“We can’t force our account managers to use it.”
“The data are not accurate so we prefer doing without it.”
“It makes us waste too much time and it’s not easy to use.”
If these are among the most common phrases heard in the company when it comes to CRM, then there is certainly something going wrong with the adoption of the projects.
Over the past 13 years, research has shown that CRM projects have a failure rate which ranges between 30% and 60%.
The first study, carried out by Gartner Group, attested to a 50% failure rate for CRM projects in 2001;
the Economis Intelligence Unit reported a 56% failure in 2007,
which ended up rising to 38% by 2014, according to data collected by Success Accelerators.
Source: C5 Insight Inc.
Reasons for failure of corporate CRMs
But what are the causes that lead to the abandonment of CRMs? Why don’t employees like working with them?
Although CRM has been designed to make life easier for company employees, especially those in the sales department, the reality is often the opposite.
The following statistics by Salesfusion illustrate the financial impact of an alignment between the marketing and sales sectors:
- Organisations with full alignment meet 66% of their revenue targets
- Unaligned organisations only meet 41% of their revenue targets
Source: Salesfusion – 2013
As a paradox, CRMs often become an obstacle for the sales team, making their interaction with the customer more burdensome and slow. As a result, efficiency is reduced.
An example of this slowdown is provided in the survey conducted by Introhive – CRM automation platform – according to which sales representatives waste an average of 5½ hours a week manually entering data into the CRM system.
This costs a company on average $ 13,200 – almost € 12,000 – a year for each worker.
In addition, 3 hours a week are spent on registering activities, such as phone calls, emails and meetings.
Not to mention that recorded data are often duplicated, old or incomplete. Indeed, this is a waste of precious time: 2 and a half hours a week are spent updating the contact database – searching for professional contacts, selecting the right profile, controlling existing contacts and removing any duplicates.
The survey data show that:
- 88% of CRM users enter incomplete data,
- 69% have old data,
- 63% duplicate data,
- 62% do not record all activities.
Therefore, instead of facilitating work and saving time, CRM ends up creating the opposite result.
We can easily understand the main reasons why its implementation in the company fails.
The first reason lies in a failure within the business process: CRM is not just a technological solution but part of a business strategy. If not supported by clear and measurable objectives, it will be able to do very little. Even the data collected and cataloged through CRM should have their own application, otherwise everything will be unproductive. It will be a waste of time for employees and nothing more.
The second reason is that employees do not fully exploit the potential of CRM. The causes of this can be attributed to a lack of knowledge of the instrument, to a failure to take advantage of its uses or to the need to learn too many concepts in a short time.
The third reason is a failure to integrate into the business process. Without coordination between CRM, marketing, communication and operations, there is no possibility for achieving profitable results. CRM must be tailored to its business, not vice versa.
The business process need not be completely distorted; the aim of CRM is to support and improve it.
Today more than ever, with increasing digitisation, companies must be able to exploit technology in order to have productive processes.
As a consequence, they should avoid incorporating the old inefficiencies of offline processes.
The presence of various performance and effectiveness gaps in CRM is especially evident in sales.
According to Salesforce, the sales team is in a worse position due to the lack, or bad performance of CRM which mainly occurs at three specific moments:
- During the transmission of new leads from the marketing sector to the sales department,
- During the pricing process within the sales department,
- During the transmission of sales forecast updates from the sales department to managers.
The classic CRM platforms still constitute a big obstacle in the application of concepts such as Artificial Intelligence – AI – and machine learning.
In short, the room for improvement is huge.
Maybe, even before talking about technological tools, we should take a step back, and identify the necessary conditions for enabling such a deep change to take place within the organisation.
A change in management mindset is necessary, even if it is not sufficient in itself.
Gamification as a remedy for the poor performance of corporate CRMs and as a support while changing the internal mindset
Despite the failures, companies are investing more and more in the use of CRM:
according to Gartner, in 2017, worldwide turnover of Customer Relationship Management platforms was about 35 billion euros (39.5 billion dollars)!
