You Are Being Lied or Why Do CRM Projects Fail

Customer relationship management software vendors don’t disclose that 80% of CRM implementation projects fail.

I’ll never forget that phone call nearly ten years ago. We were developing a major travel agency’s VIP services CRM system. Nine months into the project, my phone rang. I answered and immediately heard:

• “THIS SHT IS NOT WORKING!” a man yelled loudly on the other end.
• “What exactly do you mean it doesn’t work? Which part has failed? Have you reported a bug?” I replied, somewhat confused.
• “NO, IT JUST DOESN’T WORK!” the man continued to shout at me.

What occurred was that the product owner, who also held a co-founder’s role, found himself in a situation where he had spent most of the R&D budget on a hypothesis that didn’t pan out.

Why You Should Listen to Me

I have been in the CRM business for the majority of my career—around 15 years. I’ve witnessed the evolution of CRM software from failing to send emails on time to AI that can generate responses to your customers without your involvement.

However, from the very first day, I’ve seen the same problems repeatedly.

Consultants who sell CRMs promise their clients an unachievable future, while clients trust their consultants and believe that the vision their esteemed advisor has presented can be accomplished within a few months.

But why CRM fails? This article is my reflection on why I believe most CRM projects fail, my observations on how successful projects unfold, and what you can do to avoid costly mistakes.

The Expectation Problem

Every CRM project goes through at least three stages:

• Pre-sales: This is when a client is in search of a solution and suppliers compete to win the business.
• Implementation: During this phase, the configuration and rollout of the CRM system occur.
• Go-Live: A pivotal moment in any CRM project when the system becomes “LIVE” and, in theory, the business starts actively using it.

But here’s a big…let’s call it a challenge.

During the pre-sales stage, companies compete fiercely for the customer, and they cannot afford to tell the client that their future CRM’s effectiveness is strongly dependent on how the company applies the software in practice. They need to make promises.

What they don’t mention is the fact that the initial CRM implementation will be extremely limited in functionality and it may happen that life will get a bit, or much worse than it was before the CRM solution.

This all happens because they need to sell the project and look better than their competition in front of the client. They need to sell.

As a result, the expectations of the management of the client company are very high. Essentially, their expectations are not achievable in any reasonable future.

When the project moves to the implementation stage, the contractor is in a relatively good position, gathers all necessary requirements, delivers what’s written in the contract, and it feels like everyone is more or less happy.

Until the project reaches the Go-Live stage. This is where reality and management expectations meet. And oh boy…they don’t match.

In fact, their expectations are higher than reality by orders of magnitude.

And this is where things go nuts.

Lack of Sponsorship

In some instances, the dynamics deviate distinctly.

On a business trip to Poznan, a quaint city in Poland, we were tasked with implementing Salesforce Field Service for a major Polish roofing company.

Upon arrival at the station, I was greeted by a congenial sales rep, whom we’ll call Yacek. My mission at this branch was to assist in launching a new desktop version of the app for dispatchers, given that field representatives were supposedly utilizing a mobile app.

However, my visit to this charming town—a place that still holds a warm spot in my memory—revealed a stark reality: apart from Yacek, none of the field service agents had even installed the field service app. It was not in use at all.

Yet, management was under the impression that the launch had been a resounding success. This was my first firsthand observation of how a vertical, old-school hierarchical system operates—or, more accurately, fails to operate.

Middle management would falsify reports of success to upper management and even provide us with user feedback concocted by their IT specialist.

From this experience, I learned that even the best software in the world won’t be adopted by users if their management isn’t fully committed to the project.

The lack of what’s termed ‘Sponsorship’ within an organization has doomed more software implementations than the Black Death decimated villages in medieval Europe.

It’s akin to expecting our projects to flourish in a desert of apathy and neglect, clinging to the hope that they will somehow defy the odds and thrive without the crucial support they desperately need.

Perhaps I’m being a bit dramatic, but it is closer to the truth than one might think.

Lack of Digital Culture

But there are subtler cases, ones that are harder to detect and even more challenging to address. These cases are akin to a Trojan Horse: on the surface and at first glance, everything seems successful.

It might appear that the CRM system is implemented and user adoption is at a decent level. However, a closer look at this type of implementation reveals hidden issues and problems that slowly emerge, much like Greek soldiers stealthily exiting the horse under the cover of night, poised to wreak havoc on your unsuspecting operations.

During our audits, we often find a large number of unused fields in the system, poor data quality, never-refreshed dashboards, and numerous users whose last login date was several years ago.

I’m not referring to any particular example, but rather to most CRM implementations I’ve encountered. This is especially true for projects done without engaging consultants, or with consultants who were proficient in understanding the CRM systems from a technical standpoint but had limited knowledge on integrating the business processes into the project.

If you take a close look at the company culture, you’ll find it very… stagnant, passively aggressive, and lacking in innovation.

The business might even be performing relatively well for now. But the management is aware that the business is losing its competitive edge, yet they can’t pinpoint the exact reasons.

