Why CRM Projects Fail To Deliver On The Promise
January 10, 2008
Why do companies spend the time and money to implement a Customer Relationship Management system? The reasons vary, but near the top of the list you’ll almost always find:
- Generate more sales.
- Get control of their contacts with a central database.
- Reduce operating inefficiencies and costs.
Companies get sold on how slick everything fits together and the flashy reports that will give magical insight into their business. CRM demos are designed to give maximum WOW factor and all of the scenarios used in the sales presentation are tailored to show off the CRM system at its very best and completely side step any product deficiencies. Those selling CRM systems get good at selling the “sizzle”.
However, the “steak” usually falls well short of expectations. And that’s because the sales process they’re using has been purposely designed to distract you from a critical fact.
More on that later…but first…
Most of the resources (time, money, patience and political capital) get burned up just trying to get a system installed and users using it in a minimal way. This means that very little enthusiasm for the project is left to get into the really meaningful and valuable aspects of a CRM system.
If you think of a mining company that has just found a rich gold deposit deep within the earth; they understand a very important distinction that makes all of the difference between success and failure. Once a gold deposit is found, most of the investment in the mine is to move equipment in, build the infrastructure and dig to where the gold is. Most of the time and money goes into developing the site without any gold coming out. Only after the site is ready does the business of mining gold begin. Successful mines do not confuse set-up with production.
With your CRM project, you need to understand that there is a set-up phase and a production phase. You need a clear plan for both phases. Most companies only plan around buying, installing and training and fail to have a plan for production.
Ask yourself: “How, specifically, are we going to use our CRM system to achieve our goals:
- How, specifically, is a CRM system going to generate more sales for us?
- How, specifically, is a CRM system going to give us more control of our contacts?
- How, specifically, is a CRM system going to reduce our operating inefficiencies and costs?
Your CRM project should not start until you have a very clear and detailed answer to that question.
Now, experience tells me that even when given this advice, companies are pressing ahead with their project without taking the time to answer that question. The warning to stop and think it through will go unheeded.
Most small, entrepreneurial companies that are used to running on lean budgets and making decisions quickly find it difficult to stop and ask questions that sound simple but are actually difficult to answer. It can be a very frustrating, very aggravating process to figure out exactly how a CRM system is going to pay-off. If you understand and accept that fact, then getting through it becomes much easier.
I call it the Leadership Challenge. And this is where all successful CRM projects must start. This is where CRM begins with philosophy and not software. This is where CRM is about organizing your business around the idea that:
“If all we do is born out of a desire to Identify, Attract and Retain our Most Profitable Customer, then we will be a successful company.”
Of course, this is not what the people trying to sell you a CRM system want you to hear. They want you to get signed-up on a trial period…they want you to defer this thinking until after you’ve got the system in. They want you to pay them now and think about it later. Of course they do…they make no money from you internal soul searching, mapping out processes and really understanding your customer and how it relates to your business. They make their money when you buy software and implementation services.
Their sales process is at odds with your buying process. And your buying process should begin only after you’ve got a very clear understanding of your relationship to your customer and how adopting a CRM system is going to help you achieve your business goals.