5 Misconceptions About CRM

Customer relationship management (CRM) is a comprehensive business strategy that is designed to increase organizational efficiency, reduce costs and increase profitability. CRM is so-often associated with software X, Y or Z that it’s not difficult to see how people can conflate the CRM business strategy with CRM the business tool. To use an analogy, if we forget that the forest is made up of individual trees, we risk failing to recognize and understand the bigger picture.

If over two decades in the software industry has taught us anything, it is that every business understands, implements and makes use of a CRM system in a slightly different way. What is clear to us is that many mistaken beliefs still surround CRM, and that these misconceptions contribute to failed implementations and weak returns on CRM investments. If you represent an organization or business which has been hesitant to embrace customer relationship management, consider these five common CRM misconceptions:

Misconception #1: CRM is a new practice

CRM is an acronym for a practice and methodology which predates the rise of modern software and technology. For as long as there have been people buying, trading and selling there has been a need to keep track of information so that informed decisions could be made. A brief study of history will show that the practice of tracking communications and interactions has existed since long-ago. Although these ancient systems differ considerably from their modern counterparts, both were created to serve comparable purposes. Some of you may be able to remember a time when businesses relied upon physical objects (ie. filing cabinets) in efforts to centralize access to information and increase efficiency. These days, software databases have replaced filing cabinets as the go-to means of collecting and distributing information amongst business teams. Although the tools and methodologies we use for the job may have changed, the practice, and purpose of the practice, remain much the same.

Misconception #2: The Use of a CRM program is “more work”

Why are so many CRM software vendors intent on making it seem as though their products take the effort out of work? Perhaps this is because people do not value the process of work in the way they once did. A culture fixated on entertainment and information consumption inspires a general sentiment of laziness throughout all areas of human life. As a result, tools like CRM software are being designed, branded, and marketed as if they were the next big social media phenomenon. Call it old fashioned, but I don’t think business software should function like Facebook, Twitter, or Instagram. Some may think that CRM systems create more work, but that is simply not true. The purpose of a CRM is to give you the information you need to do more with less. A few minutes spent logging an interaction can save you an hour or even provide a priceless benefit to you or a colleague down the line, and with Flex365x you get an Outlook Connector that enables drag and drop to any item in your CRM lists.

Misconception #3: CRM doesn’t require training

Another common misconception is that CRM implementation doesn’t require training. Though it is possible to get a CRM system up and running without training users, this approach is not conducive to the development of efficient practices. The importance of training and establishing a governance plan cannot be overstated. When users have a clear understanding of how to integrate CRM software with business processes, user adoption is increased and the benefits of having the system in place become clear. The reason CRM implementations fail to bring about satisfactory returns on investment is that many implementations are undertaken before enough time has been spent learning how to successfully integrate the CRM into the existing business processes.

Misconception #4: Good CRM software is expensive

One of the biggest misconceptions about CRM software is that a good one has to be expensive, and that the more you pay, the better a system you will get. It’s like that old cliché, “you get what you pay for.” While in certain situations this is true, spending more on a product doesn’t necessarily mean it will be better. For example, let’s say there is a brand new sweater in a charity shop for $5 and the exact same sweater is in a retail store for $50. In this case, paying more for the sweater wouldn’t make it better. Ultimately, how much money you are willing or able to invest in CRM software is up to you. The point is that expensive software doesn’t ensure better results. What matters most is creating a plan for integrating your technology, people, and business processes.

Misconception #5: CRM is about software

Ultimately CRM is not about software. It’s about people, ideas, relationships, and the complex interplay between technology, strategy and information. CRM software is a tool, but like any tool, it is useless without someone who knows how to use it. CRM software is not an automated solution to every business problem. The truth about CRM is that it requires dedication and teamwork. Getting off the ground with CRM requires commitment to a process of learning, communicating, and developing processes and practices that are useful, profitable and beneficial. In short, CRM is not about software, it’s about working together to strengthen the overall performance and productivity of people working within a business or organization.

In conclusion…

With the above misconceptions called into question, it should be easier to see how the practice of customer relationship management has suffered from misunderstandings. When CRM software is misrepresented by vendors in order to increase sales, it is, ironically, the software buyers who are left unsatisfied due to costly and disappointing results. Our advice is to develop your CRM strategy before seeking out software as a solution. This will empower you to make a more informed decision, based on what situations need to be addressed, and less influenced by marketing myths and misconceptions.