5 Reasons Why CRM Projects Fail

CRM systems have been around since the 1990s but their implementation failure rate is still worryingly high. According to a report in CIO magazine, about one-third of all customer relationship management projects fail, while some business professionals put the number much closer to 90 %. Either way, this rate of failure is unacceptable for businesses - and often entirely avoidable. 

Used correctly, CRM systems can help a company increase revenue, achieve optimal levels of efficiency, improve business relationships and manage the customer experience. Sadly, this is not always the case and for those losing out, the effects can be extremely detrimental to their bottom line and customer satisfaction levels. 

Before embarking on a big CRM project, it is important to be aware of the common mistakes many businesses make in order to avoid them.

Here are 5 reasons why CRM projects fail and what to do about them. 

1.   Lack of Planning and Resourcing 

As anyone who has tried to implement a new CRM system in the past will know, it is not an easy task. There are multiple stages that go into starting a new CRM project which includes, but is not limited to:

• Refining an outline/idea into clear, actionable workflows
• Setting up and integrating software systems
• Curating data 
• Training staff (CRM impacts the entire business and a common mistake here is only training those identified as ‘key players’ in the process)
• User testing

Starting a new CRM project is a complicated, multi-stage process and to optimize success it’s not something that can be worked through and problems solved as issues come up. Before starting, it’s vital to have a clear plan in place to not only avoid confusion and frustration from employees and customers but also to prevent the outright failure of the project. 

It’s also important to remember that CRM is not a one-and-done exercise but an ongoing process to better understand and manage customer relations. Therefore when planning, not only should there be a plan in place that satisfies the CRM needs of the business at present, but allowances and plans should be made to ensure that things continue smoothly as the business grows and evolves.

2.   Teams Working in Silos

One of the biggest reasons CRM projects fail is down to a lack of communication. Every department within a business has a role to play in the overall success of the company but they cannot operate independently, if the company as a whole is to benefit. 

While specific teams may possess a unique set of skills, priorities and ideas about how to tackle a problem or integrate a strategy, for CRM to be successful, they need to find a way to work together to achieve the end goal. 

A new CRM project is likely to affect multiple departments. A lack of communication between departments or an inability to get them all on the same page and working towards a mutually beneficial solution is going to wreak havoc on a CRM project’s success rate. 

To avoid teams working in silos becoming a reason why CRM projects fail, it may become necessary to break down departmental barriers, open up communication and foster an atmosphere of sharing data freely around the company. A consistent, company approach to accessing and using customer information is going to help make sure whatever team member or department is working on the CRM project, is doing so in a consistent manner to everyone else.

Team training 

Company-wide training in the CRM software can also help to avoid isolated working conditions. It sets team members up for success and ensures that everyone involved has an equal understanding of the process, which in turn should lead to more frequent and open communication. 

As identified earlier, one common mistake when it comes to CRM training is to limit it to those directly responsible for managing the CRM project. While not every member of the company may need the same level of knowledge, equipping them with at least a basic level will make the project transition much smoother and decrease the chances of failure. 

3.   Bad Data 

CRM is only as good as its data. The software works because it gives insight into the business’ customer data but if this data is outdated, corrupted, tracking the wrong things, or just plain wrong, then not even the best CRM software can make it useful.

For best results and to easily avoid bad data being one of the reasons why CRM project fail, the data used needs to be as pure and complete as possible. Before embarking on the CRM project, it is a good idea to take a minute to evaluate the data and the methods used to collect it are up-to-date, relevant, and fully functional. It will save time down the road and up the chances of success, so it is worth dedicating to. 

4.   Wrong Vendor or software

One of the most important aspects of getting a CRM project off the ground successfully is finding the right CRM partner.

Clearly a major element in a CRM project, a CRM should be customizable to the client’s needs — a one-size-fits-all approach is not going to cut it here. Even if every other aspect of the CRM project is strong, choosing the wrong CRM partner could lead to failure if they are unable to tailor the software to suit the company and its needs.

To avoid this being one of the reasons why a CRM project fails, do the research and find a partner who is adaptable and provides software that can change and grow with the business’ needs and won’t make it conform to a set of pre-determined boxes. Talking to the vendor’s previous clients – especially ones in the same field as you - might also be highly beneficial.

The same advice applies to the CRM software. While it can be tempting to choose a CRM software simply by the cost of the license, cheaper isn’t always better. It’s much easier to get CRM software right the first time, than have to repeat the process over with a new provider or using another software. 

Make the right choice and it need only be done once, so choose wisely. Here are some things to look for in CRM software:

• Device compatibility – with which devices is the system going to be used?
• User experience - is the system intuitive?
• Customizable options/flexibility as the business evolves 
• Ability to integrate with existing technology/software
• Cloud solutions
• Ease of use for all involved in the project
• Price (some offer varying price points depending on the number of admins/teams/contacts) 

5.   Failing with the Organizational Change 

CRM can disrupt an established workflow and a company’s existing systems. If implemented correctly, it becomes a beneficial addition, but for those not willing or ready to accept the new system, it remains a disruption and potential pain point going forward. 

CRM Projects are rarely contained within one department, and in fact, to be most successful, they should be integrated throughout the entire company. Therefore, it may be necessary to implement some organizational changes in order to make this possible. Failure to do so could lead to employee or stakeholder resistance and become one of the reasons why the CRM project fails. 

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