They had a separate spreadsheet for every state (all 50 of them). Some states just had a small number of customers in them (e.g. Wyoming). Others had large numbers of customers (e.g. California).
Their support team could only update one spreadsheet at a time. So adding a customer in Texas required locking that spreadsheet until the transaction was complete. Doing reports required compiling data from all the relevant spreadsheets. Queries that could be done on a relational database in under a second, took many minutes (or hours).
I tried to show them how my system could easily load all their data and make everything work much more smoothly (and saving them hundreds of man-hours); but they just couldn't see the value of spending a few hundred dollars a year for a license for my software.