Customer relationship management (CRM) is at the heart of every business and often is the primary determinant of success. Superior customer experience sets the ground for brand loyalty and these days companies cannot afford to take it for granted.

That is why CRM usage has exploded in recent years. What started out as a fledgling software service is now jetting to become a $145.79 billion industry by 2029.

Investment in CRM is perceived as a necessity by many businesses. 91% of companies with more than 11 employees already use CRM software. The same goes for 50% of enterprises with less than 10 workers.

The name of the game seems to be the technological investment: companies want to deliver the best service to their customers and stay in tune with fast-changing digital technologies to maintain the competitive edge. However, according to Tim Kippley, CRM practice lead at Rightpoint Consulting, the companies are also driven by more internal issues.

“A lot of them [CRM implementation requests] will come surround some form around revenue. They’ve either acquired a company or they’ve changed their revenue model in some way. So they want to see what they can do to improve sales in that area. Also when there’s internal turmoil. They may be unable to get an accurate view of things. Everybody has their own version of the truth and [these organizations] want to get to one consolidated version of the truth. Another one is pipeline issues—less now but more so early on. They say “I can’t forecast my business. I need to be able to run my business effectively.” That’s fundamental.”

So if you are tired of dealing with mathematical formulas and spreadsheets and consider adopting CRM solutions to improve your sales and marketing functioning, you are on the right track.

However, finding the right sales CRM for your business is not easy. As you may already be aware, there is no one size fits all option for every company. You must be able to separate the wheat and the chaff to find your ideal CRM solution.

What is wheat and what is chaff, of course, depends on the nature of your business and that can be very subjective. According to Seth Kinnett, author of the book “How to Win at CRM,” companies that do it successfully manage to find a good mix of functional, technical and psychological factors and requires many fundamental considerations. Here is how they do it in 2017.

What are companies looking for in a CRM solution in 2017?

When thinking about CRM functionality in 2017, a simple Google search shows that this year CRM hype circles around the following functions:

•        Artificial intelligence-based CRM tools and insights
•        Improved sales automation
•        Simpler CRM interface
•        Social CRM integrations
•         A vast variety of well-integrated external applications
•        User collaboration
•        Mobile CRM
•        Omnichannel CRM

However, does that mean companies make their CRM choices based on these functions? Well,  yes and no.

Research by Software Advice shows that while most companies do want new features and applications, only a small portion of buyers chase industry-specific traits, while the rest of the businesses seek general-purpose CRM solutions.

Further research by GetApp Lab confirms it. Around 47% of small and medium businesses search for CRM SaaS that will help them to improve their existing manual methods and ease the organization of customer information.

Other respondents also indicated that they want to add extra applications to their current CRM SaaS, stressing the need for better contact management, lead follow-up and marketing automation tools. The user interface is also a notable pain point, as  9% of the SMEs also look for improvements in the user interface, as some CRM services are simply too complicated to use.  

In the same study, respondents also named the most desirable features for a CRM solution. So, in 2017, the most required features and applications are as follows:

•        Lead management
•        Contact management
•        Task management
•        Reporting and analytics
•        Email integration
•        Accounting and inventory
•        Marketing
•        Customization
•        Permissions and security

It shows that most businesses do not chase the latest trends and developments and take a more practical approach, considering their business needs first and starting with the basics.

So, before moving forward, companies and startups should figure out their preferences. You can do it by answering these questions.

1.     What is your business model and what are your growth perspectives?
2.     How many customers do you expect to serve? Will you build your relationships with every client or reach out to the agents of large groups?
3.     What will be your main marketing tools? Is there a need for emails and if so, how many? Do you have a better tool than CRM to manage that?
4.     How do your sales funnel look? Where will your prospects find you and how will you lure them?

Finding answers to these questions will let you to better visualize which needs should be covered first and look for a CRM solution that will align well with your business objectives.

Once that is clear, businesses can start considering the available CRM solutions and their features that will bring the best return on investment.

Are they looking for an in-house or a SaaS product?

The primary reason for developing an internal CRM system would be the exclusive business requirements. If they are hardly met with a commercial package, building an in-house CRM might be a reasonable solution.

