Enterprise Software

10 questions about the direction of CRM: An interview with Jon Cline

Find out where CRM expert Jon Cline thinks customer relationship management is headed, the benefits it offers, and what business leaders should expect from a CRM solution.

Find out where CRM expert Jon Cline thinks customer relationship management is headed, the benefits it offers, and what business leaders should expect from a CRM solution.

Jon Cline is a customer relationship management (CRM) veteran with more than a decade of consulting experience, including his work as a registered partner with Salesforce.com since 2003. He recently sold Enthusiast Solutions (www.enthusiastinc.com), which he co-founded in 1999, to launch Hip3 Marketing (www.hip3.com) and focus on CRM, along with Internet marketing and lead generation. His clients have included The American Film Institute, Telecare, and MAP Management Development. He has assisted hundreds of companies through his speaking, writing, and coaching on relationship management and Internet marketing. Here's his take on where CRM is headed.

Note: This information is also available as a PDF download.

 #1: How is CRM changing and what does the business owner need to be aware of?

At the heart of CRM is the benefit of having the customer record at the center of the data universe rather than multiple galaxies of transactions held in separate, transaction-specific apps. So the innovation lies in new and improved visibility for putting information to use in intelligent decision making. Companies that used to serve 100 are serving 10,000, and with this kind of scaling, better top-level tools and custom dashboards are where I see CRM continuing to morph and advance.

#2: Who are the newcomers to the CRM landscape?

It is such a hot area right now, there are literally hundreds. But two I have been following are Zoho and HighRise. Both are niche vendors that have garnered great contact lists with their other products and created relatively simple implementations for their clients and others. They both illustrate the fact that CRM is no longer esoteric -- it is going mainstream, which is a great thing for business, particularly customer service and data security.

#3: How much should I plan to spend on a good solution?

That's always a tough question, given that applications vary widely in price based on whether it's a hosted or installed delivery model, user-based or organization-wide subscription model, or a per-gigabyte or other data model. I would use the cost-per-sale and cost-per-lead values to help determine what a system is worth to a business. For most customers, services are going to be anywhere from $20 to $350 per month per user.

#4: What exactly should I be expecting CRM to do for me?

This is an important question, as there are many misconceptions about software and CRM in particular. Besides some fundamentals, like data security and access and ease of use, CRM will primarily help you do what you do anyway, but move it to the next level. If your main focus is customer service, CRM will help you monitor, deliver, and measure your effectiveness. If your goal is a flat organization where the right hand knows immediately what the left hand is doing, CRM will help you be informed about the customer's world and not just what relates to your department or team.

#5: What are your expectations for CRM in the next five years?

First, I expect CRM to become much more commonplace. Players like Zoho and 37signals (Highrise) are knocking down barriers to entry. I also expect to see some consolidation. I think the bigger players, like Salesforce, Microsoft, and SAP, will buy up some of their smaller rivals to build into their suites and migrate their user bases. As long as the acquiring provider keeps the connections intact during the migration and meets a similar price point, it will be a win-win. I also think we'll be seeing more mobile-friendly applications, like Salesforce's Visualforce and NetSuite's iPhone, to maximize data access and timeliness.

#6: What are the most common mistakes you see companies make with CRM?

Many organizations use Outlook BCM or Excel for managing their contacts, which offer no planning or setup process -- just create a column or type in a field and get started. This causes problems when information is related and the flexible aspects of the previous solution are overlooked. There are real benefits that won't happen without understanding the new vernacular; the specific way the new solution describes the data. For example, an "account" in Salesforce may not be the same as an "account" in Highrise. In fact, it might have another name altogether, such as "company." Understanding how the particular vendor uses "leads" or "opportunities" will help to avoid a great deal of frustration.

#7: Do you have a few key best practices someone considering CRM can use?

Yes, I have three that anyone can use. First, consider your future needs. Look down the road and ask "How many contacts will I have in five years?" "How many salespeople will I have?" "How many of my people will need real-time access to this information at home or on their phones and PDAs?" "How much would it cost me to replace these contacts?"

