-->
  • March 1, 2012
  • By Jim Dickie, research fellow, Sales Mastery

Are the CRM Wars Really Over?

Article Featured Image

As part of CSO Insights' annual Sales Performance Optimization (SPO) study, we ask firms if they have implemented a core CRM application. Over the 18 years that we have been conducting the study, we have seen the number of companies answering "yes" to that question rise. Our 2012 study revealed that 81.5 percent of the sales organizations surveyed have a CRM application in place.

So are the CRM wars over? Are the remaining 18.5 percent of diehards that have yet to jump on the CRM bandwagon all that is left for Salesforce.com, SAP, Microsoft, Oracle, and 35 other core CRM solution providers the study identified to fight over? Maybe, maybe not.

In addition to the SPO study, we launched a research initiative involving 463 firms currently utilizing a core CRM application. The intent of the project was threefold: to assess in detail the improvements in sales performance that companies were seeing as a result of their core CRM investments; to determine how satisfied they were with their existing system; and to uncover what factors would cause them to change applications. Let me share some of those key findings.

When firms implement technology, they are typically expecting to achieve gain and/or remove pain. In the case of CRM specifically, sales organizations want technology to play a role in increasing sales effectiveness so that the organizations can generate more revenues. We found it interesting that only 18.7 percent of the firms surveyed said they saw sales increasing as a result of the capabilities their CRM application provided.

Next, when asked if they would recommend their existing core CRM applications to others, 19.3 percent of the firms gave a lukewarm "maybe" and another 18 percent said "unlikely or never." Looking to assess user satisfaction another way, we specifically asked if they were considering replacing their current CRM system in the coming 12 months, and 27.5 percent of the participating organizations said yes.

What would cause companies to switch? Topping the list is application functionality, with 60.4 percent of respondents labeling this a key issue. Other high-ranking issues respondents said would cause them to change vendors are application reliability (41.5 percent), system integration problems (32.6 percent), customization problems (30.7 percent), and price (30.4 percent). Behind those were poor customer service (25.6 percent), application availability (20.4 percent), and future product direction (18.8 percent).

It is noteworthy that 38.6 percent of the companies said their current CRM application has been in place for more than four years. Over that time, we have seen a lot of innovation in sales analytics, sales collaboration, social media sales intelligence, etc. This begs the question: Are all applications keeping up with the pace of change?

We have also seen adoption of CRM by sales increase significantly over the past few years, to the point where, today, 66.6 percent (or exactly two-thirds) of reps who have access to CRM applications rely on them as a standard part of their daily workflow. With this level of active usage, system reliability issues can cause serious user satisfaction issues.

We also found more firms wanting to integrate their CRM application with other core systems inside and outside their company and/or tailor their application to their unique way of doing business. If they can't do that with their current system, their ROI on CRM going forward will be limited.

Considering these and the other factors, existing CRM users would be well advised to test the waters to see if something that would work better for them exists. And CRM vendors should be looking at these numbers to see if and where their install base of users is at risk. In the words of the immortal Yogi Berra: "It ain't over till it's over."


Jim Dickie is a partner with CSO Insights, a research firm that specializes in benchmarking CRM and sales effectiveness initiatives. He can be reached at jim.dickie@csoinsights.com.


CRM Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues
Buyer's Guide Companies Mentioned