In our previous article, we’ve talked about everything you need to know about Customer Relationship Management (CRM). If you haven’t read it, now is the time to check it out!
CRM entails the application of technology to organize, automate and synchronize the activities of the sales, marketing, customer service, and technical support teams, with an underlying focus on serving the customer better.
On that note, many companies expect that a CRM tool will be a silver bullet that will solve all of their sales woes, and will do so quickly. Many also believe that the change will come easily, but it probably won’t.
While it is true that a CRM can make a huge impact on a company, there are still companies that aren’t getting the ROI they were looking for from a CRM. In other words, there’s a huge gap between implementing a new CRM and reaping a return from that investment.
So, what really causes CRMs to fail? Read on and discover the 7 most common reasons for CRM implementation failure.
1. Poorly Defined Objectives For CRM
For a CRM to be effective, it requires alignment with the enterprise’s core strategy. The prerequisite for this includes clear-cut organizational goals in the first place, understanding them, and then expressing them in clear, specific and measurable terms. The CRM should then incorporate components that further such goals.
Moreover, a long-term CRM strategy must be established. What does your firm want to accomplish with the adoption and implementation of a new CRM system? You need to understand where you are starting from, where you want to go and the shortest route to get there. Your company’s business strategy architects the competitive advantages and go to market plans that strive to make the company successful.
Your objective should engineer customer-facing outcomes that align and support the company’s business strategy. That may include goals such as increased customer acquisitions, customer share, or cost savings goals.
Otherwise, if your objectives are set without a clearly defined process, how will you measure customer relationship improvement? How will you know if your CRM implementation is a success or a waste of money?
2. Customization Issues
In many organizations, the people who use the CRM system the most are not technical people. If you choose a program that your users don’t find intuitive or simple to use, they’ll find ways to avoid it. You’ll lose valuable data and your business will suffer.
Over-customization of the software is equally counterproductive, as the software runs the risk of losing much of its core functionality. This problem is usually caused by picking the wrong technology vendor.
Sometimes you end up with a stripped-down version of a product designed with someone else in mind. Or you end up paying for a boatload of features you don’t need. You can avoid picking the wrong software by clarifying your needs before you go shopping for a new provider.
In conclusion, a good CRM solution should be customized to suit your organization’s specific needs. A good development approach is to have an element of flexibility inbuilt to make changes as required.
3. Trying To Do Too Much At A Time
Once again, a formal strategy is a critical component of any successful CRM implementation. Having a well-designed plan seems obvious, but the lack of planning is often cited as one of the top reasons for CRM failure.
Therefore, trying too much too soon or sudden implementation of changes can derail the system. A good approach is to introduce the CRM in stages, launching small components, allowing the stakeholders to become accustomed to it, and gradually upgrade.
CRM is not a one-time implementation. Success depends on a continuous and on-going cycle of analysis, user feedback, and updates. Such a process would add new functionality, update processes, streamline workflow, automate processes, drive data quality and do much, helping to keep it relevant.
If your organization attempts to implement everything at once, it is doomed to fail; it can send the system down a fatal path.
4. Approaching CRM As A Technology-Only Solution
Many companies position CRM as a software implementation project and immediately turn it over to the IT, Sales, or Marketing team to manage. This is a mistake and should serve as a red flag. For instance, your organization should build a cross-functional team in sales, marketing, inside sales, customer service, and so on, to select and pilot the CRM system.
Putting processes into place to use CRM software is essential to its success. Without a strong introduction to the benefits, your employees will not do the extra work initially. They will most likely complain about the inefficiencies of doing the tasks in a new way.
For a greater chance of success, CRMs need to be viewed and managed as a sales solution and approached with a process in front of mind, and not as a technology-only solution. When a CRM tool is not defined properly, the entire initiative can cave in on itself.
Remember, there is a technology piece and a people piece to any new technology adoption.
5. Scope Creep
Any CRM system is vulnerable to the evils of scope creep — the way a project’s scope will slowly expand and grow unfocused. Hence, your organization must actively manage scope in a disciplined way and at a detailed level.
When features are deployed with a narrow focus, they function seamlessly and can result in improved operations, workflows, and revenue. However, this success may spur a desire to see what else a CRM package is capable of, possibly prompting the emergence of associated problems. It can be tempting to continue adding objectives and making minor tweaks.
Because of that, scope creep can throw a wrench into the best-designed CRMs. It can lead to reduced efficiency and analysis paralysis. By maintaining a narrow focus on the project’s scope and ensuring any changes are completely critical, scope creep can be entirely avoided.
6. Lack Of Leadership
Another major reason for the failure of CRM initiatives is a lack of leadership. The end goal of implementing a CRM solution is to have company employees actually use it.
Ensuring high CRM user adoption has a lot to do with good executive leadership. No company wants to go through the process of selecting and implementing a CRM solution only to have no one use it.
Avoiding that mistake is why a company leader must be engaged in and committed to the process from the outset of the decision to buy a CRM system. Otherwise, fractured leadership may limit its effectiveness and possibly even foster continued resentment among other employees.
In a nutshell, successfully implementing a new CRM platform requires leadership and vision at all stages, from buying to implementation to managing ongoing business processes. Having executive leadership establishes commitment and encourages collaboration between departments. Without it, your project is likely doomed from the start.
7. Lack Of Commitment To CRM Adoption
Once you have executive leadership at the helm, commitment is firm and collaboration between all departments such as sales, marketing, and customer service. If employees don’t have this kind of support, major problems are bound to occur.
Whichever CRM you have, your employees are going to need to use it. If they are not committed and not looking forward to using the system, all benefits will be negated. When that resistance fails to be quickly and properly addressed, you can quickly pass a tipping point whereby recovery is lost and the CRM system is destined for failure.
When businesses find that employees aren’t using the CRM fully, it is usually due to the staff not having accepted the new software. The lack of commitment may also set in due to poor communication, which leaves the objectives and methodology unclear, or lack of training to deliver the necessary expertise to the required staff.
Therefore, employees should not see a CRM tool as purely being a new tool for management. Whichever department they are in, they need to see how they will benefit. Looking to the future, they should also be informed of results, putting in place an ongoing report/feedback strategy.
Running successful CRM initiatives and ensuring long-term success takes vision, patience and a willingness to learn from people both inside and outside of your organization.
Companies cannot just install software and expect everything will fall smoothly into place. Planning for the shift is critical, and that includes ensuring that your team is using and taking full advantage of the benefits that CRM can provide.
You can then work on creating a prioritized set of detailed initiatives and corresponding actions that will make up your plan. Identify the people responsible, create a timeline, and establish key metrics.
Think about the problems that the CRM needs to tackle and what your goals are. By setting measurable objectives and having a clear vision of where your company should be after successful implementation, then you have a clear guide to follow. Look ahead, see where you need to be and then plot a path towards success.
Remember that failing is not compulsory. By taking the time to understand what a CRM does and looking at past mistakes made by others, then following a few logical processes, disappointment can be avoided.
Like what you read? For more information on how to avoid CRM failure, or for a CRM software consultation, please contact us or leave a comment below. We would be happy to help!
Thank you for creating this list of CRM software. We have tried most of them and then came to know about ConvergeHub. This offers a very simple to use platform with Sales, Marketing, Customer Service, Billing, and enterprise-class Automation engine. We have also found out that it is rated as one of the top 10 CRMs for 2021 by ZDNet.