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Customer Relationship Management (CRM) solutions have the potential to turn around any businesses’ fortunes. However, it’s also possible that it could derail your business, resulting in an ROI loss caused by CRM.
Indeed, according to Scott Edinger of the Harvard Business Review, only one in ten CRM implementations are a glowing success. “In my work with clients,” Edinger says, “when I ask executives if their CRM system is helping them grow their business, the failure rate is 90%”.
He explains that CIOs and sales teams report the biggest challenges. The sales team reports constantly that tracking, which is one of the foundational features of any CRM, take away valuable selling time. When the sales team can’t sell effectively, you’re unlikely to hit your sales targets. The result? ROI loss with CRM!
Edinger’s numbers might be a bit high, but he isn’t wrong. Analyst firms report 30-50% of CRM implementations fail completely. That’s without counting those that are implemented successfully but fall short of original objectives.
How can you prevent this from happening? How can you make sure that the CRM you bring into your organization/company actually helps you rather than adversely impacting your workflows? How can you make sure that you’re getting a positive return on the investment? Let’s begin with why so many organizations report ROI loss with CRM.
There are four common reasons why CRM implementations fail to meet desired objectives or fail completely;
The lack of clear, objective goals is perhaps the biggest reason CRMs fail. When you implement a CRM solution without clear, measurable objectives, you set yourself up for failure.
A common mistake organizations make, for instance, is failing to highlight revenue growth as one of the objectives of the CRM implementation. Many times, organizations will only tell staff that the CRM is meant to reduce customer acquisition costs, shorten sales cycles, etc. When you fail to identify revenue growth as one of the objectives, even people using the CRM won’t prioritize it.
Scope creep refers to when you fail to budget for certain items/vote heads. Don’t confuse this with under budgeting. When you under budget something, you identify its importance and allocate a budget that you deem sufficient, but in the end, the budget is insufficient. Scope creep is when you overlook some items entirely in the planning and budgeting phase.
These omissions can be very costly. They are the largest cause of budget and time overruns. When you fail to budget for application integration, for instance, it means that you could lose valuable time and resources along the way before you realize that such integration is necessary. By that time, you could already be seeing a negative RIO.
This is another common and very costly issue. A new CRM brings new processes, roles, information, and functions to the organization. Put differently; it creates a real or perceived loss of control. Your employees will feel like they’re using something they don’t know.
This is often made worse when organizations hurry to beat deadlines. It may mean the organization was rushing the process for employees to grasp the new software or limiting the training sessions to minimize associated costs. When that is the case, there will always be a few employees questioning the need for the CRM and even a few fearing that they may lose their jobs. All these can negatively impact the onboarding process which may spark unprecedented ROI loss with CRM.
Obviously, the first step is bringing in the right CRM for your needs. If it’s not the right CRM, be prepared for a lot of trouble. So, assuming that you’ve brought in the right CRM, consider the following;
It’s okay to leverage the CRM software for automation and to track sales and leads. But, you need to rethink your priorities and list revenue as your first goal. Educate and drive this message throughout the organization at all times. Everyone who uses the software must understand that the primary reason you acquired the tool is to make more sales and generate more revenue.
If you can seamlessly integrate sales and marketing, you’re half the way to making CRM implementation pay off for your organization. Observations show that the two are very poorly related in CRMs, to the extent that it often feels like a competition. Marketing will be blaming sales for failing to follow up on leads, while sales will complain that marketing is generating poor quality leads. Getting the two teams to work together in lead qualification, roles, and customer profiles can remove many obstacles that lead to ROI loss with CRM.
Two things are essential here. First, you need an implementation team to plan the entire implementation process, including sourcing, integrations, and onboarding. This team should comprise senior management, end-users, a project manager, and change champions. Their job is to ensure full implementation and complete buy-in. Secondly, coaching must be an ongoing activity. It’s not about scheduling a two-week training session and calling it a day. For the best outcome, you must have refresher programs even months after launching the CRM.
Take the Next Step
From the above discussion, you can tell that getting a return on investment (ROI) from CRM implementation isn’t a guarantee. Indeed, the majority of people fail to achieve their goals. If you’re serious about getting the maximum benefit from your CRM, you must be willing to put in the hard work. It is easy to ignore such information. However, if an organization is serious about avoiding ROI loss with CRM at all costs, then the above offers an excellent guide.
Plumlogix offers a comprehensive set of tools and services to ensure you don’t lose anything. Sign up for one of our managed services plans available here and experience peace of mind knowing your CRM investment is in safe hands.