Download the Top 10 Essential CRM Elements

Inorganic

1. Acquisition

Organic

1. Existing Customers - Grow by either by gaining share and/or being the benefactor of their growth.
2. New Customers – Acquire customers you have not worked with before.

If you have a growth strategy whereby you want to improve margin, pursue a new market or introduce new products, it still falls into one of the above categories.

It is all about having the CRM map to the things that are key to supporting your growth plans. There's not a lot of levers you can pull to increase your revenue and the CRM should really be focused on that, everything else is superfluous.

Get Clear On What You Want To Accomplish

Next is to get clear on what you want to accomplish from a revenue perspective and be able to distill that down to action by answering the following questions; take an educated guess for the information you do not have:

• What is your growth objective, e.g. 10% year-over-year?
• What is your attrition, e.g. 4% (3 – 7% is typical)?
• What is your average sale, e.g. $250,000?
• What is your proposal/quote win rate, e.g. 6:1?
• How many opportunities at the middle of the pipeline results in sales, e.g. 10:1?
• How many first appointments, (opening a potential sale) result in a sale, e.g. 15:1?
• How many targets does it take to get a first appointment, e.g. 8:1?

This simple exercise that will literally tell you the cadence the sales team needs to work on from the front of the pipeline to accomplish your revenue objective:

Before You Purchase

Working through this simple sales exercise not only helps you determine the pace at which the sales team needs to work, but allows you to create something that can be measured, most importantly does not leave hitting your revenue objective to chance. This creates a more sustainable sales model and reps know what to do, for example 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?” and far too often, “fire’em and replace’em”. No wonder the average tenure of a sales rep is 18 months.

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 cadence across the course, determine your results.

Digital Marketing/Marketing Automation

Inbound/digital marketing can be a source of leads if you commit the resources: time, work and expense, in developing and executing the strategy on an extremely consistent basis. Just be clear, just like CRMs, inbound marketing is not a magic bullet. It is one source of lead generation, which still requires the sales team to take the same action to open a possible sale – contact the prospect. If you have ever hit on a Salesforce.com call-to-action (CTA) and gave up your information, your phone will ring almost instantaneously. According to Pardot, which is the marketing automation platform owned by Salesforce, 79% of all marketing leads are never converted to sale. Marketing automation platforms and services success should be measured by the same ratio data we are going to cover CRM Essential #1 & #6.

Top 10 CRM Essentials

Now, given the groundwork that we have established, let’s walk through the Top 10 CRM Essentials of CRM selection. This is not a list of features, benefits, functionality and dashboards. This is a list based on a walk through the sales pipeline and what a CRM should provide in order to support your efforts in driving revenue. Sales pipelines, sales funnels or whatever you want to call them have several stages.

For the purposes of identifying the Top 10 CRM Essentials, I am going to break the pipeline into four sections:

1. Opening: Leads/Targets (Possibilities) through first appointments with potential customers or existing customers where there is more business to be earned.
2. Middle: Gather information and advancing a potential sale to proposal.
3. Closing: Proposal presentation through purchase order or contract.
4. Sales Management: includes sales leadership and sales rep management of their pipeline.

The data required varies depending on the stage of the sales pipeline. If we break the pipeline into these four areas, we have a better idea of the tools that are required at the right stages to drive to your revenue objectives.

#1 CRM Essential: Prospecting - New Customer Acquisition

The CRM should provide easy visual scheduling and tracking of your prospecting process and resulting sales ratio data.

Prospecting is vital to revenue growth. But it requries a very unique skill set that will challenge all of your unconscious fears and judgments so having a CRM to support your team is critical.

When I say prospecting, I mean using anything at the disposal of a sales rep to get an appointment to talk to somebody. For most businesses, if I'm not engaged personal contact with a prospect on some level, not much is going to happen, this is about opening a possible sale. A Salesforce.com survey of their users found the Top 20% of sales reps identified the most important action of the sales process as personal contact (face-to-face or phone).

If you cannot get in front of somebody, it doesn't matter how competent you are, how technical you are, how cool of a product you have, how good our presentation skills are, how good you are at proposal writing. It makes no difference.

