy helps to define what success is, and it incorporates the company mission, goals, processes, people and culture. CRM software is just one leg of a CRM strategy. The first thing I ask my customers after developing CRM goals (like increasing customer loyalty by x%, increasing the average order size by $500, decreasing order processing time by 2 days, etc.) is do they truly believe that simply implementing software will achieve those goals? So far, the answer has been unanimous: NO. “So, you need a strategy, then,” is always my response.

    Implementing CRM without changing processes and culture, without understanding your current workforce and their strengths and weaknesses, without focusing on measurable goals may succeed, but it will not produce the same return and the same level of success as CRM implemented within a CRM strategy.

    One of the big hindrances to CRM success is utilization. This is because companies do plan for utilization. My experience is the best sales person is the worst CRM user, and the opposite is true as well; the worst salesperson is usually a very skilled CRM user. Is a company willing to fire their best salesperson because they don’t do “CRM Fridays” and update their CRM database? No, probably not. So we have to plan, prior to implementation on how to drive proper utilization. I say proper, because I don’t believe it is proper to take a person selling $5,000,000 a year and ask them to update industries on all of their accounts, for example.

    If we plan properly, define roles effectively, focus on only those parts of CRM that drive the successful accomplishment of key goals, CRM can, and will be, a huge success.

  5. Hi Bob

    I was using the same loose definition of CRM Strategy as Luke, namely ‘By strategy I don’t mean what features and functions you want. I’m not talking about nice-to-haves. CRM strategy defines the core belief system of your organization. The ultimate goal is for CRM to be the company culture related to customers and prospects. This strategy looks at your company mission, goals, culture, processes and people. It concludes with a definition of how a CRM system will be used.’

    Extensive experience and a modicum of research support the proposition that if we look at a graph with ‘Costs to Implement’ on the X-axis and ‘Value from Implementation’ on the Y-axis we find a rough J-shaped curve. With a minimum of cost we can get a lot of value from CRM by implementing it tactically on a departmental scale. The value outweighs the costs. As the scale increases operationally across departments, the costs rapidly increase, but the value often falls due to complementary capabilities not being developed sufficiently to take advantage of the enablement provided by the CRM technology. The costs outweigh the value. And CRM implementations are at risk or being stopped. This is why so many operational CRM implementations failed in the past. As the scale further increases strategically to cover the whole organisation, although the costs increase the value increases much faster once more than 40-50% of employees start using the new technology. The value greatly outweighs the costs. This is the stuff of case studies!

    I have to admit that I am not a big fan of CRM Strategy. Or rather, I am in principle providing it is done properly, but not in practice as it rarely is. As most companies who have implemented CRM successfully don’t have a CRM Strategy, and the CRM Strategies that many others do have are simplistic rubbish, you do have to ask the question whether anyone really needs one.

    Graham Hill
    @grahamhill

  6. Hi Luke

    I don’t think you need a CRM Strategy to define CRM implementation success. What you need is an implementation plan and a suitably integrated balanced scorecard of IPOOI measures. CRM Strategy is something much more comprehensive.

    I do agree with you when you suggest that implementing CRM technology by itself is not enough. Research on hundreds of CRM projects by the Insead and Wharton B-schools showed that the choice of CRM technology and CRM vendor had no impact whatsoever on the success of the CRM projects, providing the technology delivered the minimum required CRM functionality. My own experience over the past 25 years suggests that the CRM technology alone is only worth 10-15% of the total available value from implementing a coherent approach to CRM across the organisation.

    Both of these suggest that developing a plan to harvest the benefits from implementing CRM technology and developing the required complementary capabilities is required. All business cases for CRM talk about business benefits, but it is a rare thing when they are turned into plans to actually harvest them.

    Graham Hill
    @grahamhill

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