Program: The Best CRM System on the Market
Interview with Guest David Raab
This is a literal transcript, you may quote and edit if credit is given to the program: CRM Radio.
Paul: Welcome everybody it’s time again for CRM Radio; voice of CRM Today! For those of you new to
this program, this is streaming live weekly program where we discuss all things related to CRM.
CRM Radio Today is part of the new Funnel Radio Channel which offers eight programs for at work listeners. Easy to find all of them; just check us out at iTunes, Stitcher or anyplace else where fine business podcasts are collected.
And we remind you as always like all our programs on the network, this program is not scripted, it’s a spontaneous discussion and exchange of ideas starting with this one.
Alright enough of that! Let’s get back to our show with Jim Obermayer. Hey Jim!
Jim: Hi Paul! Nice to be here again today in our second issue, our second episode of CRM Radio! We hope this one runs as long as SLMA Radio which is gone 327 episodes, 328 today and Sales Pipeline Radio that are on their 30th episode, 30th or 40th so we’ve got some good long-running programs.
Today or subject is the best CRM system on the market. The question always comes up – what is the best system? Well, CRM systems have been installed in, people tell me in 90% of the companies. Regardless, failure rates may or may not be high depending on who you talk to which seems to feel more [03:58 inaudible] to the market. The new capabilities, applications continue to be hung on the basic CRM platforms and that fuels more companies into the market; business intelligence, social media, all these things that are wrapped into it. Everybody claims their program is the best but we are going to get some opinions today from David Raab from Raab Associates. We are going to talk a little bit about the best CRM system on the market or at least for the beast systems should have.
David Raab is has more than 30 years’ experience as a marketer, consultant, author analyst. His company is one of our trusted advisors to the SLMA. He has consulted with major firms and financial services, healthcare, telecommunications, publishing, consumer technology and other industries. He’s written hundreds of articles on marketing issues that addressed audiences and North America, Europe, Australia, Asia. He is the author of marketing measurement tool kit which I love published by Raycom communications so David welcome!
David: Thanks for having me Jim!
Jim: So how are we going to answer this question – what’s the best CRM system on the market? I guess I hate to delay this answer to this question but before we get into it, maybe we should tackle a couple of other pressing issues. And I’ve had to go to an expert to figure this out; why David, are there so many new CRM system entrants each month?
David: Well I wouldn’t say each month although there may be one or two. But certainly the question remains of why does the world really need another CRM system period? I think there are several hundred at last count, maybe more depends on how you count and what you define. But I think people keep entering the market partly because they do see opportunity, the underlined technology is changing what marketers and salespeople do change so you need new systems that just reflect for the way we do things now.
Jim: Well some of the system that are out there I know Pipeliner, they are one of our sponsors, regardless of that, they seem to take a very visual approach to their CRM system. Everything is visual, everything is instant, being able to see everything instantly, not have it buried so much. So is it just a new technology offerings that’s driving this or they are just so many moving parts in CRM it’s easy to start up the system and change your offering slightly and you say it’s something new.
David: Well I think that it’s not that hard to build a basic simple CRM system that just has the core tasks so part of the reason you get so many entrants is that there is not so much of a barrier. Beyond that I think there is still a huge desire for a CRM system that works better than what people have. I think we will talk a little later about failure rates and happiness rates and…
Jim: Happiness rates, I love it!
David: … I’m sorry?
Jim: I love the happiness rates.
David: Happiness rates, right. You know, you can think about just what it is that you want and what you don’t see and if it’s not that hard you know what? I will just build my own so that’s part of it. But I think beyond that we are seeing more specialization by vertical, more additional functions like local marketing functions or distributor marketing functions so there are all these new things that people kind of want to bundle into the system that they can do and then I if it’s not that big a development project, you can have a small company with not too huge number of clients and stay afloat at least for a little while. So it’s really just a tough situational factors; the economics of the industry that do favor people starting up new companies.
Jim: Well I keep hearing that, and I’ve experienced it myself, it’s not unusual that companies will try two or three different CRM systems over three or four years before they settle on one. And often they didn’t train people well enough in the first one and didn’t set it up properly so everybody gets frustrated and they go to the next one, that one they do a little better, salespeople push back, they have a lot of pushback and then they have to go to another one. I find people just trained the salespeople right to begin with and set it up right to begin with they won’t have to go through that two or three systems. Now somehow the 70% failure rate has been kicked around a lot since 2008 and it’s actually higher in earlier years. Do you think it’s still true that that failure rate of the first-time installations could be as high as 70%?
David: Well maybe, it really depends on what the meaning of it is or in this case, the meaning of failure is. Are we talking about systems that barely do not work? Are we talking about systems that function but are not used? Are we talking about systems that are used but people aren’t very happy with them? All those are questions that are asked. I think the most common question used to measure system failure is that it met expectations and I think one of the issues with CRM is the expectations are really quite high especially from people who don’t have a lot of experience and kind of don’t know any better.
