It happens to many businesses. Imagine you’ve purchased what seems like the perfect customer engagement software for your company — the one that will take your customer relationships and revenue to the next level. At first you feel satisfied, confident in your investment. But as it turns out, the road to success isn’t without setbacks: Despite everything that this software provider promised, you begin to come across some unspoken — and unexpected — downfalls.
Maybe your customer engagement tool traps you in a price creep, a stiff contract, or forces you to purchase add-ons to get the full functionality that you thought was included. Maybe it’s missing some key features or isn’t as user-friendly as you had hoped.
Regardless of what the problem is, these pitfalls are at best annoying — at worst they can mean not getting proper use of the customer engagement software, or funneling money into an unsuccessful venture. Here are some of the hidden drawbacks of customer engagement tools that providers won’t tell you — and tips on how to avoid them when purchasing your software solution.
Here’s a quick glance at the pitfalls to avoid:
While some customer engagement solutions offer flexible monthly and per-use pricing, other providers may require an extended contract to use their services. Companies such as SugarCRM require companies to commit to annual contracts, making it hard to switch software or downgrade packages should you overbuy. That’s not all, though — SugarCRM also requires companies to purchase a minimum of 10 user licenses annually, putting their starting price at $4,800 per year (other software solutions may require an even higher user amount — SAP CRM requires a minimum of 15).
Some vendors try to lock businesses in by promising them the best rates for a longer contract: Salesforce encourages multi-year agreements in exchange for its most favorable pricing terms. While more extended contracts may not be a problem for companies who use the software year after year, it can be a deterrent for businesses who aren’t ready to commit to a long-term solution.
More than anyone, enterprises can come out affected by whether or not a software provider has inflexible contract negotiation practices. According to Gartner, one of the downfalls of both Salesforce and Oracle is that customers have given the companies “comparatively low scores for contract negotiations and pricing flexibility.” To help empower customers, Gartner, Snowforce data, and Medium have all written articles advising businesses on the best way to negotiate terms with Salesforce.
While stiff contracts aren’t necessarily a reason not to choose a customer engagement solution, being aware of this reality can help you better do your research and analyze the cost-benefit of software before committing to it.
A big problem with customer engagement software providers is that many aren’t very upfront about hidden costs at the time of purchase – and hidden costs add up.
Here are some hidden costs to watch out for, along with a few examples of companies that have charged these hidden costs:
These aren’t the only hidden costs you should be aware of: you should also be on the lookout for unexpected jumps in pricing. Some companies like Hubspot have been criticized for their steep price creeps, meaning that as your requirements and contacts grow, so does the cost — and quite rapidly.
Remember that not every company or every plan has the same hidden costs, and that some are very minor when compared to the ROI that they’ll bring you. However, it’s still good to have a full picture of what those costs may be so that you can successfully analyze the cost-benefit of a software.
Let’s be honest — who doesn’t like the sound of an all-in-one system?
Many companies with a variety of software needs may initially opt for a one-stop-shop when it comes time to purchase a customer engagement solution. And these aren’t hard to find — with the customer engagement software market ever-expanding, many vendors advertise their brand as capable of delivering on several different areas of engagement.
While these offerings may seem compelling, all-in-one systems run the risk of being a jack of all trades, but a master of none. In other words, while all-in-one systems may offer many tools, the capacities of each individual tool may not be as strong as what dedicated vendors provide.
For example, Hubspot is an all-in-one software provider that offers CRM, marketing, and sales tools. While Hubspot has received praise for its inbound marketing solution, it’s CRM software isn’t as powerful as other dedicated CRM solutions such as Oracle or Salesforce. Another example is Zendesk. Zendesk is a great all-in-one help desk software, however, its live chat tool lacks the Enterprise features and functionality that expert providers like Comm100 offer.
The fact that all-in-one software solutions may not provide companies with the individual tool functionality that they need is no secret — vendors like Zendesk and Hubspot know this, which is why they offer integrations with third-party apps. That way, businesses can use the tools that these companies deliver best on, while turning to other providers for more advanced individual tool functionality.
When contracting an all-in-one software provider, be aware that you might have to spend extra in the future if the capabilities of their tools don’t fulfill your needs. It’s also important to note that despite having less powerful tools, all-in-one vendors often aren’t cheaper than dedicated providers — that’s because to “unlock” certain tools and features customers are often required to switch to a higher payment plan or pay an additional monthly amount per feature. While all-in-one vendors have a lot to offer customers, expecting or depending on them to fulfill every need your company might have can be a setup for disappointment.
Make a list of the customer engagement tools that your company is looking to invest in. Then, on a scale from 1-10, rate how important it is that each of these tools have advanced functionality (if you know which specific capabilities you want out of each tool, be sure to jot those down as well). This will help you sort out your non-negotiables from your negotiables so that you can more easily decide what functions to invest in a leading provider vs. leave to an all-in-one vendor.
