“We will do the CRM part first and don’t need marketing for that”

Two factors that determine the success of your CRM project

I have recently read a number of studies and talked to half a dozen companies about how their CRM project was run and what was the outcome. According to the studies and my anecdotal data it seems that most CRM projects fail. The reason for failure is, in most cases, attributed to two factors: who is involved in the project and who runs it.

I think that a big reason for the failure is the misunderstanding of what CRM is.

To me, having done more than 20 years of sales and marketing, it is a hands-on tool for salesperson’s everyday work. The main purpose of the data that is put in and the data that is coming out is to support salesperson’s or account teams’ daily work.

CRM should have three purposes and three purposes only (in B2B and in this order):

1. Assist salespeople in selling more to an existing account;
2. Assist in identifying and developing new accounts; and
3. Assist in retaining accounts.

All other considerations should be secondary.

CRM should support modern sales-funnel -based way of (marketing) and selling. It should drive, together with marketing (and Marketing Automation), the whole process from lead generation to closing the deal.

Graphic 1. Modern sales funnel with marketing’s emphasized role at the top of the funnel

If you want to learn how a lead-to-SQL process can be implemented in D365 Marketing read this blog post.

Marketing has an important role in lead generation, upselling and churn prevention:

1. Marketing can raise awareness and interest in products or services and tell salespeople about it. Salespeople can try cold calling but there is plenty of evidence that content marketing (events, blog, newsletters, white papers) is the most powerful and cost-effective way of generating new leads .
2. Marketing can also pinpoint salespeople to the right direction when it comes to existing customers’ new interests (in other products and services).
3. In customer retention marketing can identify customers with churn risk and draw them back with relevant and attractive messages and content.

If this is true, why haven’t I pumped into a single CRM project during the past half a dozen years in which marketing experts are involved from the get go?

The second question about who is running the project is often political and stems from the corporate power balance and culture. Especially public companies have many resource planning, forecasting and control related requirements, which would be nice to fulfil with the CRM system.

1. Resource planning (in business which the sales item is a working day or there are production constraints) is hard without solid forecasts.
2. Finance would like to have a good understanding of the order backlog and revenue forecasts in order to feed investors insatiable (and legal) need for good information.
3. Legal department wants contracts to be sound and solid.

These are reasonable requests but should not be the primary factors driving the CRM implementation. These requirements should be carefully considered and facilitated to the degree in which they don’t intervene with and hinder salespeople’s primary job, which is to sell.

Salespeople are artists. They don’t like to adhere to structure and discipline. Psychology is a more interesting topic to them than financial projections. If the tool doesn’t bring value to salespeople, they aren’t going to use it and the data out of the system is of poor quality and cannot be used for other purposes like resource planning, controling, risk management and forecasting.

While many things seem to go wrong in CRM (and other IT) projects the failure of CRM projects can be mainly attributed to two factors: marketing’s level of involvement and which corporate function runs the CRM project. If the answer to the first question is no or not yet and the answer to the second question is finance or any function other than sales and marketing the chances of completing the project in schedule, budget, and quality are slim.

As always, I would love to hear your comments. Please don’t hesitate to contact me (matti.airas@tieto.com).