According to Salesforce.com, companies need to set a goal of having the right approach towards CRM, especially for its sales team.
Once the correct attitude has been established, the adoption and use of CRM, with related sales benefits, will follow.
Gamification generates the necessary cooperation and it manages to overcome the resistance of employees towards CRMs. In fact, they are seen as a database to be fed, consuming both time and energy.
CRMs should be able to provide managers with up-to-date information on sales almost instantaneously, in an efficient and punctual way.
This information can then be used to make decisions and for creating more accurate forecasts, as well as for managing sales more efficiently.
It goes without saying that such a tool is very attractive for every company.
As a matter of fact, by using gamification, CRMs will increase employees’ engagement, attention and productivity through the implementation of game mechanics, incentives, team building and rewards.
In the eyes of the employees, this tool for managing relationships with consumers will become more interesting, it will be seen as an aid to their work, and no longer as an unnecessary burden.
CRM will be a useful support to the daily planning of its activities.
“A gamification solution is the way
to facilitate the increase of employees’ engagement.”
Brett Brosseau – FidoTrack CEO
Gamification encourages employees in the right way: it’s not just salary that motivates them to produce a good performance; money doesn’t have the same power as it used to have in the past!
Today’s motivators are emotions, values, storytelling, freedom to choose your role, responsibility, social relationships.
The personal dimension of the employee is what pushes to act, it is what draws his attention and, above all, motivates him.
A CRM equipped with gamification logics uses scores, rewards or penalties according to the results achieved. Moreover, it makes repetitive actions less tedious through a system that uses the mechanics of the game, turning vendors into players.
Its main features are challenges, teams, levels, objectives, sub-objectives, badges, shares, rankings, timers, avatars.
In short, all this makes the employee use the tool spontaneously, since they receive benefits and awards from it. This motivates them to work more consistently and more effectively in order to achieve their goals, which will be linked to those of the company.
- The use of gamification in CRM offers sales managers many opportunities:
- The focus is on results (recognised by badges which can be seen by all users) rather than on economic rewards;
- The best results are based on the desire to win and self-assertion – instead of just profit or sales volume;
- The gamification system penalises incorrect behaviour through the assignment of scores aimed at improving work performance;
- Group work is encouraged – healthy competition motivates individuals to give their best and achieve goals together with their team;
- The inclusion of new employees in the working environment is facilitated by the gamification system.
CRMs that use gamification provide the sales department with useful data and insights, so that they can increase consumers’ engagement, track the leads and complete more sales.
According to Brian Burker from Gartner, the best approach is to build a corporate gamification tool based on the connection between the company’s and the employee’s goals.
Both must be taken into consideration and given significant weight.
Burker adds other important factors which need to be taken into account in the implementation of CRM for achieving corporate success:
- Educate your employees about improvements in the process and the difference between value and evaluation;
- Focus on the whole team, not just on ranking, in order to improve the whole performance;
- Define the process and use gamification to achieve results, to provide employees with the correct information and the most appropriate orientation;
- Help employees make better decisions and guide their performance in the right direction by identifying KPIs – Key Performance Indicators.
While applying gamification within corporate CRMs, the company adopts a methodology that fosters the engagement of its employees.
“Gamification is the use of game mechanics and it designs experience
to digitally engage and motivate people to achieve their goals”
Gartner
According to the new definition by Gartner, the key elements of gamification are:
- The use of elements such as scores, badges and rankings, which are common to many games;
- The design experience describes a journey taken by the players with elements such as playability, play area and plot;
- The fact that gamification is a method to engage digitally, rather than in a personal way, means that players interact with computers, smartphones and other digital devices instead of with a person;
- The goal of gamification is to motivate people to change their behaviour, develop skills and stimulate innovation;
- Gamification focuses on giving players the opportunity to achieve their goals: if the company’s goals are aligned with those of the players, achieving them will be a natural consequence of the actions of the individual.
