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Why Does CRM Fail?

It’s a known fact that CRM failure rates are high, at the same time CRM spending do not show any sign of abating. There are many factors that can jeopardize CRM deployments. Chief among these are having lack of a business plan, letting the vendor define your methodology, not having any firm metrics for defining success, and neglecting integration of customer data. In a nutshell between people and processes we have all the probable reasons that can lead to CRM failure.

If any of the factors mentioned above manifest in your CRM deployment plans, your efforts could well be doomed to failure from the very beginning. Your progress will be slow and the project will turn into a money guzzler where different branches of your enterprise will follow their own implementation agendas. Later on integrating separate databases of these discrete business centers will be a nightmare for your IT department.

Another thing that adversely affects integration is the manner in which CRM vendors push point solutions. Instead companies would do better to focus on back-office integration. Internal process improvements have for long been the focus of CRM deployments at the cost of customer-centricity. This overt focus on technology has led to a schism between CRM technology and the ideology of customer service. The processes, although meant to be designed for the customer are being run to make it easier for the company staff. An irony here is that customers do really value empowered staff but at the same time they also place a premium on customer focus. This is where most CRM efforts fail to deliver. An empowered staff helps cut short lengthy escalation processes and correct company mistakes but a truly customer-centric company needs to have the courage to invest such powers in its staff and also be ready to absorb the costs of customer returns.

Even when technologies like interactive voice response and online self-service help reduce employee workload and costs, companies fail to utilize the man-hours saved for building customer relationships and fostering loyalties. Instead of trying to make CRM relevant to the customers, companies do the exact opposite and fail to support the chief motivators that influence customers to do business with a given company over and over again.

So, to round off this piece here are the key points that can lead your CRM adventure to go kaput.

  • Poor strategic planning in terms of deliverables and managing critical information necessary for the deployment and operation of the CRM system.
  • Not having all the decision makers operating toward a common goal and pulling in one direction.
  • Forcing your business to fit with an out-of-the-box solution instead of modifying and adapting the CRM to fit in with your operations and more importantly customer requirements.
  • The implementation team needs to be assessed in the beginning itself for its capabilities in delivering the desired outcome.
  • A very important factor is hidden costs. Implementation costs usually balloon to twice or thrice what the vendor states in the beginning. The financial strain and a project that keeps dragging can lead an implementation to collapse.