The First 5 Factors for Choosing CRM Software

The upside of Customer Relationship Management software is well understood. This application reaches deep within an organization, pooling valuable information to improve customer satisfaction, service and loyalty, reduce costs and improve profits.

But how to select the best CRM software is less understood. To avoid expending your time and resources on CRM evaluations that will ultimately not make sense, and better focus your time on the solutions that will, start with the below 5 evaluation criteria to down select the best system for your company.



Knowing your budget is an important component of any IT purchasing decision. However, while price is only one factor, it is often more of a constraint than a score. Do not only consider the up front costs, but also plan for the implementation and ongoing investments. Know what is included in your budget and as importantly what's not.

After all, training, upgrades and ongoing services generally come out of the same budget as the initial payment. Also consider the cost of data conversion, system integration and software customization. And recognize that CRM consulting services typically exceed the annual software subscription investment by a multiple of 4 to 5.


Clearly Defined Business Objectives

Developing a clear-cut set of business goals is an integral component of any CRM software selection. In addition to the IT department, managers and a representation of end-users who will support your solution, you should secure buy-in from at least one top-level executive. These individuals should not only champion the new software; they should provide input into the available data and required capabilities of the yet-to-be acquired application.

Understand how departments currently generate, access and store data, and determine the strengths and weaknesses of each approach. Involve departments such as sales, marketing and service, tapping them to produce a compilation of mandatory requirements and a wish-list  of nice to have capabilities. You should have a check-list of measurable, weighted and prioritized requirements that will be compared to CRM capabilities and also act as a benchmark for follow-up analysis of the software's success and return on investment (ROI).


Cloud or On-premise?

There are pros and cons to both software delivery models. For many businesses, a cloud-based or software as a service (SaaS) CRM solution gives them speedy access to more powerful, sophisticated equipment, and negates their need to buy big-ticket or support-intensive technologies. Since a cloud provider already has the business software up-and-running, implementing the application is much faster with SaaS.

Other organizations, especially those with larger internal IT staffs and excess computing infrastructure, may prefer to purchase their software and the hardware needed to run it. Despite service providers' contracts, expert security and service level agreements, some businesses are leery of hiring a third-party to run and maintain a critical business software tool. Businesses that want an on-site solution but do not have the IT staff to implement it also have the option of hiring a third-party systems integrator, solution provider or consultant to host the program externally.



You are buying a CRM solution to help grow your business. But will your application grow with you? A well-developed forecast addresses the software's scalability to ensure this year's decision will not become next year's regret. Scalability is an important criteria since, once purchased, you do not want to be forced into again grappling with the costs and hours—and negative feedback from the executive suite—associated with buying a replacement system a few years down the road.

Consider, too, the expertise level of your staff. If the customer management software is extremely complex, employees may well shy away from it, instantly decreasing the software's value and ROI. Alternately, an application with limited uses is unable to fully do the required tasks and results in either software customization or increased manual efforts. Once you have an abbreviated list of contenders, take advantage of vendor trials and software evaluation programs, and encourage your focus group of prospective users to examine and check-out their potential new tools.


Vendor Strength and Reputation

It's important to scrutinize the reputation of vendors on your short-list. Check out the plethora of online media and social networks which provide user reviews and independent analysis of competing products. Many publish benchmarks and rankings based on their own or an external research firm's analysis of the software, support, service and training. Most vendors offer case studies, a great initial tool for comparing your operations to other organizations within the same market.

Perhaps the most valuable step when researching competing CRM solutions is to speak directly to existing clients about the solution's strengths and weaknesses, about how well the publisher supports its customers and keeps them in the loop on future developments and upgrades. If you are considering a cloud CRM solution, then speak to some of its existing customers, focusing not only on the software but on the provider's up-time rate, responsiveness and services.

It's also wise to consider the provider's experience in your specific vertical market. After all, financial firms have different prerequisites than an organic food wholesaler. The less experience, or the more customization that may be required, increase the up front cost of entry and ongoing maintenance. Discuss and review your implementation plan with the vendor, and go over specific objectives, business processes and forms to determine viability and any possible problems.

Rather than doing deep dives on a multitude of CRM systems, use the above CRM selection best practices criteria to quickly vet contenders and down select a finalist list to assess further. Your early investment in time and research will be repaid many times over by an application that truly lives up to its promise and benefits.