Small Businesses Are Failing With CRM Software

(Here is what they can do about it)


By Larry Caretsky

CRM software has a bad rap in the small business community and for good reason. The failure rate for the successful implementation and use of CRM software in this sector is higher than 70%. There are literally thousands of small businesses all telling the same story; we tried it and it didn’t work for us, but why? What went wrong? Outlined below are a few of the reasons small businesses are struggling with the implementation and use of CRM software, and what they can do to fix it.

First, let me take a moment to tell you that I have been in the CRM software industry for more than two decades and in the computer software industry even longer. As a sales executive, I have been engaged in hundreds of sales cycles with small, mid-size, and large corporations and I have found that small businesses tend to take short cuts when making decisions that can be critical to the success of their business.

Every business regardless of size is looking to streamline their internal processes in order to get a leg up on their competition. CRM software has been touted as the silver bullet for improving how you market, sell, and provide service to your customers. There is no cookie cutter approach to this, which is why it is critical that you put together the proper game plan for selecting the right solution for your business. I have found that small businesses tend to overlook three key decision criteria, which are often the culprit for failed installations.

Poorly Documented Requirements or No Requirements at All

Small businesses do not seem to appreciate how important it is to document their business requirements or pain points. How do I know this? Because the person inquiring tells us so. When asked what specifically is driving you toward evaluating a CRM solution they often do not know. They have been instructed to download several CRM solutions then recommend the best one for the business and if they have any questions, they will be in touch. You have to ask yourself if there are no specific business requirements how can they possibly decide which is the best solution for their business. If you are in sales this is a big red flag. Either the management does not have the time to discuss the business objectives for a CRM solution with the staff; or they don’t really care and think all products are the same so just select the one you like the most at the lowest cost. The sad truth is that is exactly what happens. Several months later the product is shelf-ware, and they become another story of how we tried CRM and it just didn’t work for us.

So how can you address this? It’s easy. Management simply needs to take the time to sit down with the staff and outline the 3-5 specific business challenges they need the software to address. If they do not have the time to do this, or they simply do not know what these challenges are then guess what? They don’t need a CRM system.

Underestimate the Commitment Required for Success

Small businesses do not fully understand that the successful implementation and use of CRM software requires a dedicated resource, a champion or someone with authority that can manage changes to internal procedures and ensure that the staff is properly trained on how to use the software. CRM is not an appliance that you simply plug in the wall and everything works according to the manual. It requires an investment and I think small businesses underestimate the level of commitment required for the successful implementation and use of the software. This contributes to the high failure, but can easily be addressed by treating the CRM system as a critical component of the business.

The Value of Vendor Engagement

Small businesses tend to overlook the experience and value added services they can take advantage of by selecting the right CRM solution provider. In fact, the majority of small businesses pay no attention to this and it is perhaps the most significant reason why so many are failing with CRM. For smaller businesses, it is hard to appreciate the value for the following reason. Most CRM solutions for the small business community are very inexpensive ranging from free to $30 dollars per user per month. In addition, to get buyers to move quickly they are offered a month-to-month payment plan that can be cancelled at any time. So if you are only paying a small amount for the software each month it’s hard to justify spending additional money for implementation and training, but this is foolish thinking.

CRM software should not be looked at like a gym membership.  Think of it this way. You cannot get yourself in shape in 30 days so how can you possibly improve your business in that same time frame. You can’t and if you do not have the resources or knowledge to design your own fitness program you will most likely hire a trainer. The CRM solution provider should be viewed as the trainer for your business. A good solution provider will have experienced people on staff to assist you and ensure the system is properly implemented and used by your staff. Yes, it will cost some additional money, but if you get the results you were initially looking for then it’s all worth it in the end.

If you are planning to select a CRM solution so that you can improve how you market, sell, and provide service to your customers, the winning formula includes:

  1. Document your business requirements and educate your staff about them.
  2. Don’t underestimate the time and commitment you need to make to manage internal changes and train the staff how to use the software.
  3. Select a CRM vendor that can act as your partner in your success.