Second, take the opportunity to clean up your data now. Moving to a CRM solution is an opportunity to start with a clean version of accurate data. De-duplicate and otherwise scrub the data to minimize the possibility of needing to import twice. For example, the flexibility of Excel and Outlook BCM allow placing incorrectly formatted information in their fields. This data will not import well without some good planning.

Third, be sure to communicate throughout the process and get early buy-in. The biggest focus of Saleforce.com with its customers is adoption. Members of your team are influencers in their departments. Leverage their expertise and influence by building a team to help you make decisions about the solution. Even if you disagree, listening, acknowledging, and respecting will build loyalty and acceptance within the process.

#8: What advantages might CRM have for specific verticals?

The answer to this question is not if but how much. Since CRM helps you do what you do better, if you are in a professional services company with long sales cycles, project terms, and frequent interactions and touch points, CRM will be exponentially more valuable to you. So service businesses, like lawyers, consultants, and accountants, are ripe for CRM but often have a technological aversion and a strong status quo to maintain.

#9: Does CRM fall more to sales or marketing in most organizations?

In my experience, marketing is somewhat of a new concept in CRM. Sales is definitely involved, but most often it is operations leading the charge.

#10: What are my best resources for finding out more about CRM?

One resource I would recommend any company create for itself is a one- to two-page document that answers the best practice questions above and includes input from the team. Send it to five vendors your team has selected and go over the proposals to see which companies address you as a unique business -- not just with a customizable offering but as a discrete business. Here are a few good sites I would recommend to anyone considering a solution:

About

Jeff Cerny has written interviews with top technology leaders for TechRepublic since 2008. He is also the author of Ten Breakable Habits to Creating a Remarkable Presentation.

15 comments
gary.vanmoffaert
gary.vanmoffaert

As always, Jeff Cerny has a crisp, clean interview that is packed with relavant info. Little by little, I've been looking for Jeff's columns in your publication. The point that I liked best is the integration of CRM to sales and marketing. Can use that in my company!

rhetorica2
rhetorica2

Great article and an enjoyable read. I'd like to see more depth on the response to question 8.

wisconsinjn
wisconsinjn

I found value/agreement on what CRM can do for me. We all find value in data security, for obvious reaons, and access and ease. If you are already doing good things and have solid practices, CRM will take you to the next level. That is something that a lot of existing and established companies look for. They have solid information, etc. but CRM will make them better. Also, it allows the company to measure what they are currently practicing and streamline current standards, etc. Also, what company doesn't want to know more information about their company and their client. If I can tap in the that.....? In the famous words of worldwide credit card.....PRICELESS. Good article. Valuable information. Good read. If your main focus is customer service, CRM will help you monitor, deliver, and measure your effectiveness. If your goal is a flat organization where the right hand knows immediately what the left hand is doing, CRM will help you be informed about the customer???s world and not just what relates to your department or team.

jmgarvin
jmgarvin

Find a CRM that lets you tailor it to fit your needs, not the other way around. Also make sure that you find a solution that allows you to work in your enterprise the way you need it to work. Make sure to account for VoIP, world wide deployments, time zones, ease of use, UI usage, etc... Don't forget, CRMs still need IT support and buy in. If you deploy CRM without IT, it won't be as successful as if you had IT behind you.

cwohl
cwohl

Jon is dead on with his analysis of CRM and what it can do for an organization. The biggest issue lies in already having a solid process in place. CRM helps streamline the process it does NOT create the process. I've seen too many organizations look at CRM as a means to solve their communication issues only to abandon the process after discovering that it created more work and didn't provide an immediate benefit. CRM is a long range solution. Be cautious when looking for a CRM solution. The CRM market is rapidly changing and you will see some significant changes in the products and what they provide. There is a new wave of tools emerging that will provide CRM and ECM at a price that small businesses can afford. This too shall pass as there is a strong push into enterprise management software for the SMB market. -CW

mozillagrrl
mozillagrrl

>#6: What are the most common mistakes you see companies make with CRM? >Many organizations use Outlook BCM or Excel for managing their contacts... So true. What's even scarier is when people bend over backwards to make Excel do things that excel wasn't exactly designed to do.

