Why Do CRM Implementations Fail?

October 27, 2022
9 min

CRM implementation failure is costly, disruptive, and embarrassing. According to a Gartner survey, around 50-70% of CRM projects result in shareholder losses, issues in customer relationship management, lost market share, and career setbacks. And don’t forget about the company-wide loss of confidence and cynicism toward future business changes.

The good thing is that you may avert the disaster by simply knowing the common pitfalls companies are likely to fall into during their long-awaited CRM implementation initiatives.

Ascendix Technologies has been selling, implementing, and supporting hundreds of CRM implementations for 26 years, which is why we are eager to share some lessons learned to help you avoid costly missteps your peers have made.

Here are some of the reasons why CRM implementations fail, and other deadly sins executives commit when embarking on a new CRM project.

CRM Mistakes That Lead to CRM Implementation Failure as High as 70%

Why CRM implementations fail | CRM Mistakes

Why CRM implementations fail | CRM Mistakes

 

Setting Unclear Purposes

The key reason why so many CRM implementations fail is amazingly simple – people don’t set clear goals for the new CRM strategy and for the company as a whole.

Well, if you are here, you most probably have been experiencing some issues in customer relationship management, marketing, sales, or back-office activities. If you are still unsure what exactly you want to fix, ask your leadership for feedback, put the main problems into a table, range them according to urgency and follow other steps we outlined in our CRM selection guide.

Once you have your list of priorities, whether it is workflow automation or data search improvement, present those to your CRM implementation partner (a third-party CRM consultant that helps businesses set clear CRM strategies) or develop an action plan on your own.

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Failure to Acknowledge What Has Gone Wrong

By definition, CRM problems are unpleasant, and exploring them is uncomfortable and sometimes even embarrassing, especially for those in charge of processes that need to be fixed. That is why many tend to downplay, deflect, or deny mistakes during the CRM requirements gathering phase.

While, at first, it might assuage anxieties, it actually sows the seed for far greater inefficiencies in the future and might even become the reason why your CRM fails.

Of course, you can adjust your CRM implementation plan as you go, but with a much higher price tag.

 

Poor Change Management Leading to CRM Adoption Challenges

A further reason for CRM failure is the unwillingness or inability to communicate the new CRM purposes to your team members and encourage them to adapt to the changes.

Change is hard. And if you don't have buy-in from the executive management and the end users by giving them a vision of why it's worthwhile to go through this change, then this change management will end up failing because of short-sightedness.

Wesley Snow, Co-Founder and President of Ascendix Technologies

By ‘change’ I mean the new systems that have to be learned and processes that might have been newly defined. Unfortunately, if your workers don’t see the clear purpose behind all this, then people end up regressing and retreating back to that safe haven of comfort of the old way of doing things. And then it becomes a vicious cycle. You just never progress.

To avoid such CRM adoption challenges, make sure your potential CRM users have a personal interest in upgrading your internal systems by showing them how the new solution may ease their daily hassle.

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Viewing CRM Implementation as a Purely Technical Initiative

What classically happens for those who have no prior experience in CRM implementation is that they assume that this is the responsibility solely of their technical department. Nothing could be further from the truth. They have a supportive role.

Wesley Snow, Co-Founder and President of Ascendix Technologies

Historically, when we started this 26 years ago, the first person that we would end up talking to was somebody from IT. But it was just naive times when no one thought of the CRM implementation issues delegating the whole process to IT might bring.

Today everything is software as a service and the IT role has diminished significantly. In fact, the primary party involved should be the owners of the business problems that you’re trying to rectify with a CRM solution (department managers and leadership) and sponsorship. The latter, by the way, don’t simply write the check for the solution, they must stay involved in the process throughout the lifecycle of the project to reinforce the commitment to change and to have the proper influence on management, middle management and line workers.

Just like in the CRM selection process we outlined before, make sure you involve some of the target CRM users – salespeople, brokers, marketing team, etc. – to address inefficiencies in your daily activities key executives might not know and avert CRM implementation risks that are yet to come.

 

Opting for ‘BIG BANG’ CRM Implementation Rather Than Staged One

Many view CRM implementations as a remedy to all business problems and tend to roll out the new system out for all departments at once. However, by doing so, you expose your company to several CRM implementation risks:

  • Your workers won’t be able to absorb that much change at once and feeling overwhelmed, they will most likely stop using the new system and revert to the old ways of doing things.
  • Instead of the natural unveiling of the best way to solve the problem over the course of time, you are likely to design the system on uninformed perspectives and opinions which ultimately lead to revisitation of design and re-development.
  • These two risks then translate into more money spent.

 

You might have heard about some of the ill-fated companies with CRM failures (just think of Hershey!), who once undertook an aggressive Big Bang CRM implementation plan without proper time and resource allocation and, unfortunately, bumped into a total sales collapse.

So, my CRM recommendation is simple: don’t bite off more than you can chew – especially if the right resources aren’t in place. Otherwise, you can fall into a vicious cycle of redoing and correcting what has veered off track.

 

CRM Data Issues: Poor Hygiene

The CRM tool itself is the house. It isn't livable until you have furniture and other supplies. Analogously, a CRM system without data isn't really meaningful.

Wesley Snow, Co-Founder and President of Ascendix Technologies

Your data is the lifeblood of your CRM. It is your true asset that needs to be groomed and cleaned properly.

