Why Do Most CRM Projects Fail?

24th November 2008 Is this headline is a mistake? Global CRM spend is estimated at US$ 14 billion annually (AMR Research). With such a huge amount of expenditure, can it really be possible that most CRM projects fail? In Barack Obama's words: "yes, it can".

And the rate of failure is staggering. Gartner Group estimate that 65% of CRM projects fail. The Meta Group has suggested failure rates of between 55 and 70%.

If we take Gartner's 65% failure rate and AMR Research's market size estimate this means that an amazing US$ 9.1 billion was completely wasted in corporate CRM spending in 2007 alone! If this continues, given AMR's projection of a US$ 22 billion global CRM market in 2012, this number will have risen to US$ 14.3 billion.

In this research note we draw upon our own experiences of failed CRM projects to draw up a list of lessons learned from real world scenarios. We focus solely on the Sales sub-segment of the CRM market, which Gartmore has estimated as the biggest category - accounting for 40.5% of global CRM spending (or US$5.67 billion) in 2007.

By far the most common CRM failure involves the wrong system being rolled out. Let's look at a couple of examples before we discuss what we learn from the mistakes management made:

Buying an Inappropriate System is the Fastest Route to CRM Failure

CRM Failures: Case Study 1: US Printing and Publishing Company

A US-based printing a publishing firm failed to adopt Salesforce.com as it was too complex for their user base. As the organisation had a fairly high turn-over of staff, Salesforce was simply too complex and too expensive to adapt to the requirements of a rapidly changing sales call centre. As a result, the sales manager decided to move away from Salesforce, but struggled to find a solution on the market which could meet both requirements of functionality and simplicity.

Lessons from Case Study 1:

It sounds obvious, but so many companies still get it wrong. The system adopted must be flexible enough to 'breathe' with your organisation. If your company has a fast-pasted sales culture, with a high staff turnover rate, a complex 'enterprise' application (whether it is hosted locally or SaaS) is unlikely to be a good choice. By the time the sales staff have received sufficient training to be able to use it properly, they are likely to have moved on - wasting precious training budget and (even worse) meaning that the system is never properly implemented. If your average sales staff turnover is one year or less you must adopt a system which is simple and easy to adopt on day one. Most likely, this will be a Saas package delivered on-demand. Our advice would be to register online for a package which appears aimed at companies who need to get up and running quickly.

CRM Failures: Case Study 2: UK Media Company

We recently spoke to a media company in the UK. They had attempted two full Siebel implementations with little success. Each time, the company met with the sales force to determine the reasons behind their lack of CRM usage. Sales reps provided a list of reasons and requirements, and changes and modifications were made to accommodate the concerns expressed by the sales force. But even after investing further in development and training, the CRM usage by sales reps remained the same as before - zero.

Lessons from Case Study 2:

Our analysis of the problem revealed that there were two fundamental issues: 1) related to the complexity of the system itself, and to the time it took for the salespeople to move from one record to the next. Given the fast-paced nature of the salespeople's' work, the system was simply not able to keep up with their minute by minute requirements. This led to frustration and an inevitable decline in usage. 2) was more fundamental. On investigation we found that management had actually spent insufficient time and planning on really understanding what was needed from the system. This company actually needed to manage leads ('opportunities') and not 'clients'. The needed a sales process management system to track the progress of leads through a sales process, but instead had purchased a cumbersome contact management database. This had resulted in little but-in from the sales staff and even less value-added from management, because no meaningful analytics on the sales process were available.

Conclusions

Our investigations into CRM failures throw up a couple of crucial lessons. The first is that companies should not 'over buy' their CRM solution. Often times a less expensive and simpler SaaS solution will end up being more valuable if it is actually adopted and used by the people it is supposed to serve, i.e. the sales staff.

The second vital lesson is that management has to understand clearly what kind of a sales CRM system they need. For many, relatively static, companies with a limited number of very deep and stable customer relationships, a contact management system with a sophisticated data structure may be the most appropriate. But for other companies who are essentially moving 'leads' rapidly through a sales process chain a very different system will be necessary, one that puts the sales 'opportunity' at the centre of the process.

So in summary, management needs to be precise in its analysis of its own organisation, but also realistic and focused on what their sales staff will actually use and derive benefit from.

Global Slowdown Boosts Free CRM Packages

SalesPush.com, a leading provider of free sales process CRM software, today announced that it has signed up 76 new corporate clients in its first month of operation. These customers originated from 28 different countries, and the key sectors were: media, IT, telecoms and finance. Of especial note is the fact that the average time from registration to completed set up was just 1 hour 30 minutes. These customers appear to have been attracted to SalesPush's free basic edition, which is both easy to use and 100% cost free.

SalesPush.com CEO Mark Donkin said:

"Of course we are delighted with the global response to SalesPush thus far. The rate of take up has exceeded our expectations when we launched the product. It seems that the economic slowdown is really having an impact on corporate spending decisions. Our conception of SalesPush as a free to use, simple and effective CRM system has clearly struck a chord with a lot of IT and Sales Directors all over the world."

