21 October 2014

Why aren't more people using CRM?


When talking about CRM, a lot of numbers are thrown around. There are lots of companies selling CRM software and the space gets a lot of news coverage. But while these numbers and the continual buzz around CRM seem pretty positive…is it really that impressive?

Most people in the CRM business will know the name Clint Oram. For those of you who don't know who he is, Clint is co-founder and CTO of SugarCRM and often talks about "the missing zero " in relation to the CRM numbers. The what?! – you might ask. What exactly is this missing zero and how does it relate to CRM?

CRM and that Missing Zero

CRM, put simply, is a model for managing a company's interactions with current and future customers. CRM as a software concept has been around for a long time and is made up of customer facing individuals inside various organisations using software to develop and support customer relationships.

There are currently about 20-30 million end users of packaged CRM software. This seems like a pretty healthy industry, and in lots of ways it is. However, when you compare it to other software markets, a HUGE gap becomes apparent in the current market uptake for CRM versus the potential.

This gap becomes a lot more apparent when comparing it to similar relationship management tools. For example: LinkedIn, one of the most popular professional relationship management tools for individuals, has more than 200 million users. Facebook, the largest personal relationship network, counts over a whopping billion users. This is where the concept of the "missing zero" comes in. In other words why is this a 20 million user market and not a 200 million market?

Why aren't more people using CRM?

The answer is that CRM was originally created to satisfy the demands of management in a pre-internet era. CRM solutions have traditionally been designed as management and forecasting tools, not as productivity tools for individual users.

Traditional CRM vendors have sometimes forgotten about the needs of the two most important elements in CRM: the customer and the customer-facing CRM user. Users spend hours putting data into the system, but don't personally get anything out of it. Early CRM systems were also difficult to deploy and based on complicated relational databases. Many of these user-unfriendly systems are still in place and are ill equipped to meet the needs of the individual modern user.

Another limitation to CRM uptake has been cost. Traditional CRM is often too expensive to put in the hands of every customer-facing worker. The result is that companies often restrict worker access to CRM, limiting their customer visibility, and reducing their ability to create customer relationships.

This is why CRM, when compared to its true potential, has been seen to have sluggish user adoption and growth for the past two decades.

So where does social media fit into all this?

Applications like LinkedIn are flexible, simple and work anywhere. Their interfaces are easy to learn and their value is immediately obvious – users get more out than they put in. Data is free flowing, easily shared and available anywhere. The cost is minimal and the "free" services available provide enough benefits to ensure users stay on the network.

Every individual gets benefits from using social networking tools, but not necessarily from using a management-focused CRM solution. By looking at the usability of successful social networks and applications, CRM developers can build tools that help end users to do their jobs, not simply capture data. These tools should be simple to use, mobile friendly, and not only make sense of the mounds of data about every customer – but provide fast and valuable insight to every user at every turn.

By being innovative and learning from consumer applications and services like LinkedIn, we can see how CRM can close this adoption gap – and fill in that missing zero!

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