4 Ways Entrepreneurs Are Getting Customer Relationship Management All Wrong The focus shouldn't be on improving CRM technology. It should be on revolutionizing the sales force's ability to use the data it provides.
By Jason Jordan Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
It has been 15 years since Gartner famously reported in 2001 that 50 percent of all customer relationship management (CRM) implementations were considered failures, and various studies since then affirm the fact that sales forces are still not satisfied with CRM. In fact, we work with some of the most successful sales forces in the world, and all of them are working intensely to improve CRM's impact on their businesses.
So why do we remain so vexed by this software? Why do the smartest and most motivated executives on the planet still rub their foreheads and wrinkle their brows when they consider their next steps with CRM?
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When conducting the research for our book, Cracking the Sales Management Code, we spent several years observing how companies measure and manage their sales forces. This gave us unique insights into the intersection between the technology of CRM and the practices of sales management. We believe that sales will continue to battle with CRM until we fundamentally shift our thinking in four key ways.
1. It's not about managing customer relationships.
We continue to use the moniker "CRM" for our sales force's software as though we're using it to manage our customer relationships. If we're honest with ourselves, we actually use these systems to manage our sales forces. Sure, there are customers on the other side of our salespeople, but we really want the software to automate important selling tasks like aligning territories, managing pipelines, winning opportunities and generating forecasts.
For these purposes, we prefer the somewhat abandoned term sales force automation (SFA) to CRM, because it describes what we're really trying to do. It's a subtle change, but if we started calling this software what it is, then we could begin to think more specifically about what we are building it to do.
2. It's not about return on investment (ROI).
One of the most cited measures of CRM failure is a low return on investment. In our opinion, ROI analyses should no longer be required to justify CRM's place in the sales force. ROI analyses were developed to help evaluate competing alternatives for capital investment, but CRM is no longer an investment alternative. CRM is now corporate infrastructure that's required to operate a sales force, just like e-mail, mobile phones and laptops.
Try searching the web for articles on the "ROI of email." You'll find no results, because email is not an investment -- it's an expense. So is CRM. We are at least a decade removed from the time when CRM was a strategic investment that required careful consideration and justification. Let's disregard the ROI calculations for CRM and start looking for more meaningful ways to measure its business impact.
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3. It's not about user adoption.
Most of our clients are obsessed with "user adoption" of their CRM tool, and it is a common metric of a successful implementation. It shouldn't be. User adoption is an outcome of good CRM, not a measure of it. Someone once told me that when you lead a horse to water, your goal shouldn't be to make the horse drink -- it should be to make the horse thirsty. Similarly, when you lead a salesperson to a CRM, your goal shouldn't be to make them use it -- it should be to make them want to use it.
Reporting "low user adoption" implies that the salespeople are somehow to blame, when the underlying cause is a tool that isn't compelling to sellers. How about tracking a metric like "Percentage of Reps Who Love Using CRM." That would be a better measure of a successful implementation, because it would shift the business challenge from getting users to log in to providing users with irresistible and unavoidable functionality.
4. It's not about technology.
Since CRM has technology at its core, we fall into the trap of thinking better technology will solve our problems. But can it? Today's CRM technology is astonishingly better than it was 15 years ago, but research says it's just as big of a failure from a business perspective as it was in the beginning. What we need is not another iteration of CRM technology (call it CRM 15.0) -- what we really need is to teach sales forces what to do with CRM.
It's like we've taught millions of people how to get in and out of their cars, but we haven't taught them how to drive. We've taught sellers how to log in, but we haven't taught them how to use the data to win more deals. We've taught their managers how to log in too, but we haven't taught them how to use the data to coach more effectively.
CRM technology has become amazing over the last 15 years, but our business practices haven't. It's time to stop focusing on what's on the computer screen and start focusing on what's in the user's head.
CRM has been with us for a long time, but it remains underl-everaged, because we are viewing CRM all wrong. We need to concede that we don't really use it to manage customer relationships -- we use it to manage our sales forces. Our goal shouldn't be to achieve an ROI or to boost user adoption -- it should be to provide an invaluable service to our sellers.
And the focus shouldn't be on revolutionizing the technology – it should be on revolutionizing the sales force's ability to use the data it provides. If we can't put CRM into the context in which it belongs, we'll be reading the same research findings for the next 15 years… and beyond.
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