Can You Sell CRM?

Customer relationship management software is one of the hottest new applications on the market. What do you need to know to get a piece of the pie?

Customer relationship management (CRM) software has surpassed ERP (enterprise resource planning) software as the hottest application on the market. "The research that we follow shows the CRM market growing at least 40% annually," says Jeff George, VP of channel programs for Epicor Software Corp. "The same research shows the ERP market only growing 20% to 24% annually."

Epicor (Irvine, CA) develops both ERP and CRM software. It entered the CRM game in 1997 with the acquisition of Clientele. "Internally, our CRM sales are doubling every quarter," says George. "ERP might be used to run the financials or the manufacturing applications at a business. CRM, however, touches every part of an organization."

Spend Money To Make Money
So, how do you, as a VAR, get a piece of this rapidly growing CRM market? "Be prepared to invest $50,000 up front before you earn your first dollar for CRM sales," warns George. "Many VARs make the mistake of underestimating the complexity of CRM installations. A VAR needs a certain level of training and knowledge to successfully implement CRM systems."

George says Epicor charges VARs an initial fee of $10,000 for the right to resell its CRM software and for the accompanying training. "That's just the tip of the iceberg, though," he adds. "You have to be ready to commit three to four weeks to training. You also want to commit one dedicated technical and one dedicated sales person to CRM sales. We've found some technically oriented VARs choke when it comes to committing a $100,000 salary to a salesperson who might not sell anything for a year."

Be Prepared To Grow Systems Slowly
George says that CRM VARs should be prepared to start with small installations. "Internally, we have more than 1,000 users of Clientele, but it's taken us over two years to grow our system to that size. Every month we are adding 15 to 20 new users," says George. "VARs should train end users to take responsibility for their own systems. This way, as the system grows, the VAR does not have to hand hold the end user through every step."

So, aside from 50 grand, what does it take to be a CRM VAR? "We look for VARs that have around 25 employees and $5 million or more in revenue," says George. "We also like them to have stable management, to have been around awhile, and to have at least five customers to reference."

E-Commerce Experience In Demand
Scott Wiebe, Pivotal Corp.'s North American manager of business development, adds one more requirement to his list. "We don't care how much CRM software a VAR has sold, we want our VARs to have Web backgrounds," says Wiebe. "We are most interested in VARs that have experience building e-commerce Web sites, especially those that manage B2B (business-to-business) transactions."

Pivotal (North Vancouver, BC) is a 300-employee developer of CRM software. According to Wiebe, Pivotal is leveraging the Web to take CRM to its next level — electronic business relationship management, or e-BRM. "Our vision is to combine e-commerce, CRM, and intelligent portals to conduct business transactions over the Web," says Wiebe. "We think all CRM vendors will follow us into this area."

To facilitate e-BRM, Pivotal has organized a network of e-commerce and content management partners in what it terms a B2B Syndicate. "Gone are the days when VARs had to develop complete Web solutions from scratch," says Wiebe. "Now, there are tools available, and we help our partners leverage these tools into e-BRM solutions. Our partnerships have led to great success in the high-tech market, for example. We've been able to satisfy high-tech vendors' demand for Web commerce solutions that can be implemented quickly."

Ralph Gammon, contributing editor