Horizontal Vs Vertical CRM: Which One Should You Get?
April 6, 2017 | Nabanita Nag
The business scene has changed drastically in the past few years. With more and more passionate individuals launching their entrepreneur dream, small-mid scale niche businesses have become as significant (and might I add profitable!) as the big boys!
However, in one respect all modern businesses, large, mid or small remains the same.
They all face the following business challenges:
- Improve Productivity
- Reduce Cost
- Increase Profit
While there are obviously other challenges (such as finding the best possible manpower or deciding whether to ban funny cat videos in office), these three remains the major concerns for most business owners and managers.
Here comes the most popular enterprise software: CRM.
Well, there’s been much talk about how a CRM (Customer Relationship Management) software is THE ultimate solution for improving productivity, reducing cost and increasing profit. And, for once, these talks are absolutely accurate (irrespective of the size of your team)!
So, if you are looking at getting a CRM system in place, the major concern for you is to decide whether to go vertical or horizontal.
Backtrack a couple of years and the CRM scene was dominated by big guys such as Microsoft, SAP and Oracle. These are mostly horizontal CRM systems (with lots of features) that offer room for customization to fit individual businesses.
And then, cloud happened!
The advent of cloud technology served as the birthing ground for several cloud CRM systems. While some preferred to stick to the horizontal approach, some targeted niche markets with vertical CRM solutions (with industry specific features).
As a result, today’s businesses have much options in hand when it comes to zero in on a CRM solution.
Now to address the dilemma of Horizontal CRM Vs Vertical CRM, let us look into the pros and cons of both Horizontal CRM systems as well as Vertical CRM systems.
Horizontal CRM: ‘an inch deep and a mile wide’
Horizontal CRM products are built to cater to the core requirements of any standard business, irrespective of industry type.
More often than not, these CRM manufacturers offer some basic features at a low cost and then a number of advanced customizable features at an elevated price.
While the basic features are workable for a generic business model, you can also tweak the system to a great extent to make it fit your unique business requirements.
Most major CRM manufacturers today offer feature-rich cloud-based Horizontal CRM (at a very attractive price too) that you can customize to your hearts extent.
A host of features at a lower cost! Sounds great, right?
The con here is, a horizontal CRM will almost always require extensive customization to fit your unique business needs. And, while the purchase cost for the CRM system may be lower, in most cases, businesses end up spending a bomb (in terms of both, money and time) on customization.
So, to sum it up, you can expect the following things from a horizontal CRM system:
- Low purchase cost initially
- Scope of extensive customization
- Flexibility of crafting a feature-rich system, just the way you want
- High customization cost
- Significant time investment for implementing and understanding the customized features
Vertical CRM: ‘a mile deep and an inch wide’
Vertical CRM solutions are specifically crafted to cater to the unique needs of a particular industry.
Instead of a bunch of features, these systems come with a high degree of verticalized customizations for a specific industry.
For example, a vertical CRM for travel agency will come with features to manage not only their customers but also their vendors such as hotels, ticket booking agencies, transportation agencies etc. Same goes for a real estate CRM where the system helps you manage your clients as well as the huge number of properties you may be dealing with.
In most cases, industry experts are highly involved in the process of designing and developing of any vertical CRM solution.
As a result, you get a plug and play CRM system that understands your industry needs and talks your industry language.
Coming with almost all the customization you need; vertical CRM systems take away the development cost from the end user.
Although a vertical CRM system may be having a higher price-tag, you save tons of money and time that you would otherwise have to spend to customize your horizontal CRM software.
Most cloud-based vertical CRM systems can be easily customized further to incorporate any additional feature that you may need.
Well, while you get an almost ready-made CRM system that understands the nuances of your business and talks your industry terms, you may miss the flexibility of from-the scratch customization that a horizontal product offers.
To sum it up, here’s what you can expect from a vertical CRM system:
- Highly optimized to your business needs
- Understands your business process and talks your industry terms
- No need to spend money or time on customization
- Supports further customizations as per your business requirements
- The initial purchase cost is a little higher than a horizontal solution
Let’s compare Horizontal CRM Vs Vertical CRM
Over to you…..
Every business is unique!
And so is their needs for CRM system.
While both Horizontal and Vertical CRM systems have their pros and cons, the pros of a cloud-based vertical CRM system far out-weight the cons for the same, especially for businesses like Travel Agency, Real-Estate, Manufacturers, Packers and Movers etc.
Still, can’t decide which one to go for?
Get in touch with our CRM experts here for a no-obligation consultation on your CRM requirements.