Unfortunately, not all of our clients take a responsible attitude toward maintaining their data – it’s often duplicated, fractured, fragmented, incomplete, and scattered across numerous spreadsheets.

And if you take all of those things and you bring them into this really well-designed CRM system, then you’ve not done yourself any favors.

This is where one of the most worrying challenges of CRM implementation arises: you need to allocate additional resources to tidying up and deduplicating your data, which, obviously, adds a few more lines to your initial budget plan.

To avoid your CRM plan disruption, make sure you minimize, if not eliminate, all the CRM data issues beforehand: you can use low-tech apps like Excel to more advanced data grooming tools like those within the Salesforce ecosystem.

 

Inefficient Post-Implementation

Many think that CRM projects are finished once the system has gone live. The truth is that CRM implementations are a journey, not a sprint. Changes take place over time, and they need to be carefully managed even after a successful rollout.

Even when you’ve overcome CRM adoption challenges, long-term success will fade if CRM is not nurtured. This includes running frequent checkups, updates, and monitoring.

So, here is my CRM recommendation: analyze your CRM metrics as you go to see which adjustments need to be made and how you can maximize efficiency within your business.

How Can These CRM Implementation Issues Impact Your Company?

The cost of CRM implementation failure is dramatic and depending on why your CRM project failed, it can take its toll in many areas of your company’s life.

Here are some of the typical impacts of CRM problems by category:

Financial Performance

  • Market share and operating losses
  • Negative investment return
  • Extra lines in your budget
  • High post-implementation running costs

 

Customer Service Quality

  • Customer confusion and dissatisfaction
  • Lower service levels
  • Slower time to market
  • Negative brand perception

 

Sales Effectiveness

 

Cultural Impacts

  • Low morale within affected departments
  • Company-wide loss of confidence and cynicism toward future business changes
  • Fewer investments in strategic initiatives
  • Suspended innovation of aging processes and infrastructure.

How to Avoid a CRM Implementation Failure?

Now that we have outlined some typical reasons why CRM implementations fail, let’s look into actionable CRM recommendations that might help you prevent your CRM strategy from falling into one of the above-mentioned pitfalls.

 

Develop a case for change

Answer the questions “Why my company needs a CRM?” “What problems am I trying to fix with it?” “What existing CRM issues am I trying to address?” Highlight the benefits of implementing the new system and using the existing one. Make sure your employees do understand the purpose of upcoming changes and, more importantly, they have a personal interest in switching to the new system.

 

Involve stakeholders in the design and pilot phase

This includes your key leadership, target users, and investors if you have any. Ask them how the new CRM can best facilitate their day-in-the-life activities. What can be improved? Use this feedback to carry out adjustments to your new CRM strategy as you proceed with the implementation. That’s what I mentioned before – CRM implementation process succeeds if it runs naturally over time.

 

Track the CRM implementation progress

Hold regular meetings across departments to report on how the implementation process is going. Keep all team members updated on the changes – this will help you avoid multiple CRM adoption challenges in the future.

 

Ensure you deploy a scalable solution

As long as your database contains a limited number of records, you may go with a straightforward CRM that only covers your most urgent needs. But once your business has expanded, you’ll need your computing resources to keep up: processing speed for larger amounts of data, increased storage, and ability to integrate with other apps. This is where a cloud CRM solution may cover your needs.

 

Act gradually and don’t rush

Stay away from the “do it all at once” mentality and implement every piece of the new infrastructure in steps. Start by entering sales contact key details. Then move into sales opportunity management and business analytics.

 

Allocate extra resources to tidying up your data

This includes several challenges of CRM implementation. First, you need to allocate enough time and budget for your data cleansing activities. Second, those in charge of these processes should be intimate with your data sets enough to truly assess the value, accuracy and completeness of the data. Otherwise, you may simply lose some important data or bump into other CRM data issues.

Lastly, don’t delegate the responsibility of data clean up to a 3rd party or someone who is not familiar with the subject nature of your data set.

Avoid CRM Problems with a Trustworthy CRM Implementation Partner

The best possible recommendation I can give regarding CRM implementation is seek guidance and outside assistance when the objective is more than a single user contact management replacement. A small startup with savvy developers and modest goals may get away using numerous self-help tools such as YouTube videos and online documentation, but for any company with more than ten employees, the risk of not having a skilled expert is not worth the modest savings (savings that are more perception than reality).

Ascendix Technologies has been helping companies select, implement, adopt, and integrate CRM software for 26 years, which is why we can proudly call ourselves one of the best consultancies when it comes to any CRM-related challenges.

Here is how Ascendix can facilitate your CRM implementation journey:

  • Our experts from scratch determine what CRM editions and features can bring maximum value to your business — and, most importantly, at a reasonable cost.
  • We also offer pre-packaged CRM plans – Quick Start Packages – a set of services that provides the fundamentals for a proper implementation such as data migration, light configuration and training.
  • Flexible engagement models – you choose to what extent you want us to be involved in the project.
  • A number of niche-specific specializations – our experts have worked with Real Estate CRMs, Legal CRMs, Financial CRMs, and others. You can check our select case studies for more details.

 

When done with thorough preparation and expert assistance, we’ll make sure your new CRM is well-adopted and properly nurtured, so you can focus on bigger-picture strategic objectives and growing your business.

Contact us today to make the most of your CRM in the future.

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