People make all of these promises and of course it sounds great, wow all my information in one place, everybody knows what everybody else is up to, it’s going to be more efficient, I’m going to not waste time on things. So you have these really sky high expectations and then people get into the reality of it and they find out you know wow, it doesn’t really do all of this stuff for me. It probably does what I was told it would do but it doesn’t do everything that I kind of hoped in my wildest dreams it would do and then so that’s part of it.
I think also a large part of it is that people often think all CRM systems are the same. They say well you know my company is a relatively straightforward company so my needs [10:02 inaudible] so yeah just tell me which one is the best and I would just buy which is the most popular and it will probably work for me or which has the most features and some of those will work. And it turns out that doesn’t really work.
Everybody really is different and differences may be small little nuances but if the system doesn’t have that one particular little feature that you happen to need in your business because you deal with multiple products and your CRM really isn’t set up to deal with multiple products as an example, that system doesn’t work. But when you buy the next system you know, there is the specific little quirky little feature that I discovered that I needed and now I am going to go out and find a system to do that. I’m in a much, much better chance the second or third time out of actually finding a system that truly meets my needs.
Jim: I think you said something very important there. You separated the failure rates and the happiness rates so to speak and separated that out somewhat with a satisfaction rates because the question is very often: are you satisfied with your CRM, moderately satisfied, very well satisfied, not satisfied at all? And very often people will give some opinion on that. And then the publishers turn this around and call it a failure rate the way I did in our program announcement using the term freely because it’s stronger, who knows. But it’s really satisfaction rate.
And I don’t know how much the satisfaction rate is in the part of the salespeople or the part of the marketing people. So I saw somebody in one of the posts the other day just said hey, this is 70% figure is crap – this was in their headline, just keeps being repeated and repeated by everybody who’s got a vested interest in turning the systems over or being a consultant to it and it’s not really true.
What do you think the main causes of CRM failure are? Is it this little feature or is it training or is it database marketing or is it… I go to companies and the sales manager is not using the system but they pound on the salespeople to use it. I go to companies and they are still using spreadsheets even though they’ve got a CRM system in place that can do all their forecasting. I am amazed at the lack of use of the system!
David: I think there are no doubt many different reasons possibly as many reasons as there are users. But I think you hit earlier on training as a critical thing that people often don’t do it because remember the system is… why would I need training? The system is so simple that people just teach themselves how to use it and most of their work it just does for you anyway so what’s to train, right?
Obviously that’s not the case but again that’s part of that experience of going through the process at least once to recognize that no, no I do need training to make people work with it. So I think that’s a huge issue. I think again, really not buying the right system, not even recognizing that there are right and wrong systems and the right system for you is not the right system for somebody else necessarily so you really do have to focus on your needs and get the system that works for you.
And then I would say the third big stumbling block is if it just really doesn’t give much value to the salespeople. That’s always been the criticism of CRM or sales automation that it was really about gathering information for sales managers and it didn’t really make the job of the individual salesperson any easier. And I still think that there is a certain amount of truth to that, less than there used to be because the systems do some interesting things now; they really do make the salesperson’s life easier but there is still a sense in many cases that at the end of the day it’s just me as a salesperson, it’s asking me to do a lot of work and I am not really getting a lot of value as that of course will lead to lack of adoption and ultimately failure.
Jim: A really good assessment, it really comes down to the salespeople using it. We’ve been speaking with our guest David Raab from Raab Associates. And David, before we go today, either end of the show I would like to hear a little bit more about Raab associates and what you do out there as well as MPM toolkit because I know it’s got some great forms there. We’re going to hear just a word from our commercial sponsors and we will be right back and we will talk a little bit more about CRM system adoption, why some people seem to buy the software without a strategy and what are the elements of a good CRM strategy in your opinion – I think you as an expert in the industry, and then let’s get into the best CRM system on the market.
Paul, over to you!
Paul: All right, now back to Jim. You’ve been holding us in suspense here. I’m waiting to find out the best CRM I need one!
Jim: Yeah, well David is our industry expert here and he’s got a lot of experience in CRM, marketing automation through his company Raab Associates and we… as we come back here I asked him to think about this; some people buy software without a strategy for implementation. And you started to touch on that David when you said they buy the software and said well it’s easy to use, they just tell the salespeople to fill out the lead forms and everything will fall into place.
Now you don’t have a CRM as part of your MPM toolkit but can people really get started without a strategy? And I’ve had other people complain about this, they don’t put down what they are really expecting out of the system so they get what they expect which is buttkiss, what do you think?
David: No, that’s right. You do have to start with a strategy and there are many layers actually of strategy starting off with what’s my business strategy and then what’s my sales strategy and my customer strategy and all of that. But you know, any strategy at whatever level strategy starts with goals and that’s what a strategy is, a strategy is a way to your goal. So is my goal better customer treatment? Is my goal faster response? Is my goal for my reps to have more information at their fingertips? Is my goal to have an easier way to find new leads or a better way to move leads through the funnel more quickly? All of those are different goals. Each of those actually implies a strategy for the sales process itself and then the sales process strategy is what has to drive the CRM strategy.