Nevertheless, most of SaaS CRMs are quite flexible. They provide many vertical integration options and can hold up to even the most sensitive SME needs.

In recent years, many firms have shown an increasing appetite for packaged CRM solutions with a particular focus on cloud computing services (SaaS).

The primary driving forces of such dramatic change have been improved bandwidth infrastructure, lower costs, growing trust and integration of extra apps in cloud services.

In the past, the main considerations when choosing an in-house CRM used to be quick response time, local security and hardware investments.

SaaS CRM is of particular importance for small and medium businesses as many of them cannot justify substantial costs imposed by on-premise IT infrastructure. For them, it would be too expensive and underutilized resource, which also requires maintenance and extra attention.

Therefore, outsourcing CRM to an external team of experts who regularly take care and update the system is an attractive option for SME’s and startups. On-premise CRM service is still being used and provides many benefits, but it is is more of a luxury choice for medium and large corporations with specific needs.  

Overall, the preference for cloud-based CRM has radically shifted, as external service providers can offer valuable benefits such as speed to market reduced operational overhead costs and simpler customization.

What kind of integrations are needed?

The ability to adjust CRM solutions in many different ways according to business wishes is a trademark of a robust CRM provider. For most of firms, integrating CRM with other systems is not a comfort, but a necessity.

Therefore, CRM vendors work with many integrations that can be classified into four broad categories:

1.     Marketing Features
2.     Analytics and reporting options
3.     Email service integration
4.     Accounting tools

A standalone CRM without access to other features is as useful as an elephant in a minefield.

Imagine the possibilities and the data if you connect your CRM with a bunch of the following:

1.     Enterprise resource planning system (ERP)
2.     Marketing System
3.     Public website
4.     Intranet
5.     Consumer price quote
6.     Mobile CRM
7.     Legacy CRM
8.     Product repository
9.     Accounting and finance system
10.  Data warehouse
11.  Knowledge management
12.  Market research tools

As you can see, integrations can enormously improve your CRM functionality. According to another study by GetApp, the most demanded CRM integrations are as follows:

1. Google Apps – 62.3%
2. Accounting apps (such as Xero, Quickbooks) – 39.3%
3. Time tracking apps  – 36.1%
4. Office 365 – 35.3%
5. Project management apps 33.7%
6. General email – 28.3%

How much of the company’s processes should a CRM cover?

By definition, CRM system encompasses all or most of the firm’s information systems which digitize business processes at the consumer end of the value chain. It includes CRM and marketing, sales, sales and marketing managment, and post-sales support.

However, a common CRM myth is that it revolves only around customers. Contemporary CRM SaaS can do so much more.

As mentioned previously, CRM can cover such areas as:

•        CRM marketing needs (websites, social media, email)
•        Team collaboration
•        Customer support
•        Team management platform
•        Data collecting and analytics
•        Inventory
•        Accounting

When it comes to the selection of which data to integrate into the CRM solution, the answer again relies on your business model and needs. For instance, if your sales and accounting need to communicate about the status of individual orders, then the components of client profile will need to communicate between accounting and sales systems.

Even though CRM started out as a sales tool, used by sales and marketing talent, today’s sales and marketing CRM functions are at the heart of the business, connecting various departments and reducing gaps in communication.

What else is expected from a CRM solution?

By now, it is obvious that CRM brings in a multitude of benefits. Investments in CRM solutions will continue to increase as it not only improves operational performance and results but also helps to obtain a competitive edge against the competitors and contributes a great deal to a superior customer experience.

However, besides already discussed CRM functions, there are a few additional things CRM does for the benefit of your business. These features are the standard for the general purpose CRM services.

