CRM (Customer Relationship Management) software is something almost every owner considers as they grow. The benefits are obvious (more on this below). Yet, most small businesses don’t take the leap. Why? Glad you asked.
I’ve asked James Russo, President and Founder of VantagePoint Consulting, to talk to you about why you should consider CRM. James is a client and a Registered Consulting Partner for Salesforce.com, the premier cloud-based CRM application. He really knows his stuff.
Take it away James. . .
If you don’t have a CRM that is implemented properly, it is costing you money. And I can prove it to you with four simple questions. Can you answer the following?
- What is your win rate for prospects vs. existing clients?
- What is your most profitable lead source?
- How long should it take a salesperson to close a deal? And how long is it actually taking?
- Where is all of your organization’s customer/prospect contact information?
How did you do? If you can answer all or most of these questions, congratulations. You have achieved something most organizations, and likely your competitors, have not; a sales CRM strategy that gives you a complete picture of your sales organization, your customers, and your pipeline. This is an outstanding tool for you to have; and if you don’t have one, there is room for improvement. Let’s look at each one of these questions individually.
What is your win rate for prospects vs. existing clients? You may have a gut feeling or the ever popular “80/20 rule” but do you know the real statistics? If you did they may surprise you, or they may not but if you don’t know how can you make strategic decisions? If the win rate for your existing customers is 8% and the win rate for prospects is 15% you have a big customer service problem. That means that people who have never done business with you before are more likely to sign a contract with you than those that have. If your win rate for new business is 2% and existing is 20% you have an entirely different problem. If you don’t have a CRM to capture these statistics, it is costing you money.
What is your most profitable lead source? Sales are down and you want to increase your marketing budget; how should you distribute it? Trade shows, promotions, your website, internet advertising? You would want to direct those dollars to the lead source that is most profitable. Alternatively if you need to cut your marketing budget, where can you make cuts that would do the least damage? Knowing exactly how much revenue is being generated from each source can help you make those decisions. If you don’t have a CRM to identify this information, it is costing you money.
How long does it take to close a deal? Simply stated – the faster that contract is signed, the faster you get paid. A common goal for sales organizations is to shorten the time to sale. Who wouldn’t want money faster? You need to know if your sales people are following suit. Are there any sales people in your organization that are not closing as fast as you would like? If so, why? Maybe they need to be coached, or maybe the structure of your incentives is making them “sandbag”. Either way, if you don’t have a CRM to identify this behavior, it is costing you money.
Where is all of your customer/prospect contact information? Is it in a central system that is easy to find? Or have you delegated that responsibility to your sales staff in their Outlook, Excel spreadsheets, or personal rolodex. If you have the latter, you should expect many of your clients and prospects to leave your organization when your salesperson leaves. If you don’t have a CRM to be a central repository for your strategic contacts, it is costing you money.
Looking at each of these individually, it’s not hard to see the value in a CRM. Unfortunately many organizations view CRM as something they cannot afford or will make a minimum investment in one. Implementing CRM is one of the most important decisions you can make as a sales leader and it should be done strategically and with serious investment. Evaluate CRM tools in the market based on your specific business needs and don’t be afraid to bring in professional services. The cost of doing nothing far outweighs the cost of software and professional services. If you had trouble answering the four questions above, I have one more question for you: Can you afford not to implement CRM?
Please take advantage of James’ knowledge and experience. He is a first-rate Salesforce CRM Consultant.