The CRM Problem is a Human One

The CRM, circa mid-20th century America.

A 1970s-era Rolodex.

Sort is alphabetical, by Company Name. Fields can include: Phone, Primary Contact Name.

As we saw in a scene from the final season of “Mad Men” in which advertising executive Roger Sterling meets with secretaries Caroline and Shirley, there was even room for custom fields:

Caroline: They want to set a call for 4 o’clock.
Roger: Hold on a second. Isn’t he NAC?
Caroline: I’ll check the Rolodex.
Shirley: I’m sorry. What’s NAC?
Roger: No Afternoon Calls. Lester’s blotto after lunch.
Caroline: He is indeed.
Roger: Well, let’s call him now.

Forty-five years later, the Rolodex is enough of an artifact that it’s probably due for a hipster-driven revival any day now. On many desks, it has been replaced by computer-based Customer Relation Management (CRM) platforms, most of which now reside in the cloud. According to a frequently-cited Gartner study published in 2014, worldwide spending by business on CRM totaled $20.4 billion in 2013, an increase of 13.7 percent over 2011.

And yet, even as adoption rates rise — according to another 2014 study, 82.9 percent of sales organizations were using CRM, up from 48.7 percent 10 years earlier — repeated studies have shown anywhere from 25 to 60 percent of CRM implementations fail to meet client and user expectations.

Just go to the comments section of this piece on “The Adoption Rate Challenge” from CRM magazine and you’ll get a sense of the ongoing doubts and challenges that plague the industry.

Everyone is doing it, it seems — but very few are doing it well.

Why is CRM so hard? Because we persist in thinking of CRM as a technology product and problem, when it is in fact a human product and problem.

I got into the CRM business almost by accident, when I left a career in journalism in 2007 to work as director of marketing and business development at a boutique investment bank in Charlotte, N.C.

After working in one server-based CRM, then implementing a cloud-based system when I helped found a second investment bank in 2010, I went to work in 2013 in sales and implementation for DealCloud, a provider of customized, cloud-based CRM solutions for financial services firms. Since then, I’ve worked on dozens of CRM implementations, primarily at small and mid-sized firms.

DealCloud’s clients — investment banks, debt providers, private equity firms and corporate development platforms — compete ferociously against one another over financial transactions involving middle-market companies.

These companies have been slower to come to CRM than more obviously sales-focused organizations, but they generally recognize the need to organize and leverage all the data available about their business relationships. They have read about CRM and have absorbed the promise that technology will help them define and master their chaotic business world; our challenge is helping them understand that technology may be the tool, but the solution needs to be human-focused.

Let’s take a walk down memory lane to see how we got here.

In the “Mad Men” era, the secretary was the keeper of her boss’s CRM. The 1980s brought change.

First, the Rolodex leapt off the desk and into the portable DayRunner/Filofax notebook. Carrying your own contact list, not having it sit on someone else’s desk, became a status symbol for hard-working Yuppies.

The digital revolution took this in multiple directions:

_ The on-desk Rolodex migrated into the PC, first in early contact management solutions like Microsoft’s Cardfile and Synamtec’s ACT!, then, with the ascendancy of email, into Outlook.

_ Meanwhile, digital spreadsheets pioneered by Visicalc, Lotus and Microsoft, which started as numbers-driven accounting solutions, evolved into tools for aggregating, sorting, linking and reporting on data of all kinds, including text.

_ It took a decade, but by the 1990s the portable path that started with the Filofax went digital as well: Apple Newton → Palm Pilot → BlackBerry → Smartphone (iPhone, Android device) → Apple Watch/wearables.

Whether leatherbound diary or plastic-and-metal smartphone, handwritten, typed or tapped with a stylus, these are all Data Management Solutions. All serve to collect information, sort it and offer it to the user in a mediated manner. Roger Sterling’s “No Afternoon Calls” is a primitive, Rolodex-based custom field: his way of sorting contacts and using proprietary knowledge about them to understand when is the right time to conduct business.

Though we’ve traveled a long way from Roger’s Rolodex to today’s CRMs, Relationships remain right in the middle of the acronym. Problem is, they tend to get lost.

I’ll give you a couple of examples.

At DealCloud, clients often want to populate their CRM with a baseline data set and then keep it constantly synced — All Contacts in Middle-Market Finance, All Consumer M&A Deals From 2010–2014.

This is useful data and it is available in the marketplace. In middle-market finance, data aggregators like PitchBook and S&P Capital IQ charge tens of thousands of dollars annually for access to the information they compile about who works where, what deals they did and when.

