10 Fatal CRM Mistakes That Will Surely Destroy Your Customer Relationships

2. But what are the 10 most common CRM mistakes and problems and how can you avoid them?
3. In conclusion, why CRM projects fail

What were your worst mistakes in the departments of Marketing, Sales, and Service? With this overview of typical CRM mistakes, you can review your customer relationships and minimize future risks.

We learn more from mistakes than from ideal-typical standard recommendations. Markus Lempa explains why CRM projects fail, based on recurring problems. Very often, it's not the technology but the person who is responsible.

Failure must also be learned. In Fuck-up-Nights, founders tell how they have “successfully” sunk their company. The unbiased confrontation with past mistakes has a healing effect for both those affected themselves and the listeners. The prerequisite, however, is that the same mishaps are not repeated.

Building and maintaining customer relationships are considered by management gurus as the alpha and omega of company success in order to make customers happy. Unfortunately, it is not enough to just preach this mantra. We must also live this attitude and correct misdevelopments in good time.

Many people rely solely on their CRM software for customer relationship management and the underlying processes, and expect it to whisper the next steps for marketing, sales, and service into their ear or conjure them onto the screen.

Whoever blindly plunges into the sales funnel and leaves the rest of the work to the computer is already violating the golden rule of CRMs: customer relationships are made by people.

But what are the 10 most common CRM mistakes and problems and how can you avoid them?

To this end, we look at three critical phases of a customer management project:

• A. False start: This refers to strategic errors in planning and CRM implementation.
• B. Frustration: Success or failure of a CRM software also shows in practical application. Often overlooked is the increasing dissatisfaction of individual customers.
• C. Meltdown: The final CRM crash occurs when customers leave us. We should quickly and quietly say goodbye ourselves to special case toxic individuals.

CRM errors in phase A "False start before the first customer contact"

The start from pole position often decides at the beginning of a Formula 1 race about victory or defeat. Whoever does not reach his vehicle quickly enough or starts with the wrong tires later has to look into the rear lights of the competition.

How do you achieve a pole position with your CRM project and how do you guarantee your success?

1. CRM error: Lack of CRM strategy and complex tools

OMR Reviews helps you with the CRM selection, so you can find the right CRM software for you with the features you need. These include, for example, the following CRM functions: appointment scheduling, documentation, quote generation, and sales controlling.

But that is only half the rent. You alone decide how big the engine size for your future customer management and its use scenarios should be and what your future cockpit looks like.

What are your requirements? Do you need the CRM system more for simple, collaborative management of customer relationships, for marketing automation or rather for an integrated management approach?

Anyone who starts without a CRM strategy should not be surprised if the project fails even before the CRM implementation. The positive feedback from the market is lacking and your overwhelmed employees fall back disappointedly on the old Excel spreadsheets.

Tip: The implementation of a CRM software follows its own sets of rules. To avoid wrong investments, your team and you should develop a clear vision for your customer relationships and corresponding goals. Who are your customers and how do you want to increase their satisfaction using the CRM system, thus measurably distinguishing yourself from the competition? Where are the touchpoints of the Customer Journey? Or is the core problem perhaps more in optimizing the processes of your hybrid sales organization?

Especially small businesses and start-ups do not need the "Swiss Army knife" of CRM software. The most frequently requested functions, which CRM solutions for small and medium-sized companies should contain, are contact management, interaction tracking, and appointment functions. Sales funnel and sales automation are far behind on the users' wish list. It would be a shame if your CRM system stays unused in the garage after the elaborate implementation.

Bonus tip: Here you can find the best CRM systems for SMEs.

2. CRM error: Acceptance problems due to lack of project communication

Why should a CRM software with all its useful support possibilities meet with a lack of acceptance? People are creatures of habit. Fear, however, is the co-driver of every innovation. It does not matter at first whether someone fears for their personal workplace or the sharing of customer data generally leads to the cannibalization of various sales channels. Bad communication and non-inclusion of those affected can, in the worst case, lead to a CRM project having to be stopped.

Tip: Transparency and participation are the magic words for the implementation of any IT project. Ask interdepartmental users of the planned CRM software about their personal expectations. Be attentive when the team suggests improvements for the marketing, sales, and service departments, and inform them in good time about all planned project steps! In this way, the CRM project can also give positive impulses for the further development of the corporate culture.

