Most companies know the value that smart customer relationship management (CRM) can deliver: increased sales, higher customer acquisition and retention, and more effective marketing based on better data. Yet for a variety of reasons, not every business that stands to benefit from a CRM or digital marketing solution has made the move.
If your business has yet to implement a CRM or digital marketing solution, you may be feeling late to the game. Not to worry. Being behind the first giant wave of these technologies may have advantages. You have bypassed the challenges that early adopters faced as they navigated uncharted waters and struggled to integrate emerging solutions into their systems.
You also now have attractive options for outsourcing any or all of your CRM solution, enabling you to capture the latest advances quickly. According to a 2013 Gartner report, over 40 percent of all CRM deployments are now software as a service or cloud-based, an accelerating trend that’s expected to reach 50 percent during 2015. Many of the technologies have become commoditized services. More important, the specialized skills you’ll be looking for are available as services, too.
Point B’s Perspective
Point B has helped many clients outsource CRM and digital marketing solutions to leverage the latest customer data management, analytics and campaign management. An outsourced solution enables you to skip forward in CRM maturity and take advantage of new solutions as they emerge. With some thoughtful planning and clear self assessment, your company can find the right solution and leverage its full value.
Consider the total cost of in-house CRM.
Outsourcing CRM can be much more cost effective in the long run. The more sophisticated CRM solutions become, the costlier and more complex they are to build and maintain. Moving from a basic CRM system with some email campaigns to an advanced integrated, omnichannel solution can take years of selection, implementation and integration. An in-house solution also requires a significant investment in infrastructure, along with the skills to support the tools you’ve selected. Finally, there is risk that your solution will be outdated in a few years.
Take advantage of mature outsourcing options.
Outsourced CRM and digital marketing solutions are constantly evolving, along with the technology advances and consumer behavior driving them. For instance, social CRM has rapidly moved from the margins to become central to the latest solutions. Outsourcing lets you tap into these advances quickly. You’ll find a well-developed ecosystem of service providers to choose from, including many solutions built on best-of-breed products.
As you explore your options, keep in mind that not all outsourced CRM solutions are alike. Based on their history, most have specific strengths. Some vendors have built on their expertise in integration and enrichment; others in marketing and analytics. It pays to choose a CRM partner whose core competencies align with your strategic objectives.
Clarify issues of data control.
Outsourcing won’t solve every problem, and it raises issues of data control that you don’t need to think about with an in-house solution. Before you commit to an outsourced solution, consider the following questions:
- Do you need to maintain in-house control of the data for business or security reasons? Some data should never leave the secure confines of your company. Strong data governance can help establish and apply the right parameters for outsourcing.
- Are some CRM activities potentially competitive differentiators for your company? If the source of your data is a significant competitive asset, you may want to keep it in-house. If analytics such as customer segmentation or propensity modeling is part of your company’s “secret sauce,” you may opt to keep analytics in-house and outsource only your data collection. You have the flexibility to pick and choose which CRM activities you outsource.
- Will your arrangement make you overly dependent on a third party or vendor lock in? There’s a healthy tension in the best outsourced relationships. Fresh insights and winning campaigns come from giving your vendor the latitude to do its best work. On the other hand, you should always be able to access the data collected and used on your behalf and be aware of all activities related to your data.
Strong in-house management of both your internal and third-party data resources will improve data quality and ease integration.
Manage risks; optimize results.
Outsourcing data-intensive programs comes with its own inherent risks. With advance planning, you can manage those risks and optimize performance.
Invest in the internal capability to evaluate all campaign plans and analytical models.
This may mean hiring a consumer engagement specialist to drive CRM strategy and work directly with your vendor.
Assess potential conflicts of interest.
If you’re outsourcing an end-to-end digital marketing solution with a single vendor, this vendor will be tracking, measuring, and analyzing its own marketing campaigns based on its own work. Consider how you will manage any potential conflicts of interest or unintentional bias. New pricing models and other tools can help manage this conflict of interest.
You can minimize risk upfront by crafting a contract that details a clear service-level agreement, exit agreement, and agreed-upon technical standards. Base it on a detailed statement of work with your vendor: who does what, when, and what it will cost you. The amount of clarity and transparency you achieve before the deal closes will determine the quality of your journey together.
The Bottom Line
Outsourcing can be a smart way to leverage the latest digital marketing solutions quickly and cost-efficiently. With proper planning and controls, it enables you to achieve breakthrough improvements in your CRM and campaign management performance. The more transparency you have as you enter into the relationship, the freer everyone will be to focus on doing their best work.