CRM implementation is a complex affair. When it goes wrong, things can go south rapidly. Here we will outline the top 10 spectacular CRM fails of all time. And how they could have been averted. So that you can avoid these mistakes.
What you will learn in this article
- Why CRM adoptions fail
- The top 10 CRM nightmares
- What went wrong and why
- How you can avoid repeating these mistakes
- The recipe for CRM success
Why CRM adoptions become trainwrecks
Having your CRM system descend into chaos is a costly and disruptive business. However, the impact is far more serious than this. A failing CRM adoption can lead to all manner of nightmares, including but not limited to:
- Shareholder losses
- Market share lose
- Brand trashing
- Unhappy customers
- Budget overspends and increased running costs
There are many reasons why CRM projects fail. One culprit is poorly defined goals and objectives. And this is often accompanied by focusing on business priorities rather than the most crucial element, the customer.
Also guilty in this respect is senior management, who are not fully engaged in the implementation. There is a tendency among the company leadership to be on board at the start. Then they lose steam halfway through.
Other failure-causing symptoms are:
- Understaffed teams
- Complicated technology
- Inadequate planning and scope setting
- Inadequate post-implementation management of the CRM system
- Lack of change management
- Lack of user training
The top 10 CRM fails no-one wants to be
The American chocolate manufacturer bit off more than it could chew. Facing diminishing market share in 1999, they invested in a bespoke $112 million CRM system. However, the ensuing CRM proved to be clunky and too complex, leading to massive delivery disruption. The timing was also a nightmare as it fell around Halloween.
2. CIGNA Healthcare
CIGNA Healthcare is a global insurer but didn’t take proper care of its customers. In 2002, it migrated over 3% of its customers to a new CRM-based claims and customer service system. The CRM was supposed to streamline healthcare billing. However, chaos ensued, and six percent of customers ditched the company as a result.
Once the darling of cell phone users, Blackberry wiped out its reputation in a year thanks to a flawed CRM implementation. Users left in droves after the flagship email and messaging service collapsed. Unsurprisingly, customers were all over social media shouting about their problems. Instead of using their CRM to reach customers, Blackberry inexplicably chose Facebook as their communication channel.
Their CRM adoption fails due to a lack of planning and scope setting. But suppose Blackberry had used the system to contact every customer directly. In that case, they may have been able to recover the situation and salvage their brand.
4. General Motors
General Motors’ mortgage arm shot itself in the foot with its CRM adoption. In a move aimed at cutting costs presumably, GM Acceptance Corps Commercial Mortgage decided in 1992 to use a CRM voice activation call system. However, customer uptake was negligible; some 99% pressed to speak to a human. And only if they had the patience to stay on the line.
The software company managed to wreck their CRM implementation, not once but twice! Their first attempt crash-landed because senior management did not view their involvement as necessary, leading to staff uptake of between 30 to 50%.
The second attempt at utilizing CRM fully fared little better. It was not until their third go at wrangling senior management buy-in that BMC finally enjoyed CRM success.
6. Dow Chemicals’
Dow Chemicals’ formula for introducing a CRM solution was a giant bust in 1996. The CRM system was overly complex and failed to support remote users adequately. This was mainly down to business processes being insufficiently defined. A subsequent smaller-scale rollout in designated local areas saw much more success. This approach allowed Dow Chemicals to address teething issues before a wider rollout.
7. British Airways
The UK flag carrier has a long track record of CRM disasters and poor customer service. A particular chart-topper was their 2001 Oracle-based implementation that took two years to implement. There were numerous shortcomings, including complexity, the length of staff training required, and poor data quality, which undermined user confidence.
Vodafone, the UK mobile phone network, ended up being fined £4.6m ($6.5 million) by regulators after a downright disastrous CRM implementation in 2016. The project involved migrating over 28 million customer accounts from seven separate billing platforms. The high-risk maneuver was, perhaps predictably, an utter disaster. Client billing was trashed, and Vodafone’s already shaky reputation was dealt a massive body blow. The total bill for the fiasco, including the fine and lost sales, came to an eye-watering £59 million ($83 million at today’s prices).
9. Owens Corning
The fiberglass company trod a familiar path to CRM infamy by focusing on internal business considerations rather than customers. The timing was out, too, having acquired many smaller companies, which resulted in inconsistent marketing efforts. CRM was seen as the solution. However, as the implementation got underway, Owens Corning was introducing a new ERP system. They stretched budgets to do both, resulting in a less than stellar CRM implementation. The company later admitted it should have focussed on customers and worked back from there.
10. Car Direct’s
Car Direct’s CRM implementation fell short and led to a $50 million operating loss. The CRM solution to track customers was just not up to the job and could not meet customer needs.
The recipe for CRM success
Above average customer support: CRM disasters are littered with lousy customer service.
Buy-in from senior management: The guys at the top must be visible advocates of CRM.
Focus on the customer: CRM is about improving customer experience to strengthen customer relationships. Start from there and reverse engineer your CRM to improve business processes.
Define goals: Map out your business objectives and ensure staff understand the benefits of CRM.
Disaster prevention is assuredly better than CRM cure. Please don’t leave it to chance; so check out our CRM system. We also have a great customer support to make sure your business won’t be on our next list of CRM fails.