4 Key Reasons why CRM Initiatives Fail

4 Key Reasons why CRM Initiatives Fail

CRM or Customer Relationship Management is one of the most powerful tools for enhancing relationships with your customers, which in turn generates customer satisfaction, retention and finally boosts revenue.

Unfortunately, according to Gartner Group’s well-publicized studies back in 2001 revealed a CRM adoption failure rate of 50%, while Forrester found in 2009 a failure rate of 47%, which leaves customers and CRM vendors baffled in the CRM space.

Given that CRM is 23 years old technology, and these CRM implementation failure reports, below are some of the top causes for CRM failure and preemptive measures that can prevent and respond to these challenges.

Reason #1

Absence of Focus

CRM application and strategies are capable of delivering a powerful combination to achieve tactical goals, strategic objectives, and effective customer-facing processes. However, for this to uphold a sustained success, CRM adoption efforts must be primarily aligned with and focus on the company’s most strategic imperatives.

Therefore, at the highest level, the question remains:
"How do we use the CRM, and these strategies and techniques to achieve our goals?"

Now, that means understanding what are your objectives and being able to illustrate them in clear and measurable terms even before purchasing a CRM for your business. 

Are you trying to use your CRM to grow customer share, increase sales, improve profitability, gain enhanced insights into your customer management efforts, attract new customers, provide better customer service, or serve your existing customers more profitably?

Although you do not want your CRM to serve just one of these goals, however, you must be able to rank them as per their importance for your company.

This also means, setting up specific objectives with measurable returns from the CRM software investment, since if you are unsure about what you are trying to find out and accomplish from your CRM, do not be surprised if you are incapable of achieving it.

Reason #2

Absence of Commitment

Before you buy your CRM if you are incapable of getting buy-in from all the stakeholders in your organization, you are going to face a tough time realizing the benefits from this software. The most important groups that you need to secure sponsorship for the adoption of your CRM software are sales staffs, top management in your organization, and the collective group of your customer-facing employees.

While unsuccessful CRM projects do not, successful CRM implementations have all these groups enthusiastically onboard even before the purchase of the software.

Therefore, make your corporate management vocally committed to your CRM implementation efforts. That means your top management needs to allocate sufficient budget and resources towards successful implementation of the software and CRM strategies and have to remain committed to see it through. Since the incomplete implementation of customer-facing strategies is most unlikely to succeed after implementation of the software.

Secondly, in addition to the top management in your organization, you also need the engagement and commitment of the people who will actually use the CRM software.

One of the most prevailing reasons for CRM failure is challenged user adoption, or incapability to simply use the software.

This problem is particularly more with sales reps those that mostly view the SFA (Sales Force Automation) in the CRM as something that is imposed on the sales teams by their sales managers that will help the managers to find improved sales performance visibility but obstruct the sales rep’s ability to sell.

Therefore, to get your sales teams to actually use the CRM software, you need to involve a three-fold approach to make your sales teams adopt the SFA system.

Primarily, you need to offer your sales team easy to use CRM software , a usable system, which actually works as advertised. That means you need to adopt a CRM that meets their requirements and provides them with tangible and productive information and advantages.

Next, you need to listen to your sales reps and tune the CRM system to meet their real requirements. You must always remember while implementing your CRM that it is supposed to make things easier and transparent for your employee. Since if it does not meet your sales team’s fundamental needs, your employees will agree to your changes, but in reality, will not use the system at work.

Lastly, to get buy-ins from your sales staffs, you actually need to hard sell the benefits of using the CRM system to your employees frequently. As you just cannot rely on your sales teams to discover the advantages of using CRM software, any more than you can expect your customers to find out the salient benefits of your offerings.

Therefore, empathize and educate each group of stakeholders about the appropriate features set for each individual groups, and thereafter find a champion in each group, to advertise and propagate the benefits of using a CRM. Constantly reinforce the message for a long time so that your campaign behind successful implementation of the software does not just end when the easy to use CRM “goes live” in your organization.

Reason #3

Rushing into CRM adaptation

Never decide that your entire organization must get CRM-ready and use the software immediately. Taking hasty measure for rushing CRM adoption in any organization is a sure-shot recipe for a disaster. 

This is because, if you do not allow sufficient time for your IT staffs to be briefed on the fundamentals of the CRM software and how the system will be implemented into your business, it will most often lead to data collection errors in the new system while transferring information from your existing legacy software applications.

Moreover, if you are implementing CRM in your organization for the first time, training the users on how to use the software accurately is a critical factor in the utilization and adoption of the software. Implementing a recurring training cadence is important for successful implementation of the CRM as there are many employees who are not tech-savvy and will, therefore, require multiple pieces of training to get used to the system.

Therefore after your CRM implementation never underestimate the time needed for training your staffs and do not deliver anything less than impressive CRM training.

Reason #4

Think CRM (only) as a Technology solution

Although the software is indeed a primary necessity to make the CRM work, nevertheless, managing relationships with your customers to keep them happy can never happen just by the implementation of the technology.

Actually, Customer Relationship Management is a continuous effort to focus the entire organization on its customers and their requirements for mutual advantages.

Hence, another most prevailing reason for CRM failure is to approach the CRM strategies as a software project, and thereafter getting the system running while failing to realize the strategic benefits that the CRM should provide to your organization.

Therefore, for a successful CRM implementation re-engineer your customer-facing business processes, and then automate them with the application software to make them more consistent, efficient, and time-bound, so that it can enhance your customer-facing strategies and improve your business processes.


Although for sure successful CRM implementation is a major undertaking, but still it is far from impossible, as there are also thousands of examples of successful CRM implementation in businesses that have noticed a dramatic increase in their customer retention, satisfaction, and acquisition of new customers for their companies. 

It must be remembered that Customer Relationship Management aided with easy to use CRM software is a long term strategy that can help your company achieve its most essential customer-focused goals. 

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