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CRM failures: A review of problems and horror stories

In this chapter download from "CRM Unplugged," you'll find case studies of CRM failures and find out what businesses did wrong in their implementations.

CRM Unplugged: Releasing CRM's Strategic Value

Excerpted with permission from "CRM Unplugged: Releasing CRM'S Strategic Value," by Philip Bligh. Published by John Wiley & Sons, Inc., April 2004, ISBN 0471483045. For more information about this book and similar titles, please visit

A Review of CRM Failures

CRM failures have been costly, disruptive, and embarrassing. Red ink, shareholder losses, upset customers, lost market share, lawsuits, and career setbacks are all typical outcomes of CRM failures. Several such failures have been publicly documented as companies have cited CRM problems for performance shortfalls during earnings announcements. In this chapter, we have collected some of these stories. Obviously, few companies are willing to detail failed initiatives but the information available provides strong indications of patterns of failure. In addition, the authors have personally seen the aftermath of many situations where initiatives had gone awry and these experiences, together with the documented failures, provide an eye-opening dossier of reasons for failure. Ultimately, the mistakes of the past will help to set the proper expectations and goals for the future.

The cost of CRM failure is dramatic and can take its toll in many areas of the business. The following summarizes the typical impacts by category:

Financial Performance

  • Market share and operating losses
  • Failure to achieve a return on investments
  • Budget overruns
  • High post-implementation running costs

    Customer Service Quality

  • Customer confusion, frustration, and dissatisfaction
  • Lower service levels
  • Slower time to market
  • Negative brand perception

    Sales Effectiveness

  • Lower sales force productivity
  • Increased sales force cynicism toward new systems
  • Increased sales force turnover

    Cultural Impacts

  • Low morale within IT and affected departments
  • Growing cultural cynicism within the company toward adopting business change
  • Company-wide loss of confidence in its ability to enact change
  • Lost jobs in the executive suite
  • Propensity for companies to become overly conservative with regard to investments in strategic initiatives. This leads to dampened innovation, a failure to strengthen advantages, and deferring the update of aging processes and infrastructure

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