Here are some questions to ask when reviewing a CRM to ensure it is designed to support driving New Customer Acquisition:

• Is it easy to see the number of leads actively being worked by rep and team?
• Can you create a process for working those leads that involves consistent reach?
• If you use marketing automation, does the CRM help me manage that lead generation?
• Does the CRM give me ratio data; number of touches to engage a lead?

Opportunity Ratios are defined as the level of activity it takes to engage with a lead. It typically is a fair amount of activity, probably the longest part of the sales cycle. You may have a list of 50 leads, but it's going to take a fair amount of activity to get in front of them. On average it takes somewhere between 8 to 12 points of contact before you will talk to anyone and have a shot at a first appointment. And the same applies to existing accounts where you are trying to gain share.

#2 CRM Essential: Activity Tracking

The CRM should allow for easy entry and tracking of activity for establishing ratio data and improving effectiveness.

Most salespeople are not particularly good at tracking activity and some are not interested in tracking activity at all. But it is essential information for determining consistency and effectiveness of the approach for trying to engage prospects, for example how much activity did it take me to get an appointment and what were those things? There are only so many things you can do to engage a prospect: call, email, walk in, reach out on LinkedIn, or other social media channels, etc.

Here are some questions to ask when reviewing a CRM to ensure it is to designed to support Activity Tracking:

• Can you easily track prospecting activity by approach? Even if you use marketing automation, that CTA, which may have generated a request for contact, still needs a sales rep to engage.
• There are only about five or six ways you can engage a lead so can you configure your CRM to have a drop down that shows you called, emailed, walked in, sent a social media message on LinkedIn, etc.?
• Can you open the CRM as you’re reaching out to a prospect, identify the action taken, make a quick note, close it, and move on.
• Does the Activity you are tracking correlate to helping you drive engagement with a possible customer?
• Is there an activity summary so you can see prospecting action taken by a rep or a team?

Learning how you can become more effective at prospecting, not transcribing conversations, is what should be tracked. Many reps log finite details of all actions and correspondence, which really doesn’t matter. Keep it simple and focused and as a result, your sales reps are more likely to engage in tracking.

There are two parts to becoming a high-performing sales person, Activity - how much are you doing and is it enough to hit the revenue objectives, and how Effective are you at each stage of that pipeline. Each stage of a sales pipeline requires is a very different set of competencies so it's important to be able to track that activity, and learn from it.

I train sales teams to define a prospecting process, how often and what way are you going to try and reach prospects in an attempt to get in touch with them?

This is opening a potential sale. That's a process. Sales reps tend to take a shotgun approach. This does not work. Not only is it impossible to improve on an ad hoc process, but you inadvertently send that prospect a message that you are not particularly interested in engaging with them.

Usually the answer is a resounding “No” Then why would you take that approach?

Be cautious of things such as email or phone integration that can just clutter up a CRM with information that seems like a good idea but is seldom actionable or even looked at. Most sales reps are not working that many leads where tracking needed information is problematic and “takes away from selling”, as I so often hear.

Again, I'm am interested in “Are we even doing enough” given our estimated ratios to achieve our revenue objective? Keep it concise and simple.

#3 CRM Essential: Sales Effectiveness

The CRM should provide easy visibility into the opportunities where you have definitive next steps, defined as a date and time to meet again.

Once we engage a prospect and start moving forward (advance a potential sale) we move to the middle of the pipeline.

This part of the pipeline is about tracking sales effectiveness. How do you know if you are effective? Simply, you have a next step with that prospect that is clearly defined as a date and time to meet again.

Assuming you have a qualified prospect that you would like to work with, your objective at any stage of the pipeline is to get to the next step.

Here are some questions to ask when reviewing a CRM to ensure it is designed to support developing sales effectiveness:

• Can I distinguish those opportunities where we have a date and time to meet again?

At the end of any interaction with a prospect, all that matters is whether you have a next step to meet again. Of course there are many things that go into a prospect meeting that cause forward movement:

• Did you connect with the prospect?
• Did you create positive forward momentum?
• How well did you conduct the meeting?
• Did you pose the right questions?
• How well and how much did you listen?
• Do you know what they do, how they do it, when they do it, where they do it, who they do it with and why they do it that way and then see a way for me to help them do it better?
• How well did you summarize how you can provide a reason and value in order to get someone to change?

