The CRM industry has been accused of being “in denial” about the challenges it faces as a new study reveals that almost half of businesses are turning their back on CRM tools.
A new study by the Institute of Sales & Marketing Management (ISMM) has revealed that a staggering 40% either do not intend to use CRM because they consider that it is ineffective for their business, or have developed their own in-house bespoke systems.
Furthermore, the ISMM’s CRM Survey 2013 suggests that of those using CRM systems only half (54%) are satisfied with them, with 43% indicating that they intend to change their CRM system in the next two years.
Responding to the results, Brian Hawkes, CEO of Foresite SPA, said: “This must be a clear indication for CRM vendors that our business environment is rapidly and fundamentally changing and that their products are in danger of becoming outdated.”
Hawkes highlights that 93% of respondents reported that contact management is the number one key function that they use – “a function that could arguably be equally performed by personal management systems such as Microsoft Outlook or IBM Lotus Notes,” he says. Indeed CRM vendors are increasingly moving more towards multi-tenancy solutions by integrating with other third party applications in order to extend front office functionality; notably Salesforce.com’s AppExchange.
Nevertheless the main criticism levied against the leading CRM vendors today is ironically a lack of functionality and flexibility.
“From our experience we believe that the fundamental issue is the way that customers identify, validate and procure from suppliers,” continues Hawkes. “We increasingly find that relationship management is no longer the most important factor in customer acquisition or retention. CRM might be accused of being in denial as it continues to widen front office functionality and ‘link’ awkwardly with back office applications, when the real challenge is to expand commercial functionality beyond the so-called front office to confront the bigger commercial challenges which are having the biggest impact on future sales every day.
“As well as internal drivers, this includes commercial intelligence relating to external factors such as market reactions to your business, competitor performance and retention dynamics i.e. what is really happening in your business. Sales performance involves every commercial business function, many of which are outside the jurisdiction of sales force. Customer relationship is (of course) very important, but seldom is it the leading mechanism in sales growth or sales performance improvements.”
In other findings, of those that are using CRM systems, the market is being dominated by three vendors: Salesforce.com (20%), ACT! (17%) and Microsoft Dynamics (16%). Other vendors mentioned included Sage CRM (5%) and surprisingly Siebel, Oracle and SAP, which shared only 7% between them.
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.