Best Practices: Debunking Eight CRM Myths

Published on August 25, 2009 by Erin Kinikin

Erin Kinikin

When I read about CRM failure rates, I tend to focus on the positive – a majority of companies now are at least somewhat satisfied with their CRM deployments. Why?  The front office is full of free-wheeling knowledge workers — impatient, process-averse, and led by revolving door executives.  So, why are the expectations so much different than reality? CRM benefits are still oversold, and the work and time (and organizational change) required is still woefully underestimated. Trying to find a short cut to customer delight isn’t new; in fact, I wrote about it in 2002. But the myths of CRM still seem to be getting in the way of effective deployments.

  • Myth 1: CRM can be bought. Despite vendors’ claims of “best practices,” the reality is that the “secret sauce” of CRM comes from your own customer processes, not the functionality of your CRM product. Lack of functionality or channel coverage can hurt – and newer industry specific solutions are more likely to include the industry terminology, functionality, and integration points you need. But for the most part, CRM technology is only a foundation upon which a CRM strategy can be built and evolved.
  • Myth 2. CRM can be built. A CRM system is never done. Companies change, products change, customers change. And that means that CRM is less about initial deployment and more about ongoing incremental improvement. In the new Enterprise 2.0 world, the best CRM solution is the one that most easily allows the business user to tailor and evolve their own CRM vision (without heavy IT support). A realistic “best by date” for any given CRM deployment is about 12 – 18 months – don’t start if you don’t have the resources to continue.
  • Myth 3: CRM can be delegated. It’s no wonder that CRM implementations sometimes underperform executive expectations when strategy work is delegated to line employees or consultants. Changing CRM processes is HARD. Only executives can weigh the trade offs between customer experience, staff time (and cost) and strategic importance. Executives need to be involved up front to set goals and priorities, ensure adequate IT staffing, check in through the process to mediate departmental conflicts and set priorities, and be front and center during and after implementation to lead adoption and assess (and act on) results.
  • Myth 4: A 360 degree view is a CRM strategy. While understanding everything about customers is a great long term goal (or at least desire), it doesn’t prioritize what customer information to get first, provide incentives to line workers to get it, or ensure that the information will be effectively used. A good CRM strategy is specific about the business goal (revenue, retention, etc.), the target customer (existing or new customers, business type, industry, geography), the desired change (more orders, deeper relationships, higher satisfaction), and the steps (business process and organizational changes) – and customer information (metrics and data) — to get there.
  • Myth 5. CRM means good customer data. Customer data management is a separate discipline, and companies relying on vanilla CRM applications to capture high quality customer information will likely be disappointed. Good data defaults and pick lists and data quality add-ons for address standardization and duplicate detection can all help improve the quality of CRM data. So can getting the right data loaded up front -especially if the business users own the data and the results. But only data stewardship and ongoing user education (and monitoring) will make CRM data a true corporate asset for the long term.
  • Myth 6. CRM follows vendor product boundaries. Pesky customers often interact with multiple departments across multiple channels – some of which aren’t even part of the front office. That means that a key part of selecting CRM software is making sure it integrates well with the operational systems and channels with which customers interact. Any task that customers can request or perform themselves should be CRM aware – whether that’s ordering a product, requesting service, managing a project, or participating in a forum or event. The best CRM is in line – performed in the process of accomplishing a task with or for the customer.
  • Myth 7. Metrics and reports are a follow-on project. Few people would consider a surgeon who operated in the dark without instruments. And yet, companies often seem perfectly willing to implement CRM with very little exploratory work to see what’s wrong or follow up plan to assess results. It’s not enough to decide to increase sales. Concrete metrics — such as number and quality of sales leads, lead freshness, cycle time and win/loss rates, and repurchase or upsell rates — can help management prioritize what to do first, measure CRM gains, identify adoption issues, and target areas for further improvement. Build a data warehouse when you can – but don’t wait to get basic progress indicators in the meantime.
  • Myth 8. Social CRM is different…but the same. There have always been customers (and front office employees) who are influential beyond their own purchasing power or revenue contribution. Social CRM technologies allow companies to find and facilitate important peer-to-peer interactions — such as online recommendations and discussions, community-based service, and idea sharing. But without a clear purpose (awareness, lead generation, service resolution, referrals), it’s hard not to drown in the social cyber noise. CRM principles – such as starting with the process and desired outcome, deciding what to measure, recording/ tracking each interaction, and incorporating results (such as “top influencers”) in other customer interactions – make the difference between “cool” and game-changingly effective.

