Where CRM Fails and Why Lead Management Succeeds

December 8, 2009

Customer Relationship Management software, often referred to as CRM, can be a powerful tool for large insurance companies that have the resources and capabilities to make it work. However, it’s very common that insurance companies in need of software to help them organize and track insurance leads will turn to CRM when it clearly is not the appropriate solution. Smart agencies will find a solution that fits their size and their needs, and in most cases, this is more likely to be a Lead Management system like Leads360 than a full-fledged CRM system such as Salesforce.com, Right Now Technologies, or Microsoft Dynamics. CRM systems can be bulky, unwieldy, expensive, and often times won’t even address the specific problems that need to be solved without expensive and time consuming customization. In most cases, a Lead Management System will provide a cheaper, more targeted, and more effective approach. Perhaps business guru Casey Gollan puts it best:

“Although several businesses have implemented CRM systems to focus on customers, several clients are still dissatisfied with its execution. They term CRM as “technology that delays” or “stops service”. … As per a recent study conducted by Accenture, receiving poor customer service remains the number one reason why consumers abandon one service provider and move on to another, be it a mobile service supplier or a credit card provider.1

Over 50% of CRM systems suffer at least partial system failure, while no more than one in three will achieve unqualified success. What’s more, a shocking 42% of CRM systems go unused after purchase, a statistic made all the more unbelievable when one considers that CRM sales topped $9 billion in 20082. Why are CRM systems so consistently failing to do what they advertise? There are several answers to that question. The first issue with most CRM systems is the number of features they offer. While large corporations with many functions and departments to integrate might need a complex, multifaceted CRM system, most companies will find that they’re sinking their money into a system that does way more than they want while not fulfilling their needs without customization.

In most cases, companies will end up investing time, money, and effort on a system that isn’t designed to do what they want. CRM systems are also very labor intensive. In many cases, the appropriate implementation of a CRM system requires a dedicated staff that invests countless hours to ensure that the system runs smoothly. What’s more, simply bringing the system up to speed can take longer than most companies can stand. CRM systems can take as much as five times as long to implement as a Lead Management System3. Finally, even when the system is implemented, most companies are going to find that CRM systems won’t efficiently aid their business without expensive customization to fit their needs. Even CRM proponents will admit to these flaws. Rebecca Haines, Marketing Manager for DMC Software Solutions concedes:

“One of the main risks involved in a CRM investment is businesses ensuring they have the right CRM software and the right supplier to be able to provide them with adequate training and business advice. The CRM software must be feature-rich to provide a company with much more than just a database solution, but at the same time it must be easy-to-use and it must provide real-time integration with other business software and data…4

Clearly, for those companies not prepared to sink large amounts of money and time into a CRM system, there needs to be an alternative solution that doesn’t create more problems than it solves.

As the new Leads360 whitepaper explains in detail, the primary alternative to these bulky, inefficient CRM systems would be Lead Management Systems like Leads360. While it’s important to use technology to track data and maximize efficiency for your sales staff, a sleeker, more focused lead management system will get you more for your dollar and be more effective in solving your company’s problems. While CRM systems can cost between $150 and $1000 a user every month, Lead Management Systems can be implemented for a mere $40 per user and can more than pay for themselves with improved throughput. Not only can captive and independent agencies expect to save money on their lead management system, these systems typically lack the delays, upkeep, and expensive hidden costs of a CRM system. They will be up sooner, focus on the specific problems your company is facing, and cost less even before you factor in expensive customization costs. Lead Management Systems will provide you with a very simple service: they will manage your leads and improve your ROI for those leads. Even better, the industry-leading lead management solutions like Leads360, feature built-in, proven best practices that allow you to benefit from the success of thousands of other agents.

Simply put, CRM systems are designed to benefit large corporations trying to integrate a unified approach to customer response over multiple branches of their company. In contrast, Lead Management Systems are devoted to helping agencies manage their sales process more efficiently to convert more leads and sell more policies. In most cases, companies that think they need a jackhammer will ultimately realize a chisel would have served them much better. CRM systems will often times be more trouble then they’re worth, piling up hidden costs, requiring a dedicated staff for regular maintenance, and failing to address the specific problems they’re acquired for. In most cases, a lead management system will prove to be cheaper and more efficient than any of the leading CRM systems.

Click here to download a complimentary copy of our whitepaper entitled, Where CRM goes wrong-8 Reasons CRM Fails to Deliver

1 Casey Gollan: http://www.evancarmichael.com/Business-Coach/163/Problems-In-CRM.html

2 Leads360 Whitepaper: Where CRM Fails: 8 Reasons CRM Fails to Deliver

3 Ibid.

4 http://www.mycustomer.com/item/133639

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