A Brief History of CRM & who will survive? – Part 2
Revised Feb, 2015
So what determines which CRMs will survive? One trend that is clear is that the desktop applications business model (vs web based/SAAS) cannot support a product in this niche. A one time fee for the purchase of the software is simply not enough money. They also charge for support and upgrades but most users do not get support after the first year and most do not upgrade regularly. The fact that there are only a handful of desktop applications left and that they are on their way out bears that out.
There are certainly no hard and fast rules because there are far too many variables. Issues to take into account other than the obvious, “Is it a good CRM?” are:
- How long have they been out of beta? (meaning when they finished testing and started selling it)
- How big is their user base?
- How many people are in the company?
- Are they part of a larger company that can support it for a while, or is it a mom and pop using personal funds?
- How is their support?
While the length of time a CRM has been out of beta is important, more significant is how many people are using it. If they have at least a thousand users in the first year or two and are continuing to grow, that’s a good sign. The problem is that vendors are understandably reticent to share the size of their user base. All you can do is ask. Also, speak to at least three users who are in no way affiliated or have a long standing personal relationship with the developers. But they have to be power users. Ask them how stable it is. In other words, does it do what it is supposed to do the vast majority of the time without locking up or giving you errors? Always keep in mind that it is human nature for people to not like to think that they made a bad choice, so there is a tendency to sugar coat issues. Ask probing questions. What do you like/not like about it specifically? What do you like/not like about support? Do they know the support people by name because there are only one or two?
I personally used a CRM that had only two support people, other than the programmer who is also the owner. They also had a bookkeeper and sometimes subcontracted some programming work. They have been in business for many years and only added a second support person about two years ago. Until then, they were rapidly falling into a downward spiral due to lack of support. Once they added that second person, their reputation for support has become stellar. It was touch and go for a while and they damaged their reputation by waiting too long.
Another factor to look at is whether the CRM is their only product. Some of them have other products that are already established and can support the fledgling CRM until it becomes viable on its own. That is the case with several of the CRMs. I have been more willing to recommend those companies despite the fact that they are newer, when other positive factors are in place.
Lastly, it doesn’t matter how good a Contact Manager/CRM is if you can’t get help when you need it. So how do you know you will get it?
There is no reason to purchase a CRM without trialing it first because they all provide trial periods. When you are testing the software, test the support as well.
Tech support is one of, if not the most costly expense a CRM company has. There is a tendency for CRM vendors, especially when they are newer, to try to put off the cost of hiring support people as long as possible. It’s difficult to spend money on those personnel when there is insufficient revenue coming in to support them. It’s a cart-before-the-horse situation and I have watched CRM companies go out of business fighting that battle. It’s very hard to build a good user base when people are not recommending the product because the support is lacking. If the support is lacking, the user base does not grow, the revenue does not come in, and the support doesn’t improve. It’s a vicious cycle. So how do you know if you’re jumping into that fray?
Some products are easy enough to learn and use, and stable enough that they require very little support so you don’t use it when you’re in the trial period. So when you first get the CRM, call them even for little things like how-to’s. Call them and ask them how to do something and see what the response time or wait time is. Call them at different times of the day, and different days of the week. Start tracking the names of the people with whom you speak to see how many they have. If you are talking to the same person each time, that can be a red flag. Is that the only person they have? Ask them point blank how many tech support people they have. Is the person you are talking to one of the principals or programmers? When a company starts out, that is very common. It doesn’t mean they are destined for failure at all. But it probably does mean that they are a very small company, personally funded, and that you now have to wonder if or when they start growing, will they be able to keep up with the demand.
When asking associates who use a CRM how they like the support, again ask probing questions.
Who makes the support calls, you or an assistant? Assistants tend to be available throughout the day, so they can keep trying to reach support. Additionally, if they get a call back, they are available to take it. They are often more satisfied with support for those reasons. If it is an agent on their own and they try to reach support but do not get a response quickly or are not available when support returns their call, you’ll probably get a different opinion.
It’s very difficult to determine whether any kind of company will survive in the long run, and CRM is no exception. There are no guarantees, no matter how much homework you do, but being aware of the issues discussed here should help.