CRM Buying Secrets of the Experienced Consumer

The Experienced Consumer

Companies that have become successful with CRM software have a uniquely different approach to the evaluation and selection process. I call these the experienced consumer. The experienced consumer has most likely purchased software before and knows that mistakes can be costly.

Creates a Requirements Document

Before seeking a solution they will engage their internal staff and document their specific requirements, so that everyone has a clear picture of what business challenges they are trying to address. The requirements are often the result of a deep understanding of their internal infrastructure.

To create a requirements document, ask your team the following questions…

  1. Where are we today with regard to business process automation?
  2. Where do we want and need to be?
  3. How are we going to get there? What steps are required?
  4. What resources or assistance will we need?

Requests Information from select Vendors

The next thing they do is send the requirements document to a pre-selected list of vendors as a request for information or RFI. These are not detailed requirements that you often see in a request for proposal or RFP. Many requirements have nothing to do with features and functions. This is simply a request for information that focuses on learning more about the vendor and their value proposition or what they provide to their customers.

Listed below are some common questions the experienced consumer may ask.

  1. How long has the company been in business?
  2. How many installations have you done in our industry?
  3. Is this a comprehensive solution that can support growth (people and transactions)?
  4. Describe your hosting service? Where is our data stored and managed?
  5. What level of support services do you offer (i.e. training, customization, system integration)?
  6. Who does the training and customization? Your company or a third party?
  7. Who are your top two competitors?
  8. How often do you release product updates or enhancements?
  9. What happens if I choose to terminate the service? How do I get my data back?

This initial document enables the experienced buyer to control the evaluation process and it cleverly allows the vendor to remove themselves from further evaluation based on their response to the request for information. Once again there is no discussion or evaluation of features, functions or price at this time. The experienced consumer knows that if the vendor cannot satisfy their initial business objectives listed above the functionality they offer is irrelevant. This is a complete reversal of how the checklist consumers and commodity buyers approach the evaluation process. The checklist consumer may not ask these questions while the commodity consumer believes they already have all the answers.

Plans for Training and Services

The experienced consumer also knows that they can’t fix everything, and that there is no perfect solution designed specifically for their business. While they will certainly pay attention to the industry leaders during the evaluation and selection process, they are more concerned in fostering a rewarding business relationship with a company that closely matches the unique functional requirements of their industry and the value added support services they may require.
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The experienced consumer is keenly aware that they will have to make a resource commitment with regard to the implementation, utilization and internal support of any solution they select. They understand that the CRM software won’t run their business – their people will. They recognize that they may need assistance from the solution provider in certain areas such as marketing campaign management or the creation of a structured sales methodology. These support services and best practices may be critical to their success and not every vendor, regardless of size or leadership position, may offer them.

Experienced consumers are not looking for anything free and while they will pay attention to the overall cost of the solution, saving a few dollars is not the top priority for these businesses.

Looks at ‘nuts and bolts’ not ‘bells and whistles’

The next step in the process is for the experienced consumer to engage the vendors and learn about the product’s features and functions that address their specific business or service oriented requirements. With their request for information met, they are doing this with the knowledge that they have already narrowed down their decision to the vendors that have a strong track record for delivering exceptional value to similar businesses. This approach is more about finding the right vendor or business partner first, then digging into their product’s features and functions.

Some will then deploy a checklist approach, particularly if they have narrowed their process to two vendors. What they are looking for here is not a feature and function comparison, but instead if one vendor or product is more mature or experienced in a specific area than the other. Here’s an example. Let’s say you are in the construction industry. You have narrowed your decision to two great vendors with excellent products but one of the firms has more experience in your industry than the other. In fact, this particular company has integrated their product to one of the more popular accounting or ERP systems in the construction industry. This is not critical to you at this time, but it may be in the future and this may be just enough value add to select them.

What I have learned from my interaction in several hundred CRM sales processes is that companies that have adapted to this approach have a higher degree of success with the implementation and utilization of CRM than those that do not. While there are no specific analytics to confirm this, my firm Commence Corporation has experienced this within our own customer base. I plan to write about this in a future article. I hope this one provided some value to those considering a CRM solution for their business.

About the Author:

Larry Caretsky is the President of Commence Corporation, a leading provider of online CRM software for small to mid-sized enterprises. Caretsky is the author of numerous white papers on the subject of CRM and is considered an expert in the industry. His articles and the free eBook Smart Practices that Pay: Leveraging Information to Achieve Selling Results are available for download from the company’s website at

CRM Buyers Guide for the Commodity Buyer

The Commodity Buyer

The commodity buyer is the complete opposite of the checklist consumer. There are actually two types of commodity buyers. They are typically defined by size.

