Why CRMs Fail

The research is all over the place. At least half of CRM implementations fail to meet expectations. (ZDNet). Yet, more and more money is spent on CRM every year… more than $10B spent each year and growing by 10 to 20% annually. (CRM Landmark)

Why?

There are countless articles out there written to tell you how to get your CRM project right. There are thousands of CRM consultantsavailable to help you plan, implement and manage your CRM system. And still businesses keep getting it wrong.

The most commonly cited reason for failure is lack of end user adoption. In most small and medium sized businesses, that means the sales people just never start using the new CRM regularly. Within most SMBs that have recently implemented a new CRM solution, you’ll find that a few of the sales people are using the CRM heavily and just as many hardly use it at all. And so the results are very inconsistent, even within a single company.

For small and medium sized businesses, the objective of the new CRM system is normally related to basic information sharing amongst the customer facing team, sales pipeline management and marketing automation. That means virtually all the information to be managed and analyzed must come from the sales team.

And therein lies the problem. We’ve all heard “garbage in – garbage out”. Well with CRM struggles, it’s more like random input = random output.

It’s pretty simple really. If you want your customer service team to have access to the details about a new customer and maybe even a copy of the proposal the sales person sent, then the sales people have to be sure they enter that information for all their customers. If you want to be able to send an email offer to all prospects in a certain industry, then your sales team has to click the box in the CRM that indicates which industry every customer is in.

Unfortunately, management and CRM vendors doom many projects from the outset. Management has their reasons for investing in CRM technology. In a small or medium sized business, the most common objectives of management for the CRM solution are:

· Sales Activity Measurement (how many calls are getting made by each sales rep?)

· Sales Pipeline Management (how many deals are we currently chasing?)

· Team Selling Enablement (what’s going on with the XYZ Inc. deal?)

· Marketing Automation (get my company’s message in front of people more often)

So, the VP of Sales or the Business Owner and the IT guy and maybe the Marketing Admin all get together and start looking at CRM vendors. They evaluate solutions from the perspective of the cool dashboards and reports that the CRM vendors show them for managing sales pipeline, etc. After all, the manager’s not planning to input much data. Marketing looks at how the CRM system will integrate with the web site and how the CRM technology enables email blasts, etc.

If a sales person is involved in the CRM solution evaluation process, it’s usually an exercise in “getting buy-in” from sales early on. That’s a good thing but, it misses the point. Sales people aren’t normally very analytical or process oriented and so their interest in the various CRM technologies is limited to looking at the cool bells and whistles that the CRM vendor has that are meaningful to sales people.

And that, my friends, is the #1 reason why CRMs fail. The CRM vendor is happy to let all parties believe they’re going to get everything they want. Generally, all CRM solutions have much more capability that will be used in a given business. So management sees that the CRM system can do a lot of great things for them. All the things they really want and are ready to spend money on and many things that just look cool and might be useful. And the same is true for marketing, sales, customer service, etc.

If 90% of the input into the CRM system is going to come from the sales team, then what marketing and management will be able to do with the system will be directly limited by the amount of consistent input by the sales team.

Shame on CRM Vendors! They know this. But none of the largest vendors in the SMB CRM market offer a process to ensure that new users of their CRM solution align management and marketing expectations and sales input requirements. In fact, Microsoft CRM, Salesforce.com, Sugar CRM, ACT!, Goldmine and most of the brand names in CRM offer generic training for managers, marketing and sales people separately, allowing this disconnect between what sales will be inputting and what management expects to get out of the system to persist even after the purchase. If you want someone to help you get this right, they’ll put you in touch with a reseller or consultant in your area. If you’re lucky, you get someone that will keep you on the right path but, there’s not guarantee.

The fact is that many business owners and sales executives are very hesitant to require much at all of their sales people. The sales people naturally push back on using the system and argue for lowering the bar and without realizing it, management has just ensured failure. Because they’re going to give the sales people flexibility in using the CRM solution, its assured that they won’t get the management metrics in any level of detail or consistency.

What to do to ensure your CRM system succeeds!

Most searches for CRM solutions get started sort of haphazardly. Maybe a new sales recruit or marketing manager joins the team andstarts twisting your arm about it. Or maybe there’s a real challenge or opportunity in your organization that CRM is the perfect answer for. The first thing most small and medium sized businesses do is to start looking around at options. It’s natural but, fatal. Since you’ve never bought or implemented a CRM system before, you’re not sure what you need. So, to get your head around your requirements, you start looking at what capabilities are offered at the price point you have in mind. That’s a classic “tail wagging the dog” scenario.

The first thing you should do is write down the business objectives you have without regard to the CRM technology that may or may not be available to you. Try to prioritize your objectives financially. Which have the greatest potential to impact your bottom line.

Then decide what the bare minimum is for you. Which of the business objectives for your new CRM system can you live without and which ones are must haves.

Now, think about the information that will have to be input into the CRM technology in order for you to be able to extract the metrics, analytics and reports you expect. Ask yourself if the sales team will be able to input that information in a timely and efficient way.

Essentially, you’re after a map of reports and metrics you want out of the system to input into the CRM technology.

With this, you can begin to investigate CRM vendors and technologies with two sets of requirements –

1) Which CRM solution does the best job of giving me the reporting, analytics and marketing capabilities we see as adding value to our business? And…

2) Which CRM solution will allow my sales team to input the corresponding information the most efficiently?

In the end, you’ll probably find that your requirements are driven less by cost and management needs than they are by what it’s reasonable to expect your sales team to enter into your new CRM all day every day.

Rest assured that you are going to have to tell your sales team exactly what they MUST do with this new CRM system. You must define the minimum level of data entry in the CRM in detail.

At this point you may be asking yourself why CRM vendors haven’t figured out how to make this process easy for you. Well, a few have. But, the truth is that need for growth drives most software, and certainly CRM, vendors to create sales compensation plans and reseller networks that are entirely volume oriented. The CRM vendor’s concern is not how much value you get out of the solution but only that you buy their CRM technology.

As I said, a few CRM vendors have built processes that lead new customer toward an integrated solution that balances business objectives, management expectations and sales input time. It’s rare though.

At SalesNexus, our small business orientation has led us create an implementation process that helps every new customer align expectations up front and adjust training plans and user requirements accordingly. In fact, our simple process for tailoring each new CRM solution to the individual customer’s needs has led to one of the CRM industry’s best customer retention rates. We’re very proud of that.

If you’d like to learn how we ensure our customers’ success with implementing CRM solutions that meet their unique needs, call us and ask your SalesNexus representative to explain what CRM implementation services are included in your subscription at no additional charge. I think you’ll be pleasantly surprised.