Ask prospective buyers of CRM software what they’re most interested in, and you’ll probably get a mix of variations on the following three themes:
- “I am not sure about the deployment model yet, although I have heard good things about the cloud”;
- “I know about the benefits of using an integrated suite, but frankly I would like to investigate some best-of-breed offerings too”;
- “Is it salesforce automation related? In that case, count me in!”
So suggests a new report from Software Advice, which queried thousands of prospective CRM software buyers to assess their purchase intents. The company analyzed 5,279 of these interactions, which were conducted between January and August this year, and came up with some interesting conclusions.
‘We Saw Strong Demand’
Most buyers did not indicate a preference for a particular deployment model, for example. Of those that did, 96 percent requested a cloud-based solution.
That’s not to say, however, that CRM vendors should move to develop best-of-breed functionality focusing on only the most basic of CRM features, said Ashley Verrill, CRM analyst at Software Advice.
“We also saw strong demand for CRM that supports social and analytics,” she told CRM Buyer.
Best of Breed v. Integrated Suite
A whopping 91 percent of prospective buyers expressed interest in evaluating a single best-of-breed solution as opposed to an integrated suite or multiple products. Note to software vendors, though: Of that 91 percent, 25 percent still want integration with other critical systems.
This division is likely due to the specialization that best-of-breed offers. There are some functions that integrated software performs well; others, not so much. Field service software appears to fall in the latter camp. It was cited as the second most popular application among best-of-breed buyers, representing about 8 percent of the sample. Field service, though, was low on the list of priorities for those wanting an integrated suite. Marketing automation, by contrast, was popular among both types of buyers.
Companies that skew towards best of breed also tend to be smaller, the survey found. Half of best-of-breed buyers Software Advice spoke to were earning less than $1 million per year, while more than 60 percent had 20 or fewer employees. Integrated suite buyers averaged closer to $5 million in revenue and 21 or more employees.
SFA Still Reigns
Either way — integrated suite or best-of-breed — salesforce automation was a top functionality request. Nearly 75 percent of buyers looking into integrated suites requested salesforce automation, the study found, while 76 percent of best-of-breed buyers were interested in a solution with this capability.
For those companies that are interested in integrated suites, the top requested features — beyond salesforce automation — include contact management, note-taking and analytics. Nearly 90 percent of prospective buyers mentioned at least one of these features when describing what they wanted in their new CRM system, the report found.
Social CRM was also cited frequently as a top-requested feature by integrated-suite buyers.
Studying the TCO Story
Some of these findings may seem surprising to people schooled in the CRM industry, Verrill told CRM Buyer. The hesitation to adopt a cloud approach is one example.
“I would have expected to lean more heavily in the direction of cloud than it did,” she said.
One possible explanation, though, is that many of the respondents were small business operations — or even new-to-CRM-buyers — and still in the process of educating themselves on the nuances of total cost of ownership of software, she pointed out.
That’s an argument that resonates with Jeff Kaplan, managing director of THINKstrategies.
“SMBs have been hesitant to move to the cloud because they are less knowledgeable about the meaning of the term, the viability of this alternative approach and how they can apply it to their operations,” Kaplan told CRM Buyer.
Also, Kaplan added, small businesses tend to be more risk-averse than large enterprises “because every little decision can have a major impact on their business, both negative and positive.”
In any case, other findings from the report make perfect sense, such as the dominance of salesforce automation in the CRM industry, Verrill said.
“CRM’s roots are in SFA,” she explained. “It is still seen as the application that delivers the best return on investment.”