But that data is just as available to your competitors as it is to you. All it takes is the willingness to pay for it.

The true value add from CRM is not in having a listing for every principal at every private equity group in the middle market, but in the global view it offers of the relationship you and your firm have with your best contact at a given firm.

That’s proprietary data that only you — not PitchBook, CapIQ or anyone else — can put into your CRM, and then leverage.

Another common distraction in CRM projects is the desire to do extensive, complex and often time-based accounting calculations inside the platform. It’s not that CRMs can’t perform these kinds of calculations — they are, after all, databases just like Excel or other accounting software platforms — but what this does to server and processing resources.

The CRM’s key functionality with regard to relationships is enabling users to connect different objects and view them dynamically in relation to one another. That core “lookup” functionality requires that the database hold all potential connections (potentially tens or hundreds of thousands) for a Contact or a Company or a Transaction or a Note or any other system record in memory and make them all available on the spot.

If a DealCloud user goes into a Contact and changes the person’s Company, that whole relationship picture — as well as all related records — must be reconfigured on the fly and made available in its new state. That’s a huge demand on both your computer’s processing power and on the memory of the server that hosts your CRM.

Now, factor in calculations based on changing number fields in records, plus the need for the server to track the current time and compare it to any number of time-based functions that may be programmed, plus additional custom-programmed workflow functionality — say, to update a record’s Last Contact Date every time a new Note or Email is added to a Contact or Company — and the potential for overload becomes clear.

Start adding plug-ins from data providers, automatic syncing of Capital IQ data, additional apps to pull in more data, workflows to auto-calculate various stats and soon your relationship mapping database starts to look like the CRM equivalent of the Wenger 16999 Swiss Army Knife: impressive, but what is it actually good for?

Here are the two most — and, I would argue, only — important questions business owners should ask about CRM.

Does it help users and senior leadership draw together and sort the key proprietary knowledge about their business relationships?

Can you persuade your users to put the data behind that knowledge into the system?

Because here’s the other human “problem” with CRM. Just as there are limits on computers and servers, there are limits to human patience for data entry and processing. Most employees asked to use CRMs as part of their daily jobs are NOT people who got into their line of work because they had passion for data entry. They’re natural-born “ABC” sales guys or junior bankers who live to execute deals.

They also may have mixed feelings about sharing their proprietary business intelligence via the CRM — particularly in industries where compensation is pegged to individual performance.

Yet CRMs are usually designed under the guidance of senior managers or database administrators. The former group generally does not engage with the system on a daily basis; the latter is paid to live in the system full time. Both naturally lean toward a belief in what we at DealCloud have come to call The Magic Box Theory:

“If I stuff every bit of available data into this Magic Box, somehow something useful will come out of it.”

This may seem harmless enough — what’s a few extra fields here or there? — but experience shows that loading CRMs with extra fields is overwhelming to users and a major hurdle to adoption. Just as an extra workflow makes big demands on limited processing resources, unnecessary fields (or, even worse, loading the system down with large numbers of required fields) waste the limited attention span users are willing to devote to CRM. The inevitable outcome: low adoption and use rates.

The third and final human challenge is to those of us who work in this space — sellers, implementation teams, consultants.

Instead of worrying about how to add the 88th and 89th implements to our Swiss Army Knife, we need to focus on improving the human experience of CRM.

That should include technology and “add-ons” that simplify and improve the user experience instead of further complicating it. (Think of how the iPhone humanized the smartphone.)

It also means paying more attention to up-front design of CRM systems, taking more care in their implementation and diving into deeper training of users.

In just the last 35 years, Moore’s Law has taken us from the desktop Rolodex to accessing a complete and detailed view of your company’s entire business while you sit in an airport terminal and look at a tablet. Undoubtedly, the years ahead will bring further leaps in processing power and the ability of the CRM to mix accounting and other functionality with relationship mapping. Advances in AI and natural language recognition may provide a way around some of our current data cleanup problems.

But what won’t change is the people — either the ones whose relationships are captured and quantified in the CRM or the ones whom you’re asking to make it a part of their lives. That’s where it all starts and ends.

Tim Whitmire is Director of Business Development and Client Integration for DealCloud CRM. Previously, he was an officer at a pair of Charlotte, N.C.-based middle-market advisory boutiques, BlackArch Partners and Edgeview Partners. He can be reached at or on Twitter @trwhitmire_OBT.