5 mistakes entrepreneurs do when they come to CRM

HBR twice stated how the CRM project failure rate was astonishingly high.

Let’s investigate, using AI, on main 5 mistakes entrepreneurs do when they come to CRM.

The first time it did was in 2002 and you may think: “ok that’s old”, then another report was published in 2018, not that long ago.
“In 2017, CIO magazine reported that around one-third of all customer relationship management (CRM) projects fail. That was actually an average of a dozen analyst reports. The numbers ranged from 18% to 69%. Those failures can mean a lot of things — over-budget, data integrity issues, technology limitations, and so forth. But in my work with clients, when I ask executives if the CRM system is helping their business to grow, the failure rate is closer to 90%.”

• Why CRM project fail and How to Make Them More Successful, Scott Edinger, HBR, Dec 20, 2018

In my experience in helping companies with CRM, I can report that many companies ask for a check for a revamping of their digital tools not very long after their first implementation!

Hence the question: What mistakes do entrepreneurs make regarding CRM? Then I tried to challenge ChatGPT on this topic, here is what it reports:

“Entrepreneurs can make several mistakes when it comes to Customer Relationship Management (CRM) systems. Here are some common ones:

1. Not choosing the right CRM system: Entrepreneurs often choose a CRM system without researching and understanding their business needs. This can lead to selecting a system that does not address their requirements and can be costly.
2. Poor implementation: Entrepreneurs may not have a clear implementation plan or fail to allocate enough resources to ensure a smooth transition to the new system. This can lead to incomplete or incorrect data, which can negatively impact customer relations.
3. Lack of training: Insufficient training can make it difficult for employees to use the CRM system effectively. As a result, the system may not be used to its full potential, and the entrepreneur may miss out on valuable insights.
4. Over-customization: Over-customization of a CRM system can be a mistake as it can make it difficult to maintain, upgrade, and use effectively. Entrepreneurs should ensure that any customization is necessary and does not negatively impact the system’s performance.
5. Not measuring ROI: Entrepreneurs may not track the return on investment (ROI) of the CRM system. This can lead to the inability to justify the cost of the system and its continued use.

To avoid these mistakes, entrepreneurs should conduct proper research and select a CRM system that addresses their needs. They should allocate enough resources for implementation, provide proper training to employees, avoid over-customization, and track the system’s ROI.”

Does it really make sense?

Let’s avoid considering the boring writing, this list is not just banal, it is substantially wrong. Why?

It focuses on the technology with a sequence of obvious critical points that any decent consultant wouldn’t do anymore. They mainly refer to a resource allocation problem or a lack of know-how that are not really the main problems of the CRM industry anymore.
The problem that chatGPT didn’t figure out here is something at a higher level: what is the CRM strategy?

What is the logic that governs the customer experience along the sales process?

CRM is not a tech problem anymore, there are plenty of platforms out there that can do virtually anything at any price. Even IT professionals are now much more aware of CRM implementation possibilities and risks.

What organisations that fail with CRM don’t do is start from the analysis: the strategic definition of what organisational processes have to be facilitated and, possibly, enhanced and how it will be possible.

But chatGPT can definitively recover when the following question refines the concept:

What is the most dangerous mistake with CRM implementation?

“One of the most dangerous mistakes that an organization can make during CRM implementation is not fully understanding its requirements and business processes before selecting and implementing a CRM system. This mistake can result in an ineffective or inefficient system that negatively impacts the organization’s ability to manage customer relationships.

Here are some specific ways this mistake can lead to problems:

1. Wrong system selection: If the organization does not fully understand its requirements, it may choose the wrong CRM system. This can lead to a system that does not provide the necessary features, is difficult to use, or does not integrate with other systems.
2. Poor system design: If the organization does not fully understand its business processes, it may design a CRM system that does not reflect the way the organization operates. This can result in a system that is difficult to use, does not capture the necessary data, or does not provide the desired functionality.
3. Incomplete or incorrect data: If the organization does not understand its data requirements, it may not capture all the necessary data or may capture data incorrectly. This can lead to incomplete or incorrect customer information, which can negatively impact the organization’s ability to manage customer relationships.
4. Inadequate user adoption: If the CRM system is not designed to meet the needs of the users or is difficult to use, employees may not fully adopt it. This can result in employees not entering data or not using the system to manage customer relationships effectively.
5. Delayed ROI: If the CRM system is not designed to meet the organization’s requirements, it may not provide the expected ROI. This can result in a wasted investment that does not provide the expected benefits.

To avoid this dangerous mistake, organizations should conduct a thorough analysis of their requirements and business processes before selecting and implementing a CRM system. They should involve all stakeholders in the process, including employees, to ensure that the system meets their needs and is easy to use. This can help ensure a successful CRM implementation that improves the organization’s ability to manage customer relationships.”

Now the suggestion is much more effective: “…not fully understanding its requirements and business processes before selecting and implementing a CRM system.”

In order to avoid that problem: “…organizations should conduct a thorough analysis of their requirements and business processes…”

This is the real point of the disaster with CRM. Organisations tend to shortcut and define the technology first, then they rely on the vendor’s implementation team to make it work for the business case.

