An Overview of CRM Software
Customer relationship management (CRM) is the process of managing an organization’s interactions throughout the entire customer lifecycle. CRM software applications support the automation of these processes and best practices.
CRM systems vary widely in capabilities, pricing and underlying technology, from basic contact management to sophisticated enterprise suites for sales, service and marketing. Moreover, the market includes industry-specific CRM solutions (e.g., real estate or pharmaceutical sales) and best-of-breed solutions for specific CRM functions (e.g., field service or help desk).
We developed this guide to complement our CRM reviews. The following sections will help potential purchasers find the best customer relationship management software package for their business:
Here’s what we’ll cover:
What is CRM Software?
The primary purpose of CRM software, sometimes known as contact management software, is to consolidate customer information into one repository, so users can better organize and manage relationships. Additionally, these applications automate common processes and provide tools for monitoring performance and productivity. Systems vary, but the best CRM software will include at least the following four core functions:
- Customer Data Management: Most products provide a searchable database to store customer information (such as contact information) and relevant documents (such as sales proposals and contracts).
- Interaction Tracking: These systems document conversations held by phone, in person, through email or other channels. These interactions can be logged manually, or automated with phone and email system integrations. Depending on the product, some systems can also track interactions on Facebook, Twitter and other social platforms.
- Workflow Automation: This standardizes business processes, usually through a combination of task lists, calendars, alerts and templates. Once a task is checked off as complete, for example, the system might automatically set a task for the next step in the process.
- Reporting: Management can use these CRM tools to track performance and productivity based on activities logged in the CRM system--for instance, how many new contacts were added to the database that day, or how much revenue was generated. These tools can also be used for forecasting, such as for the next-quarter sales pipeline.
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Let’s say you currently store customer contact information in Excel spreadsheets, appointments in a calendar, and files in Dropbox, Google Drive or another document management tool. When someone calls, you have to toggle between each of these tools to figure out whether they’re a prospect or existing customer. Worse, you don’t immediately know if they’ve spoken to anyone else in your company. Past interactions might be trapped in someone’s inbox, paper notes, or only in employees' memories.
Depending on where this caller is in the customer lifecycle, not having this information in one place can lengthen their time to conversion, limit return sale possibilities, or slow issue resolution.
If you had automation software in this scenario, you could simply pull up that account and see every meeting, phone or email conversation you or your team has ever had with that person, as well as past agreements and marketing materials sent. You might also see, for example, a contract attached to that opportunity that’s awaiting signature and a task for one of your sales reps to follow up. So you transfer the call.
A contact profile in Sage ACT!.
After the sales rep hangs up with the contact, he might close the task to follow up, then pick the next step in the process from a dropdown menu: “Did they return the contract?” The due date for this task is set for the next day, when the rep will receive an alert to follow up if the agreement isn’t returned.
You can see how this alternative scenario increases efficiency and productivity. And it prevents important activities from falling through the cracks. Managers benefit, too, by having ready access to reports that show key performance metrics and progress toward goals.
Reporting dashboard in Sage SalesLogix.
This scenario described core functionality, but these technologies are also widely used in a broad range of CRM applications. Below is a brief explanation of each of these application types.
|Marketing Automation||Lead management (generation, scoring and nurturing), email and event marketing, landing pages, Web analytics, and campaign management.|
|Sales Force Automation||Contact and opportunity management, workflow automation, territory management, sales forecasting, pipeline analysis, and reporting.|
|Customer Service & Support||Trouble ticketing, knowledge management, self-service, case management, live chat, and surveys.|
|Field Service Management||Dispatching, scheduling, invoicing, inventory management, and order management.|
|Call Center Automation||Call routing, recording and monitoring; load balancing, call list management, autodialing, scripting, computer telephony integration (CTI) and interactive voice response (IVR).|
|Help Desk Automation||Trouble ticketing, knowledge management, self-service, IT asset management, network management, service level agreement (SLA) management, and remote control.|
|Channel Management||Lead and contact management, partner portals, partner relationship management, and market development funds management.|
As you compare CRM software, it’s important you keep the following industry trends in mind. For a summary of recent trends among buyers, check out the results of our 2013 BuyerView report. Below is a summary of other recent industry trends.
Social CRM. The biggest trend is the convergence of customer relationship management and social networking technologies, loosely referred to as “Social CRM.” In fact, five top industry analysts recently predicted this trend as having the biggest impact on how customer tracking software programs evolves.
Today, this intersection of social and client management software can be as simple as adding Facebook data to customer profiles. Or, it can be as complex as niche products that tap into social APIs and generate leads, mine for customer sentiment, or traffic and prioritize social customer service requests.
An example of a social media stream with contact details from Radian6.
Mobile CRM. Mobile applications for customer relationship management are becoming increasingly sophisticated and popular. These tools don’t just port functions to a mobile interface--top CRM software vendors will offer apps that leverage the unique capabilities of mobile devices, such as GPS and voice.
An outside sales rep could, for example, pull up a map of their current location and see pinpoints for accounts in that area. Or, a customer service rep might have the ability to speak a query into their mobile app, rather than try and type everything out on a tiny smartphone keyboard.
In 1999, Salesforce.com entered the market as the first major player in the Software-as-a-Service (SaaS) CRM space. Today, a majority of CRM products are now SaaS solutions, though on-premise options still exist. The deployment method you choose should be a key consideration when conducting your CRM software comparison. Pricing between these two models usually (but not always) differs in the following ways:
- Cloud-based software, also called Software-as-a-Service (SaaS), is typically priced on a subscription basis determined by the number of “seats” (sales reps, support agents, field technicians etc. who need to access the software). This type of software is housed off-site on servers managed by the software company.
- On-premise customer management systems usually require purchasing a perpetual license upfront, with no recurring subscription cost. But users might also pay additionally for upgrades, customizations or maintenance. This software is housed on the buyers’ servers.
Customer relationship management systems have come a long way since the ‘90s. This timeline shows the diverse range of organizations, events, people and milestones involved in the evolution of this industry. Here are several more recent events in CRM history:
- Salesforce.com raising $1 billion with offering. Salesforce.com announced plans to offer $1 billion in long-term convertible debt, with the option to raise another $150 million. The sum is likely to pay for another round of acquisitions. In recent years, Salesforce.com snapped up two companies for its “Marketing cloud:” social listening software Radian6, and social campaign firm Buddy Media. The move closely follows Oracle’s acquisition of marketing automation vendor Eloqua.
- Sage sells CRM product lines. Accounting software veteran Sage announced plans to move closer to its core business by selling Sage ACT! and SalesLogix. Email marketing firm Swiftpage purchased the lines for a reported $101.2 million. Sage acquired the companies in 2001 when it purchased Interact Commerce for $260 million.