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Rich's Taxonomy of CRM Solutions

tax on o my (tàk-sòn¹e-mê) noun

The classification of organisms in an ordered system that indicates natural relationships.

The science, laws, or principles of classification; systematics.

Division into ordered groups or categories: "Scholars have been laboring to develop a taxonomy of young killers" (Aric Press).

The American Heritage Dictionary of the English Language, Third Edition.

When I started writing about software for sales and marketing way back in 1985, I really thought most companies would be effectively utilizing this awesome technology by now. It is a tragedy that so many companies have yet to discover the real power of CRM. Not only because you are wasting the valuable time and energy of so many of the people on your sales and marketing team; but also because you simply are not caring for your customers as well as you might! As I have struggled to understand what could hold people back from using these amazing new tools, I slowly came to realize one of the main problems was simple confusion. There are just too many programs making similar claims. Everybody can do everything! When faced with this confusing array of claims, many sales managers just give up and putt off making a CRM decision.

Rich's Taxonomy of CRM Software
Time for a True Confession: At times, I too have been bewildered by the ever increasing array of programs hitting my desk for review! In my never-ending quest to help people make meaningful software comparisons, I have always struggled to find an effective way to categorize all of these different programs. As I began work on this Compendium, I realized we needed a new taxonomy of sales automation software.

The solution came to me in a flashback to Sales 101 - sell benefits, not features! The software developers are always drowning me with endless lists of new features for their programs. My reply is always, “So what! How does that help people sell more?” After thinking about it a while, it seemed obvious, the best way to categorize the various CRM solutions is according to the sales or marketing problem they are designed to solve.

The primary job of most CRM solutions is to keep track of the various people you are selling to and the different activities you need to perform with these people. Since these contacts are the lifeblood of your business, I think of these as strategic solutions. Other CRM programs are designed to solve specific problems like effectively preparing a proposal or quotation for a prospect. I think of these as tactical solutions.

Strategic Solutions

The primary function of those programs I call strategic solutions is to:

Keep track of the many people you deal with

Keep track of the various activities you have with these people

Keep track of the sales opportunities you are pursuing with these people

Manage your calendar

Manage these people through your sales process

Traditionally most of the programs serving these tasks have been lumped into the one giant category called contact managers. Software developers who have focused on delivering systems for large sales forces, such as the pharmaceutical industry, tended to do a good job of data consolidation from the large group of sales people, a good job of management reporting, and a good job of communicating with the legacy computer systems used by these larger corporations. Unfortunately, these software developers seldom did a good job on the basic "contact management" functions. When challenged on this point, the typical reply was, "Our program isn’t a contact manager."
This attitude overlooks a basic fact, sales people carry out certain tasks whether they work alone, on a team of twenty, or as a member of a two thousand person sales force. As the size of the group grows, a CRM program must add capabilities to facilitate work among the various team members. However, in all cases, the program should provide at least basic contact and calendar management functions. Only after satisfying these basic minimum requirements, should a program branch out to other sales automation functions.

Another important consideration is the flexibility of the program. No two businesses sell the same way. The more complex your sales environment, the more flexibility you will require.

In my view of strategic solutions, I further subdivide the available solutions into the following on-premise and SaaS categories:

With on-premise solutions, you buy the software and the computers to run it. You also get to take care of all of this stuff and keep it running!

On-Premise SOHO CRM Solution

On-Premise Small Business CRM Solution

On-Premise Mid Market CRM Solution

On-Premise Small Enterprise CRM Solution

On-Premise Medium Enterprise CRM Solution

On-Premise Large Enterprise CRM Solution

Then, there are the "hosted" or, software-as-a-service (SaaS) solutions.

SaaS SOHO CRM Solution

SaaS Small Business CRM Solution

SaaS Mid Market CRM Solution

SaaS Small Enterprise CRM Solution

SaaS Medium Enterprise CRM Solution

SaaS Large Enterprise CRM Solution

Sub-categories that may apply to these solutions include the following:

Personal Information Managers (PIM)
As their name implies, these programs are bested suited for keeping track of all the little things that help you get through the day. In general, I do not recommend these programs as your primary strategic solution. However, many of these programs can work well in tandem with your main program.

