It’s been almost a year that we have been researching, developing, and promoting our “CRM-like” software Dex (now Network Hippo!) and I’ve come to realize how bad most of the current CRM products are.  They’re marketed to Executives, Sales Managers, and Technical people with with the promise of increased sales and “sales visibility”.

The problem is that they don’t work.  In fact, for small and medium businesses, CRM software fails miserably.

There are three major obstacles with current CRM software:

1. They do not address the real problems of small businesses
   The problem for small businesses is not based on process improvements or “sales visbility” – it’s selling more.  The biggest opportunity for small businesses to sell more is by finding more qualified leads and better mining existing customers for repeat sales.  A smart CRM system would focus on these two sales features and help small businesses tap into their network of contacts to generate sales.
2. Usability is so poor and data entry is so laborious that people don’t use the software
   All of the current CRM solutions rely on intense data entry with extraneous fields that salespeople have to fill out every time they come in contact with a potential sale.  Here is the typical data entry for a salesperson, from first meeting through closing a deal:
   1. Create a new “contact”. Enter details from their business card and save
   2. Create a new company. Link the contact.
   3. Enter details of the first meeting (met at conference, said they were interested)
   4. Create a new deal. Enter potential sales opportunity.
   5. Enter a new “task” to follow-up with the contact next week.
   6. After calling contact (a week later), enter details of the call.
   7. Enter a new task to send contact information on product / service.
   8. Close task of sending information.
   9. Enter new task to follow-up next week.
   10. Enter calendar entry for meeting next week.
   11. Enter details from meeting
   12. Update deal to higher percentage (50%) and sales stage (to negotiation)
   13. Upload proposal to deal with calculation sheet
   14. Upload signed contract
   15. Update deal to “won” and close the deal

   … this is for each deal.  And half of the steps are taken for deals that never close.
   This process is WAY too intensive to expect salespeople to complete, especially in a small business when you need to spend ALL OF YOUR TIME making calls and trying to build sales.  Furthermore, there are often too many custom fields ranging from birthday to spouse name on these forms that require more time and a “system administrator” to setup and manage a tool that is supposed to save time and money!

3. Data quality is a core feature that is very poorly addressed
   Every small business that we have worked with has a massive contact list that is several years old with 30% – 60% of the contact information outdated or incomplete.   The very basic function of a good contact database is confidence that the database contains accurate information.  This is the cornerstone and absolute fundamental of a successful CRM system, and yet the tools for keeping these systems up to date is 100% manual and very time-consuming.

The problems of current CRM systems are very real and fundamental.

The future of successful sales contact systems for small businesses will include:

1. A Focus on sales opportunities, not processes and reports
2. SMART systems that make data input extremely simple – tailored to the users of the system as an enabler, not as “extra work”.
3. Automate data quality leveraging the web and many technologies to ensure the database is always accurate.

The CRM moniker should be reserved for large businesses who focus on processes and sales reporting.  For small businesses its a no-brainer: The cost of a CRM system far outweighs the value.