The Only Way to Save Your CRM From Failure

The Customer Relationship Management (CRM) system is now a central focus of many businesses. The CRM is responsible for holding contact details, communications, social media profile data and valuable leads – the data that sales teams live and breathe every day. In theory, the CRM acts as a colossal ‘brain’, or hub: an application everyone can dip into for data.

Yet the CRM is, in itself, a framework: a holding bay for data. It cannot function if it is not populated correctly. Yes – everyone uses the CRM, but who owns it? Ask any user, and they will likely say: “not me”.

The opposite is true. And here’s the challenge: up to 46 percent of CRM systems are failing. That’s a figure no sales department can work with. But there is one way to turn it around.

Causes of CRM Failure

CRM systems are central to productivity across organisations. They are also not cheap. Gartner estimates that the CRM industry was worth $18 billion in 2012, and will be worth $36 billion by 2017.

Clearly, adoption is accelerating, and more businesses are storing data in CRM software. Yet we are no better at managing that data. Why?

Consider these five scenarios:

• The alienation people feel when new software is brought in. Often, this breeds resentment and slapdash data entry, since there’s no explained benefit to the CRM
• The fuss of having to fill in fields you didn’t have to fill in before. People quickly invent workarounds to get around required fields they feel are not necessary. Who decides what’s important: the user or the CRM?
• Quirks of the CRM: things not saving properly, or formatting on dates being too confusing to be consistent
• Imported contact records having picked up encoding errors and other mistakes that make them un-saveable in the CRM; this means records are often duplicated to get around the problem
• Decision makers switching the business from CRM to CRM to try to fix the problem

All five points result in useless data. At every touch point, the CRM is becoming less efficient. It is being diluted and polluted by incorrect entries, workarounds and flaws. And the worse the data gets, the less people want to rely on it. The CRM should be supporting customer interaction, not creating new problems for your employees.

Data also decays naturally, compounding the effect of human error. Estimates put the rate of data decay at around 2 percent per month. It is a completely natural process, and it is unavoidable. As your contacts change jobs, get married, change email addresses or get promoted, your CRM will start to lose track.

Looking closely at CRM failure rates, we have a range of statistics to work from. C5 Insight estimates that the failure rate of CRM software is around 16 percent. It says that this figure is “optimistic”, and puts its own estimates at 38 percent.

The Impact

CRM systems were designed to facilitate more efficient communication with customers and leads, helping all participants complete transactions quickly. Even the most technically advanced CRM cannot achieve its goals if the data it holds is inaccurate.

Without this data, the sales team cannot use the CRM to close deals. The marketing team cannot segment its data accurately. The customer is frustrated that they’re receiving multiple copies of marketing messages, complete with mis-spelled names and email addresses that should have long since been removed. The IT department is becoming irritated with the requests to fix the data it cannot change.

CRM data becomes inconsistent, cluttered, sloppy, out of date, invalid, inaccurate and incomplete. It lacks authenticity and cannot be relied upon. Before long, the CRM is nothing more than a dusty filing cabinet full of index cards that should have been trashed years ago.

It’s time to step in and save your CRM.

1 Way to Fix a CRM

CRM software must be seen as a useful tool rather than a hindrance, but it can only be successfully implemented if data quality is prioritised too. The business simply must invest in data quality software that supports employees in their work, without creating new challenges or time drains. The use of data quality tools must be a proactive and ongoing process if it is to stem the tide of manual errors and natural decay.

The key is ownership. Giving employees a say is the only way a CRM can be saved from dirty data.

Consider the plan of action, and the people who will lead the initiative. The key to successful CRM data quality initiatives is buy-in at every level, and a vested interest in keeping the data clean, healthy and fresh. This does not mean tasking the IT department with the CRM clean-up, or asking sales teams to correct records by hand. The business must change the culture of the organisation so everyone understands the data is theirs. Theirs to own, theirs to use, theirs to maintain – and theirs to clean.

Choosing a Solution

The data quality tool must be designed specifically for the software package in use. Specialised solutions are available for Infor CRM, Salesforce, Microsoft Dynamics CRM and other key packages from vendors large and small. Choosing a software specific package means data can be cleaned in situ, and this is key.

Very large data initiatives have failed because of problems with encoding. In most circumstances, it is best not to import and export from one system to another. By keeping data in the system, the data quality tools mesh with the CRM system, extending and enriching the functionality users already enjoy.

Success Stories

FleetBoston says its failed CRM project cost $40 million.

Gartner claims that data quality affects productivity by up to 20 percent. Over time, data quality becomes a “limiting factor for overall process quality”.

But a data quality initiative can turn things around.

According to typical scenarios, a US healthcare insurance organisation can expect the following:

• Increasing automatic decisions could result by 2 percent after data quality drives, resulting in $1.5 million savings in 3 years
• Returned mail can be cut by 10 percent, saving $400,000 over the same period
• Reporting errors caused by data quality problems could result in $525,000 savings over the same period

Once your CRM is clean, your customers will benefit from better communication and a sharper focus on their needs. Engage your workforce in ensuring your CRM does not fail.