Contact Managers
These programs are best suited for individual sales people working alone. They provide varying contact and calendar management capabilities and may provide a wide array of additional capabilities to increase your sales impact. Most of these programs provide "user defined fields," but they usually aren’t very flexible.

Sales Team Automation Systems
These programs work best if you work with more than one person. A team can consist of two people, or two hundred people. These programs should provide the full range of capabilities provided by the better contact managers. In addition, they should provide network versions and database synchronization, so that team members can exchange and share information. These programs should also be flexible enough to adapt to a wide range of selling scenarios.

Sales Force Automation Systems
These programs are also referred to as "enterprise solutions." They should provide all of the capabilities provided by the better contact managers and sales team automation systems as discussed above. In addition, they should provide a client/server version based on a robust database management system (DBMS), such as Oracle, Sybase or Microsoft SQL Server. These systems must be easily customizable to support a wide range of complex selling environments. They should also provide the flexible communication capabilities needed to put the right information at the fingertips of whoever needs it to take great care of your customers.

If a program also includes marketing and support capabilities, then it deserves the CRM classification. Then, the parameter the software industry forces us to consider is the size of your company. The table below shows how I break things down. Just so you know, other analysts may break things down differently - this is not an exact science. Also, you will see the term SMB (Small-Medium Business) bandied about a lot. Again, I doubt if you will find a lot of agreement on this one. Most people use it to describe businesses larger than "small" but not yet ready for the FORTUNE 1000.

The programs discussed on this web site fall over the full continuum - from the simplest single user PIM to sophisticated Software as a Service (SaaS)s. Though some of the developers might disagree with my classifications, all of these programs have been assigned to a category based on my judgment after reviewing the programs and/or materials provided to me. Just remember though, there are no absolute demarcation lines between categories.

Tactical Solutions
Sales people face many challenges as they continue on their quest of finding new prospects, discovering their requirements, developing quotations or proposals, presenting their products, closing orders, and taking great care of their customers. As the CRM software category continues to mature, many great programs are emerging to solve specific problems encountered in the customer life-cycle. These are the programs that I refer to as tactical solutions.

There is no magic formula here. The trick is to look for ways to use technology to leverage your efforts to close more sales and take better care of your customers. I know of companies that do not even use a strategic solution, yet are quite delighted with the added impact they get from some specific tactical program. More commonly, companies are looking for the best program to meet their strategic requirements and haven't even thought about many of the great tactical solutions available.

Some examples of tactical CRM solutions include:

Marketing Issues

Marketing Support Capabilities

Marketing Automation
Enterprise Marketing Management (EMM)
Campaign Management
Database Marketing
Lead Qualification & Distribution
Relationship Marketing
Social Networking
Customer Interaction Management (CIM)

Marketing Operations Management

Event & Seminar Management
Collateral Fulfillment
Catalog Management
Online Incentive Promotions

Marketing Research

Survey Management
Marketing Analysis

Sales Management Capabilities

Planning & Deployment

Territory Management
Recruiting & Selection of Sales Staff
Training & Development of Sales Staff

Proactive Sales Management

See also: Sales Process Management, including Structured Selling Methodologies
Quotas & Sales Forecasting
Measuring Sales Effectiveness & Productivity

Sales Force Administration

Sales Compensation
Expense Account Management

Field Sales Support Capabilities

Getting Ready To Sell

Goal Setting & Time Management
Territory Management
Product Information
Competitor Analysis

Personal Selling

Prospecting
Pre-Call Planning
Discovering Requirements
Presentations

Closing Orders

Opportunity Management
Configuration Management
Quotations & Proposals

Call Center Support Capabilities

Contact Center Management

Workforce Management

Inbound Call Support

Automated Call Distribution (ACD)
Interactive Voice Response (IVR)

Outbound Call Support

Predictive Dialer

Computer Telephony Integration

IP Contact Centers
Virtual PBX

Internet Marketing Tools

Blogging
Search Engine Marketing
Shopping Carts
Affiliate Marketing
Web Analytics