If you had done this well, you get a next step.

It is not unusual for me to view a client’s loaded pipeline, which looks impressive, and ask them to filter for next steps defined as a date/time to meet, and the pipeline is usually empty.

#4 CRM Essential: Stalled or Dead Opportunties

The CRM should clearly show where you have lost the date and time to speak to a prospect, how long it has been since last engagement and allow for traceable action on behalf of the rep to get it back into play.

How do you identify stalled or dead opportunities? If you have a date and time to talk again, you have an opportunity. Everything else is stalled or dead.

And the only way to measure active engagement, again, keeping it simple, is whether or not you have a date and time to talk to this prospect again. If somebody is interested in doing business with you, you will get a date and time.

Most sales reps will not ask for a specific follow-up meeting. They are content to walk away with the prospect saying things such as; “Give me a call on Friday”; “Let me think about it”; “Send me some additional information”; “Let me check with the team”; etc.

Interactions like this happen all the time and create an illusion of forward sales movement, when in reality only a fraction of those may advance.

Here are some questions to ask when reviewing a CRM to ensure it is designed to identify when opportunities are stalled or dead.

• Can you see what opportunities where we have appointments meet again?
• Does the CRM show you exactly where I have lost the dates and times to talk again?
• If you lost the date and time to meet again, how long has it been since the last engagement? You should be able to see the clock ticking on the dashboard to tell you exactly how long it has been since the last active interaction.

You need to know which opportunities in your pipeline have stalled so you can strategize and make decision about where to spend your time. Time and knowledge is what you have, manage it.

• If you lose the date and time to talk again, does the CRM allow for a trackable action to get things back into play?

All of this is to help you identify what is stalled or dead. So much of what makes up pipelines has no active future engagement scheduled and it may have been weeks, months, or years since there was any activiy.

I’ve seen so many scenarios that playout like this “Kyle has 44 proposals outstanding!” Sounds incredible! Then when I asked where they had an appointment to close and there were none.

I learned an invaluable lesson several years ago. I was running a company that had $50M in the funnel at proposal stage, yet close dates kept sliding according to the sales team. My reaction to things not closing was to make things uncomfortable for the sales team. I required late Friday afternoon reviews of the sales funnel having each rep walk though their opportunities and close dates. We were using Salesforce at the time. I could see records being updated just prior to the meeting. To make it more miserable for the team, I required a Monday morning report outlining all of their activity from the prior week. That is when I had a conversation with one of my mentors. He talked about active prospect engagement as a date/time to meet again. I was shocked that I had missed this simple thing! I had spent years running businesses and would never leave an internal meeting without knowing “Who is doing what and by when” yet when it came to customers, I was not expecting the same.

I went to two of my senior reps and said I have good news, “You don’t need to do your Monday report for me.” All I want to know is for that given week, “Where do you have dates/times to talk to a prospect?” The answer came back, “None”. Yikes and Eureka!

#5 CRM Essential: Lost Opportunities Analysis

The CRM should be able to track what stage opportunities are lost. From there you can create a coaching and development plan.

Where are we losing opportunities by sales rep and team? Opportunities can be lost at any stage. This information is absolutely critical for rep development. As I mentioned earlier, every stage of the sales process requires a different skillset.

Obvious loss would be a “No” at proposal stage. Sound familiar? However, I could have a first appointment with a prospect and it doesn't go anywhere. I could get beyond the first appointment, where I'm pulling together information for a possible proposal, and it doesn't go anywhere. Contrary to what most sales resp think, a small percentage of your opportunities are lost at proposal stage. Most are lost before they even get there OR prospects will send sales reps on a quoting exercise rather than say “not interested”, so it appears as though it was lost at proposal stage.

Here are some questions to ask when reviewing a CRM to ensure it is designed to support when and where opportunities are lost:

• Does the CRM allow me to mark an opportunity lost at any stage?
• Does the CRM provide me with a summary by rep or team as to what stage opportunities are lost?
• If something was marked lost, can I reopen an opportunity should it come back into play?

Without tracking and understanding at what stage of the pipeline sales are being lost you cannot figure out how to become better.