For instance, over-customization can come from that: if the platform chosen doesn’t have native features that match the business case, they have to be developed.

ChatGPT still does not fully grasp the relevance of the strategy of the business, but it focuses on requirements and business processes, which is an optimal suggestion to perform this analysis before selecting the digital tool.
And actually chatGPT refines even better the point when in the next question we ask:

How can experts limit those errors?

“Consultants can help limit those errors by providing their expertise and experience in selecting, implementing, and managing CRM systems. Here are some ways consultants can help:

1. Needs assessment: A consultant can conduct a thorough needs assessment to determine the organization’s requirements for a CRM system. This can ensure that the organization selects a system that meets its specific needs and avoids the mistake of choosing the wrong system.
2. Vendor selection: A consultant can assist the organization in selecting the right vendor for their CRM system. This can help avoid the mistake of choosing a vendor that does not provide adequate support or does not have the necessary experience to implement the system.
3. Implementation planning: A consultant can help develop a comprehensive implementation plan that ensures a smooth transition to the new CRM system. This can help avoid the mistake of poor implementation that can result in incomplete or incorrect data.
4. Training and support: A consultant can provide training to employees on how to use the CRM system effectively. This can help avoid the mistake of inadequate training that can lead to decreased productivity and poor use of the system.
5. Customization: A consultant can advise the organization on whether customization is necessary and how to do it correctly without negatively impacting the system’s performance. This can help avoid the mistake of over-customization that can make the system difficult to maintain and upgrade.

Overall, consultants can play a critical role in helping organizations avoid the common mistakes associated with CRM systems. By providing their expertise and experience, they can assist organizations in selecting the right system, implementing it correctly, providing adequate training and support, and avoiding costly mistakes that can negatively impact the organization.”

ChatGPT can then finally surprise you with the last two questions:

Is CRM a technology problem or a management issue?

“Customer Relationship Management (CRM) is not just a technology problem, but also a management issue. While CRM technology is an essential part of managing customer relationships, it is only a tool that needs to be used effectively by management and employees to achieve the organization’s objectives.

Here are some reasons why CRM is not just a technology problem:

1. Strategy: CRM requires a clear strategy that aligns with the organization’s objectives. This strategy should define how the organization will acquire, retain, and grow its customer base. It is the responsibility of management to create and communicate this strategy to ensure everyone in the organization understands it and can work towards it.
2. Culture: CRM is not just about technology; it is also about creating a customer-centric culture within the organization. Management must lead the way in fostering this culture, encouraging employees to prioritize customer satisfaction, and building processes that ensure customer needs are met.
3. Data management: The quality of data in a CRM system depends on how it is managed. Management must ensure that the data in the system is accurate, complete, and up-to-date. This can only be achieved through effective data management processes and policies.
4. Metrics: CRM success should be measured through meaningful metrics. Management should define these metrics to ensure that the CRM system is delivering the desired results. These metrics should be reviewed regularly, and adjustments made to the CRM strategy as necessary.
5. Training: Effective use of a CRM system requires training and support for employees. Management should ensure that employees have the necessary skills and knowledge to use the system effectively.

In conclusion, CRM is not just a technology problem but also a management issue. It requires a clear strategy, a customer-centric culture, effective data management, meaningful metrics, and proper training and support for employees. By addressing these management issues, an organization can effectively use CRM technology to manage customer relationships and achieve its business objectives.”

Ok, ChatGPT, but what is the worst damage organisations may suffer from those mistakes?

“The worst damage an organization can suffer from these mistakes includes:

1. Loss of customers: If entrepreneurs do not choose the right CRM system or poorly implement it, customer data may be incomplete or inaccurate, leading to a negative customer experience. This can cause customers to lose trust in the organization and seek services from competitors.
2. Decreased productivity: Poor training or over-customization can lead to employees being unable to use the CRM system effectively, resulting in decreased productivity. This can negatively impact the organization’s ability to handle customer inquiries and manage customer relationships.
3. Wasted resources: If entrepreneurs do not track the ROI of the CRM system, they may waste resources on a system that does not provide any tangible benefits to the organization. This can lead to the misallocation of funds that could have been used to improve other areas of the business.
4. Data security risks: Choosing the wrong CRM system or not implementing it correctly can lead to data security risks, such as data breaches or unauthorized access. This can damage the organization’s reputation and lead to legal and financial consequences.
5. Inability to scale: Over-customization of a CRM system can make it difficult to maintain and upgrade, limiting the organization’s ability to scale. This can result in missed business opportunities and lost revenue.

Therefore, it is crucial for entrepreneurs to avoid these mistakes and ensure they select the right CRM system, implement it correctly, provide adequate training to employees, and track the system’s ROI to avoid any potential damages to the organization.”

An article developed using AI has proved able to assist “HI” -human intelligence-
it shows how the knowledge is today very easy to collect:
everybody can develop a clear understanding of how to run perfect CRM project planning, avoiding the most common errors.

Maybe this would be the greatest outcome of OpenAI in the industry: everyone will easily be knowledgeable about everything, including CRM.
Luckily company consultants will still organise knowledge and know-how. In real life, they may make the real difference between winning or losing.