3. CRM error: The data Kraken

The uncontrolled collection of personal customer data and the creation of customer profiles may possibly get out of hand. With the additional use of AI, more and more details from customer relationships are being stored unilaterally. And what does the customer get out of it? If, for example, a bank has rejected a loan application, customers are entitled to an explanation. The reference to AI, that its scoring algorithms are a black box, will end up in a shitstorm or in court in the future.

Tip: Lacking data protection compliance of CRM solutions is no misdemeanor. Look carefully whether the GDPR of your CRM provider has been restricted to individual functions only. If the CRM's cloud server is in an EU member state, customers should also be able to rely on no access to the data being possible, for example, from the USA.

The purpose for the collection of personal data must be precisely documented. This also applies to free CRM software. Authorized data accesses, the logging of permissions, and the observance of deletion periods are just a small excerpt of what you should discuss with a legal expert specialized in data protection.

You might come to the realization that when collecting customer data, less can sometimes be more.

CRM errors in phase B "Frustration: How to surely drive your customers insane"

The first three CRM problems act like a creeping poison in customer relationships. However, it is certain that a sub-optimal CRM solution will ultimately lead to unnecessary coordination difficulties, delays, and thus also to fatal complaints. If you do not want to wait that long for the dramatic end, CRM errors 4 to 8 can shorten your route to the CRM crash via the "Highway to Hell".

Even if you have successfully survived the cold acquisition with your CRM system, this does not mean that a customer relationship must last forever.

4. CRM error: Craftsmanship deficiencies in customer management

At first, the company mistakenly addressed "Mrs." Schmidt as "Mr." The affected person complained. The apology email was sent twice a month later - from sales and service. The final straw was the new employee in the marketing department when they invited "Mr. Schmidt" to a sweepstakes. End of customer story.

Our decisions are only as good as the quality of our data. Incorrect, outdated, or duplicate contact data are not only embarrassing. They clearly show customers that their good name has been compressed by the company into a binary value and buried in a data graveyard.

Tip: The identification of duplicates and the merging of data records are now part of the standard equipment of a CRM. But we also have to apply these functions. Therefore, not only a spring cleaning should be in your CRM appointment calendar, but at least every half a year a quality check of your treasure of data for completeness and correctness.

Last but not least, in addition to checking the data management, the CRM processes should also be audited: Where, for example, do recurring information jams occur? Which departments want better feedback or access to data from other areas in response to customer inquiries?

The goal is to clearly define the requirements for all necessary information for all teams and to use this for future work.

5. CRM error: Personal accelerators in operational CRM

What good is the best tool if it is not used correctly! According to Hubspot, an incredible 22% of salespeople did not know what a CRM was in 2021. In addition to a lack of digital knowledge, the opposite case can also occur. The more we trust in the omnipotence of software, the more our interpersonal communication skills atrophy.

A positive image built up over years can be destroyed in a few minutes if employees from the Marketing, Sales, and Service departments are not personally reachable or make up excuses.

Lack of conversation preparation, the stupid work-through of argumentation guides, unfulfilled promises, or an arrogant comment made in the heat of the moment is enough to tip the scales.

Tip: A CRM system is only as good as the people who use it. Key competencies like empathy, the ability to ask questions, and to listen patiently, become even more important as we become more dependent on digital solutions.

6. CRM error: Lost in Service

Recently in the waiting loop: We all know the moment when our mood starts to tip. Since Corona at the latest, many fellow human beings' fuse has become dangerously short in dealing with customer support. From the technical problem regularly becomes a personal criticism of the service specialist in the end. Some CRM providers have promised improvement. Questions are supposed to be answered in real-time in the future.

Unfortunately, this is not due to hiring staff, but to the increased use of intelligent chatbots. However, speed is only one the conditions to avoid losing customers. The software provider's information must also be useful. Otherwise, the customer value also risks the binary depreciation spiral here.

Tip: Especially for onboarding, the service of the CRM provider should be personally reachable for you in a reasonable time. How about a test call or at least a test email? If you haven't become any smarter after the answer received, you have to make a decision: How large can the do-it-yourself training effort become? Or is there perhaps a more service-oriented alternative?

7. CRM error: Collective irresponsibility

"I'm sorry, but I am not responsible for that. You have to direct the question regarding the whereabouts of your order to our shipping service." - the only positive thing about this formulation is the word "please". Otherwise, it doesn't matter to customers who is responsible for what. If the left hand does not know what the right hand is doing, this will most likely be the last order.

