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How to Mitigate CRM Failures

CRM software earned its bad reputation when Gartner reported that 50% to 70% of CRM software installations failed. 10 years later Forrester research reported a 47% failure rate among CRM implementations. The most current reports are much the same. Not much progress for decades of supposed learning and product stability. Dig deeper, though, and you discover a minority of factors contribute to the majority of CRM software failures. Mitigate these causes, and your CRM software implementation and success rate jumps considerably.

  1. Plan for the long haul, but implement in phases
    Among successful CRM deployments, there was strong consistency that the most successful businesses planned long-term CRM solutions but phased their projects into small and manageable phases which delivered incremental benefits over time. Most companies struggle with the amount of change that comes with a new CRM system as invariably business processes and employee culture evolve in conjunction with new software technology adoption. Phasing the implementation by software module, business unit, or geographic territory grants the CRM implementation team better focus and manageability. The key to a successful phased deployment is to thoroughly understand the larger project and to link the design and configuration choices of each phase to the big picture strategy. Once you have selected a CRM application, begin your planning by thinking about how to phase the roll-out in order to deliver the greatest value early and gain momentum over a longer haul.

  2. Secure your executive sponsor
    All enterprise software implementations, including CRM implementations, require an executive leader—not a figurehead but leader who enthusiastically embraces the business strategy and reality of the CRM software and forcefully advocates its use across the entire business. Your sponsor should be a top-level executive who can be counted on to commit resources and garner widespread support from the executive ranks to operational management to the user communities. Without visible, vocal and active executive sponsorship, your CRM implementation may easily flounder. Beyond just getting project funding, the length of time typically required, the scope of the project and the level of departmental participation may mean the project could lose some of its star appeal at various times, making a strong sponsor a must-have for sustained success.

  3. Assemble an A-List project team
    There are very few things more important than making sure your best people are directly involved in the CRM deployment. CRM provides the framework for all customer facing activities and imposes a degree of process discipline on sales, marketing, and service so that customer facing business processes occur with consistency and predictability. If the CRM strategy and supporting software is the front line for customer acquisition and retention, it justifies the design and engineering of your most talented employees. While there's a necessary role for IT participation, executive sponsorship should come from the business side and the design team should be stacked with business people. Seek out staff who think systemically and understand the need for process. The sales person who hits quota every year largely based on the depth of his client relationships may not be somebody who will see the need for CRM and process discipline—and therefore may not be right for the project team. However, that is not to say we circumvent this person. Instead we recognize his success and use him in a leveraged model where we get his input on the practices that make him effective and embed those techniques for the benefit of others. Recognize that there is also an irony in that the people you need on the project team are the same people that have the least amount of time for such a project.

  4. Gain early and broad involvement
    Staff across many departments—marketing, service, sales, support and business development, for example—use CRM software. And each line of business will bring its own requirements and culture to its list of software expectations. It's critical that all lines of business are well-represented and engaged during the software evaluation phase. It's important to recognize that nobody knows what sales management want more than the sales manager or vice president of sales. The same holds true for marketing, customer service, IT—at the managerial level and the user level. Without these participants input, your business may not purchase the best CRM solution, ignoring necessary capabilities in CRM systems, thereby putting the implementation into a perpetual uphill climb. It's also not uncommon that when implementation time arrives, snubbed employees, while forced to use the program, can make the deployment project very challenging and cause delays. If users don't see measurable benefits, they can and often will put up barriers and avoid the CRM system to the maximum extent.

  5. Align business strategy with supporting CRM technology
    CRM strategy and application software can deliver a synergistic combination to achieve strategic objectives, tactical goals and improved customer facing business processes. But for sustained success, a CRM effort must first focus on, and be directly aligned with, the organization's most strategic imperatives. CRM must be an enterprise wide effort that begins with customer strategies which are then automated with CRM software. You can't just concentrate on the technology and ignore the rest. The technology is an enabler, not the be-all or end-all.

  6. Don't forget the "C" in CRM stands for customer
    Many well-intentioned customer relationship management implementations which focus on internal goals and processes have failed to serve the most important stakeholder—the customer. Executive sponsors and project managers need to drive an outside-in focus into their CRM strategies and projects by understanding and then defining the desired customer experience. They must understand the customers' behaviors and needs, and focus on building a customer-centric culture rather than data, transactions and systems.

