Customer Centric Business Strategies Blog

I have been asked by one of ISM”s clients for negotiating tips for a CRM system.  So, consequently, here are 10 negotiating tips that work in the current buyers’ market. You’ll either need to do some homework to determine the competitive CRM software pricing, or ask a consulting company to help.

1. Be sure to understand the need for each optional software module being recommended by the vendor: “What is the value-added for each of their recommended optional software modules?”
2. Include as many of the vendor’s optional modules as you can into the base agreement. This way, you can lock in prices regardless of when the modules will actually be used.
3. Be as definitive as you can in the agreement. Use your company’s well-defined business needs and screen designs as exhibits or attachments within the agreement.
4. List and define your deliverables/acceptance criteria within the agreement.
5. Spread your payments over the life of the agreement, which should be divided into phased deliverables/acceptance criteria. Here is one possible payment model: 20 percent of payment upon signing the agreement, 20 percent on the successful accomplishment of an initial set of deliverables/acceptance criteria, an additional 20 percent on the successful accomplishment of the next set of deliverables/acceptance criteria, and the final 40 percent upon the successful accomplishment of a final set of deliverable/acceptance criteria.
6. Consider requesting a site license for your company on a national and/or international basis.
7. Wait between 60 and 90 days before your final acceptance of the system.
8. The maintenance charges certainly can and should be negotiated.
9. Buy a block (of the company’s program and project managers’ time) or of the CRM vendor implementation consultants’ time to secure a discount rate.
10. Structure the agreement so your company initially purchases little more than a developer server license and about 15 pilot-user licenses.

On the top of pricing, here is an article concerning the current status of CRM pricing in today’s marketplace:   http://tinyurl.com/2bqzwsg

To all my Blog readers, please feel free to post any comments on any of my posts on my Blog.  I welcome and encourage discussion/debate on my Blog postings.

Posted by - Barton Goldenberg @ 10:07 pm

Business Intelligence Analytical tools, or predictive modeling, now can predict the monetary value and profitability of a particular customer: from profiling customers based on their behavior to segmenting markets, from predicting customer purchases based on past purchase information and psychographic/demographic data and from determining cross-selling opportunities.  Marketers are finding out that analytics programs are beneficial for tailoring marketing messages without violating privacy and other government regulations.  Business Intelligence Analytics will remain an important part of the corporate agenda as companies find that they face a 10-fold increase in the amount of data generated by their IT systems until 2011.  The expansion of social networking will lead to a tremendous increase in unstructured data, leading to an increased demand for business analytics software that combines text analytics, sentiment extraction and related technologies to find patterns and trends among social networking users.  In addition with the current economic downturn, businesses will use their business intelligence analytical tools to carefully scrutinize the effectiveness of their marketing campaigns and sales endeavors in adding value to their firm.

The Gartner Group projects that the worldwide market for Business Intelligence (BI) platforms will grow at a compound annual growth rate of 8.1% through 2012, to reach $7.7 billion in 2012.  The BI platform revenue will be less affected by the current economic downturn than other technologies because of the high priority that BI platforms hold with CIOs.

As an example of the growth and increased interest among organizations for business analytics:  IBM has just acquired Netezza for $1.7 Billion.  For more details on this business analytics acquisition by IBM, please click on this Weblink:  http://tinyurl.com/294hy6z

To all my Blog readers, please feel free to post any comments on any of my posts on my Blog.  I welcome and encourage discussion/debate on my Blog postings.

Posted by - Barton Goldenberg @ 2:02 pm

My research as ISM’s President has found that increasingly users will be accessing their software applications over the Internet rather than using on-premise applications within the near future.  Here is evidence of my conclusion about applications accessed over the Internet (Software as a Service (SaaS)) and particularly via the cloud model:

A recent survey by Elon University researchers of around 900 key Internet and tech experts and social analysts, found that the majority of the survey respondents saw the SaaS model as the prevalent future model as 71% of their respondents agreed with this statement:

“By 2020, most people won’t do their work with software running on a general-purpose PC. Instead, they will work in Internet-based applications such as Google Docs, and in applications run from smartphones. Aspiring application developers will develop for smartphone vendors and companies that provide Internet-based applications, because most innovative work will be done in that domain, instead of designing applications that run on a PC operating system. The advantage of instant access to information regardless of device, operating system or location is a huge factor in the dominance of web apps over desktop apps. “The cloud” (Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand) is accessible from work, from home, from any location with an Internet connection, and increasingly, from our ever-smarter mobile devices.”

“It is a much more financially reasonable model for customers,” according to Joanne Corriea, a market research vice president at the Gartner Group.  The Gartner Group states that through 2011, on-demand CRM will provide as much as a 10% – 13% lower total five-year cost of ownership than on-premise software for moderately complex CRM deployments. 

In addition, Microsoft has just made an announcement that that it is adding Web-based versions of Office to its collection of hosted software for business. The company will also offer traditional Office as a subscription-based service.
For more information on Microsoft’s announcement, please click on this Weblink:  http://tinyurl.com/24ntxhe

To all my Blog readers, please feel free to post any comments on any of my posts on my Blog.  I welcome and encourage discussion/debate on my Blog postings.

