How to Avoid 5 CRM Common CRM Mistakes

Updated: August 20, 2007


If executed correctly, CRM can deliver phenomenal perks, from boosting customer satisfaction and generating leads to increasing profits and slashing operating costs. There are, however, plenty of ways to stumble on the path to CRM success. Here are the top five strategies for avoiding the most common CRM mistakes.


1. Start small. According to Tim Hickernell, an Info-Tech Research Group senior research analyst, the biggest mistake companies make when introducing CRM is "trying to bite off more than they can chew." Certainly, most CRM solutions include three primary applications: SFA (Sales Force Automation), marketing and customer service. Many vendors have consolidated their solutions into a single, comprehensive suite that runs the gamut of CRM functions. But that doesn't mean a company has to address every area, from call-center efficiencies to marketing-campaign management, in one fell swoop. Rather, Hickernell recommended adopting a piecemeal approach to CRM and adding new functionalities as the need arises.

2. Don't skimp on an integrator. Don't fool yourself: neglecting to hire a systems integrator when introducing CRM is less about cutting costs than it is about cutting corners. Warned Hickernell, "For larger companies, just given today's integration, deployment and implementation issues, it really is smart to try to have help." More than simply a valuable partner in the implementation process, a systems integrator can also help a company develop a customer master data strategy that determines which systems contain the most accurate and up-to-date information.

3. Hosted isn't the deployment approach. When it comes to rolling out CRM without breaking the bank, many companies assume that a hosted solution is the only way to go. But that's just not the case, according to Hickernell. "People make the mistake of continuing to go with a hosted solution based upon an economic decision of operational savings, which only gets them into trouble," he said. Instead, an on-demand CRM solution allows for a gradual approach on a pay-per-seat, per-monthly basis. What's more, the SaaS (Software as a Solution) model allows for granular — not enterprisewide — technology upgrades at a fraction of the cost.

4. Customize carefully. Unfortunately, many companies don't know when to leave well enough alone. The software-customization craze has prompted many businesses to attempt to tailor a CRM solution right down to the database level without giving any thought to future needs and product life cycles. Cautioned Hickernell, "Resist the temptation to customize at that database level because once you depart from the vendor's actual information architecture, that's what really gets you into trouble." What's more, customization can easily drive up the costs of a CRM solution, minimizing the chances of reaping a prompt return on investment.

5. CRM is not a magic bullet. Your sales department is struggling to organize its leads and your company's marketing executives are working on a hodgepodge of ineffective campaigns. If you're hoping a CRM solution can set things straight, think again. "It's always an indication of potential failure if a company tries to bring in a technology vendor to solve a problem without looking at its organizational and process issues," said Hickernell. While a CRM solution can deliver better customer service and streamline marketing efforts, it's vital for a company to establish a solid foundation beforehand with a series of best practices and processes. In the end, companies need to view CRM as a technology project — not a business strategy.

Next Steps

If you find that your CRM solution is prone to any of these errors, you need to quickly and effectively resolve the issues. Of course, the resolution for each of the mistakes is different and will be unique to your company and its situation. For instance, if your sales force expects CRM to deliver more leads without increased effort on their part, you may need to explain to them why CRM is not a magic bullet and adjust their expectations accordingly. Regardless of the error, it is important to address it as quickly as possible so as to minimize further CRM inefficiencies.

For more information on CRM, consult relevant Focus research; pose a question to the Focus Expert Network; and join a discussion in the Sales, Customer Service or Operations Groups.

Featured Research
  • 2017 CRM Buyer's Guide

    Customer Relationship (CRM) software has become one of the most important business tools in today’s world. By allowing you to better connect with new and existing customers, CRM is an indispensable tool for sales teams and customer service teams alike. But with so many choices available, it can be difficult to decide on a solution. more

  • The New 2016 CRM Comparison Guide

    Our new 2016 Q4 CRM Comparison Guide includes all the information you need to make the best purchase for your business. With relevant information on over 40 CRM vendors, you can learn what solution offers the features and pricing you need. more

  • CRM Software Cost Guide

    Did you know that you don’t have to spend a fortune to implement a CRM solution? In today’s marketplace, there are a variety of CRM options to choose from. And whether you’re a small business or a large enterprise, there are always ways to save. more

  • CRM Basics for e-Commerce Start-ups

    Customer Relationship Management (CRM) software is an invaluable tool for any e-commerce start-up. Your existing customers are the most valuable asset you have. With a CRM, you can better engage with them so that one-time customers become repeat customers and even evangelists for your brand. more

  • The Customer Connection

    To stay competitive, your small business needs to take advantage of CRM and social media. CRM software is a useful tool that can help you develop a social media presence and connect better with the customers you already have. more