Why CRM Software is Failing Sellers
The promise of CRM (customer relationship management software) was that it would automate the selling process, help salespeople keep track of their prospects, remind them of where they are in their sales pursuits, and generally turn a physical Rolodex card into an interactive tool that is perpetually up-to-date, accessible, and in the end helps a salesperson sell more.
The reality has fallen short, and the dream of salesforce automation has turned into the nightmare of what my colleague Nate Skinner calls “salesforce administration.”
Denis Pombriant framed the issue as a competitive roadblock for business in a recent Harvard Business Review article: “How can companies expect to compete in the digital age with outdated systems that no one wants to use? How can employees properly serve customers when performing even basic functions is as frustrating as a trip to the DMV?”
The bane of a salesperson’s existence
I will discuss what CRM should really accomplish for sellers in my next article, but today I’m simply going to vent a little about how CRM is failing us. Because really, I know from personal experience that CRM has turned into a monthly chore that doesn’t make anyone happy. And I’m not alone; research by Beagle Research shows that?66% of sellers would rather clean the bathroom than update their CRM system!
CRM was supposed to help sellers sell more to new and existing customers, and to close more deals with prospects in a shorter time frame by guiding them through the sales journey. But it doesn’t do that.?
Instead, what it does is force salespeople to update the system at the end of every month, just in order to satisfy their managers. The CRM isn’t giving them updates – they’re just updating the CRM. It’s as if at the end of every day, I wrote out a to-do list itemizing everything I had done that day and then immediately checked each of them off. Sure, the exercise might make me feel good about how productive I’d been that day, but it hasn’t actually helped me do those things or get them accomplished faster.
Well, you might say, sales managers do need some kind of forensics in order to make sales projections they can share with upper management. But most of those projections are wildly inaccurate.?
Why? In a CRM system, as any user can tell you, you’re asked to rank every deal according to your likelihood of closing a deal on a scale of one to ten (usually six or seven discrete stages) where one means the prospect hasn’t been called yet, ten, when a deal has been closed.?
So deal prospects come in as a one, and the salesperson updates the status to two once the first call is made. In theory, the salesperson should update the ranking every time they think the situation has evolved, but in reality, they don’t have time to do this. They need to place another call. The salesperson doesn’t actually update the number until a sale is truly imminent, at which point they skip several stages and update it to five. Managers cannot rely on numbers that jerk forward from two to five for any meaningful projections – but they do it anyway because they derive a false sense of confidence from the system.
By the way, another vaunted advantage of CRM was that it helped ensure businesses that customers didn’t walk out the door when a salesperson took a job with another company. But what is the value of a stale customer list in a corporate database when the real information is on the salesperson’s smartphone?
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Let’s not forget that CRM was invented long before the rise of the smartphone, and today’s salespeople have all their useful contacts in their pockets. They don’t need a separate application to tell them who their contacts are.
CRM looks backwards, not forward
Why does CRM get more expensive every year if the value proposition is becoming stale? Today’s legacy cloud CRM systems don’t provide salespeople with information they need to sell more. In the best of cases, it reminds them that someone’s birthday is coming up, which is nice, but it doesn’t tell them whether that someone has been happy, been issued a refund, or could actually be in need of something they sell based on all their other activities.
It also doesn’t tell them why prospects were qualified in the first place; or suggest a great reference customer so when the salesperson talks to the customer, they have a handy example of another customer in the same industry who can act as a reference the customer can relate to.?
This failure of traditional CRM has never been more disappointing. The pandemic has accelerated a trend towards digital buying – particularly in the B2B space. According to?McKinsey, “the pandemic has cemented omnichannel interactions as the predominant path for B2B sales.”
According to?Gartner, “the typical buying group for a complex B2B solution involves six to 10 decision makers? each armed with four or five pieces of information they've gathered independently and must deconflict with the group. And in today’s world of B2B buying, there is no handoff from marketing to sales, or digital to in-person. It’s a parallel process, not a serial one.” Only 17% of the buying process is spent with sales reps.
This means customers do more research before speaking to a rep than ever before, are more empowered to make buying decisions, and are more comfortable spending in excess of $50,000 on a credit card.
The implication for sellers is obvious. They have to be more responsive, have answers to questions at their fingertips, and be prepared to close deals quickly. They have to maximize that 17%!
This means sales leadership have to ensure their teams are fully armed to meet the digital and omnichannel customers wherever they are.?
The current generation of CRM tools simply don’t do that. It’s time for something new; what that looks like is something I’ll elaborate on in my next article.
In the meantime, though, please share your thoughts on CRM and selling, and what an effective selling tool might look like. You can add these to the comments, or simply reach out to me directly.
