After spending a career in information technology doing software engineering, integration and consulting for big and small private companies as well as the U.S. government, it’s always been my experience that most organizations only really use about 10% of their Customer Relationship Management, a.k.a. “CRM,” systems.
Usually, it’s more like 1% to be perfectly honest.
Yet, every day across the business world, companies keep spending lots of hard-earned money on CRMs to cure a wide variety of ills most of which can and should be solved in other simple, more direct and more (cost) efficient ways.
Are CRMs bad? No, of course not. They’re great tools when used appropriately and in appropriate circumstances.
But, in almost every case (and especially with small businesses), firms don’t plan out in fine-grained detail what things they really need the CRM to do for them or what current problems they have that need a CRM to fix.
Instead, CRMs are one of those “aren’t we’re supposed to have it?” purchase decisions wherein companies seldom do a thorough good cost vs. benefit analysis.
To put it another way, companies rarely ask themselves “what exactly do I need a CRM to do for me anyway?” or “what am I losing out now on without a CRM?” or even “how will a CRM create more sales for me?”
The result? They end up with the proverbial “gold-plated boat anchor” that actually costs vs profits them in the end.
In the real estate sector where the vast majority of professionals are independent contractors and small businesses, CRM has become a kind of very expensive digital-age “snake oil” promising miracle cures for a lack of sales or lead generation vitality.
In practice, they instead usually do more harm than good with a wide variety of side-effects that can make individual agents and brokerages groggy, less focused and effective, as well as addicted to something that’s bad for them:
– CRMs cost a lot, many times over – More than just the money, much precious time and energy are spent on setup, maintenance, and ongoing configuration and administration that could be spent providing customer service or prospecting.
– CRMs add complexity from day one – CRMs by their nature inject themselves into the middle of vital processes such as direct customer follow-up and outreach in ways that wrap typically simple A-B processes into often unmaintainable messes when there isn’t an experienced and qualified CRM operator always awake at the wheel.
– CRMs are needy and get very messy – CRMs can only be truly useful when they’re maintained in an orderly and rigorous fashion. Most often, they become virtual “garbage dumps” for leads of indeterminate and questionable status, thus becoming even more of a maintenance nightmare as time goes on.
– CRMs are often over-kill, unadopted – Since most CRM offerings these days pack in dozens of complex and advanced features, most agents shy away and revert to simple, effective practices such as email, text and phone calls (i.e. the traditional tools of the real estate trade). Plus, data shows that most agents have not yet mastered even the basics of digital marketing, much less are they ready for complex tools that require extensive training to use and extreme diligence to keep up.
And, most notably of all…
– CRMs promise lead generation! – It’s right there in the name “Customer Relationship Management.” CRMs are for managing lead and prospect contacts you already have, not for attracting and creating new ones. Yet just about every real estate lead generation company today is really selling you a CRM being billed as a lead generation tool.
You’re paying for it too.
In fact, if you think most of the money you pay each month is going toward advertising and marketing, the SEO monitoring and enhancement of your website, new lead capture tools and techniques, or actionable traffic analysis and reports, well, think again.
From someone who’s built and sold software for more than 20 years as a living, I can tell you the number one cost your monthly subscription fees are covering is the development, maintenance, and support of, you guessed it, the CRM software itself.
The bottom line is, storing, managing and interacting with contacts (a.k.a CRM) does not equal lead generation.
Lead generation is the act of actively targeting new customers for your services who are most likely to be interested in buying or selling homes and converting them to, well, leads. Period.
What’s that usually include in today’s digital world?
– Mobile apps and responsive web apps
– Paid Advertising (i.e. Pay-per-Click digital ads)
– Lead Capture Pages and Forms
– Search Engine Optimization (SEO) and SEM Services
– Blogging and Content Marketing
– Marketing Automation (Email campaigns, social media campaigns)
These are the pieces and parts that, when done well and diligently, bring home buyers and sellers to your door, a.k.a. “lead generation.” And none of these activities require buying and committing to a CRM in order to be effective at getting you more leads.
CRMs are, of course, places to store leads when they come in, but many agents and brokerages of all sizes are really putting the cart before the horse when they go looking for lead generation by way of a CRM first.
In fact, I’ve yet to meet an agent or broker who isn’t better served by emphasizing the bigger task at hand (i.e. committing to doing digital lead generation) as the priority, while focusing on meeting the simple, practical necessities of storing and interacting with their contacts (i.e. leads) thru one of the robust, free and powerful marketing automation tools out there such as the venerable Mailchimp.
When looking to grow your leads and new customers, consider what’s worth more: storing and interacting with leads once you get them or getting them in the first place.
Committing to a simple, but long-term digital marketing strategy and doing what’s necessary to make that happen will most certainly put your business and listings in a better spot to attract buyers and sellers than any CRM with a big list of features you probably won’t ever even use.
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