When I'm in front of somebody for the first time, that's a different skill set. How good are you at listening? How good are you at asking questions to try to find ways to help that prospect do things better?

If I'm pulling together information, how well am I doing that in order to get a prospect to change? This is what you are up against -- a prospects willingness to change -- not a competitor.

Proposal stage is where typically reps send out proposals prior to have a specific date and times to talk again.

You will have to train, but the right CRM can help you be more targeted and effective in identifying the performance gaps and development needs by knowing where opportunities are lost.

#6 CRM Essential: Closing Ratios

The CRM should clearly provide all closing ratios, e.g. what happens from first appointment with a prospect through close of a sale, and allow viewing of the data by sales rep, sales team and product line by any specified date range.

In the beginning I talked about opportunity ratios, the level of activity it takes to get an appointment. That's where things start. Closing ratios are what happens from first appointment through close.

Here are some questions to ask when reviewing a CRM to ensure it is designed to provide valuable closing ratios:

• Can you determine how many first appointments does it take to make a sale?
• If you are at gather information stage, how many of those make it to a sale?
• Does it track your proposal win rate?

Understanding those ratios is key to figuring out the pace or the cadence the team needs to work to hit its budget. This should be highly visible.

By having access to this data and being able to understand it, you can predict your future with the utmost accuracy. Once you know what the future is, then you can figure out how to become better…at every stage.

You can also use this data to establish the level of prospecting activity you need to feed the pipeline to hit your plan. This data will also be key to establishing the effectiveness and ROI of your traditional or digital marketing efforts.

#7 CRM Essential: Sales Cycle(s) and Average Sale

The CRM should clearly provide sales cycles and average sale data by sales rep, sales team and product line by any specified date range.

Sales cycle is defined as the time between a first appointment with a prospect to close. How long does that take? For most businesses it generally takes between 6 to 24 months to move from a first appointment to close. A very important stat takes far longer than most sales people want to acknowledge. In other words, if you are reading this after the second quarter of your business year, it is unlikely you will close anything new before year-end.

To make matters worse, on the backend you can add your payment terms, how long it takes to see the cash. And on the front end, add how long it took for a rep beginning to work a prospect to get a first appointment.

It is a long time…and I am interested in reducing it. First of all, I have to know what the sales cycle is for all teams, reps and product lines. Sales cycles will vary amongst teams, reps, product lines and it is vital that you know what they are; if you can’t measure it, you can’t improve it. This information should be visible to within the CRM.

Here are some questions to ask when reviewing a CRM to ensure it is designed to provide sales cycle(s) and average sale information:

• Does the CRM track sales cycles?
• Does it track sales cycles by rep, team and product line?
• If it does track sales cycles, how it is measured?
• Does the CRM track average sale by rep, team and product line?

Don’t self-inflict delays.

If you meet with a prospect and things are moving along but you walk away without definitive dates and times to talk again, you have just lengthened your sales cycle. Prospects will say, “Sounds good, give me a call in two weeks”. You call them in two weeks and you know the drill… and all of the sudden you are out a month or two before you meet again.

Average sale is just that, what is the average sales by product, market, rep, and team.

Our fourth stage is overall sales management of the entire pipeline. There are two components to management:

1) How do you as a sales rep use the CRM to manage your book of business and become more effective?

2) How do you as a sales leader use the CRM to track, identify issues, train and coach the sales reps efforts

#8 CRM Essential: Sales Team Schedules

The CRM should be able to show individual and team calendars for the three vital sales activities: 1) Prospecting, 2) Appointments and 3) Stalled Opportunities.

The CRM should make schedules readily available to both rep and the manager.

Here are some questions to ask when reviewing a CRM to ensure it is designed to provide relevant schedule information:

• Does the CRM provide users with an easy look at schedules?

There are only 3 primary areas of focus when it comes to scheduling:

• Do you have a schedule for prospecting; when are we going to reach out and contact prospects?

  I often hear, “you have to block out time for prospecting.” But this is missing the mark because it's not specific. I want to know how many prospects each rep is going to work on a consistent basis. A block of time doesn’t tell me anything, it's not accountable. I want to know what targets you're going to call on any given day and what is the process for contacting them.

• Where and when do we have appointments?

  Set dates and times to meet with prospects.

