Many people who travel can’t ignore the impressive ads for CRM (Customer Relationship Management, for the acronym-challenged among us) software that have been in airline magazines for the past 10 years or so. If you are fortunate to strike up a conversation with a businessperson on your flight, the subject of your conversation might turn to what CRM software you might be using. Don’t be surprised if your fellow traveler tells you how disappointed he or she is with the CRM software that they have at their company. They are not alone. The Gartner Group, one of the world’s leading information technology consulting companies, has had several studies indicating 65% of all CRM projects fail. That is a staggering number, considering the amount of money spent on these projects and the glamorous press that the CRM companies are receiving. Why does CRM have such a miserable track record? I’ll begin what I think will be a spirited discussion in my post here.
1. Lack of Planning and Insight.
CRM systems are implemented often without any planning. The companies purchase or subscribe to CRM systems as a cure to their customer-relationship problems, expecting the software to solve their problems for them. That is never the case. For CRM to work in an organization, an organization has to evaluate how they interact with their customers and prospects, how they capture information from those customers now and what goals they have for making that information more complete and useful before they can even consider implementing CRM in their organization.
2. IT Department drives the implementation.
Most CRM systems fail because the people who interact with the customers, such as salespeople or customer service personnel are not consulted when selecting a CRM solution. If the IT department is the principal driver in selecting the CRM system, its agenda might be at odds with the end users. For example, the IT department might be impressed with the technology of a particular CRM system, but that means very little to the person that has to use the system. In most cases, an IT department would benefit from working with a CRM consultant that understands both the IT world and the business-process world.
3. Pilot-projects aren’t done.
In larger companies with many departments and other complex requirements, it is best to select a small group that will pilot the system before rolling it out to the entire company. During the pilot phase, a company can detect whether problems with the CRM system could be solved before the company-wide implementation. You can avoid a costly mistake by identifying if the problems are fixable, or if you are up against a limitation in your chosen product that cannot be resolved without scrapping the product altogether and selecting a different solution.
4. Everyone doesn’t use the system.
In my most successful CRM implementations, everyone that contacts customers or prospects uses the system, regardless of what level they are in the company. There are no excuses for not using it. The CEO uses it and the customer service trainee uses it also. All too often, CRM systems are put into place and nobody at an executive level uses it and no one makes sure that their employees are using it either. Without the pressure to use the system from the higher-ups, the end users get the message that the CRM system isn’t very important and stop using it themselves.
5. CRM is used to distance the company from its customers.
The goal of a good CRM implementation is to get a company closer to its customers and prospects, through centralized and shared customer information, records of phone calls, face-to-face meetings and emails. All too often, though, these systems have an unintended result of distancing the company from its customers by creating another layer of bureaucracy that didn’t exist before. Just because you have a system in place doesn’t guarantee that your customers will like it.
6. The CRM system fails to evolve as the company evolves.
As your company changes, the CRM system has to evolve to meet those changes. If it can’t, your company may face significant costs and downtime if you have to move to another system, not to mention that you’ll have a high probability that much of your data won’t convert to the new system.
Choosing the proper CRM system can be an important part of your company and the choice should be made with care. In today’s market, investments have to be considered wisely and the choice of a CRM system is no exception. The wrong decision could be devastating, both financially and organizationally, so do your homework, and enlist the help of a CRM professional if you need assistance.
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Great article Aaron!
You’ve nailed them! At SalesNexus we see customer after customer who’s spent thousands of hours and dollars to end up failing to achieve their goals.
Honestly, its not easy. Having an experienced hand to guide your company through the process is key.
The most common failing of companies implementing CRM that I see is that management is not willing to make use of the CRM a requirement. They’re afraid to run off their sales staff.
Craig – I concur on the issue of requiring the users to step up and use the system.
At the end of the day, as much as people say they want to improve things, improvement is a change, and many are afraid of change.