June 2003

Users Prefer Custom-Built CRM Applications, Followed By Siebel, GoldMine And SalesLogix

BY NADJI TEHRANI

This 627-page market research report conducted by TMC Research* clearly points out that users today would like to have the versatility and the ability to adapt CRM software to a variety of applications. In my humble opinion, this represents a golden opportunity for all vendors to be able to custom-build or tailor-make their products for each major customer's application. For today's sophisticated and specialized CRM applications, standard 'off the shelf' products are often not the solution of choice, as is indicated in Figure 1 on page 4., which is obtained from TMC Research's 'The Worldwide Teleservices Outsourcing Market: Analysis & Forecast, 2003.'

In addition to custom-built CRM applications, Siebel, FrontRange Solutions' GoldMine and SalesLogix have all gained market share in the teleservices industry. We feel that simple adaptability of the above companies' products to individual applications substantially increases their marketability and desirability for business-to-business and business-to-consumer applications.

TMC Researchers polled leading teleservices companies to obtain the above information. The rationale for selecting teleservices companies was as follows:

1. Teleservices companies are by far the most experienced sector in the call center industry because they spend 100 percent of their time on CRM, and inbound and outbound applications for lead generation, customer acquisition, etc.

2. Teleservices companies work for corporate America as they outsource such things as telesales, customer service, customer care, CRM, lead generation and other applications.

To the extent that teleservices companies work for a plethora of customers, such as insurance, telecom, financial services, utilities, fundraisers, etc., it stands to reason that some 'off the shelf' products may be insufficient for such a variety of demanding applications. Unfortunately, to the extent that some vendors may not have consulted with such volume users in advance of developing their CRM software, their products likely do not have the necessary application suites for the giant teleservices industry. In my opinion, this fact alone should encourage all CRM software providers to consider adding flexibility to their software systems so they can be adapted for a variety of applications. Until that is done fully, such products may not penetrate markets as they should have.

The following caption was obtained directly from the TMC Research study for Figure 1:

'It was not surprising that 'custom-built' was the highest percentage (33%), since many organizations have their own specialized applications. Often times these are legacy applications that are 10 or 15 years old. The largest, non-custom-built CRM application was no surprise ' it was Siebel with 16.7%. GoldMine was the next highest with 10%. Surprisingly, we actually had 3% choose Microsoft CRM, which was still in beta when this survey was conducted. Finally, SalesLogix had a respectable 6.7%.'

In my July 2002 editorial entitled, 'The Essence of CRM Success: Focus On Relationships'Otherwise There Is No Customer To Manage!' I pointed out a number of reasons why many CRM users have had difficulty implementing and obtaining the full benefits of such systems, as outlined below.
 

Avoiding CRM Failure
A brief, step-by-step guide to successfully managing customer relationships and judiciously deploying CRM technologies might look something like this:

' First, take a long, hard look at what your company does and how it does it. Concentrate on and define what your core competencies are, what you provide your customers and what your customers want.

' Next, look at what processes and technology you have in place currently: what are they, how do they perform, what departments or groups are touched by them, and how current or legacy systems can be integrated into any new solutions.

' Define both short-term and long-term goals (with an emphasis on long-term).

' Come to a consensus from all departments of what they need and expect from a CRM implementation.

' Reinforce the fact that this will be a companywide change and get the management of all departments on board.

' Evaluate software and services from several different vendors. Look for systems that allow you to impose your business rules upon them rather than ones that force you to adapt to theirs. Examine how the new system will impact your partners, resellers and vendors.

' Purchase the system.

' Train.

' Study feedback from customers and employees and implement valid suggestions.

' Train.

CRM'So Vital'Yet So Elusive
Having said all of the above, and with reference to an article entitled 'How To Avoid The CRM Graveyard' by Richard Early of Convansys (published in the June 2002 issue), I would like to enumerate the following as some of the other contributing factors to the high percentage of CRM failures:

Lack Of Know-How ' It seems like every time a new concept comes along that appears to be successful, many people jump on the bandwagon without really knowing what they are doing. This, by itself, in my opinion, is the biggest contributor to failures.

