Common Pitfalls to Avoid in CRM

Think Customer-Managed Relationships (CMR) First and You’ll be On the Right Track

October 24, 2002

What are the most common problems besetting today's CRM executives? And what can be done about them? We've found eight problems that recur over and over again. Too often, CRM initiatives are implemented with the wrong set of goals--internally-focused goals and metrics. If you rethink your CRM strategy as a Customer-Managed Relationship (CMR) strategy, and avoid these common mistakes, you'll be on the right track.


Lots of CRM efforts are stalled. Companies have invested a lot of money in CRM initiatives, new business processes, and expensive technologies to support these efforts. Was CRM a bad idea? Did companies over-invest? Of course not. In the customer economy, the only way to stay in business is to do a great job of serving your customers and anticipating their needs.

However, there are a number of pitfalls that are easy to experience when implementing CRM, particularly as budgets shrink. Here are eight common pitfalls we’ve found, along with tips on how to avoid them (if you haven’t bumped into them yet) or to work around them (if you have).

The bottom line: think Customer-Managed Relationships, not Customer Relationship Management. If you drive your internal processes and investments prioritized by what matters most to your customers, and you set goals and expectations carefully, you’ll regain momentum and continue to transform your organization to become more customer-focused.


If you have a Customer Relationship Management (CRM) initiative that has stalled, or one that is not delivering the kinds of results your company had envisioned when you embarked on it, it’s not too late to regain momentum. As we all know, getting CRM right has more to do with changing your organizational culture than it does with implementing the right information technology. The recipe for a successful CRM implementation starts with understanding what your customers want and need. Unfortunately, customers’ needs are often the last element to be considered in many companies’ CRM strategies!

Remember that the key to success in customer relationships is to deliver a great Quality of Customer Experience(SM). (See Illustration 1.) Customers won’t buy from you if they don’t have a good experience with your brand. The great news is that by focusing on the quality of customer experience, you’ll be able to reduce your costs to serve and to acquire customers. How? Simple, you prioritize and streamline your internal initiatives based on their impact on customers. That’s really the essential difference between Customer Relationship Management strategies and Customer-Managed Relationship strategies.


Customer Relationship Management is usually about gaining the upper hand--something that is actually impossible to do in the customer economy. One problem with CRM initiatives is that they are often driven by a set of goals that have very little to do with what customers want and need. Often CRM goals include things like:

  • Improve our sales forecasts
  • Reduce customer churn
  • Increase the number of successful cross-sells & up-sells
  • Acquire and retain more profitable customers

Notice that none of these goals helps your customers!

By contrast, the notion of Customer-Managed Relationships (CMR) assumes that customers want to have visibility into, and control over, the information we have about them, across product lines, interactions, transactions, and channels. CMR is driven by one basic tenet: make it easy for customers to do business with you!

CMR goals are invariably stated from the customers’ point of view. Yet, each goal provides benefits to the company as well as its customers.

Goal of CRM/CMR(click to enlarge)

Illustration. The secret to success in CRM is to focus on the Quality of the Customer Experience(SM) you deliver across all of the interaction touchpoints and distribution channels the customer chooses. You build and deepen customer relationships through trust. You build that trust by giving customers access to, visibility into, and control over all of the things they need in order to have a great experience--from product suitability and availability, to delivery, to billing, to after-sales service.

TYPICAL CMR GOALS. Examples of CMR goals might be:

  • Make it easier for customers to buy your products
  • Resolve each customer’s problem in a single interaction
  • Provide customers a consistent and up-to-date 360-degree view of their relationships--across product lines, interactions, touchpoints, and channels.

In 10 years of looking, we have found very few organizations that have actually implemented and delivered a true “360-degree view of the customer’s relationship with us.” The few companies that tend to have the best picture of customers’ relationships across products, interactions, touchpoints, and channels have achieved that Holy Grail because they began by putting themselves in their customers’ shoes. Blue Cross and Blue Shield of Massachusetts is one organization that has made this investment. This healthcare insurer pulled together the information that customers (employers and their employee-members) needed to see. Blue Cross Blue Shield of Mass. didn’t limit this information integration to the customer self-service Web site or to its contact centers. They made sure everyone in the company has access to the same 360-degree view of each customer.

As a result, firms like BCBS of Mass. have reaped the benefits of having a more complete picture of each customer. They are able to make more relevant offers, often reminding members of benefits they could be using. They’re able to continuously streamline customers’ interactions, saving customers’ time and aggravation, while reducing their own overhead and redundancies.


What are some of the “mistakes” that companies often make when implementing CRM/CMR?

What NOT to Do in a CRM/CMR Initiative!

Here’s our list of the most common pitfalls we see CRM teams encounter when they’re planning and implementing CRM initiatives:

1. Design from the inside out

2. Neglect the necessary corporate culture changes

3. Focus on customer acquisition vs. customer retention

4. Start with Sales Force Automation (SFA)

5. Neglect to streamline decision-making information

6. Do an inadequate job of customer database design

7. Postpone the integration of information and business processes across interaction touchpoints and operational applications

8. Avoid integrating direct and indirect sales and service channels

How to Avoid or to Redress these Eight Common Mistakes

If these are the most common pitfalls that well-intentioned CRM/CMR teams and their top executives run into, how can you avoid them, or how should you alter course if you’ve already headed down one or more of these paths?

1. Did you design from the Inside Out? In other words, did you begin your initiative by focusing on what your marketing execs and your sales execs wanted from the CRM initiative, rather than starting with what your customers needed? If so, the obvious antidote is to immediately find out what it is that your customers want and need to ease their interactions with your firm. Start by asking the folks on the front lines. Then ask your customers.

What will you find? Usually the “low-hanging fruit” that customers demand is visibility into any and all processes they’ve initiated with your company: they want to be able to see the status of their inquiries, service requests, applications, approvals, purchases, and delivery.

Typically, your customers and prospective customers will also need quick access to pre-sales decision-making information that is presented consistently no matter whom they interact with or what interaction touchpoint they use (Web, catalog, phone, e-mail, face-to-face). They want to be able to get ballpark pricing, answer their own questions about purpose and fit, and decide whether or not they want to consider your firm’s products--usually in a single, informative interaction.

2. Did you neglect the necessary corporate culture changes? We all know how necessary it is to make major, transformational changes to our corporate culture, compensation structures, and training as we try to implement a customer-managed relationship strategy. But this is, unfortunately, the area in which most companies don’t get it right. It’s easy to underestimate the amount of work, time, and attention it takes to make CRM/CMR succeed. If you feel that the organizational transformation that needs to take root hasn’t exactly blossomed in your company yet, what can you do about it, particularly if the bloom is already off the proverbial CRM rose due to unmet (and probably unrealistic) expectations?

We recommend that you place a renewed focus on customer metrics. Measure, monitor and continuously improve what matters most to customers. Set realistic goals and achieve them. Amplify these results loudly. Recognize everyone who contributes to these results. Start by monitoring and reporting on two or three goals that matter to customers.

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