Your Customer Relationship Management (CRM) system fuels your lead generation, marketing and prospecting efforts, as well as your client relationships. Guiding you with insights, a powerful CRM will ensure you’re pursuing the right leads, at the right time, in the right way. It can also help to reduce the total cost of ownership (TCO) of your software stack. According to Finances Online, a CRM can boost conversion rates by 300%. Given the value a CRM can offer, the stakes are high when it comes to choosing a system that will deliver and implementing it correctly. According to CIO, approximately 33% of all CRM projects fail, which highlights the need for smooth implementation.
Businesses may delay moving CRM due to perceived concerns about cost, user adoption, or migration issues. However, sticking with an ineffective CRM can be detrimental to revenue growth and operational efficiency.
The impact of an ineffective CRM system
Lead generation, sales, client services and marketing initiatives are all impacted by a mismanaged CRM. An outdated legacy system that doesn’t meet your business needs often won’t provide the insights and features needed for scalability. Legacy platforms can also cause frustration internally and lead to operational inefficiencies, as well as issues managing contract renewals and making the most of cross-sell opportunities.
Loss of leads and revenue
An inefficient CRM system can harm your sales cycle and cause leads to fall through the cracks. Poor data quality and a hard-to-use system can mean you’re not nurturing prospects effectively, and a lack of confidence in your reporting can make it difficult to forecast the sales pipeline.
Harm email marketing efforts
Successful email marketing is contingent on reliable customer data. If your CRM is making it difficult to see where prospects are in the customer journey, it’s almost impossible to deliver targeted campaigns that convert. Without the ability to confidently identify ‘hot leads’, it can be challenging to target them at the right time.
Undermine business reputation
A poorly managed CRM system can cause a disconnected, frustrating customer journey. If leads are missed, responses are slow, and untargeted content is delivered to prospects, it can harm business perception.
Inefficiencies
If your CRM isn’t providing quality data to inform your sales strategy, you’ll pour time and resources into pursuing dead-end leads that are unlikely to convert. Sales teams will waste time and the results won’t deliver.
Tech stack misalignment
If your current CRM doesn’t offer the capabilities you need or integrate smoothly with other software, your tech stack becomes misaligned and convoluted. Miscommunication, confusion, and a drop in productivity often follow. Additional systems may be added to compensate for CRM software issues, which can increase ongoing costs.
What is the cost of doing nothing?
Focusing solely on the cost associated with moving CRM, and less on the cost of not moving CRM, can have significant operational implications. Consider:
- How many employees are affected by your CRM?
- How many leads are being lost along the way?
- How much time is being wasted with your current CRM?
- How long has your CRM been ineffective?
- What additional software have you purchased to compensate for shortcomings with the current CRM?
If your CRM is no longer fit for purpose, it could be impacting daily operations and preventing revenue growth.
The ROI of an effective CRM system
With a strong CRM system, businesses can tailor their marketing and sales strategies to meet prospect needs, follow leads more closely, and drive sales. According to IBM, a CRM software system's return on investment (ROI) can exceed 245% when properly implemented.
An effective CRM is a significant time-saving solution. It has the power to automate manual tasks like follow-ups and reporting, freeing up capacity for teams to focus on more strategic initiatives. HubSpot’s predictive lead scoring software, for instance, uses machine learning to prioritise leads based on thousands of data points automatically. This data-backed prioritisation lets your team focus more on selling to the right prospects, and ultimately close more deals.
Evaluating and streamlining your tech stack
Ignoring inefficiencies within your tech stack can lead to missed opportunities and reduced productivity. Bloated tech stacks with software tools that overlap in functionality, can lead to a complicated sales process and IT infrastructure, as well as ineffective marketing efforts and disjointed client onboarding.
