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How To Avoid Failure When Implementing CRM

By Exforsys | on January 3, 2007 |
CRM Tutorial

How To Avoid Failure When Implementing CRM

While Customer relationship management systems can be a bonanza to companies that utilize them properly, they can be costly if a company fails to properly implement them. In addition to this, the relationship that companies have with their customers can be tremendously weakened if privacy concerns are not taken into consideration.

The field of CRM has run into a number of problems. Because of economies which have become weaker, many companies are forced into a situation where they must reduce projects that will not bring immediate benefits to their companies. A number of companies have implemented CRM only to find that their customer relationships did not improve, and many of these companies continued to lose customers.

Many CRM vendors have been forced out of business because of this. However, many vendors are looking to consolidate their services, and this has brought a certain degree of stability to the market. In most cases, the companies that failed to utilize CRM are those that didn’t use the proper steps in implementing it. When you look at the goal of CRM, it should be difficult for companies not to succeed. The reason I say this is because the goal of CRM is to build a stronger relationship with your customers, which will build both their loyalty and your profits at the same time. Many CRM vendors have fought back by lowering the price of their products so that more companies could afford it.

Customer relationship management is a necessary investment, and any company that wants to be successful must understand the importance of using it. In addition to this, they must avoid practices that can lead to failure when attempting to implement it. A number of studies have indicated that many companies lose a maximum of 50% of their customers each year. This is especially true for large companies. Statistics also show that technology based companies lose more than 50% of their customers within a 12 month period. The good news for those who are considering CRM is that Customer relationship management tools can allow a company to boost their profits by 80% if they can hold only 5% of their highest paying customers. This means that a CRM system can offer an excellent ROI by only having a 5% success rate.

There are a number of reasons why CRM systems often fail. A Customer relationship management system is considered a failure when it does ot achieve the goals that the company originally set out to achieve. However, in most cases, this will be a reflection of the company rather than the system. A company must have well defined goals before they begin looking for a CRM solution. If the goals of a company are not well defined, the CRM implementation will be a failure, no matter how successful the system is. It is important for companies to be realistic. If the company is tyring to achieve multiple goals, the goals that are the most importance must be emphasized first.

Another reason why CRM implementations fail is because the company misses the big picture. All too often, CEOs are concerned with increasing the profits of the company rather than increasing the satisfaction of their customers. It doesn’t matter how much money a company spends on a CRM system. If they have not taken the time to create realistic goals, and they are not looking at the best interests of their customers, the project will fail. It must be emphasized that CRM is more than just technology. Technology, no matter how advanced, will not get people to buy your product, and it will not get them to keep buying it. This can only be accomplished when the company puts their best interest at heart.



Everyone in the company must understand the purpose of implementing the system before it is purchased. A good corporate executive will get together with the IT staff and explain to them where the company is failing. They will explain in detail why the existing system is not as effective as it should be, and then they will demonstrate how implementing the CRM system can allow them to become much more successful. If the IT department doesn’t see the importance of utilizing CRM, they will be reluctant to use it, and this can lead to problems.

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Editorial Team at Exforsys is a team of IT Consulting and Training team led by Chandra Vennapoosa.

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