A successful CRM implementation can be a game-changer for an enterprise, delivering a 100 to 200% improvement in sales performance. But here is the bad news. If you have implemented a CRM System, maybe you will find the 60% figure as an underestimation. A CRM system (also known as a Sales Automation System), is essentially a ‘Front-end Customer facing’ system which helps organizations to improve Sales & Service Productivity.
However, ask any IT and Business Heads in enterprises, and you will find that most of them have been frustrated with and struggling to make the sense and benefit out of CRM system investments. CRM failures include:
- Non-Usage: Users simply do not use it, and if you don’t get the ground-level data, it’s a complete failure.
- No Quantifiable Benefit: This does not lead to any significant increase in Sales or Profitability or any other benchmarks.
- No Decision-Support: Does not give the kind of information needed, to make management decisions.
This is a big paradox, that the failure rates are not reducing in-spite of CRM technology in itself has come to a long way. Today’s CRM platforms are best of the breed, and are available to organizations in a highly cost-effective (Software as a Service) pricing models, without the need for any IT infrastructures or Skills. Apart from that user as well as management is more tech-savvy. Today’s CRM systems are highly configurable, and you can change most of your sales processes, reports and communications in a jiffy.
So why in-spite of highly evolved products and skills in CRM space, a successful CRM implementation is still elusive? Here are the 10 biggest Reasons and how to fix them:
Reason #1- Lack of Clear Vision and Goals
Problem– A CRM System can be scope anywhere from a simple leads funnel management to a comprehensive sales & service platform, integrating Channels and Enterprise Functions. A typical CRM system scope starts with a small scope and quickly expands to include everything possible. There is a typical lack of clarity on why you want the CRM and what is the expected benefit?
Not every feature provided by a CRM solution will be relevant for your business or could provide expected returns to the effort and investment. Due to this lack of clarity, the stakeholders, as well as business needs, keep on changing. This leads to a confused and cluttered implementation, leading to a lack of ownership.
What to do?
- Thanks to the highly configurable and Scalable nature of most of the CRMs, a business can afford a multi-phase implementation. So the best way to go about it is to have a small, quick implementation scope, with high clarity on effort, monies, and timelines.
- CRM is a change management project and not a push-button technology. Therefore, all stakeholders should be taken into confidence and aligned on the scope.
- Management should fix simple & measurable benefit targets, in terms of increased sales, profitability, productivity and/or Effort. They should have a way to measure it, and should not progress to the next phase without a successful first phase.
Reason #2- Lack of Participation and Ownership from Day 1
Problem– The biggest hurdle in the way of successful CRM is a severe lack of ownership at the ground level. If you do not get 100% entry of ground-level data including leads status, sales activities status, customer meeting outcomes, product placements at sales outlets etc…, CRM will fail. The main reason for this is the non-involvement of feet on the street in the CRM initiative. As a change management project, field feedback and ownership is extremely important. However, more often than not, CRM systems are designed and implemented in headquarters, sometimes without taking any input from field commanders and troops.
What to do?–
Field Troops should be involved genuinely in the CRM Scoping and ownership:
- Ideally, someone from the field should be made as part of the CRM Task Force. Their inputs should be taken and incorporated with due sincerity
- For Every Business Location, a champion who is 1st line manager to be assigned.
- A special Rewards and Recognition for the champions to make CRM successful.
Reason #3- Ground-Level Employee not considered as the True Beneficiary
Problem– Decision-makers for a CRM system is either CxO or CEO him/Herself. Due to this CRM design and features are more focused on fulfilling the management’s need for complex information and analytics. However, all the information fed to management is derived from raw data entered by sales staff. While there is a lot of attention given to management’s convenience, there is hardly any thought on two questions?
- How we can make the system convenient to use for the sales personnel?
- What benefit we can provide to sales staff so that they see using CRM as being beneficial to them?
- The lack of this sensitivity leads to a highly unwieldy and complex interface and low priority to features that are needed by sales to improve their productivity. The focus is more on monitoring & reporting, instead of ease and effectiveness.
What to do?–
We need to design CRM to be aligned first to the need of the bread-earners for the company, who are operating on the front. The needs of a soldier come before the need of a commander. So you need to understand what sales need to improve their performance, what and how can CRM make their life easy and how spending 20 minutes on CRM will save their two hours.
Reason #4- Highly Intellectual and Unwieldy and non-intuitive Design
Problem– Extending upon the previous point, a CRM system is designed by people at head-office, who are in a position to think and define complexities. Salespeople on the other hand like simple, ‘click and drag’ and ‘drop and select’ kind of interface. At the end of the day, most CRMs end up having too many screens, too many options and too many fields to fill. It’s a double whammy, as most of the information sought in CRM is not used, as it is too much to handle.
What to do?– There is a strong need for simplifying CRM interfaces, and apply 80-20 rules on the data you plan to gather. If complexity is needed, we should first have everyone settle down with simpler design, before evolving further. It’s common-sensical to any change management.
Reason #5- Information Glut- Too Much is too Little
Problem-Have you faced a situation where you have too many reports and analytics, but too less a decision or action? The benefit of ‘Reports on the fly’ in CRM systems is like a double-edged sword. It allows one to configure new reports and change existing ones quickly. The over-abundance of reports leads to confusion and clutter. This results in conflicting and misdirected decisions. When the organization is not sure about A) what information it needs?, B) Why it needs it? and C) how it will use it? results will always be counter-productive.
