Summary
In today’s volatile economic landscape, where layoffs are rampant in every major industry, banks (like Silicon Valley Bank) are failing, and venture capital is harder and harder to come by, the need for efficient revenue programs has never been more urgent. Businesses are scrambling to adapt to new buyer’s journeys, which have undergone significant recent transformations, none more so than the advent of Chat GPT earlier this year. Customer Relationship Management (CRM) systems have long promised to be a tool that, if used wisely, can be a game-changer. However, CRM is not without its pitfalls, some of which have persisted since the early 2000s and others that are new in our modern, mobile, data-driven era.
The Original Four Perils of CRM Revisited
Implementing CRM Before Creating a Customer Strategy
The first peril, as outlined in this HBR article from 2002, is implementing CRM without a well-defined customer experience strategy. This issue is still relevant today. Businesses often get enamored by the shiny new features of CRM software, forgetting that these tools are meant to support a broader end-to-end digital customer experience, not replace it.
Rolling Out CRM Before Changing Your Organization to Match
The second peril is rolling out CRM technology before aligning your organization’s structure and processes with customer needs. This is a classic mistake that many companies continue to make. They equate an investment in CRM with digital transformation, then invest in CRM software but neglect to train their teams or adjust their business processes to make the most of these new tools.
Assuming that More CRM Technology Is Better
The third peril is the assumption that more technology is better. This is a dangerous mindset because it can lead to overinvestment in features and capabilities that your team doesn’t need or won’t use. The result is often a complicated, cumbersome system that hinders rather than helps your sales efforts.
Stalking, Not Wooing, Customers
The fourth peril, stalking instead of wooing customers, has evolved in a way that could be likened to Big Brother from the book 1984, watching over the shoulder of sales professionals. Instead of empowering them with tools that are force multipliers, companies are using CRM systems to micromanage, creating a culture of surveillance rather than support.
The New Perils of CRM
The Evolving Buyer’s Journey
The first new peril is the dramatically changed buyer’s journey. With the advent of revolutionary technologies like the mobile devices circa 2007, and now generative AI, customers now have more control over how, when, and where they interact with brands. According to a Gartner study, the buyer’s journey is no longer a linear path but a complex web of touchpoints and customers are more than halfway through the purchase process before they have the first meaningful contact with a seller.
Lack of Organizational Alignment for CRM success
The second new peril is the lack of organizational alignment between marketing and sales, between business and IT. This is where Patrick Lencioni’s concept of The Five Dysfunctions of a Team can be applied. The lack of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results are often magnified when there is a disconnect between different departments. A lack of alignment between marketing strategy and front line sales execution can lead to massive overspending, while misalignment between business and IT can lead to CRM cost overruns, extended project timelines, and payback periods.
CRM Continuous Improvement and Change Management
The third new peril is the widespread adoption of agile, continuous improvement, and change management methodologies, which have become the norm for virtually all enterprise business applications—except, notably, CRM. While these methodologies are excellent for keeping complex projects on track and teams aligned, they expose a glaring gap in the maturity of Salesforce, whose appetite for complex digital transformations has increased but its ability to deliver on a predictable schedule has not kept pace.
Navigating the Future of CRM
To navigate these perils, both old and new, it’s crucial that CEOs make CRM decisions in the context of their overarching revenue programs. This involves a multi-step approach that begins with a clear understanding of your buyer’s journey, then defines your customer experiences in that light, and finally allocates sales and marketing resources in the most impactful, efficient way.
Key Takeaways
Findings
- Finding 1: CRM is a powerful tool but comes with its own set of perils, both old and new.
- Finding 2: Salesforce’s fragmented platform poses challenges for unified CRM implementation.
- Finding 3: A user-centric approach to CRM is often overlooked.
- Finding 4: Microsoft leads in AI innovation within the CRM space.
Suggested Actions
- Action 1: Schedule a Free Consultation with SalesSmyth. Let’s study your current revenue program and CRM tool stack and make some independent recommendations for improvements and strategies to capitalize on AI now.
- Action 2: Before implementing a CRM system, document your buyer’s journey.
Action 3: Align your marketing and sales organization and processes; then organizes your technology roadmap into very small steps.
Source References
Avoid the Four Perils of CRM – Harvard Business Review
Gartner CEB Challenger Sale Study