Telecom and enterprise industry analyst
3 年A couple of additional articles on this subject, by some guy: Ricoh leader lauds the indispensable inside sales team—and says CRM isn’t doing enough for them https://www.oracle.com/news/connect/ricoh-leader-lauds-indispensable-sales-team.html Inside sellers work heroically to close deals https://www.oracle.com/news/connect/inside-sellers-work-heroically-to-close-deals.html
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Application Support Manager at GSOA - Dimension Data- CRM CRM Architect/CRM Domain Specialization - Siebel/Salesforce/Microsoft CRM/Bitrix CRM
3 年Hi Rob, - CRM is a company strategy to engage with its Customers so it does not only involve a System(CRM Software), To make any software successful you need a Sync of People Process and technology. So to blame a software for a failure in a Company would be too harsh. I would understand Sales people complaining about System slowness or notifications not coming through or correct figures not showing up etc but those things can always be rectified. Few points from your articles like - 1 - The promise of?CRM?(customer relationship management software) was that it would automate the selling process, help salespeople keep track of their prospects, remind them of where they are in their sales pursuits, and generally turn a physical Rolodex card into an interactive tool that is perpetually up-to-date, accessible, and in the end helps a salesperson sell more. Any Basic CRM system in todays day does it for you, Sales people can keep track of their prospects they get reminders, they can even get reminders if something is in service cycle and a need arise for an extra part or extra solution for the customers which in turn becomes a new sale, But unless sales person dosnt keep the System upto date or refuses to update the system all this will not happen. 2- So deal prospects come in as a one, and the salesperson updates the status to two once the first call is made. In theory, the salesperson should update the ranking every time they think the situation has evolved, but in reality, they don’t have time to do this. They need to place another call. The salesperson doesn’t actually update the number until a sale is truly imminent, at which point they skip several stages and update it to five.? Above point is purely a comapny strategy - you can only have two slaes stages or you can have 10 it doesnt have anything to do with CRM system its purely a company process, so if only tow stages work for a company they can simply have two stages for say - Calling and Won. 3-By the way, another vaunted advantage of CRM was that it helped ensure businesses that customers didn’t walk out the door when a salesperson took a job with another company. But what is the value of a stale customer list in a corporate database when the real information is on the salesperson’s smartphone? CRM has your customers whole view from their Address to contact details to what they bought what went into service, what problems customers had with your product, how he was helped, what was he quoted for what he purchased and list is long, a sales person mobile phone generally have contact number of a customer, and when a new Sales person joins it is very quick and easy for him to get a hang of Customers he will start dealing with. 4- In the best of cases, it reminds them that someone’s birthday is coming up, which is nice, but it doesn’t tell them whether that someone has been happy, been issued a refund, or could actually be in need of something they sell based on all their other activities. Again basic CRM system does that too Customer talking to a service rep might need something which can be directed towards sales rep easily who can then pursue that deal, or things like generating a Lead(Prospect) from Companies website request which in todays CRM System can sit as Lead and again a sales rep can make use of it. So these tools are to enable sales rep, but they need information(Data) in them and that data is responsibility of a sales rep. These tools enable intra company process flows better and fast (Marketing/Sales/Service) which can always lead to more selling better servicing to customers. So there is a lot which should go into a companies CRM strategy - starting from putting down CRM objectives (What they want to achieve out of it). Discipline among Sales rep to take ownership of Data (infomation) going into a system Which CRM System can best suit a company (Guys who pitch a CRM system are also Sales people and they can tell you 50 benefits, but to do your own homework and involve inhouse IT teams always help) Policy to share information among departments, people don't tend to share info. Process implemented in system should not be cumbersome (Ex by you of 10 sales stages if company doesnt need have two or three) Ofcourse system implemented should not be slow and consume sales reps time and should be accessible from anywhere(Mobile/internet) So all in all we need to look at all the aspects in an ecosystem to make an CRM Strategy a success.
The biggest issues with CRM system implementation is that they are set up by individuals who are not the end users of the CRM system. Usually, there are already processes in place but, when the CRM system is implemented, businesses tend to think that it MUST follow the old process, rather than adapt and change the process to fit with the system. This means that the implementation is led by "what do we do today and how do we replicate it?". This is not the way to set up the system. When we set up CRM systems, we work from the end - What do you want to get out of it? What reporting do you need? What do you want your sales people to be able to do? These questions should govern what information you need to put in. If you want your sales people to be out selling and actually fill in the CRM system properly, make it as simple as possible for them to do this. Give them the minimum number of fields to complete. If fields must be completed, give them something they can use on the fly so it is painless and hassle free.
CRO | CGO | Scale-up CEO | SVP Sales | Transformation, Scaling and Revenue Growth
3 年Well said