I believe that the hosted CRM vs. non-hosted (or cloud CRM vs. on-premises) argument is a red herring that needs to be reframed as CRM Strategy vs. Stopgap.

1. Stopgap: The solution that you buy because you just need something.
2. Strategic: The solution that you buy because there are a multitude of options that can be deployed as part of your strategy.

If it’s the latter then hosted or non-hosted, cloud or on-premise CRM – it doesn’t even come into play. It’s a non-issue.

If it’s the former and you’re just buying it without a strategy then you’re probably doing more damage than good. You’ve deemed that lack of access to customer data is not a threat – but relationships (and selling IS relationships), customer data and what you know about the customer IS the game.

Why CRM Minus Strategy Doesn’t Work

There are a couple of schools of thought when it comes to hosted (cloud) CRM. One of the schools of thought is: “I don’t really know what I need but I know I need something. I either don’t have the time, don’t have the energy or I don’t really know how to describe what I really want but I want something because everybody is screaming at me.”

 “But I’m not really ready to go through an in-depth needs analysis, so I’ll get some online thing.”

They ask themselves “What do I know about? Actually I know about Salesforce. I’ve seen that around, that’s probably going to be OK”. So provided it doesn’t kill them financially, they buy 5, 10, 15 users and boom: “There’s your CRM. There’s a place you can put your data. Now go away and stop bothering me”.

It’s not strategy, but they’ve got something so they can say “I’ve delivered CRM”. And they can start to use it. What generally happens then is you’ll get some data into it, you’ll get a couple of evangelists who’ll go off and do something with it and you’ll get a couple of other people who will do the mandatory minimum or nothing at all.

It’s probably about a 15 – 20% chance of it igniting and only if one of the evangelists happens to have the ear of anybody senior.

But successful adoption tends to be flukey. So there’s no necessary guarantee of outcome. But what it does enable them to do is to use their credit card to solve a problem. It doesn’t involve IT so they can go around a lot of work and just say “There’s a subscription, knock yourself out”. It doesn’t appear as a capital cost so they didn’t have to budget for it. They can just put it into an operating budget and deal with it easily. 

This scenario is not the ideal way because it doesn’t really get you anywhere. It just puts a finger in the dam and stops it from dripping until you get back to it.

This is Part 1 in a 4 part series. Read the next entry.

Brett Cruickshank, MIMC
Managing Director, CRM Strategy
Mobile: 0419 631 375
Email: brettc@crmstrategy.com.au