7 Reasons Why Companies Fail After Deploying a CRM (And How to Avoid Such Mistakes)

Customer Relationship Management (CRM) software is becoming more popular with each passing day.

Research shows that businesses using cloud-based CRM grew from a mere 12% in 2008 to a whopping 87% in 2018! CRM is one of the fastest-growing industries in the world with revenues expected to cross $80 billion by 2025.

Then why do many businesses still struggle even after adopting a CRM? Why doesn’t their business grow in leaps and bounds? Why do such businesses grow sluggishly or stay where they are?

Why is the failure rate of companies across industries after deploying a new CRM software almost 63%?

We’ll dive into seven CRM failure reasons here.

1. Expecting Magic

Most companies that fail despite deploying CRM tools think that technology will solve all their problems.

Technology is a means to ends like improved customer relationships, disciplined follow-ups, better customer discovery and more. It’s not an end in itself.

It’s important to recognize that a CRM tool is a supplement to enhance the customer experience. Data from CRM tools should be used to refine business processes rather than expecting acchhe din to magically arrive once the tool gets deployed.

2. No End Goal

How can one recognize whether a CRM tool is working effectively? By using data to measure how much a team is moving towards its goal. But what if the team doesn’t know its goals?

Ask most leaders what their sales goals are and they simply say “more.” Without knowledge of what “more” means, leaders cannot detect whether a team is progressing or failing and as a result, cannot detect whether the CRM is working effectively or not.

A CRM solution needs to get fed with proper data to align it with the organization’s goals and track whether people are doing what’s expected of them.

3. Poor User Adoption

When an organization lacks goals and an understanding of how to use technology to achieve it, people avoid using CRM software because it becomes an additional task i.e. it increases work rather than reducing it.

There could be many reasons for this. Maybe the CRM isn’t well integrated with other systems. Maybe the CRM is complex to use because of too many features. Maybe people don’t know what they should do.

Research showed that 65% of sales reps who adopt a mobile CRM achieve their sales quotas, while only 22% of reps who don’t reach the same targets. But to ensure that your sales reps adopt it, the CRM tool must be simple and easy to use.

4. Lack of Training

Another reason for the poor adoption of CRM software within organizations is because people don’t know how to use it. This often happens when a CRM tool gets deployed in a hurry and sufficient training is not provided.

While choosing a partner to deploy your CRM software, it’s important to audit their training process as part of the offering. Without proper training, people will find a CRM tool complex to use and it will feel like extra work. And nobody likes doing extra work.

5. No Focus on the Customer

A customer, not the CRM tool should be at the centre of business. When the CRM begins to dictate how the business should function, the process takes priority and creates a harmful culture where employees compromise customer experience in the name of the process. It doesn’t take long for such companies to start losing market share.

6. Lack of Accountability

It’s one thing to update the CRM software. It’s another to update it with accurate information. The onus for updates lies on sales reps. The onus to check whether the data is accurate lies on managers.

A properly maintained CRM software can predict the sales pipeline with better accuracy. Apart from sales, it can improve revenue-generating activities like receivables management. But if sales reps know that their managers won’t question them over the data and next course of action, they can neglect to update the CRM tool real-time or update it with incorrect information.

Neither of this is good news for any business.

7. Doing Everything at Once

An organization that thinks of deploying CRM software as a one-time activity tries to make it feature-laden right from the start. Leaders demand as many features and functions in the CRM so that they can save cost in the long term.

But for people who’re not accustomed to using a CRM tool, this can become too much too soon. This is yet another reason why people don’t use it.

Think about WhatsApp. It’s an integral part of our lives today. But how many people would’ve used the tool if it came with video calls, audio calls, file sharing, groups, double-tick notifications, texting, voice recording, stickers, status updates, and more in 2010-11 itself? I’m already feeling overwhelmed thinking about it. What about you?

Like products and business models that evolve over time, the features in CRM tools should grow steadily in sync with business needs at that specific moment.

Summing Up

Smart businesses understand that tools like CRM software can increase business efficiency when used properly. They have a strategy in place for their business to grow and know where a CRM fits in it. Such companies see their businesses propelled to the next level and can handle that growth without losing customers in the long run.

If your business needs to grow, it definitely needs a CRM tool. But that’s not all that it needs.