Wednesday, April 15, 2009

CRM: Buying Software vs. building your own integrated web solution

To build or not to build … that is the question

Is it better to buy an existing CRM (Customer Relationship Management) solution or to build it in-house? The answers is clear: If you have a website and need to manage clients, It’s much better to build your own application than to buy an existing solution... And in this article I’m gonna explain why.

How to do it?

The idea is not just to build any CRM in-house, but to treat it just as another administration module of your website. The trick is to plan and build the CRM system at the same time you plan and build your website’s architecture (not after). The same programmers that will program your website should program your CRM interface, and using the same programming language. At the end, the goal is to automate most of the tasks that a CRM system must register as an integral part of the website, reducing in this way the amount of information that Customer Support Areas have to enter manually. Just like Google Analytics does, the idea is to build your website inserting small pieces of code that will track predefined customer behavior, but behavior that Google Analytics doesn’t measure and that’s specific for your business. For example, if your client needs to complete a 5 step process online (registering, uploading a file, confirming by e-mail, etc) to finish a sale, you design your CRM to track each step for each client. This way customer support personnel can call/email each client, knowing beforehand in which setp they abandoned and why, helping them solve their specific problem. With offline CRM solutions you can’t track customer behavior this way. Having the CRM application online allows any other party to access the information in real time.

I started working this way with ImprimaOnline and have continued working with this methodology in all the websites I’ve been involved since then.

If you adopt this way of structuring your web projects, you’ll achieve the following benefits.

Save costs by saving personnel time

It might seem counterintuitive that you actually save costs with this option being so many cheap CRM Software options available but the reason is simple; You save on one cost that is usually the most expensive in the long run: People. Of course you have an upfront cost of development, but this is usually one upfront cost compared with the neverending data entry and data checking costs associated with buying off the shelf CRM software.

Automating and integrating tasks into your website from inception, reduces dramatically the amount of time needed by Support agents in updating, crosschecking, validating and entering data into the system, and therefore reducing your company personnel costs.

Avoid unnecessary features

CRM tools, like most software, are intended to wide markets. These pieces of software have to serve diverse businesses, people with different needs and markets in different geographic locations. In order to meet all that the market demands to a piece of software, it usually has to have a lot of features, most of which you’ll end up not using at all. At the end, as a user you pay for a CRM software that does A, B, C, D, E and F when you only need features B and E. It’s true, with some SaaS provided by some companies like Oracle or Salesforce you can avoid this shortcoming… but only this one, not the rest.

Real information in real time

The system doesn’t need to be “updated” or “checked for duplicates”. By having the entire application online what you have at all time is the latest version of your information, no manual tasks needed, no additional typing tasks at the end of the week, no actualization is required. Real information in real time.

Flexibility

The first and most important reason why most CRM solutions fail is that they don’t adapt to the needs of the end user, usually Customer Suport Agents or Sales Reps. People tend to use the system for a while, but if it really doesn’t adapt to what he/she really needs, it will end up being a waste of money. The advantage of building your own integrated solution is that you can constantly tweak it and fine tune it to meet your end user’s request. If you have your programmers in-house, you can even do it do it without having to subcontract constantly someone else, because the same developers that programmed your website programmed your CRM solution.

One centralized database

Usually, when using an external piece of software (not integrated from inception to the web’s architecture like proposed here) the most common problem is that you will end up having 2 client databases (at least). You have some information that comes through your web and other that is managed by your CRM Software. To centralize both on one single database often requires manual interaction by customer support agents or sales personnel. Most of the times, this time consuming tasks of actualizing databases or checking for duplicate info usually are needed for reporting reasons (management wants to see historical data, trends or analyze something) but without a direct impact on the people that actually enters it. For example, if your Sales Reps use GoldMine, they’ll need to fill several forms after visiting a client. These forms will not be on the same database if the client registers later via web and the only solution to have one centralized database would be by manual interaction.

By having your CRM built as a part of your website you avoid these unnecessary manual interactions, entering customer data only once while having the extra benefit of having a more actualized and only one centralized database.

This is my view, with my experience …. but what is yours? Maybe you think otherwise?

Feel free to open the discussion.


Copyright MBA Internet Marketing Manager

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