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A prescription for CRM change

Users recently graded more than a dozen CRM vendors, and not a single one of them got an A.

SearchCRM.com user: Dick said the industry is 'dealing with airline scores.' What's the answer?

Vendors could start by redesigning their systems from the ground up using component-based architecture. CRM systems are far too big, unwieldy and expensive to implement because they're overbuilt. And customers continue to vote loud and clear in favor of adaptability and flexibility, rather than behemoth systems that try to do everything. SearchCRM.com user: The top-rated vendors serve the small and midmarkets. Are customer expectations lower in these sectors than they are in the enterprise space? Is it possible that's what's accounting for the higher satisfaction rates there?

In my opinion, yes. At the very least, expectations are different. But I don't know that anything in the research gives a definitive answer. Large enterprises are inherently complex, and I could argue that it's tougher to get a high score. But large enterprise vendors would be well advised to not use this as an excuse, and figure out how to get the high ratings of some of the SME-focused vendors. SearchCRM.com user: You've said the CRM vendors are stuck in a 'bells and whistles' race. What's it going to take for vendors to move beyond the functionality battle?

The game is changing, but old habits die hard. Functionality is still critical, but has to be better applied to individual customer situations. More is not better if it's not relevant. That said, I think customers still overbuy as much as vendors over-design and oversell. And neither side works enough on the strategy, people, and process issues that are the real drivers of CRM success. SearchCRM.com user: You've said the CRM vendors are stuck in a 'bells and whistles' race. What's it going to take for vendors to move beyond the functionality battle?

How about a two-by-four to the head? Seriously, many companies, and I'll use Oracle as an example, are highly resistant to doing things other than 'their way.' SearchCRM.com user: Even though its satisfaction rates are low and it got a failing grade, do you give Siebel some credit for managing to maintain its functional lead? Or do you see that lead slipping at all?

Siebel still has an overall functionality lead, but it's shrinking and may not be as relevant as more mainstream customers adopt CRM technology. While I see functionality continuing to be Siebel's strength, their sales and customer sat performance the past two years clearly shows that's not enough for long-term success. The good news is it does appear that Siebel is working on cost and complexity issues while continuing to offer the broadest product line. If they execute well, Siebel could make a comeback in 2004. SearchCRM.com user: Would it surprise you to see any other CRM acquisitions?

It wouldn't shock me to see another large enterprise ERP/CRM vendor jump into the ASP game with an acquisition, now that Siebel has done so. SearchCRM.com user: Would it surprise you to see any other CRM acquisitions?

A private holding company with a customer service system has made an offer for Pivotal. I suspect that Onyx may also receive an offer or two.

The 124-page report, "The State of Customer Relationship Management Software: 2003-2004" costs $195 and will be on sale Oct. 29 at the  HYM Press Web site.

SearchCRM.com user: The top-rated vendors serve the small and midmarkets. Are customer expectations lower in these sectors than they are in the enterprise space? Is it possible that's what's accounting for the higher satisfaction rates there?

If that were true, [midmarket] vendors wouldn't rate so high. SearchCRM.com user: Dick said the industry is 'dealing with airline scores.' What's the answer?

Even the airline industry, which overall has lower customer sat scores than other industries, has standouts like Southwest and, more recently JetBlue. In the CRM industry, newer vendors like Salesforce and Microsoft are doing better -- perhaps in part because they are targeting 'easier' customers (small businesses), but also because they have learned from the experiences of vendors that entered the market earlier. SearchCRM.com user: Even though its satisfaction rates are low and it got a failing grade, do you give Siebel some credit for managing to maintain its functional lead? Or do you see that lead slipping at all?

I do give Siebel credit for maintaining their functional lead. And while I don't want to get too far ahead of things, I've experienced more rationality and introspection talking to Siebel folks about the report this week than I've ever experienced before. It was a breath of fresh air -- and, with a significant attitude adjustment, I believe Siebel can slay its demons, and I very much hope it does.

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