CRM has been and continues to be a critical strategy for improving profitability, better productivity, lower costs, better customer retention and insight into behaviour and preferences of customers and prospects, no matter what the economic climate might be. Some businesses, however, still struggle to get the return-on-investment that they anticipate with their new CRM system, despite CRM success rates having markedly increased. So what are these reasons for CRM failures, and how can you avoid these problems?
Reason #1: Having a Poor Definition, or Lacking a Definition, of Success
One would suppose that companies undertaking a major CRM project would be clear and decisive about what they want it to achieve, and what ROI they want to get from it. The problem with not having a definition of success means that there’s no way to show that the initiative is giving the expected ROI, or even any at all. So to avoid this serious pitfall, be sure to create a clear case for implementing a CRM system that is unique to your business, document your current CRM situation so you have a clear baseline for comparison, and most importantly, establish criteria for success, so you can observe whether or not the CRM implementation is achieving what you intended it to achieve.
Reason #2: CRM is Viewed as an IT Project
A crucial thing to remember about a CRM implementation is that it is a business venture rather than strictly an IT project, and as such, requires as much guidance from the CEO of the company as the CIO. The CEO’s concerns about a CRM system, such as driving sales, encouraging customer loyalty, or streamlining processes, whereas the CIO thinks about implementation deadline, communication with other data systems, and budget. Both sets of concerns are equally valid, but frequently, once the CEO’s questions are adequately answered, they take a hands-off approach, and cause the implementation to be an IT project, instead of a business initiative that aligns with corporate strategy.
Reason #3: Automating a Misaligned Process
CRM systems don’t do anything supernatural; they simply automate and streamline processes that would ordinarily be time-consuming, repetitive, or difficult. They don’t alter or repair the processes if they’re misguided or broken from the start, so for a company to get a good ROI from a CRM system, the processes already in place have to be well documented and aligned with the corporate mission. As such, process alignment is arguably more important than the software; well-aligned and documented processes often result in the technological needs coming naturally, whereas software can’t help a set of processes that are poorly thought out and disorganized out of the gate. Rather than using software to impose processes that don’t fit the business, use a CRM initiative as a way of improving things like procedural clarity, alignment, and definition.
There’s a lot more than just software that goes into a CRM system’s success. Change management, initial strategy, and procedural alignment are just as important as the software itself, and will help businesses get the ROI they expect out of their CRM systems without falling prey to these major pitfalls.