• What action am I taking to get stalled opportunities back into play?**

  What is stalled or has gone dark? What action are we taking, and when, to try to get these opportunities back up and in play. Either get them back up into play with specific engagement or get them off the pipeline and start over working the opening stage.

That is it. The three key things to drive revenue.

How quickly and clearly can I as a rep see my schedule for the day and how quickly as a sales leader can I see if the team doing what it needs to do to drive sales. I am not talking about Outlook, I'm talking about looking at the CRM and being able to see my teams' schedule for the day related to the three key sales activities you need to manage.

Internal meetings and anything else not connected to those three key sales drivers should be managed in your preferred calendar.

One caution, sales reps can and should be doing some level of networking. Make a distinction between working prospects who have a possibility to become customers and those networking contacts which could be a lead source. If you want to track networking contacts in your CRM make sure they can be filtered out when evaluating the strength of your pipeline.

#9 CRM Essential: Sales Forecasting

The CRM should provide highly visible forecasts for a specified date range, rep, team, product line in two ways: close date and rep committed. Actual Closing Ratios data should be factored into the forecast, not just assummed.

The forecasting representation in the CRM should be delivered in both a visual and list format. Forecasting is vital and should be easy to review.

Here are some questions to ask when reviewing a CRM to ensure it is designed to support relevant forecasting views:

• Does the CRM allow for forecast view in both the pipeline and list view?
• Does the CRM allow for higher rep accountability for close dates?
• Does the CRM take in consideration actual closing ratios when developing forecasts?

Most CRMs allow for forecasting based off of a potential close date. Most reps enter that date without engaging in any conversation with a prospect about this date, which is why it seldom closes on the date entered in the CRM.

I say take it to another level. What is a rep committing to close? This is about accountability; the CRM should be able to look at both close date forecasting and sales rep committed forecasts; these paint two very different forecast scenarios. In other words, the CRM should have an option for “rep commitment” to close date.

As a sales rep, are you in charge of what's going on within your pipeline to commit with reasonabe certainty that your customer will make a decision on our proposal? You shouldn’t provide a prospect with a proposal without hearing from the prospect the timing of their decision and a date and time to discuss the decision.

A forecasting model should be able to display forecasts for reps, team and product lines. Ideally, the CRM should have a pipeline view, where you will see all opportunities at the various stages. The forecast view should be able run a forecast based on a future date range/rep/team, committed and/or product line. The pipeline should then roll up to only display those opportunities.

The forecasting should also take into consideration your closing ratio data. You are not going to win them all so don’t roll up a listing of opportunities based off close dates and think that is going to happen.

#10 CRM Essential: Highly Visual

The CRM should be highly visible, easy to interpret and you should be able to determine if a sales rep or sales team is on target within seconds

In order to determine if a rep or team is on target, you first have to make sure everyone understands and abides by what it means to be at a particular stage, for example if an opportunity is at proposal stage that means a proposal with the right plan, right timing, right dollars and have delivered to the right person who is in a YES/NO decision-making positon and you have a date and time to meet again.

Here is the one question to ask when reviewing a CRM to ensure it is easy to interpret:

• Can you view the CRM and instantaneously determine if a rep, team or product lines is on/above/below sales target?

After evaluating all ratio data, you can determine the number of leads and first appointments that are required to hit your revenue objective. For instance, if the teams closing ratio data shows it takes 15 first appointments to make a sale and you have a team of six reps, you should have 90 first appointments in the pipeline collectively at any given point in time if you want each rep to be moving towards a sale; 6 sales x average sale = $.

Once you know what those numbers are, you can look at the pipeline and quickly determine if where you stand is on/above/below target.

That's the unfortunate reality of most CRMs and their design and usage is it is extremely hard to quickly determine if a sales rep or sales team is on target.

BONUS: #11 CRM Essential: Other Stuff

There are other features and benefits that could be important when choosing a CRM although they didn’t make my top 10.

When evaluating a solution, do not become enamored with features and benefits that really don't help you drive revenue. Keep the CRM lean; it will help in so many ways from sales adaption to training to focusing on what’s important.

Does it help me drive revenue? That is the clarifying question that needs to be asked repeatedly.