And they are right—there isn’t just one reason. It’s a series of events and decisions made over the last few years that have led to such a culture and atmosphere within the company. It’s no wonder that tools like CRM solutions are not effectively supporting the business.

Business Not Ready

Sometimes I converse with over-excited business owners and CEOs who envision their company’s growth.

They understand that software can enhance their productivity, offer more visibility into their team’s activities, and provide tools that simplify life.

However, what they may not realize at times is that their company is not ready. They might just need to do a bit of groundwork.

This involves creating Standard Operating Procedures (SOPs), testing various sales scenarios to find effective ones, refining their organizational structure so that roles within the team are better defined and have clear boundaries.

These are tasks that typically trained MBAs are adept at assisting with.

Less Common Reasons

While I’ve outlined some of the most common reasons why CRM implementations fail, it’s important to remember that CRM implementation failure is typically a combination of various factors, each contributing in different proportions.

Interestingly, we recently conducted user training for a client in the Middle East, and there was one lady who, right from the start, complained that “They do it all differently.” I’m not privy to the political reasons behind her overt resistance to the implementation, which was supported by most of the company management, but her behavior underscored that there’s often that one person who consistently whines and complains.

So, among other factors, here’s a short list of “other” causes why CRMs fail:

• Disturbers: Like the lady I just mentioned, who resist change and disrupt the CRM implementation process.
• Poor Management: Ineffective project leadership and subpar performance by the digital team.
• Wrong CRM Provider: Occurs when a company opts for “the cheapest” or the contractor “with the biggest list of features,” rather than the one best suited to their needs.

How to Avoid CRM Failure

As I always say, there is no one-size-fits-all solution. Some companies are in their early stages of development, and implementing change is a natural part of their growth process. Others have been on the market for over a century, with a strong, well-established, yet conservative culture and approach to their operations.

While I can’t provide a detailed sequence of steps in this text, I can help you during an in-person consultation. I can’t create your CRM strategy for you, but I can share what I’ve noticed has universally worked for others.

Lower Expectations

The first key to your CRM success is managing your expectations. Not the expectations of your employees, managers, or investors—yours.

There is an abundance of educational material available online to learn about CRM systems. Often, inspired by case studies, we start applying the successes of others to ourselves and grow our expectations.

All—yes, all—digital projects are evolving. Uber was not born with a “Book for Later” button. E-commerce didn’t have a “Buy Without Registration” option for many years until someone hacked human psychology and understood that shoppers perceive registration as something alien to them.

Get Involved

If I could give only one piece of advice to anyone starting their CRM project, it would be this: get involved in your projects. Become the executive sponsor of your project, be a trailblazer for others, and show by example how to embrace digital transformation.

Develop your personality, and learn how digital projects and digital teams work together. Don’t hesitate to talk to companies that have already done what you are doing, and learn from their mistakes.

But most importantly, get involved. Check in with subcontractors, and share what you know with business analysts and developers. Ask them about what you don’t know and don’t understand.

Set More Granular Goals

Start small and learn to formulate smaller, easier-to-achieve goals. Focus on quick wins that can immediately benefit your team, even if it’s something you could do without digital tools but that digital can do better.

No consultant can define your goals for you—don’t be swayed by persuasive language or sophisticated phrasing. To avoid CRM implementation failures – clarity is key. For instance, if you’re losing leads from your contact forms, the solution is straightforward: establish a centralized repository for all leads generated through your website.

Similarly, if you’re overlooking client complaints, begin by consolidating them into a single location, even if it’s just an Excel spreadsheet. Assign a unique number to each inquiry, record the date, and keep track of both the status and the responsible party.

Tackle your problems in a granular way and think of possible solutions. This approach will help you make your goals more precise, easier to achieve, and crystal clear to the team.

Learn Agile Practices

Google “Agile” and learn about Scrum and the philosophy of iterative development.

Even though I’ve worked in the industry for many years, it took me a while to understand how Agile works. I had to familiarize myself with an environment where you only know your next step, have a vague idea of your path, and are almost blind about the end result.

You should accept and embrace the fact that you don’t know what will work in your business, and you should be experimenting.

Of course, there are industry experts who can save you a lot of time by telling you what hasn’t worked for them. But remember, that’s what didn’t work for them. Great companies achieve what others thought was impossible.

Build a Digital Culture and Team

Easier said than done, but build a great culture. I know this sounds like the “Spend less, earn more” advice, yet it is crucial for successful CRM implementation.

The better your team, the more acceptable to change, and the more proactive your people are, the less likely you will waste your hard-earned budget on CRM software that no one will ever use.

Watch your people carefully, and try replacing low-performers and those who are bad team players with people who want to contribute, are active, and want to share.

I don’t know how you will achieve this, but you will have to. A great digital culture and team are the single components that can make a difference for any company in any situation.

On that note, I wish you good luck with your CRM adoption. If you need a pair of carefully listening ears, drop me a line by leaving your contact details in our contact form. The first consultation is on us.

Cheers, 

J.