In the construction industry, many companies find that generic Customer Relationship Management (CRM) systems fall short of their needs. These systems, often designed for traditional sales processes, don’t align with the project-centric nature of the built environment. Let’s explore the key reasons why standard CRMs may not work effectively for construction firms, subcontractors, main contractors, consultants, developers, and manufacturers.
1. Projects as Leads
In most CRMs, the initial step is to create a lead, typically representing an individual or a company. However, in construction, leads are often projects rather than people. Generic CRMs may require a first and last name for each lead, which doesn’t fit when the lead is a project. This mismatch can lead to workarounds that complicate data management and reduce the system’s effectiveness.
2. Unknown Clients and Multiple Stakeholders
At the outset of a project, the end client might not be identified. Generic CRMs struggle with this uncertainty, as they mandate specific client information. Moreover, construction projects involve various external team members—architects, cost consultants, engineers, subcontractors—with whom engagement is crucial, even without direct financial transactions. Standard CRMs aren’t equipped to manage these multifaceted relationships effectively.
3. Multiple Potential Customers
Consider a subcontractor bidding for a mechanical and electrical package. They may submit tenders to multiple main contractors for the same project, knowing only one will win the bid. Investing time and resources into bids that don’t materialise is costly. Generic CRMs don’t handle such scenarios well, lacking the flexibility to manage multiple potential customers for a single project.
4. Evolving Customer Relationships
In construction, the customer isn’t static. A lighting design company, for instance, might first engage with an architect or consultant to get their products specified in the design. Once specified, they then need to sell to the bidding main contractors. This evolving relationship—from architect to contractor—is complex and not adequately supported by generic CRMs.
5. Fragmented Pipeline Overview
Traditional CRMs often separate leads and opportunities into different categories, making it challenging to view the entire project pipeline cohesively. For construction projects that progress from lead to opportunity, prequalification, tender, on-site work, and completion, having a unified view is essential. Generic CRMs’ segmented approach can obscure this holistic perspective, hindering effective project management. If not handled correctly, pipeline values can easily be skewed, particularly in scenarios where users create multiple opportunities to track progress with each contractor they are selling to. This can result in inflated pipeline values and an inaccurate forecast of actual work-winning potential.
6. Winning the Work is Just the Beginning
Most CRM systems are designed to close an opportunity as ‘won’ before moving onto an order record, often for reporting purposes. However, in construction, securing the contract is only half the battle. The project then progresses to on-site work, requiring ongoing data recording and document storage. Increasingly, Golden Thread data is being captured, such as details of product installations, records of who carried out the work and when, and whether the relevant safety checks were completed. Closing the opportunity record prematurely can restrict the ability to manage this critical information effectively.
7. Marketing Limitations
Using the lead table to record projects means that it cannot be utilised for marketing purposes in the way it was intended. Many CRM systems allow marketing campaigns to target leads or prospects, but if these records represent projects rather than people, this functionality becomes redundant. This makes it difficult to execute marketing activities such as email campaigns or event invitations aimed at actual prospective customers.
Conclusion
In the construction industry, many companies find that generic Customer Relationship Management (CRM) systems fall short of their needs. These systems, often designed for traditional sales processes, don’t align with the project-centric nature of the built environment. Let’s explore the key reasons why standard CRMs may not work effectively for construction firms, subcontractors, main contractors, consultants, developers, and manufacturers.