Commodity buyer 1 is a mid-sized or larger firm with specific business requirements that need to be met. The requirements are typically documented but may not be fully understood by the product evaluators. This however is irrelevant because the commodity buyer is not going to spend too much time evaluating CRM solutions, or comparing features and functions like the checklist consumer does.

Trusts the Top Rated CRM is the Best CRM

Commodity buyers are highly influenced by brand recognition and have already made a decision to select one of the top two industry leaders, convinced that they have chosen the best solution available and one that will serve their business well.

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Are you confident the #1 CRM is the best CRM for your business?

This is not to say that they do not do some evaluation of the features, functions and services provided. They do, but the failure of this approach is that choosing a solution based on brand recognition alone does not guarantee success.

Where the Commodity Buyer’s Process Falls Short

 Choosing a solution based on brand recognition alone does not guarantee success.

The number of failed implementations and utilization rates associated with industry leading CRM products is in-line with all other service providers in the sector. What this illustrates once again is that it’s not about the consumer’s lack of commitment to success or industry leading products that are too hard to use. The commodity buying approach, not unlike the checklist approach, fails to take into consideration the same core elements that have led to the disappointment consumers continue to have in this industry.

Issues with the commodity buying approach include:

  • Rules out other good offerings – Commodity buyers make their decision based on brand recognition ruling out other offerings that may potentially be a better fit.
  • Higher upfront cost – Commodity buyers traditionally pay more for industry leading products, but suffer equally from failed implementations and low utilization rates.
  • Unbudgeted additional costs – Industry leading products are often generic in functionality and cost a great deal of money to customize for specific business purposes. Support services are also much more costly from industry leaders than vertically based or pure play CRM providers.

The Commodity Buyer for Small Business

There is a second type of commodity buyer and that’s the small business consumer or commodity buyer 2. These smaller businesses are traditionally using an older contact manager or an Excel spreadsheet to run their business. Management may be getting some pressure from the staff to better manage customer data.

Thinks Free is Better than Cheap

The commodity buyer 2 is very price sensitive. They are willing to consider a CRM solution, but they are not going to pay much for one. Their requirements are quite basic and there are dozens of basic low cost CRM systems available that can most likely meet their needs. As such, while they are willing to pay a small monthly fee for a solution, they tend to favor the plethora of free ones that are available today. You have to admit, it’s hard to argue against free.

10097418 Free Trial On Blackboard by Stuart Miles

Does your business have the time to try a free CRM solution?

Has High Expectations of Low Cost CRM

Commodity buyer 2 suffers more from unmet expectations than failed implementations. These free or low cost offerings by design are quite basic with little to no implementation effort and don’t offer much with regard to system administration or customization. What occurs most often with their use is simply disappointment. The users quickly discover that the product is limited in many aspects such as functionality. Perhaps the number of contacts or sales opportunities you can enter are limited as well. Upgrading to a more advanced version may be possible at a higher monthly fee, but sometimes what you are using is all that is available. Typically, the buyer simply discontinues the service or switches to an alternative.

Where the Small Business Commodity Buyer’s Process Falls Short

The problem with this approach is as follows:

  • Narrow focus on price – The small business commodity buyer’s decision process is driven almost entirely on price, and does not give enough consideration to other selection criteria that are just as important to making the right decision for a small business. These may include functionality, data storage limitations, data security, and support services.
  • Trial and error – The small business commodity buyer very rarely has documented requirements, and as such does not know the right questions to ask. But because the majority of the offerings in this industry segment are either free or a few dollars a month, they are not concerned overall. They can discontinue their use at any time.

This commodity buying approach can result in time wasted and failure to improve internal business processes.

The Secret to CRM Customer Success

In this series of articles we have taken a look at two different approaches to the CRM evaluation process – that of the checklist consumer and the commodity buyer. Because so many companies fall into one of these categories you can begin to appreciate why the CRM software sector has continued to suffer for so long. But there are companies that have been highly successful with CRM software and can point to improvements in multiple areas. Many have successfully integrated their front office and back office business processes, resulting in their business becoming a more efficient sales and service organization.

So what have they done differently? Well let’s take look. Continue reading the next article in this series:  “CRM Buying Secrets of the Experienced Consumer

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  • Image Credit: “Free Trial On Blackboard by Stuart Miles” at

CRM Buyers Guide for the Checklist Consumer

The Checklist Consumer

The checklist consumer is motivated to find the best solution for their business. This is no simple task because they may not have documented requirements to guide them, nor do they have a lot of experience as software evaluators. As such, the best solution is typically the one with the most features.