Posted by - Barton Goldenberg @ 2:34 pm

Competition in the CRM SaaS marketplace is heating up as indicated by the recent announcement that Microsoft has cut the price of its SaaS to compete with Oracle CRM and Salesforce.com: http://tinyurl.com/28hfukt

According to ABI Research, the global market for hosted services will exceed $34 billion in 2012, of which $11.6 billion will be from the North American market, primarily from SMBs. The SaaS model is also being adopted more often by enterprise companies, as evident with the 2007 Salesforce.com deals with Dell and Merrill Lynch for a 15,000-seat and a 25,000-seat license, respectively.  The two major drivers of accelerated adoption of SaaS in enterprise companies are its obvious cost advantages and its increased proof of data security.  Companies wanting an inexpensive, low risk CRM application will be attracted to its typically reduced startup costs, speed of deployment and no need for hardware investment.  Moreover, the growth of online Social Media applications has lead to a need to interface Social Media applications with CRM databases that are additionally online.  This interface will ensure that customer data will not be outdated and will promote a degree a bi-directional information exchange on topics that are important to all contacts in the CRM database.

So look out for a decline in the price of CRM SaaS applications as the SaaS model becomes the norm in the CRM marketplace.  Each SaaS CRM vendor will furthermore  increase the functionality of their SaaS application to provide a competitive advantage against their competitors.  The likely consequence of these two trends will be a movement towards the SaaS model as the dominant method of organizations utilizing CRM applications.

Posted by - Barton Goldenberg @ 1:56 pm

I have been asked recently about the impact of Social Media in emerging markets.  Here is a discussion of Social Media and my thoughts:

Social media is online content created by people using highly accessible and scalable publishing technologies. At its most basic sense, social media is a shift in how people discover, read and share news, information and content. It is a fusion of sociology and technology, transforming monologues (one to many) into dialogues (many to many) and is the democratization of information, transforming people from content readers into publishers. Social media has become extremely popular because it allows people to connect in the online world to form relationships for personal, political and business use. Businesses also refer to social media as user-generated content or consumer-generated media.

Social media can take many different forms, including Internet forums, weblogs, social blogs, wikis, podcasts, pictures and video. Technologies include: blogs, picture-sharing, vlogs, wall-postings, email, instant messaging, music-sharing, crowdsourcing, and voice over IP, to name a few.  It has become apparent to that the Internet is an inherently social medium. That will not change as people will always want to engage with one another online, and social media will be there in one form or another to accommodate this need.

Now, more than 75 percent of all Americans are participating in some form of social media through blogs, forums and Websites like Facebook, Linkedin, MySpace and Twitter. As this chorus of conversations and the proliferation of technologies that enable participation in social media grow, companies must make sense of the new channel for consumer interaction.

The growth of social media is already having a tremendous impact on business throughout the world.  Social media is changing the rules of the marketplace, just like the Internet did a decade ago. It is still early of course and no one — not even the experts – knows what the total impact it will have on the marketplace. But it is clear that times are changing again, and those that do not embrace social media will go the way of print media.

There is a recent article that makes it evident that the Internet and Social Media will change the world, particularly in emerging markets.  The U.K.-based research agency TNS has found that Internet use now tops TV, radio and newspapers — but emerging markets use the Net more than in developed nations. Users in emerging markets also engage in more social networking, while users in developing nations spend more time on e-mail.

Please click on this weblink for access to this article:  http://tinyurl.com/25sa3n2

To all my Blog readers, please feel free to post any comments on any of my posts on my Blog.  I welcome and encourage discussion/debate on my Blog postings.

Posted by - Barton Goldenberg @ 2:25 pm

I have thought more about the importance of data integrity in a CRM implementation.  Here are my additional thoughts:

• Data cleansing tools, such as the Business Objects products, cleanse, standardize, and consolidate customer-centric data anywhere that data is touched, stored, or moved. The tool helps to consolidate multiple identities of the same customer across several legacy systems data sources to create a single customer view.
• Data-cleansing tools can be integrated into an enterprise application architecture. Several data-cleansing tool vendors already have APIs developed for CRM and ERP [applications. Depending on the company’s enterprise technical architecture, these APIs should be relatively easy to implement. The data-cleansing tools follow business rules that proactively maintain data quality.
• An ongoing plan to maintain data cleanliness and integrity (parsing, correcting, and matching data) can help prevent data degradation over time.
• Quality data can help deliver more accurate reports to customer-facing personnel and customers.
• Costs (associated with poor data quality) can sometimes be reduced, including redundancy costs (storing same data in more than one database) and infrastructure costs (costs of hardware used for data storage).

To all my Blog readers, please feel free to post any comments on any of my posts on my Blog.  I welcome and encourage discussion/debate on my Blog postings.

Posted by - Barton Goldenberg @ 11:30 pm

I was recently asked by an ISM client about the importance of data integrity in a CRM implementation.  Here are my thoughts:

Data integrity consists of two processes: data cleansing and data management. Data cleansing/data management is a core component of every successful CRM program, and it should be developed at the outset of any CRM program. Data integrity should include ways to document current data inventory, develop data standards, cleanse existing data, and develop processes to maintain, change, and enhance the quality of your data. The justification for data integrity is critical as illustrated in the following:

• Quality data is a strategic asset that will impact your CRM system success.
• The quality and accuracy of data (i.e., customer, market, competitor, product, and supplier data) in the CRM system will impact a consistent, error-free way to enhance the customer experience.
• Data inventory is important to determine the source, location, flow, and extent of existing data to understand which data may be used for the CRM system.
• Data cleansing is critical to eliminate any data duplication. For example, eliminating duplicate customer entries will reduce marketing costs by preventing duplicate marketing mailings, faxes, and emails.

To all my Blog readers, please feel free to post any comments on any of my posts on my Blog.  I welcome and encourage discussion/debate on my Blog postings.

Posted by - Barton Goldenberg @ 2:06 pm