Some things to consider:

Where is your data? In other words, is your data co-mingled with other unrelated subscribers or is your installation a separate database. Security, server redundancy and the co-mingling of data should be discussed and understood. How easy it is it to be an admin? You should easily be able to add users, delete users, import leads, export items, change lead sources, product lines, etc. Start a list of things that are fluid and make sure you can make those changes easily.

API: Does the CRM have an API and how easy is it to integrate with other systems such as marketing automation or your ERP? Integration is never a no-brainer or free.

Configuration: Does the CRM come right out of the box to help the team drive revenue? CRM without configuration support can be a difficult row to hoe on your own. Just look at all the integrators that spun off because of the complexity of Salesforce and MS Dynamics. If you need outside support, make sure you understand the costs.

Sales Adaptation: Sales adaptation of the tool is all that matters in the end. If the reps and managers are not going to use it, you are wasting money and time. Most CRM’s measure sales adaptation by things such as number of log-ins, time logged in, the number of records manipulated, etc. I measure it in terms of whether a rep views the CRM as a means to assist them in driving revenue, hitting goals and becoming more effective. Also, I have seen it quite often where a sales rep will become stuck on a particular thing that cannot be done, or doesn’t exist, in the CRM as a way to proclaim the CRM is virtually useless and not of value to them. This often is just a means to avoid accountability. Learn more about what you can expect for reactions to implementing, or enforcing, CRM usage.

Reports: If the CRM does the above properly, the need for additional reporting should be unnecessary or at least a very secondary concern.

Data Exports: Exporting of your data for different analysis or changing platforms should be easy and not require an upgrade. Some platforms have been known to hold your data hostage.

Mobile Functionality: Occasionally I hear reps and managers say that mobile functionality is required; the reality is most reps do not use a mobile app for working within the CRM. In fact, according to CSO Insights 4 out of 5 sales reps are only using basic productivity mobile apps such as email, and only 1 in 5 companies have even tried to apply mobility to their business processes. If I'm on the road for a long period of time I may call on three to six prospects a day; it's not hard to come back at the end of the day and put that in that data in the CRM. If you want more real time upkeep of your CRM, you can do that from a laptop on a mobile hot spot or available internet connection.

Sales Training

Sales is an interesting profession on so many levels:

• Sales people make up the largest group of professionals.
• Most sales people have never been trained, or if they had been trained, it made no difference in practice.
• There are very few 4-year business sales degree programs, yet it is arguably the most important position in the company.
• I have yet to come across a sales rep who consciously decided to become a sales rep. Most got into it because someone thought they would be good at it, it was easier to find a job, they are an extravert, etc. the list goes on.
• We often hire sales reps with zero experience or training and then expect them to deliver. It’s lunacy! We would never hire any other position with no education or experience in the field an expect results. You wouldn’t hire a controller with no accounting education or background and expect them to close the books.

Sales Myths and judgments abound:

• Sales is an art form.
• It takes months or years to figure out if you have a good sales rep.
• Most important thing to focus on is “When is it going to close?”
• I “think” they have what it takes to be a good salesperson.
• Sales people should know what to do.
• Sales people cannot be trained or managed.

As I mentioned earlier, you will have to train but the right CRM can help you be more targeted and effective in identifying the performance gaps and development needs.

Consider training that addresses specific performance gaps based on where those challenges exist in the pipeline. For example, if a rep is struggling with prospecting, consider training that effectively addresses the effectiveness of prospecting.

If a rep is having a tough time developing a connection with prospects, consider training that gets to the underlying issues. Not everything about developing sales effectiveness has to come from sales focused behavior training.

This pipeline view and the corresponding skill sets, while by no means all inclusive, can provide a guide to assist in what needs to be developed.

Do you have an activity problem; is the team doing enough?

• If you are not doing enough as a team given your closing ratios, you’ve got an activity problem. You have to first pick up the pace.

Do we have an effectiveness problem? This is about opening enough possible sales and advancing possible sale.

• How can we improve and what is the coaching and development plan?

Do you have systemic problems with certain sales reps?

• Can they be corrected? Some folks may not a fit depending on your revenue growth plans.

Do we have a sales problem or a leadership problem?

• Worth contemplating if your sales issues are systemic.