When a Customer Relationship Management solution is implemented properly, it can be an invaluable resource for growing your business and maintaining great customer service. So, why do so many CRM systems fail and what are some of the pitfalls you can avoid?
CRM systems are designed to be a tremendous help to your business instead of a hindrance to daily operations and customer retention. When the system is implemented properly and managed in the right way, most small to medium sized business owners wonder how they survived without it.
For more than ten years, research studies conducted by major firms such as Gartner, Forrester, IDC (International Data Corporation) and AMR Research (Advanced Market Research), have shown that between twenty and seventy percent of CRM projects have failed shortly after implementation. And, despite the outstanding reviews for many CRM systems, many of them fail during or after implementation mostly due to the failure of due diligence on the part of the business purchasing the system.
When a CRM system fails, the end result is chronic disruption in daily operations, customer frustration, financial loss, and damage to your company reputation, to name a few problems. After consistent reports by research firms regarding CRM failure, many SMBs become wary of CRM systems because they fear they will wreak havoc with daily functions within an organisation.
The truth is, a well-designed and properly implemented and managed CRM system is part of the cost of successfully doing business on a daily basis. Any SMB that does not adopt an efficient strategy for serving customers, along with the necessary support for management and automation, is at risk for losing business to competing companies that have properly implemented CRM and automated a lot of the processes. Although choosing the right CRM system is a critical part of the process, knowing how to deploy the system and identifying the challenges are also an important part of the process as well.
That said, let’s talk about the key reasons why CRM projects fail along with how to avoid some of the pitfalls that contribute to a failed system.
1. Lack of Visibility
If you have ever worked in change management, it will quickly become apparent that any type of change within an organisation does not come easy. What makes it even more difficult is when your organisation fails to create visibility from the very beginning. Visibility plays an important role in how well the senior management and staff will embrace the change and support the initiative.
The way to avoid this is to become committed to the project’s success from the very beginning and maintain visibility among senior management, staff, and key stakeholders in your organisation. The minute the visibility wanes, the better the chances of CRM project failure since it will be difficult to get the cooperation necessary to launch the project from the ground up.
2. Failure to Operate as a Team
Many companies fail to get people fully involved in the decision making process that comes from a deploying a team of key people within the organisation. The failure statistics we discussed earlier result mainly from purchase decisions that are done without conducting the proper research and talking to the end users who will be using the system to run daily business functions. The end result is a CRM system that does not accurately meet daily operational requirements.
The information you gather with your team must be accurate and high quality in order for you to trust in it and act upon it. Gathering of data that is inaccurate, incomplete, or duplicated can result in a premature project delay and lead to CRM project failure.
It is very important to organise a team early on in the project with a group of people that have expertise in specific areas of your company. Each person can conduct the research and talk to the end users to determine what functions are necessary, what processes can be improved through automation, and some of the current issues the end users face on a daily basis. Thorough research and analysis results in a system that is easy to use, provides specific functions that help to streamline daily operations, better data management, automated processes that save time, and customised functions that meet specific requirements for your organisation.
3. Failure to Choose the Right Software Solution
CRM systems are offered in a variety of different types, each of which offers an array of different functions. Almost all CRM software solutions are customisable to avoid the problem of wasted resources you pay for but are never used. The reason software solutions can cause your CRM system to fail is the fact that many SMBs choose the solutions based on subjective standards, instead of taking specific functions into consideration which will meet specific business requirements.
Instead of focusing on the numerous unnecessary functions included in the CRM software, you should concentrate on the criteria you set prior to choosing the software and then look for the capabilities in the solution to see if they appropriately meet specific business functions. Going into the decision making process prepared in advance with daily problems that need to be solved will help you to avoid the sales pitches that often lead you down the wrong path and ultimately to CRM failure.
The right software solution should be determined from the information you gathered during the teamwork phase of the project. The information should be carefully analysed to ensure it meets important business objectives.
4. Failure to Set Clear Goals and Objectives
Failure to set clear goals and objectives along with anticipated outcomes for each is one of the primary reasons CRM projects fail. More often than not, the goals and objective lack definition with no thought given to a measurable outcome. This is the equivalent of trying to navigate in the darkness without a flash-light or compass.
Each goal should be set with specific milestones that will be used to achieve the end result. Each milestone should be measurable to determine the expected outcome. In turn, this will allow you to accurately measure the various stages of software deployment that will ensure CRM success.
5. Failure to View a CRM Project as Part of the Entire Business Culture
One of the common mistakes SMBs make is to leave the selection of the CRM system in the hands of the IT department. Many organisations believe a CRM solution is strictly IT without giving any consideration to how it will impact daily business operations and the end user. They simply let the IT department choose and implement the solution. Then they wonder why the end users do not like to use it, customers are frustrated, and daily operations slow down.
To avoid this pitfall, it is important to view a CRM project as part of the entire company environment. This means using effective planning from the very beginning and using some of the steps we have discussed earlier in this article.
6. Failure to Consider the Existing IT Infrastructure
Another reason CRM projects fail is the disregard for any existing IT infrastructure and how it will impact a new CRM solution. Although CRM solutions are very advanced, if you do not examine and analyse existing technology, the end result could be project delays, glitches in the system, incompatibility issues, and many other problems that can crop up once deployment is under-way. This can cause unanticipated costs or a solution that is virtually impossible to implement.
Instead, it is better to invest the time to go through your existing infrastructure and consider its use with different types of CRM solutions. The solutions can include industry specific CRM, open source, CRM on demand with a hosted provider, or a solution that you deploy on the premises. Work with your IT department to identify the challenges that can occur with legacy systems and new CRM systems that offer mobile and social technologies, customisation with legacy technologies, upgrades, and other services.
7. Failure to Anticipate End User Challenges and Provide Training
Companies who have taken the steps we described earlier but failed to anticipate end user challenges and provide adequate training, have experienced failure with CRM systems. If the end user does not know how to use specific functions and challenges are not identified before and after training, the project will fail to meet daily business requirements.
To avoid the pitfalls associated with frustrated staff that are not using the system because they find it too complex, make sure you provide proper training on the new system along with a refresher course to address any challenges that may crop up after the initial training. Talk to other companies that are using the system and the solutions vendor to learn all you can about the challenges typically encountered by the end user.
8. Failure to Deploy the System in Increments
It is a common practice for companies of all sizes to deploy all of the modules in a CRM system simultaneously. This is often the equivalent of biting off more than you can chew and creates more new business processes than the typical SMB can handle. It also leads to problems with cross-functions that relate to one another in the system.
A CRM system that has been deployed successfully is implemented in increments one module at a time before moving on to the next. Once you have one module working successfully, then you can deploy another module along with the necessary training and support.
Deployment should happen in phases just like the other steps outlined in this article. It takes more time but the pay-off is great when you finally have a successful solution in place that the end users are willing to use on a daily basis.
As the old saying goes, “Anything worth doing is worth doing right the first time around.” CRM systems can really take your business to the next level if you exercise patience and invest the time to implement a solution properly. Many SMBs give into the temptation to get moving forward as quickly as possible which is why most CRM systems fail. If you use a systematic approach, you will end up with a CRM solution that is easy to use, easy to manage, and easy to upgrade. The cost savings that results from carefully planning will also improve your ROI as well.
About the Author
Our CRM is a professional software development company. We provide businesses across London and the Home Counties with the original CRM software application for Microsoft SharePoint.