Why Isn’t CRM Adoption Higher? CRM Vendor Execs Weigh In

At this year’s SugarCon conference, I spoke with SugarCRM CEO Larry Augustin on everything from machine learning to digital assistants and relationship intelligence. We talked about how the cloud makes things more accessible and affordable than we could’ve imagined just a few years ago. But in the midst of discussing all these great things, Augustin hypothesized that we’re still seeing only about a 10 to 15 percent adoption rate for CRM. And if that number is in the right ballpark, then the adoption rate for SMBs is lower still.

With this conversation in mind, I asked a number of executives at CRM vendors for their take on why, and how to fix it. Below are some of their answers, which I’ve placed into five categories.

CRM MISCONCEPTIONS PERSIST

There are many people out there who fought the CRM wars over the years, and who, based on their past experiences, liken CRM to a word on George Carlin’s infamous list. And they’re having difficulty letting go of old feelings.

“The idea that getting a CRM tool up and running is difficult and expensive is a common misconception among small-business owners, which attributes to the low adoption rates,” says Jamie Domenici, vice president of SMB for Salesforce.com. Zendesk vice president of strategy Sam Boonin agrees, saying that “some SMBs still feel that CRM is out of their reach because of its historical cost and complexity.” And research conducted by Insightly backs this up, with 52 percent of respondents believing CRM is too expensive. “This misconception is one of the biggest things keeping SMBs from implementing a CRM,” says Insightly’s CEO and founder, Anthony Smith.

Domenici says the thought of learning how to use a new tool like CRM and moving away from Excel and email, which 85 percent of SMBs still use, can be daunting. Pipedrive CEO Steve Oriola agrees. “Many small-business owners still think that CRM solutions are for companies with big budgets and big sales teams. As a result, many business owners continue to keep track of their sales using Post-its or Excel.”

And the persistent worries about cost and complexity lead to what could be the biggest misconception surrounding CRM, says G2 Crowd CMO Adrienne Weissman: that SMBs don’t really need a CRM solution unless their customer base hits a certain size.

THE VALUE PROPOSITION IS MISCALCULATED

The durability of the above misconceptions may hinder SMBs from exploring what CRM solutions can do for them, and also from understanding the value they offer. “Small-businesses owners face many challenges when it comes to implementing CRM solutions in their business,” says Terry Hicks, chief product officer for InfusionSoft. “They’re strapped for time, face financial constraints, and often lack the expertise and ability to adopt solutions that are constantly evolving. However, one of the biggest barriers I see is the lack of understanding in the value CRM provides. If CRM seems too complex or the value isn’t clear, businesses won’t invest.”

Zoho president Raj Sabhlok agrees. “Many SMBs are skeptical of the CRM value proposition. They just don’t believe the return on investment is worth the time, complexity, and cost. They also question whether a CRM system will play well with their other business applications.”

CRM APPLICATIONS NEED BETTER DESIGN

While modern CRM is without question more accessible and adoptable, the vendors themselves say that reaching the masses will take more effort on their part in terms of design and messaging.

“At a time when more small businesses are moving to digital prospecting and sales, the need for a modern and cost-effective CRM has never been more acute,” says Freshdesk’s president, Dilawar Syed. “However, poor design and complexity, siloed tools, and price continue to be barriers to the adoption of modern CRM for SMBs.” Jon Ferrara, CEO and founder of Nimble, takes it a step further: “The biggest reason why SMBs fail to use CRM is because you have to work for your CRM instead of it working for you. You have to Google people before meeting them, and then log who they are and what you did and what you need to do in the CRM. Also, you shouldn’t have to go to your CRM to use it.”

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