"Most SMEs, in particular, are paying too much for CRM systems that are often simply not adopted by large segments of the workforce. We think that free to use systems like SalesPush.com are striking a cord because they add value immediately without the need for costly consultants and the paraphernalia which come which more complex products."

ENDS.

Global Slowdown will Kill 'Big Software' - says SalesPush CEO Mark Donkin

16th October 2008 Mr Mark Donkin, CEO of SalesPush.com, today predicted that the global economic slowdown will end an era of ever more complex and expensive corporate software products. Writing on the company's News Forum, Mr Donkin said:

"Large software companies have made a good living over the past 20 years selling ever more complicated software products, for ever more inflated prices. But this trend has now peaked and will go into reverse".

Donkin pointed to the dramatic fall in SalesForce.com (CRM) share price as evidence that companies are turning away from overly engineered systems weighted down by functionality that is often unused by the majority of employees.

"Businesses are under pressure to innovate as never before. They must respond instantly to changes in their market places. So they need products that are simple and adaptable. Products like SalesForce.com and Oracle on-demand are not poor products per se, but they are too unwieldy and complex for most organisations to use properly. I cannot tell you how many conversations I have had over the past year with managers who have purchased these products, often on expensive multi-user licences, simply to have them languish unadopted by a majority of the employees they were bought to serve."

He went on to explain that simply delivering products on-demand (the so-called 'software as a service' model) was not enough:

"The key to a successful corporate software deployment is getting buy-in from the end users. Too many systems are bought by senior management and deployed by diktat. But if a product isn't simple and quick to get going, employees, especially sales staff, will find multiple reasons not to use it.

This era of 'big software' is now dead. All but the very largest companies, who can afford to pay the armies of consultants to explain and implement these systems, are going to migrate rapidly away to simple to use, often free, products.

The future of corporate software is bright, but it certainly isn't 'big'".

ENDS.

For further info. contact Mark Donkin, CEO of SalesPush.com at mark.donkin@salespush.com or call +44 7734 256709

SalesPush Launches Free Sales Process CRM Software Platform

24th July 2008 - Today saw the launch of an exciting new on-demand sales process management product aimed at organisations of all sizes. SalesPush is a CRM system with a difference: it is free for users but is backed by an enterprise level SLA. SalesPush drives an organisation's sales process forward from cold leads right through to active customer.

SalesPush was designed by a team led by former software executive Mark Donkin. The team were frustrated that sales people got so little value from the CRM products they were (or actually weren't) using. And as a manager, Mark realised that existing CRM products were giving too little visibility into why some salespeople or strategies were more effective than others. SalesPush's mission was to produce a platform that helped salespeople and their managers achieve sales - not merely to store records. SalesPush found an early partner in UK venture capital fund Aspiration Capital Management, who are the only external investor.

As if SalesPush's revolutionary thinking about the application of CRM to sales process management wasn't bold enough, the company has gone further in deciding to make its product on-demand and free to users. CEO Donkin explains the reasoning:

"We want to create a large community of SalesPush users. This is why we have made the application free to use. By helping them, our users will help us - help us to grow our brand and to perfect our product. The SME marketplace, in particular, is crying out for sales software that is easy to use and sales process orientated. We are certain that if we create a large global SalesPush community that the company will be a major success."

SalesPush customers are able to access the product and get going immediately at no cost. They can upload all their customer records themselves or for a modest charge have a SalesPush technician do it for them. In customer trials, SalesPush found that customers responded very positively to the ease of set up and to a feature suite that was designed around the achievement of quality sales.

SalesPush is now being rolled out on a global basis, and although the company is headquartered in the UK, it expects to achieve significant penetration into sales organisations in the US, continental Europe and the Far East.

SalesPush sales process CRM platform acquired by Aspiration Capital Management

7th May 2008 - Today SalesTrak Limited, a leading UK-based software development company announced the sales of its of its sales process CRM software platform to the venture capital and private equity firm Aspiration Capital Management for an undisclosed fee. Aspiration Capital will acquire 100% of the assets, which have been spun out into a new UK company called SalesPush Limited. Former SalesTrak Managing Director Mr Mark Donkin will join the SalesPush board.

Aspiration Capital Founder Dr Jeremy Howard said:

"The continued excellent performance of companies such as SalesForce (CRM) in the US demonstrates that the market for sales-orientated CRM platforms continues to exhibit substantial growth. But many of the existing products on the market are too cumbersome and expensive for most SME companies to adopt.

We believe that the SalesPush platform can attain a dominant global position in the sales process CRM market due to its ease of use and function suite tailored to the needs of SMEs. We also believe that the future of CRM software is on-demand, and as such we are pleased to acquire a system delivered solely in this way.

Our expertise in online marketing and promotion will enable us to establish a significant global community for the SalesPush product in a short space of time. This is the important synergy between the SalesPush platform and the expertise of Aspiration Capital Management."