•        Cloud service. Having your data in the cloud allows to access it from any device with internet connection. Such flexibility is a huge advantage. An investigation by Software Advice shows that 87% of CRM service providers offer cloud-based service, while in 2008 the number was only 12%. It indicates that cloud-based services already occupy the majority of the market, and, vendors who are “on-premise” are the dinosaurs. They better be avoided.  
•        Mobile access. Another function which stems from cloud storage is mobile services. Mobile CRM solutions do not only increase its usage but also lift productivity. According to the report by Nucleus Research, adoption of a smartphone app leads to up to 15% gain in productivity. Also, a staggering 65% of sales reps from mobile CRM enabled companies have reached their sales quotas, in contrast to only 22% reps who did the same for companies without mobile access to the software. Therefore, ability to access and edit data from the smartphone or tablet should not be overlooked.
•        Ease of use. Straightforward and easy to use user interface goes a long way. Your employees have to learn how to use it because there is little pleasure in it if the interface is terrible. In fact,9% of SME’s considers it as a major point of pain. Also, 65% of sales CRM users claim that ease of use is their top priority, and for all the right reasons. Some CRM software’s are so complicated that they are not worth the investment and training time. Clean, simple and easy to use are the main marketing buzzwords with the most services, however, testing the demo to get the feel of it might help you to find the right platform for your taste.
•        Third-party integrations. CRM systems work with all types of external programs, so it becomes almost effortless to have all the data you need in one place. This means automatic synchronization between your favorite business tools, saving you loads of time. However, if you get there you have to make sure that your CRM software supports the apps which you already use.
•        Customization. There is no one-size-fits-all CRM solution for everyone. CRM for small or medium businesses can cover many business areas, so customization is a must. Companies look for software that aligns well with their primary and support activities.
•        Niche specialization. As you know, there is a variety of CRM options. Companies lean towards solutions that are tailored to their business. For example, real estate dealers look for solutions designed for property and buildings sale. Finance services favor programs that comply with financial regulations and transparency.
•        Clear big picture. Ability to see a big picture quickly and without much friction is also amongst the top demands for sales CRM. Whichever stage of sales pipeline you are in, a good CRM will display the current stage of events and even suggests a course of action.

Why is it not a good choice to develop your own CRM?

Developing your own in-house CRM application may be advantageous for larger companies with unique business models that have exclusive business requirements. Other than that, most of the commercial CRM packages are flexible enough and were designed with a specific industry needs in mind. It means that your perfect CRM solution has already been made and most of the time you just need to find it.

Businesses who decide to build their own CRM often want to allocate their spare development resources to create a cost-effective alternative. However, too often it happens so that they just simply underestimate the required effort and investments that go into such projects. Here are some of the most common mistakes that happen with the in-house CRM’s.

• People tend to underestimate the workload and effort required to create and maintain a quality platform which results in wasting too much valuable time and resources.

• The developers get into other projects as well, so the new in-house CRM is delayed.

• Most companies do not realize the effort that goes into such project. If they dedicate development resources to one project, they may miss out on other activities.

• In-house CRM applications are not that easy to use, lack functionality or commercial applications which also affect user adoption rates.

• If developers decide to leave the company, it will be harder to find a replacement.

• The management team can get attached to the built system which will affect their decision-making regarding the system related issues.

• Built-in CRM systems often are sturdy and lack flexibility. When management or developers realize a mistake, there must be changes to work effectively and you can find yourself cornered.

Overall, the in-house route is a good choice if there are specific business needs that are hard to meet with the standard packages. However, it requires careful planning and estimation as well as financial considerations. A good option might be to look for open source CRM applications as your foundation.

If building your own CRM is avoidable, a commercial package is a reasonable solution for the most startups and SME’s. However, this comparison would not be complete if we do not overview the advantages and disadvantages of both system types.

Advantages and disadvantages of in-house and cloud-based CRM?

SaaS CRM can bring many benefits. Most prominent ones are:

1. Customer data management. Organization of all sales funnel information in a single place with automated data entries. CRM system eases the process and saves time.
2. Advanced sales forecasting. Instead of using complicated formulas a CRM sales and marketing software system generates an accurate sales pipeline, making it easier to predict future sales and effectively control the sales funnel.
3. Sales reports. Sales CRM keeps tabs on many far-reaching metrics, including sales quotas, sent emails, conducted calls, meetings, created opportunities and closed deals.
4. Process scaling. A repetitive sales cycle helps to implement and test new sales strategies and tactics. A CRM system with smart insights helps to recognize effective and ineffective approaches by tracking client activity and identifying behavioral patterns and trends. Essentially, most successful CRM integrations become the backbone of firms growth.
5. Customer segmentation. Prospect differentiation by deal size, closing date or whereabouts along with other categories makes it easier to recognize and sell to particular industries, areas or business types. Also, it makes it simpler to find the average deal price as well as sales cycle.  
6. Scaling the sales funnel. Ever-repeating sales cycle delivers many opportunities to test new sales tactics and strategies, which is the key to your business growth. The collected data help to identify consumer behavior patterns, distinguishing between what works and what does not. Enabling data-driven decisions can be the main difference between staying competitive in the market.
7. Streamlined costs. All the costs are summarized into a single monthly payment and in most cases, economies of scale apply.
8. Better utilization of business resources. SaaS CRM allows all staff to focus on achieving their strategic goals rather than daily activities.
9. Flexibility and scalability. Cloud systems are very flexible and serve the ability to scale processes up and down as needed.

However, wherever there are advantages, there are also disadvantages. Some of the drawbacks posed by external CRM systems are:

1. Security. Hosted solutions can be more prone to hacker attacks and as a result, more companies may feel uncomfortable storing important data and financial records within an external storage.
2. Training and adoption. Training is a vital part of CRM adoption and can have a significant impact on company’s culture. The internal challenges always follow the transition from manual to automatic CRM.
3. Not invented here (NIH). Managers must be aware that very often external CRM packages are met with resistance. It is called NIH syndrome. NIH is a natural psychological reaction which takes form in the organizational phenomenon when groups tend to resist inputs and ideas from external sources, often resulting in a bad performance and underutilization. The underlying reason for NIH is the false perception that external vendors are mainly profit-driven instead of consumer-driven and they do not understand the complexity of the business and just try to push their “one-size-fits-all” package.
4. Risk of going out of business. Some of the newer players are in danger of bankruptcy, especially during their first years, which could lead to stressful consequences for business continuity and even poses a threat of data loss.
5. Recurring costs. The monthly bill never goes away.
6. Less configuration. Obviously, it depends on cloud CRM service, but it is harder to make customized changes, or they happen slower.
7. Performance issues. Sometimes, latency can be a factor with some of the cloud-hosted CRM.

Although tailored and expensive, on-premise CRM systems also have its pros, such as:

1.     Little to no hosting and management fees. On-premise systems rarely pose additional costs for hosting or maintaining the system.
2.     Performance. Well designed and fully functional internal CRM’s can perform better than cloud-hosted platforms.
3.     Management control. In-house CRM allows businesses to decide everything within the hosted environment and thus serve a greater level of control.
4.     Change control. Internal solutions allow for easy CRM environment customization according to every organization’s need.

However, on the other hand, it brings out the following cons:

1.     Management responsibility. Internal systems need an extra careful full-time monitoring and administration and very often it is the manager’s responsibility.
2.     Maintenance costs. All the hardware, software and upgrade costs fall on the firm’s shoulders.
3.     System support costs. Additional costs derive from hosting, cooling, power and space costs which also are firms responsibility.
4.     Additional resources. Developing, managing and maintaining infrastructure will require extra attention as well. Therefore, the company has to either allocate someone or hire new personnel.

How to choose CRM software, which is right for you, is never easy, and it should not be. It is a critical task for a growing business. Before examining available solutions, companies put great emphasis on considering technical, psychological and financial considerations, because the decision to purchase externally hosted software can have a significant impact on company’s performance and culture.

SaaS CRM packages seem to rapidly improve and bring great and cost-friendly solutions to small and medium enterprises. However, for large corporations, on-premise CRM solution is also not completely out of the picture just yet, even though its influence and market dominance is vanishing as growing cloud-service niche replaces them. Thus, it is safe to say that cloud-based systems are here to stay as they are innovative, robust and customer responsive players.

As for now, SME’s have a variety of options to choose from. With so many sales and marketing CRM software choices on the market, the main considerations seem to be financial implications, business model nature, list of requirements, features, expectations, future ambitions and current business strategy.

No matter what vendor suits your business needs the best, one thing remains clear – the sooner your business will jump in on the CRM bandwagon, the faster it will reap its benefits.