Why So Many CRM Marriages End in Divorce

If CRM and clients were in a conventional marriage, the divorce rate would be high.... But there is hope!

Most companies implement Customer Relationship Management (CRM) systems because they promise streamlined processes, better tools for improving customer relationships, and more effective ways to increase sales. However, many organizations find that their CRM initiatives fail to meet expectations. This disappointment often leads to poor user adoption and, ultimately, technology abandonment. Understanding the root causes of these failures is crucial if you aim to harness the full potential of CRM (as technology and as a process for managing profitable business relationships).

Here are some top reasons behind the disconnect between CRM promise and reality, according to researchers.

??1. What part of CRM makes ME successful?

Older research by CSO Insights (acquired by MHI Global in 2015) found that nearly 43% of CRM customers use less than half the features of their CRM systems. However, more recent Forester studies show that "efficacy" (the ability to produce a desired or intended result) is a more influential factor than the features and function on the screen. CRM users must understand the system's ability to produce the results THEY need. When people see results and value from CRM, adoption increases. So it is not as much about the number of features as it is about the results, and the results must be making people more successful (functionality and effectiveness), a decrease in effort (helping them make things easier and more accessible), and enjoyment (because who wants work to suck?).

[I think another article about the conflicts between what sales managers and sales users think MUST be on the screen to be successful is in order... more to come on that...]

Think about this... If you told an aircraft pilot that you are going to reduce the number of instruments on the cockpit they would probably kick you off the plane. However, at some point, someone ensured every instrument served a USEFUL function that leads to a safe take-off and landing. Same applies to CRM.

??2. What do I need to learn to leverage CRM for my success?

The other side of efficacy is ability. Seeing that a system meets needs does not automatically add confidence that someone can use it. We are all enamored with AI, but there is still a lot of fear about it and knowledge can help mitigate that fear. Your team has to believe they are capable of mastering CRM innovation like AI conversation intelligence, for example (a great way to use AI to discover gold nuggets in your conversations with prospects, clients, and peers). A report from Salesforce indicates that 70% of CRM users feel they would use the system more if they had better training. Comprehensive training and ongoing support are critical for CRM success. Employees need to understand how to navigate the system, input data correctly, and use the features that can enhance their productivity. Without this knowledge, the CRM system becomes another complex tool that employees avoid.

??3. What does CRM success mean to us?

There are so many studies we misquote about the failure of CRM technology. Everyone throws around the "60%+ CRM failure rate" quote from the early 2000s. However, by 2013 companies like Merkle and Gartner started to correct the record. Merkle found that 63% of CRM initiatives fail due to a lack of clear objectives in their survey of 352 senior-level, U.S.-based executives in $1+ billion organizations. Gartner points the finger directly at the failure to meet expectations.

Implementing a CRM without clear goals and measurable metrics sets the stage for failure. You need to define what success looks like—whether it's accelerating the sales cycle by x%, increasing sales by x% per quarter, or enhancing operational efficiency by x%—and establish metrics to track progress. Without these, it's challenging to assess the system's effectiveness and make necessary adjustments. Lack of clear objectives and expectations will mean poor success metrics and ultimately CRM failure (perceived or actual).

??4. Can I rely on my data?

The saying "Garbage in, garbage out!" is very much alive in CRM. The 2015 Experian's Data Quality Benchmark Report told us that 94% of businesses suspect their customer and prospect data might be inaccurate. More recent studies still put data confidence at around 75% (not much better). But frankly, what has always scared me is something else included in the study:

On average, U.S. respondents feel 27% of their revenue is wasted due to inaccurate and incomplete customer or prospect data

What business stays alive for long losing 27% of revenue? A CRM system is only as good as the data it contains. Inaccurate or incomplete data can lead to poor customer insights and ineffective decision-making. Ensuring data quality involves regular cleaning, validation processes, and encouraging employees to input data accurately.

Experian's 2023 data management research report adds that there are some ongoing market disruptions will make data quality efforts more challenging, including technology advancements in AI, increasing operational costs, depleting skill shortages, changing customer expectations, and supply chain and availability issues.

??5. Is the CRM carriage driving the process horse?

Admit it... you purchased a CRM system because you thought it was going to improve your business processes. Then you realize how much work it would take to develop good business processes or clean up bad ones for CRM to drive. Or worse, you implemented CRM to accelerate bad processes. If you can relate, you are not alone. Research by Forrester shows that 49% of CRM projects fail to achieve their goals due to poor alignment with business processes. For a CRM system to be effective, it must accelerate GOOD business processes, not just existing ones. A one-size-fits-all approach often leads to friction and inefficiencies, causing employees to revert to familiar, non-CRM-driven processes.

??6. Do I REALLY need Executive Sponsorship

Maybe when you had a team of three sales-people and purchased a few licenses of Hubspot on your company credit card it was OK. But your team has grown and it is time to turn CRM into a company-wide customer relationship management effort. It is time to get an executive sponsor because, as Gartner reports, CRM projects with active executive sponsorship are 50% more likely to succeed. Executive sponsorship provides the necessary authority and resources to drive CRM adoption. When leaders are visibly committed to the CRM initiative and communicate its importance, employees are more likely to follow suit. Without this top-down support, CRM projects can quickly lose momentum.

There are other reasons CRM fails and it would take an entire book to talk about them. So I encourage you to read my book, Speaking Frankly About Customer Relationship Management. In the meantime, I hope this insight motivates you to save your relationship with your current CRM.

??I write about the things that help people connect... jcquintana.com