What to do?
Enterprises need to:
- Limit the number of Daily, Weekly, Monthly Reports and Analytics.
- Design the reports, so that it should not take more than 5 minutes to figure out the exceptions and their reason (through drill-downs).
- People should be trained on what they need to do, and what follow-up action they need to take on which product, location, employee (and any other entity), if there is an underperformance.
This one action can simplify the whole CRM equation.
Reason #6- Fudged and Junked Data- CRM not Abuse-Proof
Problem-Let’s face it, no one wants to be monitored. One key use of a CRM system is that it not only helps an enterprise on measuring output (like sales orders), but also input (like customers contacted, meetings done, locations visited etc…). Now it’s a natural human condition for people to avoid monitoring and tracking what they are doing, when they are doing and where they are going.
Therefore more often than not, people enter misleading data presenting a high amount of effort, by entering meetings which never happened and visits which were not done, or marking leads as HOT when they are actually Cold. Apart from that people end up entering junk information in the free form fields like remarks.
Now this bad quality date makes any kind of reporting as unreliable and kills the basic purpose of CRM
What to do?
This is a complex issue but with simple solutions-
- Make an interface that does not have any free-form. All the inputs to be taken through drop and select methods.
- If a manager is diligently looking at the data, he will be able to figure out the fudging and he can take disciplinary action.
- Design reports so that fudging is automatically detected. For example, a high number of visits to a client with no change in lead status or any order should be highlighted as potentially bogus data entry.
- Enforce strict discipline and make examples of employees who are not showing integrity.
Reason #7- Lower Middle and Senior Management Commitment to Use CRM
Problem– My observation is that more than ground-staff, it is the lack of commitment from middle and senior management to use CRM. CRM requires a greater discipline from management than from ground-staff. While management is excited to have CRM on board and sponsors money and resources, but overtime, it goes back to their natural style of management. For example,
- They want to see the reports in same excel format as they have been using before CRM
- They do not want to look at the reports but being talked to
- They rely more on their Guts and Anecdotes than look objectively at the data.
- They do not demonstrate the intellectual stamina to delve down deeper into detailed data and insights which is made possible through CRM, as this requires processing more realities and bad news.
We all know that culture flows from the top. This eventually holds back the organization from a golden opportunity to totally transform its culture.
What to do?
Every stakeholder should go through systematic training (including management), on what change they need to bring in themselves and their team, in terms of:
- What they should stop doing (i.e. asking ad-hoc MIS)
- What they should start doing (i.e. Minimize meetings, and get status updates from the system)
- What they should do differently (i.e. Drill down to the lower level of information to find root-cause of low performance, and spend more of their time in decision and action, then fact-finding)
Reason #8- Too Many Process Changes- Lack of Stability of Thought
Problem– CRM is configurable and you can define and re-define work-flows. Spoiled by this new power, organizations tend to keep on revisiting their sales process, and do not do a deep think-through on the flow upfront. Few examples are frequent changes in the lead funnel stages, sales quotation approval matrix, Leads allocation rules, etc… Now the sales process is not only a system change. It leads to changes in the reports, roles & responsibilities, Turn-around times and also needs retraining of users.
What to do?
Here are a few tips to get around the problem:
- A strict rule to not to change any sales process for at least 3 months (irrespective of how dynamic the industry is)
- In-spite of configurability, the sales process needs to be defined on paper, and people should formally sign it off.
- Any sales process change to be signed off by the CEO/Head of Sales.
Reason #9- Inadequate Support Systems to Support CRM-Driven Sales
Problem– A CRM platform is expected to deliver much-needed speed and efficiency in leads conversion. It puts significant pressure on sales staff to perform and respond to customer inquiries. However, this front-end speed is not matched by the back-end support functions, such as Sales support sending samples in time, marketing updating pricing & discount structures, warehouses providing product replacement and manufacturing confirming delivery timelines to inquiries. CRM is considered as a tool & game-changer for sales and not for the entire enterprise. This leads to frustration as the success of CRM is based on the weakest link in the support chain.
What to do?
CRM has to be seen as a holistic tool to transform the way an enterprise does its business. Therefore, the back-end functions need to be upgraded to quickly respond to sales needs, as the leads are tracked on a real-time online basis. Support functions should be made a signatory to the CRM project with clarity on expectations.
Reason #10- Lack of Management’s Determination and Persistence
Problem– It is not easy to make an initiative successful, especially when you are dealing with highly dynamic sales function and its people. In spite of doing everything right, it takes a high degree of management push to make it happen. However, more often than not, management loses its steam, if CRM does not pick-up within few weeks of its implementation. At the same time, ground-troops are also testing management’s stamina to drive the change. After a few months of push, management gets distracted to a new set of strategic challenges and opportunities.
What to do?
Assuming other points as mentioned above are taken care of, we need to adopt a combination of methods to make it happen
- A high degree of discipline. A clear message to everyone- If it is not in CRM it was not done. People’s compensation, career, promotion, etc linked to CRM success.
- A ‘CRM War-room’ to be established where one or more person is following-up and driving every manager and user to use the system, providing retraining and troubleshooting any issue.