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Best practices for mid-market CRM
A whitepaper by Soffront Software, Inc.
Abstract
The Risk of Enterprise CRM
In the decade since customer relationship management (CRM) software first appeared on the market, implementation of the enterprise application suite that helps businesses find new customers, retain existing customers and otherwise increase revenues have gained a reputation as being risky ventures, subject to user rejection, cost overruns, and missed deadlines.
That bad reputation was substantiated in a Gartner Inc. survey of more than 600 enterprises that indicated that nearly half (42%) of all purchased CRM licenses are now “shelf
ware” - that is, companies paid for them but never installed them. Maintenance fees associated with those fallow licenses drive up the wasted money even more. Gartner’s March 2003 report, called “Unused CRM Software Increases TCO and Decreases ROI,” estimates more than $1 billion has been spent on CRM software that is not being used.
A recent AMR Research Inc. study called “CRM: Inflicting Profit or Pain?” concurred with Gartner’s findings. AMR surveyed 80 large CRM customers and found that 47% had difficulty with end-user adoption, leading to abandoned projects or unused software modules.
Mid-Market CRM - The Low Risk Alternative
However, the need for a low risk CRM approach, and the appearance of easier to install and use packages, has enabled many mid market businesses to enjoy the benefits of the software without the risk. Mid-market companies (defined as those with 50 to 1000 employees ) are even more wary of CRM risks since they do not have the resources of their larger corporate peers. Approximately 640,000 U.S. businesses - most of which have not yet invested in CRM fall into this category. Today the mid-market CRM solution offers benefits that traditional, client/server-based CRM packages do not.
Tailored specifically for use by mid-size companies, mid-market CRM products are designed to be implemented quickly (generally no more than 90 days versus years), cost-effective (roughly $1,000 per user, rather than $5,000 to $10,000), and require less maintenance than traditional CRM. “Mid-Market CRM is gaining steam,” says Kelly Spang Ferguson, principal analyst at Current Analysis Inc., in Sterling, VA.
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