CRM's Dirty Little Secret and Uncertain Future

CRM is about to die and it is with great sadness that I write its obituary in advance.


Customer Relationship Management (CRM), approx. 25 years old, died suddenly due to chief executives and sales leaders scrutinizing their return on investment and acknowledging, with much regret, that after several years of attempted adoption, they were not getting the value out of their systems that they were promised and that they had eagerly hoped for.

CRM is survived by more focused technology that actually helps sales professionals meet and exceed their sales targets and presents business executives with helpful client scorecards that drive customer retention.

There will be no funeral as those who knew CRM and invested in it, feel nothing but bitterness and resentment.

What went wrong?

I think I have an idea.

I first came across CRM in the late 1980s. I was a technology sales rep and I was the leader in my firm in adopting and using technology to support my sales efforts. Back then I used ACT! and loved it. I then convinced the sales team to switch to Maximizer because of its ability to better manage interaction with organizations rather than just with individuals. I configured the system to meet our needs and trained my colleagues in how to best utilize it.

As a result of my prowess with these systems, my VP Sales dropped a brochure on my desk and asked me to see if it's something we could use. It was a brochure from a CRM vendor called ONYX Software. I was more than impressed! I was enamored - maybe smitten is an even better description. I couldn't believe what I was seeing: a single platform for marketing, sales, customer service and technical support. I went beyond evaluating ONYX, I got on the phone, spoke to their executives, convinced them to fly me to Seattle and sold them on hiring me to introduce ONYX to the Canadian marketplace.

I sold ONYX with evangelical fervor! As a result, I got on the radar of Vantive Corporation. When I was being recruited by Vantive, the VP Sales said to me, "Adrian, you're doing really well, but you're playing in the junior league. Why don't you come and play at the NHL level." That statement convinced me. It turned out to be a great decision. Through Vantive, I helped organizations implement multimillion dollar CRM solutions and the solutions really worked.

Eating My Own Dog Food

After a couple of years at Vantive, I got on the radar of a company called Portal Software, which specialized in billing software for Internet companies. Moving to Portal was another great move. What shocked me, however, was they had purchased and implemented ONYX as their CRM. As someone who sold ONYX and knew what it was capable of, the implementation was deeply disappointing. I suddenly came face-to-face with the difference between a sales pitch and what actually gets implemented. When I was with ONYX, I did all my own demonstrations. I knew how to make the software sing and how to make decision-makers drool. When I got to Portal several years later, the software was bloated.  A lot more functionality was added and  it actually confused users rather than helped them. As CRM vendors race to add more functionality, they end up with software features that feed their egos, but that people don't actually use.

I really believed in what I sold. What I didn't understand back then is that successful adoption of software involves more than fancy features. Software is adopted and its features are utilized when they make sense for the end user and make the end user more efficient. As we shifted from systems such as ACT!, Maximizer and Goldmine to robust CRM systems, a fundamental sacrifice was made. In pursuit of a platform that would do everything for everyone, we gave up systems that were designed from the ground up for the sales professional. Contact Management Systems actually made us more efficient because they helped us do our work. These Contact Management Systems were up to date because they enabled us to do our work. The fundamental flaw of CRM systems is, for the most part, they don't help salespeople do their work. For the most part, with CRM, salespeople do their work and then they are coerced into updated the CRM so everyone else knows that they've done their job.

Bloated Software

When I was at Vantive, we focused on call centers and our systems really helped call center staff. Eventually, we built functionality to include the sales force in an attempt to compete with then industry leader, Siebel Systems. Siebel, whose primary focus was sales, purchased Scopus (a Vantive competitor) in order to provide customer service functionality and compete with us. Eventually, all the big players ended up doing was competing with each other and providing really bloated software to customers. Customers didn't get software that actually helped salespeople do their work. They just got more and more flashy and promising functionality. Despite the millions of dollars spent on software, sales professionals continue to keep their own records in manual or point solutions. Is there any large CRM vendor out there has walked into a customer meeting and received a standing ovation for their exceptional CRM implementation?

When cloud-based solutions came, new hope sprung in the hearts of chief executives and sales leaders. However, even with these cloud-based solutions, not much has changed. The fundamental structure is wrong. Rather than use CRM to do work, salespeople still do work and then update the CRM to get management off their backs. Salespeople need systems that are designed from the ground up for their unique type of work. While sales is ultimately process-based, it is not transactional like accounting or technical support. There's a looseness and fluidity to selling, which must be acknowledged. Moreover, most of the information that salespeople are asked to capture in CRM is never utilized. I've never met with a CEO who has pulled out a detailed report from the CRM system to explain anything to me. I've even heard sales leaders say they don't care about what's in CRM, all they care about is the sales funnel they're responsible for managing. With this internal ambivalence bordering on hostility to CRM, why do we persist in pretending CRM is worth all the money we are spending on it? Who's really benefiting? Sales professionals and their customers or the CRM vendors who charge inordinate fees for licenses and implementation? Does anyone have a crystal clear ROI on their CRM implementation? I'm sure there must be someone out there with a crystal clear ROI, but for most, it's foggy. Most are chasing a myth based on the belief that others our there are getting it right.  Maybe it's time to call a spade a spade.

A Place for CRM

OK. In reality, there will always be a place for CRM - especially, niche-based players like Infusionsoft. Infusionsoft, which I use in my own business and recommend to other small business owners, works well because it helps small businesses get work done. It is as much workflow software as it is CRM. The large CRM vendors, however, do not provide this type of meaningful workflow to sales professionals. Therefore, I think it's time for these large CRM vendors to step out of the limelight. They've had over 25 years to deliver on their promise to help sales professionals and they have fallen short. The emperor is naked and someone needs to have the courage to say so. The religious-like fervor with which some defend CRM notwithstanding, I challenge any sales professional to use a tool like Nimble for 30 days and then go back to being happy using their CRM system,  no matter how much money was spent on the CRM. I think we need to figure out how to get CRM solutions to live with solutions like Nimble that are really targeted at helping sales people do their work efficiently. For CRM to survive, it can no longer take centre stage.

Introducing ARPEDIO

I also challenge sales leaders and CEOs to try a tool like ARPEDIO and see if they ever refer to information in their CRM to help guide key account acquisition and retention. ARPEDIO is a platform for key account management that enables sales professionals to develop and execute key account strategies and client scorecards. I see it as the future software for large sales teams and, for that reason, Whetstone will be entering into a strategic partnership with ARPEDIO. Connecting ARPEDIO to CRM is another sound strategy for enhancing the value of CRM.

If you'd like to talk about the role of CRM in your organization, or better understand Nimble or ARPEDIO, please contact me using the form below. In the mean time, look out for more insights on my blog on how we can achieve greater sales force effectiveness and efficiency.