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5 Things That Kill CRM ROI Dead

5 Things That Kill CRM ROI Dead

CRM is light years ahead of where it was a decade ago, but if it's no longer a money pit, that doesn't mean it's necessarily delivering the most bang for the buck either. Businesses can get better ROI from their CRM if they avoid some common mistakes: creating a siloed CRM system; letting sales and marketing squabble; ignoring reports; blasting messages on social media; and turning a deaf ear to customers.

By Christopher J. Bucholtz CRM Buyer ECT News Network
04/05/13 5:00 AM PT

Back in the old days -- like around 2003 -- the rate of what was termed "CRM failure" was unacceptably high. You often heard it bandied about that 70 percent of implementations were failures. That was an estimate -- companies were not coming forward to confess their CRM disasters, so building a scientific sample was impossible. Still, the number reflected the general dissatisfaction businesses had with that generation of CRM.

A decade later, things are better. CRM vendors have focused on areas that users identified as sticking points, and users are coming to CRM better equipped to internalize the ideas of CRM so their own actions don't lead to failure.

Yet there are still things that businesses do that sabotage CRM -- or at least prevent them from capitalizing fully on the information CRM collects and makes available to sales, marketing and support.

Here, in no particular order, are the five worst offenders.

1. Replacing Information Silos With CRM Silos

One of the big selling points for CRM was that it could expose information about customers to every part of your organization that could use it. For example, knowing a customer's recent experience with your service organization could benefit sales; accessing information about recent new customers could help marketing refine its lead-generation activities.

Many organizations fail to get that deep -- CRM is brought in because of a major sales or support fail, and it's set up to serve that organization. Integrations with other applications may be neglected; worse yet, training may be limited to solving current problems.

After a while, you've merely shifted your customer data from one siloed system to another one. When it eventually occurs to someone that the information should be available to everyone who needs it, processes will need to be unraveled and a new silo must be broken down.

2. Sales and Marketing Infighting

You can have the most effective CRM system in the world and see it squandered by the classic "misalignment" problem. CRM data can be used to evaluate what qualified leads look like; which marketing campaigns lead to closed sales; or which customer interactions signal an opportunity for an upsell.

However, a lot of businesses never get to the analysis that delivers these insights because they require input from both sales and marketing -- not input into CRM, but input into discussions about how to work together and then use that CRM data. Without these discussions, there's no thought about these insights; thus they go undiscovered.

The solution is to get sales and marketing in a room to discuss the goals they have in common; if you can focus on sales and marketing's shared objectives, the two sides are likely to find that the answers to their shared questions are available within your CRM application.

3. Generating Reports Just to Generate Reports

A good CRM application can present data in preformatted reports and keep managers updated on a regular basis. The key analysis is done automatically and it's right there, ready to be read, understood and acted upon. Unfortunately, like so many things in this technology-driven business world of ours, these reports are often taken for granted and ignored.

The classic is the weekly report that a manager demands from an underling, which typically makes two stops in its lifetime: on the manager's desk; then straight into the recycling bin, unopened, several days later.

Reports are not generated simply to enhance your relationship with your toner supplier; there's a lot of great data inside them, organized to make it easy and quick to understand what's going on and what new opportunities exist for you. If you don't read them, reports are as helpful as a concrete life preserver.

4. Using Social Media as a Broadcasting Medium

We've all seen businesses that grasp social media's potential for reaching vast numbers of customer prospects -- and who then abuse that potential. These businesses are missing more than a simple sense of etiquette. By being completely focused on blasting their message out through social media, they're not listening for the valuable insights their customers could be sharing in return.

The culprits in most such cases are old-school marketers who think they can still control the conversation. When they try to overload social media channels with their messages, they shut down conversation and deprive their businesses of the intelligence that can be gleaned from intelligent conversations with customers. If you want to take advantage of the ideas of social CRM, you need to first understand the two-way nature of social media.

5. Creating 'Relationships' That Don't Extend to the Customer

Businesses often view what's going on with customer relationships in the context of the business. They have a good idea of what they're doing to foster relationships, and those things correlate to what experts say are the best practices for CRM.

However, instead of corroborating this with the most important people in this mix -- the customers -- businesses make the assumption that all is well and they are living in the best of all possible worlds. It's unpleasant to have your reality upended, so it's easy to tell yourself that your business is doing a great job of understanding its customers and building relationships with them.

Your customers may have a different view of this, though. Even if things are hunky-dory now, customers evolve and change, and assuring yourself that all is well prevents you from evolving with them.


CRM Buyer columnist Chris Bucholtz is a speaker, writer and consultant on topics surrounding buyer-seller relationships. He has been a technology journalist for 17 years and has immersed himself in the world of CRM since 2006. When he's not wearing his business and technology geek hat, he's wearing his airplane geek hat; he's written three books on World War II aviation.


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