I have been implementing and using CRM systems for my whole career, as a VP of Sales at PTC, as a VP of Sales at Groove Networks, and for several venture backed startups I consult for in the Boston area. The way business is conducted has been transforming over the last few years and has led to the current state of the CRM art becoming nearly useless for small businesses. Most small businesses I deal with have either tried and failed on a CRM implementation or are getting marginal value from what they consider a sunk cost in software and human brain-damage from their implementation. Here are a few of the reasons why these initiatives tend to fail...
Counting v. Creating Customers: The current crop of CRM systems are very useful for large companies with thousands of customers that want to "count" them in interesting ways. If you are like most small businesses, you probably only have tens or hundreds of customers -- your main problem is finding new customers and efficiently growing existing customers, not counting customers in interesting ways.
Measuring the Wrong Thing: The current crop of CRM systems is myopic in focus. They measure the activities of prospects after they have "self-selected" in some way by calling the your office or filling in your form somewhere. Pre-internet, prospect "self-selection" occurred early in the buying process while today "self-selection" occurs late in the buying process. Think about buying a car...Ten years ago, the first step in the car buying process was going down to the local dealerships to chat with their salespeople and go for a test-drive. Today, most of your research is done on the internet and you don't end up stepping into a dealership until you are well on your way to a decision armed with as much information as the salesperson. This pattern repeats itself now not only on the consumer side, but also on the business side. CRM systems have not accounted for this change in shopping behavior and moved the measurement up the process to what is happening on the web prior to "self-selection."
Stuctured v. Unstructured Data: CRM systems are essentially databases with customer oriented forms built on top. They are very good at capturing and organizing structured information, but are horrific at capturing and organizing unstructured information. Therefore, the interesting/reusable knowledge about customers/patterns is captured in employees' email threads instead of the CRM system. That means the knowledge that can really help you nail a major new account or help you rethink your positioning based on buying patterns is stuck on individuals' desktops versus in a centralized, searchable repository that survives changes in personnel, territory shifts, and memory lapses.
Ease-of-Use (for IT folks only): Most CRM vendors say their product is "easy-to-use." The reality is it is easy to use if you have dedicated "operations" people or a dedicated CRM IT person to figure out how to do the hard/useful stuff. If you want to create a decent graph that depicts the state of your business every week for the last year, it can be a mind-numbing task that involves learning the vendor's own particular/peculiar vernacular. This task and many others is beyond the reach of people who have a day job outside of IT. This problem is not limited to just the “old school” CRM companies, but the newer, web-based ones as well.
"Feeding the Monster": Like many knowledge management initiatives, CRM requires end-users to take actions that are not part of their natural work process in order to "update" the system. After all, CRM output is only as good as the input -- "garbage in, garbage out." Most end-users in small businesses, whether a partner in a law firm or an account manager at a consulting shop, interact with customers in their email system (usually Outlook). The act of opening the browser, putting in your password, navigating to the proper account, and filling in a form, fundamentally wastes that user’s time. The only way to motivate most users to "feed the monster" is by forcing them to update the system prior to the weekly meeting. Many sales organizations make updating the CRM system a requirement for getting paid. In fact, we added a paragraph in Groove Networks' sales compensation plan requiring the updating of our customer systems (feeding the monster) as a requirement for getting paid. […CRM needs to learn a lesson from Del.icio.us and the rest of the web2.0 crowd where the application provides real value to the user and incidental value to the network/community.]
Transactional Systems v. Solution/Relationship Systems: Today's CRM is more useful for transactional (i.e. call center) types of companies than it is for small businesses who have client relationships that are more solution oriented in nature. Call center people are at their desk all day, so feeding the monster is easy. A partner in a law firm, a business development manager at a startup, or a major account manager at a consulting company is roaming all over the planet, so feeding the monster is more complicated. A structured set of fields is just what you want for a highly repeatable, transactional, individual-centric call-center. That structured set of fields limits creativity and limits team collaboration when dealing with complicated relationship/solution-oriented sales.
What inspired us to start HubSpot was how poor the state of the art was in terms of the current toolsets at helping small businesses take advantage of the transformative effects of the internet to grow their business.
-Brian Halligan