The bottom line – choose based on business strategy

I recently helped a nonprofit select a CRM solution. The decision came down to two very different finalists. One met all their current requirements. The other was more aspirational – less deep in pragmatic areas like membership but designed for innovative community building and outreach. They choose the more aspirational product, which better matched the strategy they’d defined. The COO then identified the additional people resources needed to execute the strategy – and tied both together in the funds request to the board. They have a long journey ahead of them – but they’re off to a good start.

Your POV.

What myths ring more true to you?  Are there other myths you’d add to the list.  Please share your thoughts in the post/comments section.

Copyright © 2009 R Wang & Erin Kinikin. All rights reserved.

  • Great read Erin,

    We’d add the following myth:
    – We’ll get people to use the system through some good training classes

    All too often companies implement CRM with a whole host of training classes or online instruction designed to gain optimal adoption at go-live. The problem is that CRM systems are dynamic. Processes are dynamic. The user audience is dynamic. Simply put, any user adoption initiative that doesn’t involve an ongoing and iterative approach with supporting KPI to help identify opportunities for improvement/remediation is doomed to failure.

    And on that happy note, here’s to more myths debunked in 2011!

    Team datango

  • This whitepaper, “Ten Things to Consider Before Purchasing a CRM” is also helpful and can be read at intelestream web page.

  • Good comments all. (And Shane, I agree that customer data management is critical — and long past due to be addressed. Just can’t be assumed — and requires separate processes that are often overlooked.)

  • Good stuff. Back in the day, when I worked for [Redacted], I was on a team that went into ‘red’ accounts to assess what went wrong. I can attest to, and have the wounds to confirm, that all of the myths (well, except for #8 because it didn’t exist back then) were true back then, and continue to be the source of many ‘teachable moments’ today. The four forensic factors that lead to CRM failure back then were:

    1. Poorly executed sales process – Generally speaking, blame could be assigned on both sides of the sales process. Buyers of CRM technologies rarely give access to the right people/processes for CRM vendors to construct the right solution, and sales teams at CRM vendors were not incented to construct the right solution since the right solution may have required a phased approach. For an organization that I worked at later, we did a fairly good job of building a process that helped resolve for this – but it required a fundamental shift in the way salespeople were compensated for their deals, and some expensive, front loaded resources to extract real customer challenges during the presale process.

    2. Systems Integrator with divergent interests – Ahh, yes, the SI in the middle. I’ve arrived at customer sites, asked them to demo their CRM system for me and then asked if it were home grown. Just imagine my horror when they said, “No, this is [Redacted] as implemented by [Insert your favorite SI here]”. This is just too painful to dig into…

    3. Actual product defects – Otherwise known as ‘undocumented features’. What do you mean the software doesn’t behave like the glossy brochure and high powered ‘expert’ presentation that we saw a few months ago?

    4. Total lack of change management – As the myths above confirm, software is not the panacea for what ails customer relationship processes inside companies. I remember sitting in front of a Global VP of Sales for a major financial services firm and he said “[Redacted] sucks! I don’t get any good information from it!” I asked him to load up the application on his computer, and he froze…he’d never logged in himself. His executive assistant was told to log in daily and produce reports with deal pipeline info [this was more SFA then CSS,but I’ve got similar stories in CSS], and the [Redacted] application pumped out garbage. The problem was, despite all the formal training that was shoved down the sales organization, nobody actually was prepared to adapt their processes to the new application. During an interview, one account executive [A classic New Yorker] put it very succinctly, “I see the stick, but I don’t see the carrot in [Redacted]. I have deals to close, I close them. End of story.” Part of the change management that the company overlooked was what impact the new system would have on those who, you know, were going to use it everyday.

    I could go on and on about this, but generally I’ve seen some improvement as customers are more savvy, and vendors are more humble. My fear is that SCRM, currently riding the hype cycle, may fall victim to the same failed approaches.

  • I disagree with Myth #5. I don’t see good customer data as a separate discipline. If CRM can’t help capture it, what’s the point? I’m all for MDM and CDI strategy, but I think customers should expect a bit more from products by now.

  • Good article. Also read @JohnFMoore post on Social CRM at

    But I think there is at least a #9 (if not higher on the list) that was missed. Which is CRM is not just a pre-sales tool. CRM, and particularly Social CRM, needs to truly integrate the post-sales aspect as well. The conversation truly begins after the sale is made and people start using the product. That’s when you need to know what people are saying, not just to you, but to the rest of the world. It’s also how you can build longer standing engagement with your customers to enhance brand loyalty which is increasingly important in an On-demand world and even in the traditional on-premise software industry where maintenance revenues are about 4:1 to new product revenues.

    Twitter: @ggruber66

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