Wednesday, September 27, 2023

1 in 4 small businesses replaced their CRMs in 2022 and here are the lessons learned

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Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

A new survey of 300 marketing executives conducted by Third Door Media – the publishers of marketing and SEO research and news platforms MarTech and Search Engine Country — revealed something that may not surprise you: many companies are still unhappy with their customer relationship management systems.

The survey found that nearly one in four (26 percent) small businesses (companies with revenues under $25 million) replaced their customer relationship management systems last year. Large companies replaced their CRMs at about the same level. Mid-sized companies (those with revenues between $25 million and $500) slightly less — about 17 percent.

For me this is a big number. One in four? Why is this happening? Why do so many companies feel the need to spend the time, cost, and effort of switching out their existing CRM systems for something better? According to the research, there were two main reasons: better features and more integration. And there are some lessons to learn.

Many companies still use homegrown CRMs made by in-house developers on custom databases. In the MarTech survey, 43 percent of respondents who replaced a native application cited better features as an incentive, with 14 percent of those who replaced homegrown tools saying the platforms were too expensive to maintain. So here’s the first lesson.

Lesson #1: Homegrown systems are becoming less and less cost-effective for CRM.

I’m not surprised. When I speak to companies considering building their own internal CRM systems, the vast majority ultimately choose to purchase and customize a commercial solution. Remaking the wheel just doesn’t make sense, especially when there are so many affordable CRMs out there that provide out-of-the-box tools with low-code/no-code functionality to build and integrate apps around them. For those who own homegrown CRMs, that realization also becomes apparent as they become more familiar with the vast array of features and tools provided by commercial systems. In short: homegrown apps rarely make sense anymore.

But that doesn’t mean commercial apps are perfect. Many commercial apps do not integrate well with other platforms. That’s why 24 percent of marketers who replaced their commercial CRM applications last year did so in favor of better and easier integration. Which brings me to:

Lesson #2: Integration is becoming increasingly important for CRMs.

Most of my clients want their CRM systems to communicate with their finance, projects, and e-commerce systems. They want to see order history, open transactions, and the types of products and services being delivered and purchased in real time. For my clients – mostly small and medium businesses – integration with these platforms is never a short-term goal, but always a long-term priority. That’s why it’s critical to make sure you choose the CRM that either integrates directly with these systems or provides the tools to do so. Also make sure you have the human resources (external or internal) to do the job when the time comes. Integration capabilities are better than ever. But doing the job is still not easy and takes time.

Finally, and interestingly enough, the majority of people (53 percent) surveyed by MarTech who said they’ve replaced their commercial apps said they did so because of the “need for better features.” Here, I’m going to argue.

I often come across companies looking to replace their CRMs for the same reason. But when I start digging, I often find that “better features” are just an excuse for a poor implementation. Today’s mainstream commercial CRM applications have the features most businesses need. And because they reside in the cloud and are closely monitored, new features are often imitated. Unless a CRM system is very old or on-premise, I’ve found that the “lack of features” excuse is often due to a lack of knowledge about the product. So…

Lesson 3: Get expert advice before blaming “lack of features” when replacing your existing CRM.

Talk to the seller or a partner. Go to their conference. Pay for some advice and training. Spend some time on YouTube. Read. I bet you will find that the “lack of features” is really due to your lack of understanding and can be addressed through customization or training at a much lower cost than replacing the whole system. It will certainly be less disturbing.

There’s a lot of good stuff in the MarTech survey and maybe I’ll get back to it soon. But in the meantime, consider these lessons before replacing your current CRM system.

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