Why do so many businesses under-value CRM?

Wiraya’s annual Barometer report suggests CRM continues to be under-utilised by a large number of organisations.

It’s over 15 years since the first in-depth analysis of the CRM market revealed to the world that a huge number of system deployments were tanking.    

Gartner’s now-infamous 2001 report found a 50% CRM failure rate existed across the globe, and subsequent studies have regularly reported rates of anywhere between 30% and 70%.   

In comparison, Wiraya’s 2018 CRM Barometer paints a fair rosier picture, but still reveals that businesses are struggling to make full use of their CRM’s capabilities.   

Interviewing 750 CRM leaders across the Europe, the report discovered that 35% of organisations lacked ‘clear plans and processes’ for their CRM.    

In most cases the lack of vision was in correlation with budget - just 34% of businesses have a specialist budget for CRM, with 53% stating that any financial resource applied to CRM planning and process was often extrapolated from their organisation’s marketing budgets.

Too many ad hoc users

The report identifies 5 clear types of CRM user among businesses:

• ‘Ad hoc’: Businesses that use CRM but have no direct organisation or ownership for its strategic benefits.
• ‘Traditional’: Those that use CRM and can attribute ownership to it but have no clear planning and processing around its long-term goals.
• ‘Ambitious’: Those that have plans and processes in place and a team with dedicated responsibility for CRM success.
• ‘Leader’: Businesses who have clearly-defined CRM processes, measure KPIs, analyse and monitor their work and have a team dedicated to success.  
• ‘Best in class’: Businesses that understand that CRM is business-critical and continuously work to analyse, develop and refine their practices within a team with dedicated responsibility to its evolution.  

Tellingly, 51% of businesses identified themselves as ‘ad hoc’ or ‘traditional’ users, compared with 8% who define their business as ‘best in class’.

According to Wiraya’s UK director, Sam Madden, the difference between the contrasting types of user lies with how well senior executives in a business understand the correlation between a fully-firing CRM system and the customer experience being delivered by the business.

“For CRM leaders to win trust from top management, you need to be able to show an aggregated view of what you want to do (a strategy), why (the business case) and how you’re performing and progressing (with KPIs).”

“Another good way of getting your management to better understand your customers is by letting them become the customer. Let the executives sign up for your service and go through the whole customer journey themselves to really get a feel for the importance of a CRM focus.”

Integration concerns

The other factor hampering many businesses is their lack of a fully integrated CRM system. The 2018 CRM Barometer highlights that 35% of businesses feel their CRM is not integrated, with legacy of old systems a continual burden.

“There is still a gradual migration of long-term users of CRM from legacy systems to web-based access and the SaaS model,” Mike Richardson, managing director at Maximizer Software told MyCustomer.com, for our 2017 CRM guide.

“However, a trend we see is towards greater integration with other systems, moving data from disparate sources into the central ‘hub’ of a CRM solution. This data centralisation delivers business intelligence across all aspects of a business – not just the sales and marketing elements.”

Indeed, Maximizer’s own 2017 Benchmark Study found organisations report the top 3 operating benefits of CRM as ‘centralisation of customer data’ (80%), ‘improved data quality and value’ (70%) and ‘improved visibility of communications and activities’ (60%).  

Until more businesses achieve this, the 15 year-old cloud around Gartner’s reported ‘failure rates’ may yet continue to hang over CRM.  

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