The biggest myth about CRM

Today’s guest post is written by Gene Marks, small business owner, technology expert, author and columnist. He writes regularly for leading US media outlets such as The New York Times, Forbes, Inc. Magazine and Entrepreneur. He has authored five books on business management and appears regularly on Fox News, Fox Business, MSNBC and CNBC. Gene runs a ten-person CRM and technology consulting firm outside of Philadelphia. Learn more at

CRM systems and databases

Image courtesy of ddpavumba /

The rebranding of CRM

My company has been selling Customer Relationship Management (CRM) systems for more than 15 years. During that time I’ve watched these products go through multiple rebrandings, from “contact managers” to “sales force automation” to “collaboration” to CRM, which now encompasses not only sales but service, marketing and operations.

But, rest assured, these are all just elaborate names for one thing: databases.

The makers and marketers of today’s CRM systems will throw around all sorts of buzz words to describe what they do. “Social CRM.” “Workflows.” “Automation.” “Call Center.” They will dangle cool and exciting features in front of their customers like “Outlook integration,” “Mobile Apps,” “Self Service” and “Dashboards.” And they will romance the VPs and executives who read their inflight magazine ads with promises of increased sales, improved productivity and better analysis. All of this is true (or can be true). Today’s CRM systems, particularly the ones that integrate with Xero, all have some amazing capabilities.

But none of this works very well without one thing: the data.

CRM systems store data

Your CRM system is nothing more than a database. That’s it. Maybe it’s hosted by some cloud provider. Maybe you have it in house. But in either case it’s just a big ol’ database that’s being updated by the people in your group. Sure they’re accessing it now via their iPads and Droids. But this system is no different than any other databases used by employees over the past half century. It’s just that today we have more ways to get to it. And that, in itself, is the reason why so many CRM systems fail.They fail because people forget that they are databases first. They get caught up in all the features and bells and whistles of the CRM vendors who are trying to come up with new and exciting ways to lure in more customers. The smart companies that I know who use their CRM systems well put the data as their first priority. They know that they can’t do all the advanced stuff, like workflows, automation, collaboration and marketing, with the data being right.

What do these companies do to make sure their CRM databases are as accurate and complete as the financial statements they send to their bankers?

Three things:

They keep it simple. My best CRM clients start simple and keep it that way. They focus on contacts, accounts and opportunities. They don’t clutter up their screens with tons of useless fields. They don’t over-integrate. They don’t over-customize. They make the things they’re not using invisible because they recognize that they only use 20-30% of the CRM application’s features and that’s perfectly OK.

They secure it. They create user groups and teams with specific permissions. They assign lookups to every field so data entry is not left up to chance. They make critical fields required. They set audit trails on certain fields to track transaction history. They make some fields visible to those that need the data and hide it from others. They make some fields updatable for those who need to change them and not for those who only need to view the data. They make sure that only the people who should be changing the data are the ones allowed to change it. Oh, and they also make sure these people have plenty of training and support too!

They put someone in charge of it. They assign a database administrator. This is the person who “owns” the data. Incorrect, out of date and missing information is the database administrator’s job to fix. The administrator receives automatic alerts when certain fields have been changed or others haven’t been updated in a while. This is not an IT person. This is a power user, or one who supports the users. My clients who do not have an administrator in charge of their CRM systems simply…fail.

Maintain your CRM system properly

Having a CRM system can be a great thing. But go ahead – you try and have five, ten or fifty people work on a database for a few weeks and see what can happen. Without the right controls, your database will turn into garbage. And then your CRM system is not a great thing. It’s a failure.

To learn more, sign up for my free 30-minute on-demand webinar via Xero U on 5 Ways to Grow Your Business Using CRM. You can also read my earlier blog post on How CRM will benefit your business in just 3 words.


Wayne Smith
August 21, 2014 at 5:25 pm

I’ve had a number of clients use a variety of CRM’s and 75% have issues. Whether its not training staff to use it properly, not researching it enough or some staff refusing to use it, it’s only as good as the data entered. I would always trial 3 different CRMs before you settle on the one.

Kundan Lal Rana
September 9, 2014 at 12:52 am

Thanks Gene for sharing this information. The most likely reason that businesses may fail is because they consider CRM about two things, people and technology. But it’s more than that where data and process are the key contributors.
It’s extremely important to focus on data as the first priority before choosing any technology for implementation.

April 23, 2015 at 8:11 pm

Good read but do you have a recommendation for a xero user wanting to keep up customer service and manage leads?

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