There are many kinds of caps and restrictions that could hit your company when purchasing a customer engagement solution. One of the most common and transparent ways that software providers manage restrictions is through pricing tiers. Pricing tiers often correspond with different business sizes and starting levels (for example, MailChimp’s subscription plans are named Forever Free, Growing Business, and Pro Marketer, after who they’re geared towards). Free versions of software typically have the most caps and restrictions, making them hard for companies to use beyond an introductory level. The rule of thumb is the more a business pays, the fewer restrictions they face and the more features they unlock.
Having greater restrictions on cheaper pricing plans is standard among SaaS providers and isn’t always a downside to the software solution: the inclusion of less feature-rich packages keeps prices low for smaller companies that don’t need them. That being said, it’s important that you check out exactly what features are included in different pricing plans so that you won’t be disappointed if your favorite features aren’t part of the bundle.
Companies may boast their integration abilities, but watch out: integrations are also prone to restrictions. If you’re banking on a software solution integrating with your current CRM or social media tool, be sure that that integration is included in the pricing plan that you’re interested in.
It’s not just features or integrations that come with restrictions: some customer engagement software providers will even restrict engagement depending on how much you pay. For example, CRM software solutions like Salesforce may not allow lead assignment and routing unless businesses to upgrade to at least a second-tier plan; marketing solutions like MailChimp may only allow so many email automations or subscribers. Engagement solutions like Hootsuite that charge per plan and not per user can greatly restrict how many users companies are allowed. Even live chat providers often put caps on the number of chats that companies can send monthly from lower paying accounts (don’t worry, Comm100 doesn’t do this!).
It’s not just about caps and restrictions — some customer engagement software vendors don’t offer as many features as their competitors, regardless of the price plans. And what’s missing can often go unnoticed: after all, you won’t find SaaS providers boasting the features they don’t have – they flaunt what they do.
Let’s take a look at live chat, for example. Some live chat providers such as SnapEngage and ClickDesk only collect data on visitors that have sent a live chat request, whereas Comm100 proactively collects data from all website visitors — regardless of whether they request to chat. The result is an extreme difference in reporting capabilities between these live chat solutions and Comm100 — a gap that many customers may not realize exists based on these providers’ websites alone.
A gap in reporting capacities isn’t the only example of key performance differences amongst live chat providers. Some live chat providers also penalize lower paying plans by providing them with fewer customization options, which can be hurtful to startups and small businesses. Others, like Velaro, don’t offer a remote desktop feature, which is useful in supporting customers. And others still lack audio and video chat capabilities – a feature which is available as an add-on from Comm100.
Sometimes similar types of solutions have different focuses that set them apart. For example, there are many kinds of social media solutions. Some, like Hootsuite, are more focused on marketing. Others, like Sprout Social, have a built-in social CRM. It’s important to be aware of these critical differences to pick the solution that will best fit your needs.
Many businesses believe customer engagement software providers when they say that their software solution is easy to use. However, expecting a tricky software to be user-friendly can result in complications down the line.
The consequences of a less-than-user-friendly software are felt most strongly by SMBs and startup companies with small budgets. That’s because software that is not user-friendly can have additional training and even hiring costs attached to it. For example, a product like Salesforce might boast that it is user-friendly, but then prove to be too complicated to use without hiring an administrator (and if you don’t have money in the budget for an administrator, then you’re out of luck).
In another pitfall scenario, you might hope that you will be technologically savvy enough to use a specific piece of software, but then have trouble adapting. If this doesn’t directly result in you investing more money, it will at least cost you time as you adjust to the learning curve (and as the saying goes, time is money).
But it’s not just small businesses that are affected by overly complicated software. Big businesses may want a solution that their team can adapt quickly to, or software that they can make changes to on their own. This is where engagement solutions like BoldChat become a problem – they require users to be versed in coding to make changes to the software, which alienates businesses that want a simple solution.
As a leader in Gartner’s SFA Magic Quadrant for the 11th straight year, we can learn a lot from Salesforce. One of those things is that the cloud is the future of SaaS — which makes on-premises deployment a thing of the past.
According to MaximizerCRM, on-premises systems were shown to be more expensive to operate annually than their cloud-based counterparts, with an overall cost that is 60% higher on an annual basis — even after the first year. With cloud-based deployment, companies typically face lower upfront and ongoing costs.
Companies that rely on on-premises deployment have to wait for essential upgrades — some even see additional fees for upgrades, customization, or maintenance. Meanwhile, companies that opt for cloud-based deployment can receive updates, data backups, and more instantly — keeping them up to date with the latest software developments.
According to one study, 93% of organizations are now using cloud services. And the best cloud-based providers have robust security requirements that often trump the need to implement in-house — for example, Comm100 is ISO27001 certified.
