CRM Software: Customer Service for a Song

When Mike Gillespie arrived in January 2000 at SecureLogix, a firewall and security management firm in San Antonio, he knew that he had a big job ahead of him. In September 1999, the 90-employee company had begun deploying a powerful customer relationship management software package to help the company keep up with a growing customer base. Four months later, that effort had stalled badly. An experienced manager of CRM systems, Gillespie had been hired to help pick up the pieces.

"When I got here, I looked at the cost benefit of moving forward with the [existing] software [versus] scrapping it and putting in another system," Gillespie explains. "It was a lot more economical to deploy another system."

The company chose SalesLogix (no relation to SecureLogix), an affordable CRM package tailored for small and medium-size businesses. CRM software like SalesLogix allows companies to gather, analyze, and act on information about current and prospective customers. These packages unify access to this data, ensuring that sales, marketing, customer service, and even product development teams all work from a common set of contacts, customer histories, and other information. The result: more-focused interaction, fewer embarrassing gaffes, and--hopefully--increased sales and profits.

Gillespie and his team evaluated a number of CRM packages; of these, they opted for SalesLogix because of its substantially lower cost and faster deployment time. Six months after Gillespie arrived, the company had the new CRM system fully deployed and operational.

"I didn't have time to mess around. We were a start-up, we had guys in the field, and we needed to get it done," he says.

CRM Writ Small

Gillespie's experience is hardly unique. Customer relationship management systems have been hailed as a way for companies to find, influence, and retain customers. Packages from companies like Onyx, Pivotal, and Siebel go far beyond simple contact and sales management--they link sales, marketing, and customer support operations into a single, cohesive chain.

But the complexity of CRM systems can turn deployments into expensive, time-consuming mistakes. SecureLogix, for example, had poured nearly $200,000 into its aborted CRM project. Many companies need low-cost, easy-to-implement CRM software. Fortunately, affordable packages have finally matured.

"Anecdotally there's a fairly high failure rate attributed to CRM implementations," says Jocelyn Young, program manager for CRM services for IDC.

Industry experts cite failure rates for CRM rollouts of up to 70 percent. That's a disastrously high figure for initiatives that typically cost hundreds of thousands--or even millions--of dollars. For smaller businesses or for departments within large companies, even successful implementation at that cost is out of the question.

Jerry Norman, president of Market Answers, a CRM consultancy in Austin, Texas, says the broad definition of CRM is part of the problem. "If you ask 100 people on the street what CRM is, you are going to get 100 answers. The executives know that they need CRM, but they don't know what they are getting."

One way to sidestep the issue, says Norman, is to narrow the focus of the CRM effort. Lower-cost CRM products such as Microsoft BCentral Customer Manager, SalesForce.com, and SalesLogix provide common CRM features like lead generation and management, deal tracking, and customer support management. These packages can be installed on a company's servers or hosted by an application service provider. But while a Siebel deployment can cost several hundred thousand dollars, a package like SalesLogix can be had for less than $50,000 for 20 users--a relative pittance by CRM standards.

"If you've got a sales force of 20 people, there is no reason to be spending more than $40,000 to $60,000 on sales force implementation," says Norman.

Bob Thompson, founder and president of Front Line Solutions, a consultancy focusing on CRM issues, urges smaller firms to consider shrink-wrapped sales tools as well. "[Interact Commerce] ACT and [FrontRange] GoldMine have been around a long time," says Thompson. "The reality is that they have five times more functionality than most sales reps need anyway. And you can buy it at a store for a couple hundred bucks."

Both ACT and GoldMine fall under the rubric of sales force automation software. These packages help sales reps maintain contact lists, manage schedules, and close leads. While not technically CRM software, SFA products help companies find, capture, and keep the most profitable customers. These products typically integrate with desktop productivity software like e-mail and office applications to streamline interactions and provide improved account tracking. The result: improved customer satisfaction and lower turnover.

Small Names, Big Companies

Lower-cost CRM solutions don't appeal solely to small and medium-size businesses. Departments in large companies often turn to economical CRM packages as a stopgap measure while they wait for completion of enterprise-wide initiatives.

"You'd be shocked at how many [corporations] buy Siebel and then still have to buy and implement our package," says Clark Dircz, the CEO and founder of Worldtrak, a provider of CRM products that integrate with Microsoft Outlook. "We have clients that have been told that they won't see their part of a Siebel implementation for two and a half years. What are these people going to do? Two and a half years is an eternity in most of these businesses. So a lot of these people will come to us, and we'll do a departmental or divisional solution." (For many companies, however, enterprise CRM products like Siebel are still the best choice. See "Setting Up Siebel: When It Makes Sense to Go Big.")

One way to speed things up is to avoid deploying servers and software at all. That's the tack taken by offerings like Microsoft BCentral Customer Manager, Oracle Small Business Suite CRM, and SalesForce.com--which are all Web-based services. These browser-based applications store CRM data on remote servers, making it easy for users to access the data anywhere that they can get an Internet connection.

Online customer relationship management seems to be gaining appeal. Leading technology companies Autodesk and Broadvision have both standardized their CRM on SalesForce.com.

CRM in the House

Not all companies are ready to take their CRM business online. The prolonged outage of Microsoft's MSN Messenger service in July offered a cautionary lesson for IT managers who considered hosting business processes on remote vendor servers. For companies that prefer to keep their CRM efforts in-house, packages like Optima ExSellence and SalesLogix can cost less than half as much as software from IBM or Siebel.

Dick Lee, principal of High Yield Marketing and author of four books about CRM, warns that no package can cover the broad range of CRM tasks. "When Siebel says 'we do it all,' forget it. Nothing does it all. Not at a best-of-breed level. As you downscale the packages, they get more specialized."

The secret, says Lee, is to find a package that dovetails with your organization's priorities. Lee singles out SalesLogix as a good sales force automation package, and he feels that Clarify excels in customer service. The best all-around alternative, however, may be Optima ExSellence, which Lee says offers enterprise-class functionality at a reasonable cost.

Companies looking to bulk up contact management while preserving ease of use might consider packages that integrate with Microsoft Outlook. By serving up information in the familiar Outlook interface, CRM products from companies such as Worldtrak piggyback CRM onto the popular e-mail client and interact with Microsoft Exchange Server to provide users access to CRM data.

Walk the Path

Deciding between using a Web-based CRM package and hosting an application in-house should be the last thing to worry about, contends Lee, who speaks frequently about CRM. He says CRM adoption must start from a well-defined strategy that focuses squarely on the customer.

"The single most important thing is for the business to step back and take the time to develop customer-centric business strategies," urges Lee. "If you don't, it doesn't matter what kind of technology you put in--it's not going to work."

Market Answers' Norman agrees, but warns companies not to overanalyze. "I think it is a huge mistake for midmarket companies to analyze their sales process and get [it] down to a gnat's whisker. It's going to just stall them."

Ultimately, says Thompson, CRM is about people and customers. "Good businesses understand intuitively that good CRM is about taking care of your customers," Thompson says. "If customers don't like what you are doing, you're toast."

Photographs: James McGoon, Andy Snow, Robert Holmgren, and Marc Simon