What is a CRM and Why do they Fail?

Using a CRM effectively means a full organizational commitment over a long term. That shouldn’t scare you off. After all, the same is true with the adoption of any technology. That commitment of time and energy will pay off in improved customer relations, better departmental interoperability, and more sales.

Have you dreamt of having a machine that could maintain relationships with all your customers and found new ones for you, too? That’s what a lot of people think a Customer Relationship Management (CRM) tool will do for them, but the reality is that CRMs fail businesses often and it happens for a myriad of reasons. 

Without the proper planning and policies in place, a CRM will not only be ineffective, but add confusion and complexity to your business. Here are some pitfalls to avoid.

What does a CRM do?  

A customer relationship management tool is any technology that manages your relationships with customers and potential customers. It enables you to get a handle on all the individual people you interact with throughout the sales process. 

CRM tools are meant for anyone in a business to have a central point of data about customers. They can be used by sales departments, business development, customer service, or any other component of your company. They allow you to ensure that no important customer data gets lost and that your organization stays on the same page.

Why is a CRM important?

Perhaps the most important thing a business can do is get more customers. You want to retain your existing customers and acquire new ones. The more information you can collect on those customers, the better. And the more you can have that information available and in a useful form for every department in your company, even better. That’s a lot to manage and a lot of different needs to address. 

Why do CRMs fail and how can they succeed?

Like any complex system, there are lots of reasons a CRM can fail a company. A few top contenders are:

  • Staff not committing to using it: It sounds obvious, but if every member of your team doesn’t use it, your CRM is doomed. There are a number of reasons they may not use it, for example, maybe it’s not user-friendly and difficult to maneuver or maybe it doesn’t integrate well with the existing workflow. 

Training your staff can help with a lot of this, but it’s also important to bring them into the initial design and testing of the system. They are the people who you want using the system, so why not have them help create it?

  • No purpose: It’s not enough to just set up a CRM and hope for the best. A CRM system needs to be implemented with clear goals and purpose. Do you want to make sure you don’t lose customers who complain about your service? Do you need to have sales leads connected across departments? Do you want a face and story for every contact your company has? These are the questions to ask yourself.

Related to this is the need for quantifiable metrics for success. How do you know when your CRM is succeeding or – perhaps more importantly – failing?

  • Outgrowing it: Your company is going to change over time. This means your goals, your audience, and maybe even your service will change as well. A CRM set up a year ago may no longer make sense for who you are now. Make sure your CRM can adapt with you.

This may mean having a team devoted to monitoring the CRM’s success and providing modifications when it makes sense. 

  • Bad data: As the saying goes, garbage in results in garbage out. You want to make sure your data is accurate and clean enough to be analyzed and useful. This will help with employee buy-in as well.

This can mean monitoring your data collection and providing clear direction as to how you want it done. 

Moving forward 

Using a CRM effectively means a full organizational commitment over a long term. That shouldn’t scare you off. After all, the same is true with the adoption of any technology. That commitment of time and energy will pay off in improved customer relations, better departmental interoperability, and more sales.

FAQs

What does a CRM do? 

A customer relationship management tool is any technology that manages your relationships with your customers and potential customers. 

What are the benefits of CRM? Why is CRM needed? Why is CRM important?

CRMs enable you to get a handle on all the individual people you interact with in the course of sales. They allow you to ensure that no important customer data gets lost and that your organization stays on the same page. A CRM is important because it helps you to retain your existing customers and acquire new ones by collecting important data about them, and have that information available and in a useful form for every department in your company. 

Why does CRM implementation fail? 

CRMs fail for many reasons. For example, your staff may not be committed to using it, it may not have been set up with clear goals or purpose, your company has outgrown it, or the data collected is either inaccurate or not useful. 

What makes for CRM system success? 

To successfully implement a CRM tool, you can involve your employees that will be using the system most in the initial design, invest in training them on how to properly use the tool, provide clear direction on how to collect data and input it accurately, and have quantifiable metrics to determine its success.

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