Choose the Right Customer Relationship Management (CRM) Database

Today’s Customer Relationship Management databases, or CRMs, are hardly the static electronic address books of yesterday — they’re a whole ecosystem of applications and plug-ins that let businesses from psychiatrists to multi-site manufacturing firms track, automate, integrate, and predict nearly every aspect of their workflows.

The right CRM can not only keep your sales details straight, but it also can drive more sales faster and integrate sales into other areas of your business such as accounting and fulfillment.

When choosing a CRM, keep in mind the Total Cost of Ownership. This term refers to the lifetime cost of a product or service, including setup fees, consulting costs, maintenance, the cost of the (dedicated) person(s) using it, and annual subscription fees for as long as you expect to use it.

If Total Cost of Ownership seems high, compare it to the potential cost of not having a CRM — which are almost inevitably higher.

Some questions to ask when choosing your next (or first!) CRM include the following:

  • Do you hire programmers to build your own CRM or choose an existing solution? The answer to this question is almost always to never build your own CRM. Most companies do not have the internal resources to create or maintain such a system, and if they do, their resources are better spent on tasks that are not reinventing the wheel.

    You can, and probably will, use IT staff to build additional customizations or integrations on top of an existing CRM.

  • Is the CRM on an internal server or in the Cloud? “The Cloud” refers to services that exist entirely online, which means you can access them from any computer, or even a mobile phone, with the right password. You never need to upgrade software that’s in the Cloud or install software on your computer.

    Internal CRMs require installing software on each computer and generally require IT services for installing and upgrading a network across your company so people can share contact details. If a computer crashes, all that data is lost.

    Go with the Cloud! CRM software that you have to install is not worth the IT expense, and you can’t access data securely from home or on the road.

  • What integrations do you need? What are available? If you’ve already constructed some Lean value-stream maps, you have a good understanding of how information flows through your business. How exactly does customer information flow from when it first becomes a lead to when the final payment is made?

    Which parts are clearly CRM domain and which, such as order fulfillment and accounting, are not? Can the CRM you’re considering integrate with those other areas, either through an existing third-party application or a custom-developed solution?

  • Is there an API? API, or Application Programming Interface, refers to your ability to build on top of an existing system — such as to have it “talk” to your manufacturing mainframe, sales forecasting tool, or website. An API is critical for being able to customize a CRM beyond simply making custom fields.

  • What training and consulting resources exist? The default configuration of today’s top CRM tools is most efficient for exactly no businesses. Some degree of customization is necessary to really get the most bang for your buck — and unfortunately sometimes the trade-off for a highly customizable system is that there’s a lot to learn.

    You can ease this learning curve with the right consultant, or, if you have the time to learn, the right training resources.

Popular CRM applications include Salesforce.com, SugarCRM, ZenDesk, and BatchBook.

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