What is CRM? And what is its purpose?
The reason for the failure of CRMs often derives from a lack of understanding of its role within the company system.
If you overestimate what CRM is able to do, you end up making significant mistakes. Believing that CRM can immediately solve problems or that it can solve all the problems in the company is wrong.
Therefore, let’s make its function clear.
CRM – Customer Relationship Management is a software used for managing relationships with customers. It is useful for organising contact information, relationships and interactions.
In short, it helps manage the entire online and offline experience with customers – both current and potential – along with all the other contacts involved in the company.
Pivotal illustrated the steps which build the management of corporate relations:
- organising the information of a client,
- drawing conclusions from the information collected,
- preparing plans for subsequent actions,
- monitoring the effects of actions.
The goal of CRM is to help the company align business processes with the needs of its customers, in order to improve the quality and consistency of their relationships. Thus, it builds the foundations for a brand’s loyalty, resulting in a consequent increase in profits.
What is the value of CRM that uses gamification?
Since employees’ performance is closely linked to customer satisfaction, we can identify the customer experience as part of the broader service-profit chain.
But, where does this chain start? Obviously from employees’ involvement in the workplace.
In this regard, Harvard Business Review OnPoint published “Putting the Service-Profit Chain to Work”, an article which explained in detail the value of employee involvement and dedication to the company.
According to Harvard Business Review, it is the service-profit chain which establishes the relationship between profit, customer loyalty, employee satisfaction and productivity.
Source: Harward Business Review OnPoint
The graph illustrates a cascade effect:
- It all starts with the engagement of the worker, which determines their satisfaction;
- The satisfaction of the employee makes him loyal to his company;
- The loyalty of the employee increases company productivity;
- Productivity brings value to the company;
- A valuable company is able to satisfy its customers;
- A satisfied customer will be more inclined to become loyal to that particular brand;
- Consumer loyalty brings profit and growth for the company.
“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”
Steve Jobs – Apple
The same opinion is also shared by Forrester Research Inc., which established that companies that achieve greater employee engagement generally have higher profit margins, as well as better results from consumers – for example, in terms of customer satisfaction, brand loyalty and willingness to recommend the product or service to other consumers (WOM – word of mouth).
The situation of business CRMs in Italy
C-Direct Consulting, a consulting and training company, decided to take a snapshot of the situation in Italy, creating an Observatory for the analysis of the main CRM trends among Italian companies.
Nearly 200 Italian companies participated by providing their data and, since the Observatory was implemented three years ago, models mapping the evolution of the situation over time have also been provided.
The data reported by the Observatory, regarding the relationship between CRM and the knowledge of the company’s customer base, are as follows:
38% of companies believe they have a good level of knowledge of their Customer Base, while 63% have partial, incomplete or non-existent knowledge.
According to these results, there are two different trends operating: technology is growing by 7% (+ 20% in 2 years) but, CRM – seen as a consolidated and operative business area – is decreasing (down 6% compared to 2016) ).
The application of gamification in corporate CRMs will be able to align these two trends, with positive consequences for employees and companies.
What is the advantage of implementing CRM with gamification logics?
Given the problems of traditional CRM systems and the urgent need for digitalisation, gamification is one of the most successful solutions.
In fact, thanks to its dynamicity and its immediate feedback, it allows the validation of digital processes. Basically, gamification is a way to implement the “Agile method”, which usually only exists on at a theoretical level because it is not always implemented with consistency in the execution phase.
Gamification is able to model processes based on actual user responses:
the feedback received in an objective manner can be used so that decisions are made on an objective basis, with a view to continuous improvement, structured over time.
Thanks to the value added by the implementation of gamification, the CRM tools of a company will be able to achieve digitisation at a speed which suits the company and with security, keeping up with the current necessary multi-channel sales networks and their transformation, as well as their relationships with customers.
If you are interested in getting more detailed information on how gamification can improve a company’s performance, here is our contact details to book a free call with our experts.
