Why Have so Many CRM Initiatives Failed?

If you Google “reasons CRM fails” you’ll get 443,000 results. For the dollars spent many companies consider their investment in CRM software a failure. Just look at these comments from industry leaders.

“A CRM initiative can backfire if you’re working with poor data.” Ruth Fornell, SVP – NCR Corp.

“Sometimes the employees know the data is bad, so they avoid using it.” Charles Chung, VP – Experian Information Solutions, Inc.

“Real-time analysis to determine the right offer to the right customer at the right time in a predictable manner is driven by the quality of customer data supporting that analysis.” Steve Deeb, VP – Monster Worldwide Inc.

Every experienced direct marketer knows the 40-40-20 rule for direct marketing success. Forty percent of your time and money should be spent on the list, forty percent on the offer and twenty percent on everything else.

CRM is all about data. It includes customer, product, inventory, and transaction data. This huge amount of information must be at the right place at the right time to be effective. Data quality requires even greater importance than the list in 40-40-20 rule. Devoting 50% of the total CRM timeline to a data quality strategy is considered essential for CRM success.

Various studies have shown that anywhere from 30% to 70% of all CRM efforts failed. Contributing factors have included company politics, poor planning and flawed processes. But data quality is always cited as reason “number one”.

Tim Waggoner, at one time the CTO of Group 1 Software Inc, once said, “A company can spend $10 million on a CRM system, but not get a return on investment because the data is bad.” It’s obvious that data quality can make or break any size CRM initiative.