About the author

Larry Caretsky is the CEO of Commence Corporation a leading provider of CRM software for small and mid-size businesses. He is considered an expert in the field and has written numerous articles about the implementation and use of CRM and an e-book, “Practices That Pay: Levering Information to Achieve Selling Results.”

Is CRM Software a BIG SCAM?

If you are a small to midsize business, you may find yourself frustrated with the inability to efficiently capture, track, manage, and share customer information. Perhaps you are using an Excel spreadsheet for this or a dated contact manger and it is just not working. Customers call and you have no idea what they purchased when the purchased it or what their experience has been in dealing with your company. It has gotten to the point where it is embarrassing. You have had enough and are more determined than ever to fix it so you decide to get a CRM software system. There are a myriad of them out there and they all seem pretty much the same. In fact, several are free. What can be better than this? We can quickly and easily fix this problem for free. So you go out and sign up for a CRM system, maybe it’s not free but cheap enough and it seems like it will do what we need.

Three months later virtually nothing has changed. You are putting lead names, addresses, and phone numbers in the system. But the sales team does not use it and management is just too busy to pay attention to it. The result is that you realized virtually no value from the CRM system. Did you get scammed by the CRM vendor that told you how their product was going to improve how you sell and provide service to your customers? Probably not, and perhaps there is a different reason why it just did not work.

“You must have long-range goals to keep you from being frustrated by short-range failures.” — Charles C. Noble

The best CRM software programs are designed to automate internal business processes. That is true, but you need to have those processes in place to automate. Most small businesses do not have formal processes in place for how they capture email communications, qualify leads, or track new business opportunities. Others do not have a methodology for managing sales opportunities and do not have documented procedures for handling customer inquiries. Here you have a CRM solution designed to automate internal business processes that simply do not exist. As time goes by you forget all about the CRM solution. The sales team does not use it and management has simply moved on. Why did this happen and what do we do about it?

This reason for this is clear and that is because CRM software, regardless of which one you select, is nothing more than a tool. Just like a hammer, in the hands of an experienced carpenter with a blueprint to work from, that hammer can provide a lot of value. With no project or blueprint to follow, that hammer provides nothing. The key to realizing substantial value from CRM software has more to do with the people behind the software than the software itself.

CRM solution providers like Commence Corporation, manufacturers of Commence CRM, have a staff of highly experienced people whose job it is to assist customers with the implementation of best practices for sales execution and customer service. We work closely with your management team to implement the software, and to ensure the customer sees measurable results and a return on their investment. This knowledge of sales best practices, marketing automation, and customer service is often what is missing in smaller businesses, and is the key ingredient for improving business performance. This differentiates Commence CRM from the myriad of crm solutions you can buy over the internet.

CRM is not a scam, but it is not going to improve how you market, sell and provide service to your customers without an experienced team of professionals behind it.

4 Reasons Why [CRM] Software Purchases Fail

Joe Stangarone, of mrc’s Cup of Joe Blog, gives some great advice about how to avoid being in a “blame” meeting for a failed IT project or failed software purchase:

Have you ever been in a “blame” meeting? It’s one of those meetings called when numbers are down or after a project or purchase failed miserably. As you might guess, there’s a lot of finger pointing and blame spreading. Not only are these meetings painful, they are completely unproductive. Since everyone is too busy deflecting blame, no one learns from their mistakes.

This article has some good advice and mirrors the points we have discussed on our blog many times, about how we help customers have successful CRM software implementations. It all depends on the people, training, process, and commitment that you make to your new CRM solution. And Commence has great experience in helping companies do this successfully.

CRM No Commitment – Means No Results

Your success, our commitment

Select a CRM Vendor Committed to Your Success

As an executive of a company servicing the Customer Relationship Management software sector, CRM has become a bit of an oxymoron for me.  I believe that building long term business relationships with your customers requires a commitment to providing quality products and great customer service.   This traditionally involves reaching out to your customers and engaging with them so that they realize the maximum value from your product.

