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Why CRM fails

The effectiveness of software as a business solution directly depends on managerial competency. Learn about some poor decisions that can make your CRM software a waste of money. 

Lack of company management’s commitment to CRM integration

One large international company spent several million roubles to implement Microsoft Dynamics. Later, the company contacted us with a request to integrate a new system, as that one did not work.   

After the company’s managers explained to us why they decided that the CRM failed and how they expected it to work, we understood that they could not effectively use it due to the complicated interface. That’s why the system failed to perform properly. 

It often happens if the CRM software is installed by a contractor, a system vendor and an IT department, without a business decision-maker being involved in the process. Managers see this just as a purchase of new office equipment, not a change in the approach to business, thinking employees would learn how to benefit from the new sophisticated tool.   

The system could have worked well if business customers were involved in creating a technical assignment and specified exact business needs.     

Poorly tuned business processes and lack of responsibility 

Companies often fail to fully benefit from CRM capabilities as their business processes are poorly configured and/or responsibilities are not assigned.

For example, a company that has several business units with different clients can increase sales value using an upselling technique. CRM can help with this. But if a business process to exchange customer data between the units is not set up properly, it will not work. Sad but true, managers of business divisions often think that sales of add-on products happen without their participation and that they are not responsible for this.

If the company clearly sets a goal for every unit to improve revenues using upselling programs and defines KPIs for that, it can succeed. And a CRM program could help it coordinate the activities of business units. 

Narrow view of customer’s life

CRM not only enables customer data storage and management but also serves as a basis for generating new data and assumptions. It works only if this data is reliable. After analyzing the information about the client, you can make records of the whole company or related business units within the company. United records can provide a broader view of the company’s or customer’s needs, and, consequently, offer your customers more and improve your sales.         

But if you don’t create a proper business process for group records and don’t set yourself a goal of communicating new offers to a broader spectrum of business units, then every single manager will focus solely on his/her responsibilities without seeing the bigger business picture.      

Managers are not in the process of selecting a CRM system

As a matter of fact, CRC is a software solution. It means that it is an IT team that should be responsible for selecting the right system. However, as this software is aimed at improving your business, managers must be also involved in the selection process. An IT department should be responsible for some technical aspects, such as failure safety, tech stack, cybersecurity, data flow rate and others.   

Business goals and requirements are a cornerstone for the successful integration of the CRM solution. Only competent managers, knowing all the details of the business process, are able to develop these goals and requirements. 

Unfortunately, business decision makers often ignore this aspect, relying on their IT specialists. If the latter are not initiative enough to collect business requirements, the selection of the CRM system becomes a mere formality. This approach will not bring the desired results.     

 Lack of analytics transparency

There is another problem that can arise due to a lack of understanding of the goals and process of using CRM in business. For example, a company integrated an expensive CRM system for lead generation. In practice, those who are instructed to perform this task, are not aware of the lead processing and lead funnel organization due to opaque reporting. Sometimes, a lead manager does not have access to analytics, receiving information about the customer journey unsystematically and accidentally.

If the initial task was to trace your leads movement through the funnel and accelerate this process, the CRM system would have been configured differently.

All these problems have one root. CRM was introduced for solving some minor or applied problems rather than focusing on strategic goals aimed at improving CX and increasing LTV. If managers, even before choosing and buying a particular CRM system, had developed a strategy and tactics for improving CX, they could have avoided these poor decisions and waste of money.