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Why CRM Projects Fail?

Why CRM Projects Fail?

Top 5 Reasons Why CRM Implementations Fail and What To Do About It

Customer relationship management software (CRM) provides exciting tools for marketing and sales departments as they seek to more efficiently and productively identify, earn, qualify, and nurture leads. Between 2000 and 2005, the potential of CRM drove spending on these platforms to more than $250 billion (paywall).

Purchasing a CRM system, however, does not automatically lead to improved sales and marketing success. In fact, the implementation failure rate of these systems is often quite high (as high as 90% according to HBR).

One evaluation from MIT Sloan found that 55 to 75 percent of companies fell short of their expected ROI from their CRM systems. CIO Magazine, in 2017, estimated that an average of one-third of CRM implementations fail.

The cause of CRM implementation failure can vary from business to business. However, 5 primary reasons drive why CRM projects fail. Here is a look at all 5 of them, and how to fix them.

1) Lack of Supportive Capabilities

A CRM is a tool. As with any tool, its effectiveness depends upon how it is used. In order to effectively choose, implement, and use a customer relationship management platform, businesses must first have certain capabilities in place.

That is, businesses that are positioned to make the most of their CRM platforms are those businesses that can effectively:

  • Generate revenue
  • Capture and communicate insights about customers, competitors, and markets
  • Build effective brands
  • Develop customer relationships

Without well-established organizational processes designed to meet these marketing goals, a business is unlikely to effectively leverage their CRM technology. CRM implementation failure occurs when a business expects its customer relationship management software to automatically generate revenue, deliver insights, build brands and drive customer relationships without a knowledgeable team applying proven capabilities to their use of the software.

A better approach for businesses that wish to use their CRM effectively is to develop those capabilities within their organization, and then to purchase customer relationship management software that can support and enhance those capabilities.

2) Lack of Effective Organizational Integration

In order to deliver the greatest possible benefits, a CRM platform depends upon effective integration into an organization’s workflows, sales team, and customer relationship processes. When a CRM cannot or is not integrated into existing and successful approaches to sales and marketing, sales teams quickly become frustrated, and the CRM itself becomes less effective.

For example, one study revealed that among the departmental responses to CRMs, the sales teams reported the highest levels of dissatisfaction with the software. Why? Because they felt as if they spent hours inputting information without receiving significant benefits in return.

On the other hand, a CRM that integrates into the workflows and, as mentioned above, capabilities, that already exist within an organization delivers a seamless experience for every team member who uses it.

Consider the difference, for example, between manually inputting customer data from a website contact form into a CRM and having that CRM automatically integrate that information into a central database. Imagine the possibilities available when the CRM automatically adds follow up phone calls to a sales rep’s calendar or sends out follow-up emails triggered by certain lead actions that fit with the workflows already set up by your business.

How does a business achieve this level of integration so that the CRM saves sales teams time and energy rather than consuming more of it? Through careful consideration of their workflows and the selection of a customizable CRM with a proven ability to fit within them.

The right CRM becomes the foundation for successful workflows. You know it is doing its job when it makes your team members’ jobs easier, enables your team to devote more attention to higher-quality leads, and develops greater efficiencies within your organization.

3) CRM Investment Without Planning

Why do CRM investments fail? According to MIT Sloan, the businesses most likely to experience a CRM fail are those that invest large sums of money into customer relationship management without spending time beforehand evaluating their institutional needs and how a CRM might meet those needs.

Why a CRM fails, then, often has less to do with the capabilities of the platform and more to do with the organization’s self-understanding.

A business whose customers prefer to discuss things over the phone or in person, for example, may experience a CRM fail if it invests in software that streamlines emails and text messages.

In order to avoid CRM failed actions, a business should take stock of its marketing and sales situation before making an investment into customer relationship management software.

Careful reflection and evaluation can allow a business to align a CRM solution with their customers, workflows, and unique needs to develop a platform that is truly effective.

4) Collaboration Failure Across Departments

Why does CRM implementation fail? One of the biggest reasons is difficulty getting departments to collaborate with each other regarding the use of the CRM. In particular, it is collaboration between marketing and sales departments (or the lack thereof) that drives (or undermines) CRM success.

Marketing and sales may have different roles to play in the capturing and nurturing of leads, but both are critically important in earning leads and converting them into paying customers. Marketing needs to identify target audiences, develop strategies for reaching them effectively, implement those strategies, qualify leads, and pass them on to sales.

Sales needs to evaluate leads sent to them by marketing, nurture leads through each stage of the sales funnel, and complete the sale when the lead converts. These tasks also require sales to identify prospects that do not provide a promising source of revenue and to keep track of interactions with each potential consumer in order to streamline their trip through the sales funnel.

A CRM can help marketing and sales with each of these responsibilities. However, the CRM is most effective when sales and marketing use it, together, to create integrated approaches to earning leads and customers.

For example, GoCRM delivers all relevant information about a lead in one centralized and intuitive interface. Using this interface, sales and marketing can work together to translate this information into effective strategies and materials that can win over customers and close sales.

5) Failure to Train CRM Users

If a CRM is only as effective as the people who use it, then the question of why a CRM fails and how to fix it can also be answered with employee training. Users who do not understand the CRM, do not know how to leverage its capabilities to achieve the greatest possible benefits, or do not feel comfortable utilizing its platform are not likely to see much improvement from the CRM.

In fact, team members who do not feel comfortable using a CRM are more likely to abandon its use or to use it improperly. For example, the loss of time that occurs when an employee spends too much time figuring out a function of the CRM can outweigh any benefit that function provides the business.

In order to prevent CRM failure due to lack of training, businesses should focus on CRMs that are: 1) Easy to use and 2) Training rich. For example, GoCRM uses an intuitive interface to simplify its use and provide easy access to all relevant data on all leads and customers. Automation of tasks also simplifies the use of the CRM and saves team members time.

Simultaneously, we provide comprehensive training in the use of the CRM. Every user receives instruction in how to make the most of GoCRM so that every employee feels comfortable using GoCRM to achieve your company’s sales and marketing goals.

đź’ˇTakeaways

You do not have to become a CRM failure statistic. When applied correctly, a CRM can be an invaluable tool for improving the efficiency and success of your customer relationships. Understand the potential cause of CRM implementation failure, and know how to avoid them. Then, find a customizable, flexible, and state-of-the-art CRM, like GoCRM, to match to your organizational workflows, capabilities, processes and goals in order to enjoy all that a CRM has to offer your business.

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