When a company chooses a hosted-CRM solution, a layer of complexity disappears from the CRM process, allowing employers to focus on running the business. CRM users, however, also surrender control of valuable customer data to a third-party vendor. Vendors certainly have a stake in keeping customers happy because they live and die by subscription-renewal rates. But at the end of the day, how does one monitor the effectiveness of a hosted-CRM provider? A few industry experts offered their advice.
1. Is the system working? When it comes to a hosted system, users want to have confidence that the system is going to be there when they log in. A CRM system that is unreliable means a vendor is not delivering on its promises.
"The fundamental question is, 'Is the system working?'" said Clarence So, CMO at Salesforce.com. To find answers to their hosted-system questions, Salesforce.com customers can go to a special site that helps users monitor system performance. The system's current status, as reported by Salesforce.com, is revealed simply by clicking System Status on the site. This is also a good place to start if your provider has a similar online monitor.
2. Is the system accurately reflecting your sales reality? When printing out a report, figures can sometimes appear unbelievable and unreliable. Are the top 20 customers actually the company's top 20 customers? This information can be checked against information maintained in the company's finance software. If this cross-check verifies the figures, you can be confident that the system is tracking information accurately in its reports and dashboards. If there is a discrepancy, your CRM vendor — and the system — isn't doing its job.
3. Is the system fast enough? Another issue with hosted-CRM providers is speed. If the system is running slowly, users will not be able to get to needed information quickly enough. Since that tends to annoy customers, said So, it is in the provider's best interest to keep its clientele happy and the system running at a decent clip. If you are having continuous performance problems, it may be time to consider a new provider.
4. Are your core sales metrics improving? One way to measure the effectiveness of a CRM provider is to assess key sales metrics, said Frank Lee, president of Workopia and a Microsoft Dynamics MVP (Most Valuable Professional). According to Lee, CRM users have to consider whether they have more customers or more customer orders, or if they are generating a greater profit from each sale after using a CRM system. He also recommended analyzing new customer data and whether the company has a better understanding of its customers. If it seems that your company has a better handle on customer information and is acquiring more sales, the CRM system is doing its job.
5. Is your staff using the system? A CRM system will not be effective if staff ignore it. One way to measure the system's success is to ensure that employees are using it. "The most important question is, 'Are end users actually using the CRM system and incorporating it into their daily practice, because it benefits them and not just management?'" Lee said.
The fundamental issues with hosted-CRM systems are whether they work and whether the information they produce is accurate. While an online-monitoring system like that offered by Salesforce.com can be useful to customers, Lee suggested that a need could arise for a third-party monitoring board (similar to those that monitor power utilities) to serve as an impartial watchdog for hosted-CRM customers. For now, though, use these tips to get started.