Are your sales reps frustrated with their customer relationship management (CRM) software?
If it’s time to procure a new CRM, you might be considering sending out a request for proposal (RFP) to CRM vendors.
It’s not uncommon for distributors to rely on the RFP process to guide them through the technical, functional, business goals and budget requirements of a software purchase. An RFP response can provide an objective and data-based approach to your CRM options.
Unfortunately, the RFP process for CRM in distribution may be broken, causing distributors to lose sight of what really matters when selecting a CRM.
4 CRM Selection Pitfalls
Before you spend time and effort sending out an RFP for a new CRM, take some time to learn these common pitfalls in the RFP review process so you can avoid them.
1. An IT vs. sales-led selection committee
Often, the IT team takes the lead in selecting a CRM. True, IT’s expertise is important when evaluating a CRM’s technical aspects during the RFP process. But if the IT team isn’t going to be the main user of the CRM, their analysis might not fully understand the impact on the parts of the business that need changing, even after they’ve spent hours gathering requirements. This is where the leaders of those departments shine.
Talking to leaders in distribution, the goal with CRM often focuses on giving sales leaders a clear view of rep activities and a method for reps to record customer interactions. It’s about using CRM to change the way they sell, what they discuss with customers and how they manage their sales teams.
Your IT team isn’t out there selling products or making cold calls. They’re essential for checking the CRM’s security and how well it shares data with other systems. But they may miss the small yet vital details that determine whether a CRM really works for a sales team. In CRM selection, it’s these details that matter most.
When the sales team leads the CRM selection process, the committee gains a deeper understanding of sales workflows. They can more accurately identify which CRM features might strengthen sales processes or enhance effective practices.
Introducing new software also involves change management. Ensuring sales input in the RFP process can lead to smoother adoption and lessen resistance from users.
2. The CRM features war
Gathering feature requirements for a CRM RFP can be needlessly complex. Typically, you talk to multiple teams and end up with a massive spreadsheet of desired features, transforming the selection process into a binary checklist exercise: Does the CRM have this feature? Yes or No.
If you find yourself in this binary reality, it’s a good opportunity to re-focus on the strategic goals that you were trying to accomplish with the CRM software implementation.
It’s crucial to remember that not all features hold the same value. A critical assessment is necessary: Is each feature truly significant to the process?
For example, I’ve seen specific requirements such as, “I need a CRM that allows my sales reps to scan business cards to create a contact.” That’s an attractive feature, but what if that same CRM can’t integrate with your ERP?
Every feature doesn’t carry the same weight on the buy-it/don’t-buy-it scale. For example, if you choose a CRM just because it has some nice extra features but find out it doesn’t easily connect with your ERP system (which is really important, in my view), it’s probably not the right choice. I’ve seen quite a few distribution companies focus on the wrong things and end up writing a big check to a third party for a custom CRM to ERP integration, all because the CRM they picked didn’t have this feature out of the gate.
If your feature requirements were distilled down into a simple set of checkboxes that discard your strategic goals, ERP integration and business card scanning would both be checked. But one is a must-have feature and the other is a nice-to-have.
When you’re putting together your CRM RFP, start by identifying your key workflows. What workflows does your team need to succeed? This strategy helps you identify the crucial features that support these workflows. It’s a way to keep your focus sharp and prevent the trap of chasing after too many features. Focus on the workflows that matter. It’s a simpler, yet effective way to ensure your CRM choice aligns with your real business needs.
CRMs are feature-rich. CRM sales teams know how to create a feature war between vendors. You can avoid these battles by remaining focused on your strategic goals.
3. Trying to please everyone
The decision-making process for selecting CRM systems often stumbles over the desire to achieve consensus among all stakeholders. The desire to please everyone can lead to prolonged deliberations, inefficiencies and, ultimately, decisions that no one is quite happy with. A more effective approach is to designate a single decision-maker or a small, empowered team with the authority to make the final call.
This method is echoed in the philosophies of Amazon, with its “Disagree, then commit” mantra, and HubSpot, which emphasizes a “Debate, decide and unite” approach. These strategies are not just about speeding up decision-making but also about fostering a culture of trust and commitment to the decisions made, even among those who initially disagreed.
McKinsey’s research supports this approach, finding that quicker decisions often lead to better outcomes. Minimizing the number of people involved in making a decision can enhance the speed and quality of that decision. This is not to suggest that all deliberation is bad — far from it. Input should be gathered, options considered, and potential outcomes evaluated. But once a decision is made, the focus should shift to united action and implementation.
4. Simultaneous price and feature evaluation
A primary bias in procurement is the confirmation bias — the tendency to look for and believe information that supports our goal or hypothesis. It’s this bias that might lead us to see a lower-priced option as the best choice.
To avoid focusing solely on price, your evaluation method should map the proposals you receive to the criteria the selection committee determined were critical for success at the onset of the procurement process. Then, evaluate proposals on features and vendor qualifications first without considering price. Once you’ve determined the leading solutions based on vendor qualifications and features, you can overlay price as a consideration.
Alternatively, you can take a weighted scoring approach. Using this method, you assign a value to each RFP question or section. For example, you might weigh the price at 20-30%, while the right features might make up 40% of your scoring formula. You assign a higher percentage to criteria that are most important to your business.
Always remember that price is negotiable, but some of the features that you’ll need may be less so.
Improve Your CRM RFP Evaluation
When you stay focused on what really matters with an appropriate CRM selection process, you’re one step closer to a CRM deployment that can enhance your entire organization’s goals.
To get started on your CRM evaluation, you can use this checklist to better assess what features or functionality your team needs and to prioritize those requirements as you talk to CRM vendors.
Benj Cohen founded Proton.ai, an AI-powered CRM for distributors. His company’s mission is to help distributors harness cutting-edge artificial intelligence (AI) to drive increased sales. Benj learned about distribution firsthand at Benco Dental, a family business started by his great grandfather. He graduated Harvard University with a degree in Applied Math, and speaks regularly at industry events on the benefits of AI for distributors. Benj has been featured in trade publications including MDM, Industrial Distribution, and Industrial Supply Magazine. His company, Proton.ai, announced a $20 million Series A round of funding in 2022, led by Felicis Ventures. In 2023, Benj was recognized in Forbes 30 Under 30 – the first leader in distribution to receive such recognition.