Tip: The Corona pandemic has shown how important the interplay of analogue and digital channels is. Department boundaries fall away. Marketing, Sales, and Service merge together to better meet the increased tempo demands of the market.

In order to meet customer wishes in such hybrid organizations better, however, all participants must have shared access rights to the CRM system. A collaborative CRM system can solve the associated interface problems.

8. CRM error: The muzzle contract - Customer Hijacking

How carelessly we use the term "customer loyalty" in everyday life! Acquiring new customers is many times more expensive than maintaining existing customers. So, we make efforts to bind these contacts more tightly to us. However, opaque and unfair muzzle contracts transform customer loyalty into hostage-taking.

To do this, the provider switch is technically made difficult. Even if the import of data into the CRM system is easy, this does not automatically apply to the data export when the user changes.

Such a "lock-in strategy" is frustrating for users willing to change if they do not receive support to take their master data, customer history, and other files with them.

If customers do find a way to jump ship, then the change is usually permanent. Attempts to regain them only generate more frustration.

Tip: If customer data, alongside employees, is the most valuable thing in your company, then you should also take time for the legal review of your CRM software. Fair, transparent, and flexible contract designs are just as important as the functional scope. If necessary, have special promises confirmed in writing.

CRM errors in phase C "Meltdown: The beginning of the end"

For the finale of a Customer Relationship, there is no script. There are customers who love the dramatic exit. A Big Bang applies the unwritten laws of every breakup conversation: stay factual, express remorse, and if possible, find out what happened. The latter helps us start a recover attempt or at least minimizes the risk of future negative comments online.

Most customers leave the sinking CRM quietly and gently. The CRM crash then correspond's to the iceberg lurking in the sea, which we have spotted too late.

And then there is a category of contacts that we wish we had never included in our CRM system.

9. CRM error: Lacking early warning signals for customer churn

B2B companies lose around 11% of their customers annually because they switch to other providers. The loss predominantly occurs without warning. And unfortunately, many companies do not even ask for the reasons to at least learn from this for the future.

Instead, all this is often seen as "normal loss" by those affected. Who shrugs their shoulders at this instead of attempting a recovery, makes the ultimate CRM mistake. A termination can sometimes just be an attempt to achieve better conditions, as a loyal customer, that are only intended for new contacts. Talking helps!

Tip: If sand is in the gearbox, Marketing, Sales, and Service need to descend into the engine room and find the cause of the problem. Threatened customer departures often announce themselves in the form of weak warning signals: increasing complaints, late payments, less personal communication. The company should take a closer look and take CRM measures at the latest now, before it is too late.

10. CRM error: Holding onto toxic customers

The CRM errors mentioned so far were primarily charged to the company account. However, there is a category of contacts where the company should take the initiative to dissolve the customer relationship. Toxic customers are never satisfied.

Criticism is the highest form of praise for them. Every bill is re-negotiated. They are real nerve-wreckers. Our extra effort for voluntary service does not cover the missed profit that we could have achieved with other projects. Not to speak of the lost quality of life and job satisfaction. But why do we hold onto them for so long?

Tip: The problem is our mindset with a too exaggerated politeness - thus we make ourselves a perfect victim. Unlike narcissists and egomaniacs, we have learned that societal rules of play must be adhered to. For toxic customers, this unfortunately does not apply.

In order to not mentally and financially crash with such a customer relationship, you need to articulate your conditions for a fair partnership clearly.

Document reactions in your CRM system factually and ready for court. The voluntary dissolution of the customer relationship succeeds the moment you can say "No" clearly. The breakup should, however, save face for all those involved.

With the search for alternative clients, the circle closes and we receive the new chance to repeat the above-mentioned CRM problems or better yet, to avoid them.

In conclusion, why CRM projects fail

The goal of the article was to sensitize you for the most important pitfalls in customer management. Together with the OMR shortlist for the best CRM sales softwares you are prepared for unexpected CRM errors.

Of course, a lot can also go wrong in the recovery of customers. But that might then be a topic for another article.

What's important is that you accept mistakes as a thankful gift for possible corrections in Marketing, Sales, and Service. And if customers annoy you in a wrong moment, then deal with it like Maurice de Talleyrand-Périgord: Diplomats never get annoyed. They take notes. Hopefully then you have your CRM solution at hand. Best of luck!