Why CRM Fails – From MIT Sloan Management Review

After sharing a recent article from MIT Sloan Management Review with various colleagues a few times I’ve decided to share it with you as well.

“Why CRM Fails – and How to Fix It” by Stan Maklan, Simon Knox and Joe Peppard of Cranfield University does not pose a new hypothesis for CRM failure, but references the authors’ research and describes two cases (BMW and Flutter) to factually support what many hold to be the failings of CRM – namely putting capital investment in technology ahead of changes in business practice and the creation of marketing capabilities that can leverage such investments. Billions have been spent on capital investments over the past several years (the article footnotes the sources) while repeated studies have indicated that 55% to 75% of these initiatives failed to meet expected returns.

The insights from the authors’ research and the cases they studied are detailed in the article under the following headings:

• Capabilities are the precursor of CRM investment and not vice versa
• The rate at which capabilities develop varies between companies (as underscored by their two cases)
• CRM cannot always be driven top-down (top management won’t create the capabilities, but can too easily write the checks for the technology)
• Hard work and commitment are what it takes to develop marketing capabilities

A final gem related to the last point before you launch into this solid article on why CRM so often fails… the authors call for “leading radical change – with patience.” Well said. If it were as easy as writing a check for software, we’d all be ecstatic customers.

Why CRM Fails – and How to Fix It,” MIT Sloan Management Review June, 2011 - Maklan, Knox, Peppard

Any gripes, agreement, experiences or insights you care to add about why CRM fails?

Tagged as: CRM