  7. Allow for change
    New systems supporting new strategies must allow for change. Too many implementations focus on how things have been done in the past, and not how they can best be done going forward. Among other things, successful CRM deployments involve the improvement or re-engineering of customer facing business processes which are then integrated with the CRM software in order to make them efficient, consistent and timely. New customer strategies, business process improvements and software implementation require a willingness to change any aspect of the way your business relates to its customers.

  8. Plan for system integration
    CRM systems don't live in a vacuum. To achieve business process automation that extends outside of customer facing processes, and to achieve a 360 degree customer view which includes data in back office accounting and ERP systems, CRM software must integrate and share data with other legacy applications. System integration is a key success factor when procuring a new CRM application. It's critical to make sure that all business applications which share business processes or transaction data can be easily integrated, that data is not siloed or isolated, and that data is automatically updated simultaneously across apps. For these reasons, it often makes more sense to standardize on a single CRM application rather than deal with multiple systems from different vendors.

  9. Try it before you buy it
    Many times CRM software vendors are guilty of over-hyping their products, over-promising the software's capabilities and dodging weaknesses that can come back to challenge particular customers. Experiencing the CRM software in action is the best method to verify top requirements can be met. Almost all CRM software vendors will permit a trial or pilot system.

  10. Calculate your ROI
    As the old adage wisely says, "What gets measured gets done". Immediately after your implementation go-live event, begin measuring your ROI. To do this effectively, the business should have assigned resources and identified methodologies to measure quantifiable benchmarks, periodic progress and ROI. Previously measured baseline metrics should also have been recorded to set a baseline, show payback and allow future trending. ROI calculations should be done on a periodic basis, often quarterly, in order to understand what's working, what is not working and quickly implement course corrections where necessary in order to ensure software technology payback.

  11. Anticipate user adoption challenges
    Getting sales people and other staff to adopt CRM software can be accomplished with a three-fold approach. First, you must give them a usable system. That is one that meets their business needs and aids them with tangible productivity or information advantages. Second, listen to the staff during the implementation and tune the CRM system to meet their real needs. This may require integration or customization, but may be vital in actually delivering a productive system. Third, get user buy-in by selling the benefits to the staff early and often. You can't just rely on the staff to discover the advantages the CRM system will offer any more than you can expect customers to discover the advantages of your products. Successful software adoption is accomplished with a guided, comprehensive effort to proactively show the staff the most helpful advantages.

  12. Whatever your training budget is, increase it
    Most implementations skimp on user training. There's a tendency to treat staff training as an afterthought or assume that a few hours of training which shows staff which keys to press is sufficient. It isn't. The key to fluency is thorough training on all material aspects of the system that staff will employ. This goes well beyond a couple of hours showing what data goes in which fields on a screen. The goal is understanding and comprehension, not just rote actions. Staff should not only understand how to use the new software, they should also understand the anticipated benefits and how their participation fits in with the rest of the business. This is important for their comprehension as well as to understand why they are being asked to enter the data the system calls for. It can also help in reducing incorrect or incomplete data being entered into the application. Extensive training builds familiarity with the application and confidence for the staff. That not only makes staff more productive in the first instance, it also encourages them to develop their own routines and shortcuts. By sharing these user-developed techniques you can improve user adoption across the board and make your business more productive.

  13. Plan for a CRM journey
    CRM is not a project or one time event; it is a journey. Customer strategies are often dynamic, require constant review and periodic updates. CRM software systems are increasingly powerful, and increasingly under-utilized. When you consider that most CRM deployments use little more than 20% of the applications potential, you realize there is a lot more potential for increased automation, information and insight from subsequent implementation phases.



CRM from Hell





About CRM From Hell

This site examines the top causes and most cited factors that contribute to CRM software failures in order to share mitigating factors and clear strategies that avert failure and capitalize on the promise and potential of Customer Relationship Management.






Failure to prepare is preparing to fail."

~ Benjamin Franklin








CRM projects most often fail because of the 3 P's people, process, and politics. Any one of these factors can challenge a project, but when two or more are combined, the project may not be salvageable."

~ Edy Henao



CRM failure





The way successful enterprise software companies have historically operated has been more or less uncontested: licensing costs increase at regular intervals, technology is difficult to integrate, and the user experience is often atrocious. Unlike most other open markets, which force out negative behaviors over time, many of the practices in place today serve the vendor and customer asymmetrically. Amazingly, more than 40% of IT projects still fail to deliver the expected business ROI, yet enterprise vendors come out winning regardless."

~ Aaron Levie, CEO of




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