Common CRM Mistakes – And How to Avoid Them

By Jennifer Schiff
April 12, 2011

Whether you’re in the process of choosing a new customer relationship management (CRM) system, about to deploy one, or looking to get the most out of your existing CRM software, these expert tips can help you avoid some common CRM mistakes.

Here, then, are 10 common CRM mistakes — and how to avoid (or fix) them.

1. Focusing on features instead of process

“Buying a CRM system because of the features it has today is the stupidest decision you can make,” said Martin Schneider, senior director of communications at SugarCRM. “Just like buying a computer — the system could be obsolete before you go live with the project if it is too rigid and relies on features instead of a fluid data model and simple process engine.” And Schneider is not the only CRM expert to warn against “feature-itis.”

“By themselves, all the CRM features in the world won’t make sales reps collaborate, improve customer service or raise customer loyalty,” said David Taber, CEO of SalesLogistix, a certified consulting company. “Those results happen only when happy users have put good data into the CRM system as a natural part of doing their job. So the only features you should focus on are the ones that accelerate adoption by employees.”

2. Deploying a CRM system that isn’t optimized for mobility

Considering that today’s sales force is mobile, your CRM system should also be mobile. Yet according to the experts, there are still companies out there using CRM systems that don’t easily synch with mobile devices. The solution: “Ensure that your CRM system’s mobile capabilities are tethered to the core CRM platform — and not another system that needs to be bought, configured, implemented and maintained alongside the core CRM system,” said Schneider.

3. Trying to do too much, too soon

Start small — and gradually evolve your CRM system, say the experts. “The most effective CRM systems are built out gradually so that they fit naturally into the way you do business,” said Taber. “Sure it’s tempting to have a big budget and a fixed deadline — to get the project all over and done with — but that approach almost guarantees a CRM system that doesn’t work smoothly with your existing internal policies, channel interactions or business processes.”

Similarly, don’t worry about importing all your contacts in one fell swoop as soon as your new CRM system is up and running, especially if they are located in multiple places, said Pamela O’Hara, the president of BatchBlue Software. Rather, use an “incremental approach to CRM implementation and expansion,” said Taber. “With the modern, cloud-based tools of today, companies can start small, taking on very little risk and proving the value of the CRM system to each team before getting more strategic,” added SugarCRM’s Schneider.

4. Not owning your information

When deploying a CRM system, you need to take the appropriate steps to protect your information from the start by setting up your system wisely, advised O’Hara. “Use the business name, business credit card, and be sure that a business email address is used when registering the administrator on the account,” she said. “These steps will protect you from legal ambiguity about who can access the data, ambiguity you’ll be thrilled to avoid if the employment status of the person who sets up the account changes.”

5. Deploying from the top down instead of from the ground up

“In a world where social media and Web 2.0 application experiences rule, the key to successful CRM adoption is relinquishing control of the decision-making process to the end user, not to the CIO or vice president of sales,” argued Schneider. Find out which CRM-related tools your employees like using “and create a formal program based on real usage,” he advised.

6. Using CRM as a micromanagement tool

“CRM systems are about improving the speed and effectiveness of managing customer relationships — which means a CRM system should be for the Sales and Support reps first, management second,” said Taber. “Of course you need visibility and discipline, but if the reps believe that the CRM is just a surveillance and measurement tool for upper management, they won’t really use it.”

Moreover, “the data will be incomplete or — worse — faked. So you won’t get either the effectiveness or the visibility you wanted out of the system.” Taber’s solution: Optimize your CRM system to save your sales reps time and hassle, so they can close deals faster.

7. Creating a CRM silo

“Many businesses deploy their CRM without thinking about connecting it with the larger business,” said Paul Turner, senior director of product marketing at NetSuite. That can mean having to manually reenter data, slowing business processes. To avoid this CRM mistake, Turner advised managers to “tightly integrate sales and service applications with accounting, so you can accelerate, streamline and reduce errors from the quote, to order, to fulfillment and invoicing, through to customer service process.” An added benefit: “integrating your sales and finance systems also provides the most accurate way of building accurate forecasts, and monitoring unbilled and billed orders versus quota,” he said.

8. Decentralizing customer data

“It’s easy to end up with customer data spread out and duplicated across lines of business applications, such as opportunities and upsell information in the SFA [sales force automation], invoicing information in accounting and customer issues in the service system,” said Turner. However, by doing so, “it makes it almost impossible to get a holistic view of your customers.” Worse, some systems or departments may have outdated or inaccurate customer information. The solution: Centralize your customer information in a company-wide CRM system. When “customer data is centralized, everyone gets consistent, real-time visibility into one version of the customer, improving productivity and overall customer satisfaction,” he said.

9. Thinking locally instead of globally

“It’s easy for global businesses to end up with multiple CRM systems,” said Turner. “But this can cause real problems when it comes to sales forecasting and quote planning — and can really hinder corporate visibility into sales performance.” If your business is multinational, it’s important to choose a CRM system “that can support multiple currencies, multiple subsidiaries, be easy to tailor to specific regional sales processes and enable a consolidated view of global sales performance (actuals, forecast and performance against quota),” he said.

10. Getting overwhelmed by social media

“Relationships are growing all over the Internet, thanks to social networking sites like LinkedIn, Facebook, blogs and Twitter,” said BatchBlue’s O’Hara. And while more relationships are good news for your business, keeping up with all your new friends, followers and contacts can be overwhelming. So, she advised, “be sure to capture these non-traditional communication channels in your CRM system so you can get the bigger picture on your relationships and help them grow.” (For more on social CRM, see Ten Ways Social Media is Changing Sales and CRM and Top 10 Tips for Using Social Media to Improve CRM.)

Jennifer Lonoff Schiff is a regular contributor to eCRM Guide and runs a marketing communications firm focused on helping small and mid-sized businesses.