Cloud systems have better data backup, faster implementation, require no additional IT resources to support your infrastructure for servers, networks, and applications. Any upgrades are received right away, so you can continue to perform at a high level with the latest software. Avoid the pitfalls of on-premises deployment by choosing the cloud.
Customer engagement software solutions have enormous potential when it comes to growing businesses — however, if businesses aren’t serious about implementing them, then this potential can go to waste. Some companies invest significant amounts in CRMs and other engagement software systems only to see them fail after six months. The reason why is an improper use of the engagement tool.
There are several ways that a company could fail to take advantage of their customer engagement software. Companies could fail to make serious use of reports that the software provides. They could fail to invest in a dedicated system administrator — something that is necessary for companies with CRMs such as Salesforce, Oracle, etc.
Or, they could fail to embrace the software. Forbes contributor Gene Marks recalls salespeople at one of his clients not taking Salesforce seriously, which when coupled with lax management ultimately caused the system to flop. As Marks says, “Don’t want to embrace your CRM? Don’t want to require a bare minimum of data entry to track customer contacts and key profile data?
Don’t care if a salesperson isn’t paying attention to the system? Then suffer the consequences. The most successful CRM systems are at companies where the system is the culture.”
Especially if you’re a business on a budget, you might be compelled to pick a single customer engagement function and say goodbye to all the rest.
Maybe you just want to focus on marketing, and you aren’t interested in using customer engagement tools for customer service. Or perhaps you want to invest in a knowledge base, but you aren’t interested in connecting with customers over any other touchpoints.
Customer engagement software is an essential part of creating a frictionless, omnichannel customer experience. By meeting your customers across all channels with the help of a variety of applicable customer engagement tools, you will be putting your business in the position to better collect customer information, strategize, engage, and ultimately drive sales and customer loyalty.
For businesses who can afford to, it’s essential to invest in a multichannel, multi-tool approach to customer engagement. After all, your customers need to be cared for at all phases of their customer lifecycle to remain loyal, engaged brand participants. Just like how sales, marketing, and customer service work together on customer outreach — CRM, social media, marketing automation, live chat, knowledge base, and other engagement tools work in unison create a seamless buyer experience.
You don’t want to underinvest in your customer experience, but you also don’t want to overinvest. Customer engagement software providers will sell you on as much as they can — it’s up to you to know what’s vital to the success of your business, and what isn’t.
For small businesses and startups, affordable customer engagement tools are worth looking into as your organization takes off. However, for large companies and enterprises, these tools can come at a price.
According to CCW Digital’s latest Winter Report, the top priority for organizations going into 2018 is to create a frictionless experience for customers. When enterprises invest in low-quality customer engagement tools, they may fracture rather than build better relationships within and outside of their organization. Poor software tools can make it harder for employees to work as a team thanks to limited functions, user allowances, and disempowering permission restrictions. This can frustrate employees, and even influence a higher turnover rate.
Remember that the employee experience is directly related to the customer experience – employees that struggle to operate within the limits of a low-quality software can impact how satisfied customers are with a company. Low-quality engagement tools also fall short on delivering personalized service to customers, which is one of the most essential qualities that defines a customer-centric brand.
Some of the downsides to using a cheap customer engagement software may vary per solution. Spam-like messages from bad marketing automation software tools can drive customers away and into the arms of the competition. An unattractive, poorly customized live chat window can look bad on your company’s otherwise professional website.
Poor reporting capacities, limited customization options, and weak tools can all be signs of an inflexible software that can cause a lasting headache for your organization, and make it harder for you to analyze or adjust your current strategies. Basic systems can fail to collect the customer data needed to create a smooth multichannel user experience.
For enterprises, lower quality customer engagement tools can reflect poorly on your business. If you aren’t willing to invest in quality customer engagement solutions, why should customers invest in your product?
For startups and small companies on a budget: don’t forget that free and low-quality customer engagement tools are packed with restrictions that can limit even the smallest business. Remember what many software providers are ultimately intending when they offer free tools: to give you a taste of what their software provides while limiting how much you can actually reap the benefits of it. This forces growing companies to upgrade their software solution, or be content with getting little to nothing out of the software.
Before contracting a free or inexpensive software provider, ask yourself the following: Are they going to have all of the basics you’d take for granted in enterprise tools (e.g. security?) Is their engagement software well supported enough to be business-ready? And what happens if development of the tool gets abandoned? (This is probably less likely when adopting an established paid solution with a strong team/business model behind it.)
If you are new to customer engagement software, consider implementing one solution at a time, so that you don’t overwhelm yourself. Take time to learn the systems, perform proper training, and pave the way for growth.
No customer engagement tool is perfect. Expecting that you’ll find a customer engagement software without a single setback is a pitfall in itself. However, with a bit of time, patience, and research, you will be able to find the best tools for engaging with customers, gathering data, automating your marketing, and everything in between.
For more reading, check out our blog post, How to Set Goals & Build a Strategy to Drive Customer Experience Improvement.
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