Implementing A CRM Strategy ' There is a tendency to wish for the benefits of CRM while neglecting the principles that make CRM a success. Many companies jump into CRM without adequately strategizing and keeping the entire corporation's needs in mind. It is imperative to analyze your customer relationship needs and match system capabilities to those needs. Failure to do this also contributes significantly to failure.

Haste And Lack Of Due-Diligence ' To the extent that CRM technology solutions have produced many successful results, as evidenced by our CRM Excellence Awards in this issue, many companies hastily, without proper due-diligence, try to undertake a CRM venture to their detriment.

Substantial Consolidation And Innovations ' As in any growing business segment, consolidation occurs in technology industries, which can and does often lead to their failure (please see my explanation of this in my June 2002 editorial). This factor, plus continuous innovations, can lead to significant end user failures. Lack of continuity at the vendor level certainly increases the probability of CRM failure.

Unreasonable Expectations ' I believe systems and software are often cited as failures simply because someone chose the wrong system for the wrong reason. CRM implementations encompass a host of challenges, including having the appropriate personnel and rules in place, understanding and managing the scope of the project and managing the data strategy. Once again, due-diligence on the part of the implementer is to blame.

Lack of Proper Buying Strategy ' Because CRM encompasses many departments within the corporation, input and requirements from all other divisions are required before deciding on the CRM solution. In short, an improper buying strategy will contribute immensely to failure, obviously.

The Bottom Line ' If you are not an expert about every aspect of CRM, selection and implementation, get a true CRM professional's advice and don't wing it because it will not work.

For more information, please go to http://www.tmcnet.com/cis/0602/0602toc.htm for the Convansys article and to http://www.tmcnet.com/cis/0702/0702po.htm for my July 2002 editorial.

Lack Of Appropriate Positioning And Differentiation
As I studied further the just-released TMC Research on the teleservices agency market (www.tmcnet.com and click on Market Research) discussed above, it became apparent to me that certain vendors have not adequately differentiated and/or positioned their products. For example, in a particular section, enterprises that outsource to the teleservices companies were asked how important the availability of predictive dialers in a teleservices agency was to them in choosing to outsource to a given firm. Overwhelmingly, respondents replied that it is very important to them to have this technology in place at the teleservices agency of choice. However, when outsourcers' customers were asked a similar question, 'Does a specific brand of predictive dialer influence your decision?', the respondents showed significant indifference to which brand of technology the outsourcers had implemented. Translated, enterprises that outsource are saying, 'As long as the teleservices company has any type of predictive dialer, the brand simply doesn't matter to us.'

What the above position of the outsourcers' customers explains is that vendors of predictive dialers have not done an effective job of differentiating their products (in the manner of Intel's brilliant 'Intel Inside' marketing slogan) to the vast audience of enterprises that will ultimately benefit from their use. Therefore, customers simply don't care which dialer is used in the processing of their marketing campaigns. In such a situation, where there is no differentiation between the products involved, competition reduces down to price-cutting and commodity selling, which is not good for anyone.

Judicious Selection
The above editorial and my column from the July 2002 issue of Customer Inter@ction Solutions' magazine, clearly represent that selecting the proper CRM technology for your application depends substantially on doing the appropriate due-diligence prior to adoption. These editorials clearly point out that many things can go wrong if extreme attention to detail in the selection and adaptation of the CRM system is not applied. I hope the above reasoning provides the necessary foundation on which to base appropriate selection of your CRM products.

You Will Need This New Research'
If you have anything to do with CRM, call center outsourcing, teleservices, customer interaction centers, inbound/outbound marketing, I urge you to purchase this 627-page report with over 450 charts, plus analysis and teleservices agency profiles today.

For More Information On The New TMC Research, 'The Worldwide Teleservices Outsourcing Market: Analysis & Forecast, 2003,' visit www.tmcnet.com and click on Market Research or contact Bruce Hirsch at 203-852-6800, ext. 130 or bhirsch@tmcnet.com.

As usual, I look forward to hearing your comments.

Sincerely,

Nadji Tehrani
TMC Chairman, CEO and
Executive Group Publisher
ntehrani@tmcnet.com

For information and subscriptions,

visit www.TMCnet.com or call 203-852-6800.

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