Customer Relationship Management (CRM) solutions aid in the management of organizational interactions with present and potential clients. These solutions centralize all information related to clients—including their contact information and interaction history with the organization—on a central, easily accessible platform. CRM software improves business-client relationships, boosts client retention, and drives organizational success. CRM systems are utilized to develop customer loyalty and enhance brand recognition.
CRM securely stores all the data available on every customer and provides actionable insights that help management teams to make estimations and generate useful reports. CRM helps personalize customer interactions and boost the success of outreach efforts.
CRM for business is a powerful solution; however, if not utilized to its full potential, it may lead to diminishing RoI due to its high initial and recurring costs. There are a number of ways in which incorrectly implemented CRM can negatively impact the revenue of a company.
Factors that Negatively Impact Revenue
Outdated Sales Data
Weak outlook and random allocation of opportunities are two reasons for viable sales prospects being overlooked. CRM helps sales personnel overcome these challenges and deal with qualified opportunities first, guiding them towards less viable opportunities later. However, the most viable opportunities will not be correctly displayed by CRM solutions if the sales department is working with inaccurate and outdated data. Apart from this, sales teams may incorrectly focus on bad or small opportunities if the data does not correctly display potential customer value—leading to big opportunities remaining unprocessed and company revenue being directly impacted.
Distortion of Forecast Precision
To guarantee forecast precision, there needs to be information precision. There can be instances where sales representatives estimate the same opportunity multiple times in different time periods, which can lead to bias in the forecast—if the lead has been forecasted various times, then it may not have been closed in the previous forecast period and the revenue from it may not have been received. If such information is missing, incorrect, or hard to follow, CRM may not be able to assist with accurate forecasting.
Length Sales Phases
Inefficient sales processes are often caused by sales representatives not knowing how to allocate their time and effort properly. Such inefficiency may slow down the rate of closure of opportunities, which in turn results in spiraling costs. The root cause of inefficient sales processes may include inefficient management or outdated data. Ultimately, such inefficiency leads to questions about the ability of the organization to serve its customers and employees efficiently. Without more deep-rooted changes, CRM cannot solve this problem.
CRM implementation is a multi-stage process that requires dedication from employees and management, proper training, a thorough understanding of software systems, clear workflows, and clean data. If proper CRM-related planning and organizing do not take place, the system will be confusing to understand, and no one will gain all the benefits that they could be. Poor planning leads to high-value opportunities being overlooked, which in turn impacts the revenue stream of the organization.
Lack of Role Clarity
CRM handling is not the work of a single person. Every employee has to understand their CRM-related role for the system to work effectively. Data has to be imported into CRM and updated regularly. There may be instances where employees shift responsibility from themselves due to CRM being a recent implementation in their place of work. This may lead to inaccurate data being provided to the sales department, which will then approach customers and leads with the same data and fare poorly.
Lack of Support
Not all companies may be able to afford a full-time CRM champion. In this case, it is essential to ensure a minimum level of support from the CRM vendor. Sales teams and other personnel may have important questions about the system as they work on it, and if these questions are not answered in time, it could impact performance significantly. CRM support needs to be available at every step and not just at the time of implementation.
As outlined above, the incorrect or incomplete implementation of CRM can impact business operations on a large scale, affecting company credibility and customer loyalty. Improper CRM implementation can also affect employee morale—sales representatives and other personnel using an incorrectly-implemented CRM solution may start getting frustrated, impacting the revenue of the company.