10 Reasons Why CRM Initiatives Fail
The sad truth about CRM is that many initiatives do not give the expected return on investment. As with many things, if you know what can go wrong ahead of time then you can plan accordingly. Here is our list of the top 10 reasons why CRM initiatives fail, so that you can make sure your initiative is one of the successful ones.
1. CRM confusion
People have different interpretations about what CRM really means in their organisation.
CRM is a business culture with well-defined and implemented business processes, measurable business objectives, and an ability to quickly and efficiently adapt to the changing customer demands for products and services
2. Poor vision and alignment to strategy
Leadership teams often fail to establish a common view of how the strategic CRM objectives align with the business strategy, and how the company will look, behave and feel differently if the CRM strategy is executed well.
3. A belief that the system is the solution
The emphasis on the need to automate frequently means automating bad processes, implementing poorly integrated point solutions. The scope of the project becomes dominated by system and IT issues at the expense of the crucial soft process and cultural issues.
4. Lack of cross functional sponsorship
As CRM is a methodology for doing business, the right executive level management must spearhead the project and make the change decisions. Middle management cannot effectively lead this enterprise project.
5. Lack of clear process ownership
Assign an executive to be responsible for enterprise business process development to ensure that you do not create inefficiencies caused by faulty organisational structures and limited functional mind sets.
6. Inadequate understanding of the real work
Processes are often superficially understood. Systems vendors or managers perception of the real work that goes on is not accurate. It is important to prepare a good map of the real processes, the variances and exceptions, and understand how they impact customers.
7. The initiative scope is too narrow
Which processes should be in scope? Here is a list of candidates.
Many initiatives fail to consider the interdependencies of these processes: Market segmentation, Campaign planning, Lead management, Account planning, NPD, NPI, Needs analysis, Proposal generation, Close the deal, Demand planning, Order management, Installation, Enquiry management, Problem resolution, Customer analysis, Needs reassessment, Up-selling, Cross selling.
8. Inadequate product, service and market segmentation
It is a fundamental requirement to ensure the processes associated with each product and service create the effective relationships with the different types of customers who want them.
9. Poor people change management
A CRM project provides the information that will change the way people work and how they should interact with customers.
Failure to put in place an effective ‘people change management’ work stream that overarches a CRM system project will lead to disaster.
10. Lack of optimisation and continuous improvement
Initiatives are often closed too quickly or are overtaken by events. Things do not go according to plan and change happens. A post implementation audit will reveal lots of unforeseen problems, workarounds and opportunities for improvement. Fixing these will drive up adoption and make a big difference to the ROI. I hope this short list doesn’t put you off!