So you have to go back to the beginning because you do things differently. If I want it to all be about having information instead of a complicated product line then they are again certain CRM features that I need to surface product information quickly and do some sort of a little artificial intelligence, thing-a-ma-bob that I will figure out for the customer; hey, these are the three right products for you, that sort of thing.
If it was about accelerating movement through the pipeline, then I would be looking at a different set of features about nurture streams and watching people’s behavior and sending alerts to the sales guy to look out to reach out when somebody does something or looks like they might be getting stuck – so totally different kind of requirements depending on what my goal or my strategy is.
So it’s hard to generalize actually, it’s impossible to generalize but we will just ignore that fact and go ahead and generalize anyhow because that’s what we do here. You know generally you’re going to care about a strategy for explaining the right leads in the first place, some sort of a call or lead generation strategy, it’s not demand gen. So where am I going to find people? Is it cold calling or advertising or prospecting or whatever?
Getting useful data about those leads – am I going to collect it directly? Am I going to go to third-party sources? All kinds of information sources available that again we didn’t used to have social media, it’s a whole new thing that didn’t exist certainly 20 years ago, I don’t know, 10 years ago in a meaningful way so how am I going to do that?
How am I obviously going to make sure that my users make use of the data and make use of the system features assuming I found the features that are right for my company West and Marco am I were to track behaviors? How am I going to fix problems? What kind of metrics am I going to have to measure progress throughout the cycle so that I can learn what’s working and what’s not working and also so I can just prove to myself and to my salespeople and to my CFO and everybody else that yeah, the system is really worthwhile, it’s worth the salesperson investing their time, it’s worth the company spending its money on, it’s worth spending on training, it’s worth spending on all of these things that cost money that are not immediately obvious in terms of returning value.
So that’s a handful of things that are going to be important. Most situations, then again you really always just have to look at the individual case and figure out what’s really going to be the critical success factor in your particular situation.
Jim: Which somewhat brings us to this final question here – what’s the best CRM system out there?
David: Well you know, funny you should mention, we actually just launched a new product called…, no I am just kidding. There is no… if I really give an answer wouldn’t you be shocked? – Yes. And we’ve used a few around here over the years, I think you’ve used a few as well and they have their pluses and minuses. We, I guess don’t want to mention product names but you know we’ve had one that we have to customize very, very highly and back to the issue of particular needs and this is really my wife’s business, she runs a PR agency and it’s not normal PR, it’s book PR and book PR is different from other PR I should tell you. So, we spent thousands and thousands and thousands of dollars customizing her system, got it to exactly where we wanted it and worked quite well and then two things happened; the industry changed, the marketing, the book PR marketing industry changed and the platform of the system it ran great on, I think was the dos system or maybe it ran on Windows, was an old system.
After a while we actually ended up having to go out and buy like reconditioned 486 computers because it wouldn’t even run on modern hardware, that’s how old it was so eventually ditched it, we kind of had no choice, replaced it with something much more off the shelf, much less customized and believe me she says it doesn’t do everything she needs or everything she wants but that’s the system she works with nowadays. So it’s good and the bad. I’m sorry but that’s the only answer, it really… the best system is the one that meets your needs.
Jim: The one that meets your needs. I think to a certain extent, you and I have run this back and forth, the best of course I am coming from a sales perspective, the best system is the one that the salespeople will use and so the one that meets your needs, you spend a lot of time talking about that very individual need and defining it and defining the strategy up front and the ones that the salespeople will themselves use which means the one that gives them the most satisfaction probably with the least perceived work in the system. I would like to say that it’s a particular system but I’ve seen some people throw out Salesforce and four years later I brought it back in and they thought it was wonderful. Now it’s not a product change differently, we just set it up differently and made sure that there needs were met.
So we hate to disappoint people but it really does come back to I think the ones that meets the needs of your company that you so well pointed out the very individual needs and the one that the salespeople will use. As we wind up in our last 30 seconds, tell us a little bit more about Raab Associates and how they can reach you.
David: Well Raab associates, you can look its R-A-A-B Associates Inc.com is the website. You go to www.Raabassociates.com you will find my wife’s business. My side of the businesses consultancy, we help people select software is really what we’ve done to help marketers select software for many years now.
We do other things too but that’s the main thrust of the business is just understanding what products are out there and understanding how to figure out why those needs are and what the strategies are that we’ve just been talking about and making sure that people end up with something that they will actually use happily and will drive their business forward because that’s why we buy software in business, is to make our business better.
Jim: Well thank you very much for your time today David. It’s been very useful and now let’s not forget about the MPM toolkit that people can download and use in all the different forms. It’s great device, great series of things that people can use. Thank you so much for taking your valuable time today to be on CRM Radio Today, thank you!
David: My pleasure, thank you.
Jim: Thank you. Paul, over to you!
Paul: You’ve been listening to another episode of CRM Today Radio, part of the brand-new Funnel Radio Network with a growing list of at work business programs. Check us out on iTunes, Stitcher, anyplace, podcasts are found as well as live here each and every Thursday as we run programs continuously now from 9 o’clock till noon on the new Funnel Radio Network.