Six Reasons Why CRM Initiatives Fail

There can be many reasons why CRM initiatives fail but here we’re going to focus specifically on six of them pertaining to small businesses and startups. Brian Halligan has been implementing and using CRM systems for his whole career and has some good points.

"Most small businesses I deal with have either tried and failed on a CRM
implementation or are getting marginal value from what they consider a
sunk cost in software and human brain-damage from their implementation."

Here are short summaries of the six reasons why CRM initiatives fail:

  • Counting v. Creating Customers – The current crop of CRM systems are very useful for large companies
    with thousands of customers that want to "count" them in interesting
    ways. If you are like most small businesses, you probably only have
    tens or hundreds of customers — your main problem is finding new
    customers and efficiently growing existing customers, not counting
    customers in interesting ways.
  • Measuring the Wrong Thing – CRM measures the activities of prospects after they have
    "self-selected" in some way by calling the your office or filling in
    your form somewhere.
  • Stuctured v. Unstructured DataCRM systems are essentially databases with customer oriented forms
    built on top. They are very good at capturing and organizing structured
    information, but are horrific at capturing and organizing unstructured
  • Ease-of-UseMost CRM vendors say their product is "easy-to-use." The reality is it
    is easy to use if you have dedicated "operations" people or a dedicated
    CRM IT person to figure out how to do the hard/useful stuff.
  • "Feeding the Monster"Like many knowledge management initiatives, CRM requires end-users to
    take actions that are not part of their natural work process in order
    to "update" the system. After all, CRM output is only as good as the
    input — "garbage in, garbage out."
  • Transactional Systems v. Solution/Relationship Systems – Today’s CRM is more useful for transactional (i.e. call center) types
    of companies than it is for small businesses who have client
    relationships that are more solution oriented in nature.

Article Source

Author: Brian Halligan was inspired to start HubSpot
because his current toolset of helping small businesses take advantage of the transformative
effects of the internet to grow their business was poor.

2 thoughts on “Six Reasons Why CRM Initiatives Fail”

  1. Research has shown that many company executives declare CRM a “Failure” because their employees aren’t entering in the information they were hoping for. After being a sales rep for over 20 years and using technology to manage my customers since 1994, I lead a major MS CRM initiative at my company. The technology worked, we gave mobile access to reps, the data was cleaned and we had executive buy-in. BUT in the end, the reps weren’t using CRM and had all the excuses we have become used to. I then tackled a research project to determine the unstated reasons employees weren’t using CRM. My research “The CRM Dilemma” was a huge eye-opener for me that points the blame on the huge aversion to activity controls by sales reps (And all of us for that matter)

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