How to Know When It’s Time to Enhance or Replace your CRM

Customer Relationship Management software is widely hailed as the technology to improve customer relationships and carry your company to a profitable bottom-line. Even so, sometimes CRM feels a bit like a clunker. How do you know if it's time to trade-in your application or just give it a tune-up?

"This is a difficult economic climate, so companies should think doubly hard about what they can do to make better use of what they already have," advises David Frenkel, CEO of Panviva, a developer of business process guidance software.

"We see a lot of companies contemplating major rip-and-replace CRM projects," adds Frenkel. "However, we know that most failures are a result of end-user adoption issues rather than software issues." A specialized training program for company staff may be the only upgrade needed.

Most CRM systems scale quite nicely and can be customized to accommodate most user requests and reporting requirements; however, there is a time when a software upgrade or trade-in makes the best business sense. The trick is in being able to know the difference.

You Might Need a CRM Software Upgrade If …

The experts have weighed in with their tips on how to make that call. Randy Saunders, program director of customer experience management solutions at Cincom Systems provided this Letterman-like list to guide you:

  • Your customers need to run through their history with you each time they call.
  • You tout a "new customer sale" only to later discover that it's actually from an existing customer.
  • You need more than a few minutes to find an existing customer's order or purchase history.
  • Every time a customer calls, you need a carrier pigeon to access supporting systems and information.
  • You find out you've lost a customer from a competitor's press release touting their new customer win.
  • "Integration with legacy systems" means you share a workstation with the oldest person in the company.
  • Someone calls to place an order, and you only find out they have a quote when they tell you.
  • You ship an order to a customer's competitor.
  • Instead of Christmas cards from you customers, you receive sympathy cards.
  • You don't even know who your customers are.

On a less humorous note, below are suggestions from other experts in the CRM software field.

10 Warning Signs Your CRM Needs Resuscitation

  1. "If your enterprise doesn't know how to incorporate digital engagement to the customer record, such as tweets or social media content, it's a sign that your CRM platform desperately needs a social upgrade," says Michael Wooden, senior vice president of market development for ACS, a business process and IT services outsourcer. Not only can companies use social media to listen to what customers are saying about their brands on blogs, consumer sites and social networks, he says, they can also incorporate this information into their customer service solution. The results are reduced costs (via reduced call and email volumes and increased agent productivity and first call resolution) and improved revenues (via higher customer lifetime value and increased lead conversion rates). "Organizations must also capture and distill those 'conversations' into knowledge that can be used to improve customer service," advises Wooden. "Enterprises will need social media monitoring and management tools not only to report on what people are saying, but also to store, distill and leverage the knowledge gained from them."
  2. "When customer communications start taking place outside of the CRM system and there's no direct way to manage and influence your customers' experience with your organization, it's time to upgrade your application," says Gregory Hopkins, president and CEO of Libra OnDemand, makers of CRM solutions for the hospitality industry.
  3. "If you find yourself having to go to a web team to find out what customers are doing online, your marketing team to understand the impact on sales your best customers have, and your email marketing provider to understand which of your customers actually respond to email offers, you lack the fundamentals to be able to succeed with your CRM program," says John Bastone, global product marketing manager for SAS' Customer Intelligence Solutions.
  4. "If a company finds that it is 'hacking' its existing solution to make it do something it wasn't designed to do, or putting off important initiatives because the system can't support them, it's time to start looking for an alternative," says Dave Raffaele, executive director of solution architecture at customer intelligence software vendor Quaero.
  5. "If your CRM software doesn't have customer intelligence and analytics at its core, it's time to upgrade," says Scott Ortiz, executive director of product management at CSG Systems.
  6. "If a quick audit of the sales team reveals your reps aren't truly using the CRM system, a fix or alternative must be considered" says Bill Johnson, CEO of sales force automation firm Jesubi. "If your sales reps utilization is completely random and has no cadence, you need to find a new solution that gets rid of ad-hoc selling and instead facilitates a systematic approach. If your current system provides no institutional insight as to what is happening in your sales channel before a forecast is due, it's time to make a CRM change," he adds.
  7. "If your existing application doesn't easily integrate with other systems like email or accounting, it's time to upgrade," says Raju Vegesna, evangelist at business application developer Zoho, which provides the online app Zoho CRM.
  8. "If your existing customer management system lacks essential CRM capabilities and is not customizable enough to accommodate your company's growth, it's time for an upgrade," adds Vegesna.
  9. "If a business is having a hard time tracking customer data centrally, then they need to upgrade quickly. Many businesses lose vital customer data because it is not safeguarded in a company database and centrally managed," says Todd Simons, senior director of technology at FranklinCovey Products.
  10. "If you have first-generation, management-centric sales force automation system, which turned out to be a sales force accounting system, it's time to upgrade to software that actually helps sales people sell rather than require them to be simple data entry clerks," says York Baur, CMO of the TAS Group, a sales performance management automation specialist.

There you have it: the evaluation criteria to determine if your CRM system is a dying clunker or an underused hot rod. Now start your engines and hit the track!