CRM Failures and Reasons for Failure

CRM Strategies Which Do Not Follow Proven Methodologies Will Fail

Apr 16, 2009

Organizations which become complacent about developing and implementing a CRM Solution will not be successful in achieving the anticipated results.

Some organizations spend months of staff resources attempting to justify the initial data warehouse and subsequent CRM solution expenditures, and then become complacent, immersed in the technology and its projects. When the usage grows and the system grinds to a halt, corporate management may challenge requests for more capacity. This issue can be addressed by following a proven development path, which includes the following key elements:

A Gradual Process

There is a tendency for some vendors and consultants of software solutions to focus on CRM as a ‘trans-organizational strategy,’ requiring immediate commitment throughout the organization and rapid re-engineering of processes and philosophies to make the customer the focus of all activities. In reality, in many cases the CRM process will be more readily accepted by organizations if the process is a more gradual one, building from a series of data marts to an enterprise-wide data warehouse and CRM solution.

This methodology is highly recommended for those organizations that are just embarking on a CRM solution, as opposed to those companies that have already installed a data warehouse, or have already tested the waters with a data mart, and are now prepared to embark on a corporate-wide CRM strategy.

When CRM is only seen as a solution that needs to permeate all aspects of an organization’s activities to be effective, there is a natural tendency to want to roll it out all at once in what might be called the ‘big bang’ approach. Too often, the big bang turns out to be a big mess!

Facing Challenges

Organizations confronted with more change than they can handle at one time, may find that the challenges faced by employees are exceeded by the challenges faced by the software. Because of the complex nature of even a modest CRM solution, successful CRM implementation requires above average consulting. Vendors tend to want to solve all the problems at once, and while consultants can assist in analyzing a business and its processes, there are more issues to be considered addressed and solved. The chosen CRM solution needs to be implemented, with three objectives:

Believe in CRM

If those involved in the development and implementation of a CRM solution do not firmly believe in the long-term practicality and benefits, and the capability of the solution to improve customer relations and enhance profitability, the path to a successful implementation will not be easy. An organization has to believe in its underlying proposition of improving customer relations. It’s more than software and digital switching systems. A customer-focused mindset must take root in the organization and this takes time. Ideally, it should begin well before the CRM solution is rolled out. Employees require the skill sets to serve customers better; senior executives must show the leadership that encourages a customer-centric culture.

Customer Service: More Than a Slogan

There must be incentives for people to believe in CRM. Customer service has to be more than a slogan, therefore, tangible benefits, whether in data mining that allows sales and marketing to hone their efforts, or in measurable successes in repeat customers and overall satisfaction, have to be seen and appreciated. Advances in technology tend to move at breakneck speed- it is often said that an Internet “year” lasts about four months. But the frantic pace of development doesn’t mean that implementation should also be frantic

CRM is about cultivating a long-term relationship with the customer by enhancing the value of a company’s products or services, therefore, the process of implementing CRM should be approached as a long-term strategy. If it is not, the dangers of a failed CRM solution which does not deliver as promised, are very real, leading to a dissatisfied management and frustrated employees.

The copyright of the article CRM Failures and Reasons for Failure in Strategic Business Planning is owned by Duane Sharp. Permission to republish CRM Failures and Reasons for Failure in print or online must be granted by the author in writing.