axel.cerny
axel.cerny

To keep up in the competitive world of business service today, it is vital to be using efficient technology, but is a CRM tecnology solution efficient for your company? I found the questions in the article to be precisely what any service-centered business needs to be asking in regards to the importance of CRM today. For some companies, it may not be efficient to be paying for a high-tech CRM solution, but regardless it seems absolutely necessary for companies to be doing to something to clean up their data, because business is moving in a new direction. I found the most useful question and answer to be in #7. It seems to becoming clearer and clearer that CRM solutions will become the standard in competitive service-centered business, and those three questions could not be more applicable to companies that are wondering how to handle a transition.

jhf0924
jhf0924

I appreciate the nature of this interview - in that it really presents a Primer for individuals and organizations on essentials - that while maybe obvious - escape many peoples lists of key points to consider. It's as if Point #10 is the self- fulfilling prophecy - WRITE IT DOWN - and then make it a living and adaptive document. Great Questions to drive actionable answers. Great Objectivity, Thanks to Jeff Cerny,

rickpumo
rickpumo

It is so refreshing to see a real-world perspective on best practices. Buy-in is one of the most overlooked issues in the planning stage. The value of your CRM solution is only as good as the data your employees are committed to entering. Employees need to understand that CRM data entry is a critical function. Employers need to communicate this with more than lip service. They must measure their employees on performance in this area. Further, compenstation should be impacted by this performance. If you're not ready to make that committment, you can save yourself $20 - $350 per person and a big headache. Great interview.

jon
jon

Thanks for the note rhetorica2. Since these benefits vary for each of the verticals, I will use professional services as an example. Whether you are an Architect, a Quickbooks Trainer, or an IT Consultant, the services you directly provide people deliver your revenue at generally higher margins than average. Given this higher price, customers have a higher expectation for customer service, responsiveness and quality. CRM dramatically improves the ability to set and exceed customer expectations while saving resources simultaneously. It also enables historical records and often location agnostic access that makes backing you up (and maintaining the client's expectations) much easier. Also, CRM enables the strategic use of automation such as annual contact info updates, a service & support helpdesk, and realtime reporting that save lots of time and protect the client relationship from breakdown. Finally, CRM enables a wide angle lens of the customer. This is often called the "360 degree view" as it enables many or all sides of the business to be visible from a single location. This benefits professional services companies by providing a single location a salesperson can check prior to a call just to confirm no outstanding support issues, frustrations expressed over email or phone contacts, or outstanding invoices remain that could interrupt a positive sales call. I hope that helps and I am certainly available for further info in general or salesforce.com info in particular. Take care. jc

mktackabery
mktackabery

For me #7 hit home. I've been a part of three separate CRM implementations and they all had data quality issues. I'm not sure all execs see the huge problems data quality causes, and migrating your data quality issues to a new system just demonstrate how badly your processes already work. I also agree that CRM doesn't fix your process - but it should be a critical part of any marketing organization by now. It is the key way to automate your marketing from the beginning and get a 360 view of your customer from the very beginning. Knowing where your lead came from, how long he or she was in the sales cycle, what drivers led him here and lead him now - there is so much intelligence to be had from great CRM. It's truly sad that so many companies don't recognize its value.

wbontra
wbontra

I think your point about needing to already have good processes in place is only partially right. My experience has been that CRM not only streamlines existing processes, it also acts as an enabler for processes that simply would be too cumbersome to institutionalize without an effective CRM tool. Data is definitely becoming more and more the king of many industries, and great customer data at your fingertips is a winning edge for sure.

EvaGoyena
EvaGoyena

Very true, indeed! I was once guilty of that. But now everything is laid out correctly using my crm (www.worketc.com), I manage my leads; add comments and updates without messing up my files.

marc
marc

Good read. One of the trends that I see making sense--especially if CRM becomes the center of the universe--is integrating with Service Request Management systems. An integration of that nature certainly isn't something to make light of during the initial planning. But since more and more organizations are becoming familiar with service catalogs, it makes sense that the systems will become more tightly integrated. I have also seen organizations approaching CRM by building the service catalog first, then publishing it out to their customers for zero-level transactional services. Those need to be visible to CRM as well.

Editor's Picks