Users Give CRM Vendors A Big Thumbs-Down

Riding the wave of enthusiasm and hype, hundreds of CRM software vendors, integrators and consultants have entered the market during the past five years. Total worldwide CRM investments could exceed $75 billion in 2005, according to Boston-based AMR Research. So you'd think CRM vendors would set a good example in how they take care of their customers. Wrong, according to "Multi-Function CRM Software: How Good Is It?" a report recently released by CRMguru.com, High-Yield Marketing and Mangen Research Associates.

Vendors were rated by more than 1,000 software users and evaluators in the CRMguru.com online community. An overall customer satisfaction index (CSI) was determined by analyzing survey responses for five criteria (see chart).

Industrywide, the CSI rating was a dismal 63.1 on a scale of 0 to 100. "Normally, we see scores in mid-80s to low-90s for the overall [CSI," says David Mangen, principal of Minneapolis-based Mangen Research Associates. "Even telecom providers and utilities rarely score as low as CRM vendors."

Why the low scores? "Last year, companies thought they were buying a car, paid their money and were delivered a chassis, frame, engine block, wheels and a box of parts," says Jim Dickie, managing partner of Boulder, Colo.-based Insight Technology Group. "Nobody told these guys the nasty secret,that when you buy CRM, you get the parts of a car, not a car."

Eight vendors received enough responses to be rated individually: GoldMine, Onyx, Oracle, PeopleSoft, Pivotal, SAP, SalesLogix and Siebel Systems. SalesLogix snared the best overall CSI score (66) by combining affordable pricing, relative ease of implementation and good functionality. CRM market-leader Siebel Systems finished fifth overall, with strengths in functionality and support undercut by low scores in implementation and pricing. Oracle brought up the rear with a CSI score of 58.1, receiving below-average scores in every area, except customer support.

Ironically, one of the lowest-scoring areas of overall vendor performance was customer focus.

"Any time you get in an early-stage market like this, vendors tend to overpromise and underdeliver," says Chris Selland, managing director at Boston-based Reservoir Partners. "The hype has gotten far ahead of the reality, and vendors are always talking about the next product."

It isn't fair to blame vendors entirely. Often, customers get into CRM without a clear idea of how they're going to use it. That's where solution providers can help to make companies more successful with CRM, which requires a blend of business strategy, business-process design and properly focused technology.

This study shows that companies are frustrated with complex software implementations, enterprise software sticker shock and hard-driving software sales reps. Solve those problems, and you'll be welcomed with open arms.

Bob Thompson founded CRMguru.com two years ago and is founder and president of FrontLine Solutions, an independent CRM consulting and research firm in Burlingame, Calif.