Uses a Point System

The checklist consumer’s process consists of documenting a list of all features then comparing vendors using a point system, one point for each feature. The vendor with the most points at the lowest price quickly becomes the front-runner.

This evaluation process is based primarily on features and functions, many of which may be irrelevant to their actual business requirements. This results in the selection of a solution with comprehensive functionality that, more often than not, never gets used.

Reads CRM Reviews and Feature Comparisons

Checklist consumers do not want to make a mistake so they are going to take their time and review a laundry list of products. They do not initially rule anyone out. They are looking for the perfect solution – the one that stands out among the competition. They are often frustrated when they can’t find it, but they won’t give up because this is the only way they can feel comfortable that they are making the right decision for their company.

Often Runs out of Time

The checklist approach takes so long that business requirements often change during the evaluation period…

Checklist consumers always feel like they are compromising. They have not been able to find the perfect solution, but they continue the search month after month frustrating the administrative, sales and service staff who have been waiting for a decision. The checklist approach takes so long that business requirements often change during the evaluation period, adding to the frustration. Everyone wants a decision so they make one even though they are not comfortable doing so. This often ends up being one of the more popular solutions or simply the last one they evaluated.

10034838 Attractive Woman Writing On Clipboard by photostock

Feeling overwhelmed? Out of time? Let the checkmarks make the decision.

Where the Checklist Consumer’s Process Falls Short

The checklist approach is a popular one and is built around the concept of more is better. This results in the purchase of a comprehensive and costly solution that may never fully be implemented.

Industry surveys indicate that most companies use between 30 – 60 percent of the CRM functionality they purchase. I believe this is an accurate assessment that has nothing to do with the consumer’s lack of commitment or the vendor’s product being too hard to use. It is the result of an evaluation process that often overlooks the following:

  • Functional requirements – Do the product features match the functionality we need? Do they address any of our specific documented business requirements?
  • Best Practices – Does the solution provider offer best practices for the successful implementation and utilization of their solution?
  • Change management – What internal changes need to take place to improve things, and who is going to manage them?
  • Value added services – Does the solution provider have an experienced staff that can provide the training and support services required for our success?

The next article of this series will be a CRM Buyers Guide for the Commodity Buyer

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What Type of CRM Buyer are You?

The CRM software sector is an explosive market. The introduction of cloud based CRM solutions that no longer require the implementation of computer hardware or software, coupled with a large number of low cost offerings for small to mid-size businesses, have fed the global growth of this industry.  Growth predictions for this sector indicate that businesses are going to continue to buy CRM software to automate and streamline their internal business processes.  Despite the rapid deployment and ease of use of web-based systems, the CRM software sector continues to suffer from low utilization levels and unmet expectations.

Consumers often point to the solution providers for over engineering the software, making it too hard to use. Vendors could argue it’s the consumers who are at fault, having not made the proper commitment to training and best practices necessary to ensure the successful implementation of their software.  The blame game continues year after year yet for some reason very little changes.

Why the evaluation process can make or break your CRM success

A high degree of unsuccessful implementations have more to do with a flawed evaluation and selection process than anything else.  It’s not the vendor’s fault nor is there a lack of commitment by the consumer.  What I discovered is that very often companies are ill equipped in their approach to the evaluation of CRM software.  Here is what I mean.

Management decides they need CRM software to improve how they market, sell and provide service to their customers. That’s great! But very often their specific objectives are not well-documented. They may not have given enough thought to the internal and external resources needed to ensure their success. Their staff is told to “Go out and evaluate CRM solutions.” In many cases, they are not clear on the business challenges they are trying to solve or what approach they need to take to complete their assignment.  At this point going out and selecting a CRM system is not the answer to the problem, IT IS THE PROBLEM.

Easing the CRM Buying Process

Very few people are experienced software evaluators.  As such, they may feel a bit apprehensive interacting with software vendors and they may not know the right questions to ask.  Now you have a group of people who are not experienced software purchasers, looking for a CRM solution to address unspecific requirements.   This is not a formula for success.

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What are the right questions to ask when selecting a CRM?

So what does this team do?  Well, they are not at all comfortable with the process so they instead head down a path that they are comfortable with, and become what I have termed the checklist consumer or the commodity buyer. Let’s take a look at these evaluation processes. Later we will compare these to a process that is quite a bit different but delivers much better results.

Stay tuned for the next article in this series:  “CRM Buyers Guide for the Checklist Consumer

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