The Problem With Most CRMs - An Alternate Perspective
Most companies spend money, often a lot of money, on Customer Relationship Management (CRM) software in an attempt to manage and track their sales leads, know what their reps are doing, keep an eye on sales activity, and magically drive sales. The responses I get vary as to why people invest in CRM’s. There is only one reason – to drive revenue.
However, the reality of what I have observed working with sales teams and CRM’s since the advent of the CRM is that very few companies realize a return on their investment.
According to Forrester Research:
Less than 37% of sales reps use their company’s CRM.
83% of senior executives explained that their biggest challenge was getting their staff to use the software.
72% of CRM customers indicated they would trade functionality for ease of use.
While there are many reasons behind the failure of CRMs to drive revenue, the primary reason is the absence of an effective sales process that defines explicitly effective sales behaviors, in which the CRM can provide visibility to help managed and develop.
“CRM’s are Not a Sales Solution, Sales Process, or Sales Training. They are Part of the Solution. The Solution is Effective Sales Process, Effective Training, Continual Rep Development, and Solid Sales Leadership that the CRM Needs to Support.”
Don’t Become Enamored With Unnecessary Features
The most popular CRMs today are loaded with features and benefits, many of which over-complicate them but seldom have a connection to driving revenue or identifying and supporting sales reps development. If you have ever been through a demo from a CRM provider, they will almost always hype features but never touch on effective sales processes. Over the years, I have personally been enamored by such presentations and had bought in. In retrospect, there was seldom a connection between the CRM and effective sales behaviors; I purchased a CRM because it seemed pretty cool.
In a nutshell, the problem stems from placing a technical solution on top of a non-existent or ineffective sales process.
The Illusion
Unfortunately, many sales teams enter large amounts of data into a CRM, but it is generally not actionable, and it does not lead to increased sales volume. Most managers cannot easily decipher what is going on with a sales rep or sales team by viewing their CRM. To further complicate it, CRM’s, which are already overbuilt, continue to be “enhanced”, which adds to the opportunity to get “lost’ in them. This complexity works to create an illusion of activity that seems to be forward sales movement, but in reality, it’s not. Just look at your top line for validation.
“Great Selling Provides the Key to Freedom. Effective selling not only solves many problems and provides vital employment, but provides the creative freedom necessary to serve and continually grow your customer base.”
Want To Grow?
Look For a Customer “Revenue” Management Tool. When I’ve invested in CRMs in the past, only one thing was important to me, growing revenue, CRMs need to be Customer “Revenue” Management.
When it comes to growing the topline, you only have three options:
Acquisition (inorganic)
Existing Customers - Grow by either by gaining share and/or being the benefactor of their growth. (Organic)
New Customers – Acquire customers you have not worked with before. (Organic)
Existing customers dominate what makes up most of a company’s revenue. In other- words, most company’s survival, let alone growth, is dependent on what customers make up their current account listing, so it is vitally important that the CRM map to the things that are key to supporting your growth plans. There are not many levers you can pull to increase your revenue, and the CRM should focus on that, everything else is superfluous.
A Good Day Selling: “Opening a Potential Sale and Advancing a Potential Sale.”
Before You Purchase
Working through a simple sales exercise that defines the following, a sales rep needs to get in front of “x” possible customers at this prescribed frequency as opposed to the usual message of “Go Sell” or “When is it going to close?”
Far too often, the focus is on “when is an opportunity going to close?” An important metric for sure, but you couldn’t be paying attention to a more lagging indicator. Sales cycles for most B2B companies are 6 to 18 months. Focus on the cadence across the pipeline, in particular, the beginning of the sales cycle, and not the end. How you start the race and your rhythm across the course, determine your results.
Stop Focusing On “When Is It Going To Close.”
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