But many small to mid-size companies and CRM vendors that service the SMB sector just don’t see it this way.  The vendors prefer that you just buy their product over the internet. If you need assistance send an e-mail and they will get back to you when it’s convenient for them. The buyers seem to feel comfortable with this and often hold the position that if I need assistance using your product, then it’s too hard so I’m not interested.  It’s almost as if they view CRM software as nothing more than a commodity.

Your CRM Success Needs Your Commitment

Interestingly enough industry reports have indicated that there is as much as a 70% failure rate among CRM implementations.  This is far worse than any other segment of the software industry.  Much of this occurs in the SMB space where companies never get off the ground and as a result discontinue the service.

You could place the blame on the CRM software providers for developing products that are too hard to use; or perhaps the management of the company that purchased the system for failing to properly match their business requirement with the vendor’s offering or assign a champion who’s in charge of the CRM system. I blame the management and here’s why.

The CRM sector is crowded and highly competitive, with several hundred solutions ranging in price from free to more than $200 dollars per user per month.  Most of the offerings targeted at the SME sector offer basic functionality and as such are very easy to use so this is not the problem.  Furthermore, they are designed to offer limited to no customization so that the customer can’t get themselves in too much trouble. This is because with price points of free to $15 per user per month the vendor cannot afford to hire the resources to provide customer service.  So when you see CRM products offered for free — no contract, or go month-to-month with no commitment, they mean it.

The real problem lies with the management of these small to mid-size businesses that have limited resources, are stretched thin and often do not understand that in order to improve how they market, sell and provide service to their customers they have to do more than download a cheap piece of software over the Internet.  This commodity mentality is what I believe has led to the high failure rate in the industry.  So how does this change?

Successfully Implementing Your CRM Solution

First, the management needs to agree that No Commitment – Means No Results.  The first task is to make a commitment to put someone in charge of the CRM process. A champion who will document the business challenges such as ‘we need to improve lead generation‘. Then focus on finding a CRM solution that will address these challenges and a CRM vendor who can provide advice, counsel or value added services that will ensure results.

CRM is a two way street and you need to feel comfortable that the vendor has the staff and experience to make a commitment to your success. As I stated earlier you won’t get this by putting your credit card over the internet. This does not mean you have to mortgage the business to find a quality product and company that can deliver both at an affordable price. There are several good ones and you may be surprised to find out that the difference between a low cost CRM product and a CRM solution provider offering the value added services you need may be less than you think.

About the Author:

Larry Caretsky is President of Commence Corporation, a leading provider of online CRM software for small to mid-size businesses.  Caretsky is considered an expert in the field and has written numerous white papers on the subject and the book, Practices That Pay – Leveraging Information to Achieve Selling Results.  All are available from the company’s web site at

Image by Piero Fissore on Flickr under Creative Commons license.

Commence – The Go-To Guys for CRM

What makes one CRM software provider better then another? In today’s competitive environment it’s typically not a specific feature or function.  Unfortunately too many companies focus all their attention specifically on a CRM product’s features and price and often end up making the wrong decision.

Companies that have chosen Commence CRM as their solution for managing their customer relationships have indicated that in addition to the product having a top 10 rating, it’s the company’s track record that made the difference for them.

Jeff Spilfogel, an executive at Clear Stream, said.  “I just felt comfortable with these guys. I am a small business so I won’t be anyone’s top account, but Commence was the only company that took the time to understand my business requirements and demonstrate how they could address them.  Their competitors did not seem to be very interested in engaging with me and suggested via an e-mail that I sign up for a free trial over the Internet. This is why I went with Commence.”

Commence has been providing customer management software solutions to small and mid-size businesses for more than two decades.  The company’s professional services and CRM support team have been engaged in more than 1,000 implementations, conducted thousands of training sessions and boast a client retention rate that is one of the best in the industry.

“Very few CRM software providers can match our experience level” says Larry Caretsky, president of Commence Corporation.  “Our staff has expertise in more than 35 different industries and in 22 countries around the world. This knowledge is invaluable to our customers and helps ensure that their implementation goes smoothly and that they realize the maximum value for our CRM software. “