ROI Benefits of a CRM for Your Business

Are you guilty of still using an excel spreadsheet to manage your leads, customers and sales pipeline? Think a CRM is too costly or not appropriate for your small or medium business? Wondering why you fail to grow your revenue? Customer Relationship Management (i.e. CRM) have been a key enabler technology for many successful business and have a very appealing ROI.

A few years ago, my two business partners and I agreed our product was ready for prime-time and the task of putting together a sales and marketing strategy fell upon my shoulders. I knew a thing or two about marketing but was pretty much clueless about sales. So I did like most sales leader back then and created an excel spreadsheet to start capturing our leads, customers, opportunities and create a simple pipeline. I placed the spreadsheet on our company intranet so my partners and sales team could access it and edit it. I had no idea what a mess I had created…

Our sales team, myself included, spent most of our time on the road visiting potential and current customers; connecting to our VPN in our hotel room to access our Intranet and edit our spreadsheet was a huge hassle. We had no automated way to notify the team when it was time to re-connect with a customer for a specific project. Creating a report for our Board meetings was a pain. It was nearly impossible to analyse our data and figure out where in the sale stage our opportunities where getting stuck. Leads were not assigned automatically to the right salesperson and had to be managed manually by me. And I could go on and on and I am sure many of you have similar stories to tell. The bottom line is that our sales were failing to meet our expectations. Instead of creating a growth enabler, my spreadsheet was a growth preventer.

After two quarters of snail-pace growth and two hellish board meetings, it was time to change. I consulted with my team and phoned a few friends with successful and growing businesses and asked them how they managed their sales process. The answer was unanimous: a cloud-based CRM, Salesforce.com being the most popular choice.

Sure, it wasn’t free like a spreadsheet. But the time I gained by not having to manually managed the spreadsheet, assign leads and hassle with pipeline reports was spent instead in front of customers. According to Salesforce research, sales people spend 68% of their time not-selling! I definitively fit that profile back then. For this reason alone, our CRM paid for itself. Also, keep in mind that most cloud-based CRM like Salesforce offer monthly fees so you don’t have to fork out a costly sum up-front; making it ideal for small businesses. And with Salesforce partners offering quickstart implementations, you can be up and running with an efficient system in less than 30-days at a reasonable price.

As you can imagine, the ROI of our CRM was felt in less than 2 quarters. No more VPN’ing into our intranet for our sales team, they could access our cloud-based CRM and update their own pipeline. Back then, smart phones weren’t available but today, sales teams can update their pipeline on the fly directly on their phone. All of the pipelines rolled into one company pipeline we could share internally and to our board. It allowed us to analyse our data and figure out how to fine-tune our sales strategy. We constantly iterated our sales process based on the data we gathered. For example, we defined sales best practices and guidance based on the stage of the opportunity. This facilitated the on-boarding process on new sales reps. We shortened our sales cycle with automated reminders to contact our customers and follow-up on opportunities. And voilĂ , our sales growth was solidly under way. We later sold our company to French multinational Schneider Electric.

In sum, a CRM will pay for itself through better visibility, productivity and intelligence. Our sales team had better visibility of their pipeline, they were spending more time selling and they were more efficient. The bottom line can be summed up with this equation: monthly cost of the CRM license of 130ish $/per seat is always smaller than the hours wasted by salespeople without a CRM * their hourly rate; factor in their productivity increase and it is a no brainer. Are you sure you want to stick with your spreadsheet?

Is CRM Hurting Sales? The Answer Might Surprise You

Back in the 1990s when business was bad, and corporations were downsizing or as they laughingly put it, rightsizing, no one was safe from executive scrutiny and the corporate axe. With dwindling sales, sales management was an easy target. To survive in what was coined, ‘crises management’ one had to be able to demonstrate that they had a plan and/or were doing everything they could, to drive sales.

So, what did sales management do? Suddenly, sales reps had to fill out detailed micro-managed reports that monitored their every movement: The number of calls they made every day, the names of companies and customers they spoke to, what was discusses, how many phone calls / cold calls, et al. It was endless! The data, and the time necessary to complete the detailed minutiae, was ridiculous and often fictitious [made-up].

One could ask, who was served by this burdensome activity? The sales manager; who, when the corporate axe-holder showed up at his/her door, would survive because they could show reams and reams of data they hoped might do 3 things: 1) Demonstrate they had a plan and were working the plan, 2) Stand apart from other managers without a similar plan, and, 3) Their plan would send the axe-man down the hall to other managers – those without reams of ‘insurance’ data. Crises management – the way to survive! In hindsight, the irony was that burdening frontline sales reps with this reporting strategy actually drove sales down – demonstrably! Why?

With over 3 decades in successful frontline sales and, having a Masters degree in psychology, I can shed light on the empirical human factor that operates like a system-of-influence within the demands of professional sales and CRM.

Think about the behavioural attributes of the best sellers you have ever known. Outside of their innate people skills and high energy, what was it they did best, that garnered sales success? Their modus operandi was to ‘simplify’ everything. They were minimalists. But the question is, did they learn to be minimalists or, were they naturally [psychologically] wired to be minimalists?

I had the answer to this long before my psychotherapeutic training. In the late 70s, I was a national sales trainer and recruiter for a fortune 500 company. Every applicant had to take an aptitude test to determine whether they fit the traditional psychological sales success mould. I was trained to mark and measure the results of these tests that were surprisingly accurate. The fact is, there are ideal psychological profiles for almost every profession. I need only look at an individual’s profile graph and could say, “That’s an accountant, that’s a politician, that’s a scientist and ‘that’ is the perfect personality profile for a successful sales person.” All results – for the most part – as I said – were surprisingly accurate and beyond chance.

Within each profile there are detailed personality traits that exist on a spectrum that predict the adequate and sufficient fit of that individual within that discipline. For sales, high energy, above-average people skills, high need to control and dominate and high motivation to activate [get things done] are the essential components for ‘the right stuff’.

But they possess another strong personality trait. One in which they are not so strong. Detail!

In psychology we know every personality has its strengths and weaknesses. For accountants, doctors and lawyers, detail presents strongly within their unique personality traits. But rarely in the best sales people.

Sidebar: One of the challenges for those who suffer from Attention Deficit Hypertension Disorder [ADHD] is the inability to concentrate on ‘detail’.

You may find it interesting that psychological studies posit there is a disproportionate number of top sellers, business leaders/entrepreneurs [who often got their start in sales] who suffer from ADHD. In my case, I have ADHD and mild Dyslexia. Is it a coincidence that creative over-achievers like Albert Einstein, Richard Branson, John F. Kennedy, Will Smith, Jim Carrey, all suffer from ADHD? Despite their disorder, what were they all good at? They are minimalists. Einstein once said: “If you can’t explain something ‘simply’ then you don’t really know it”. The fact is, they possess the ability to take what for others in their profession is seen to be exceedingly complex, and make it look simple – minimize the detail. The same system-of-influence exists within the art and science of professional ‘successful’ selling. The question remains, however, do they do it because they want to or because they must?

Going back the question, whose needs is your CRM programme serving, you may find it’s not your frontline sellers but rather the ‘detail-oriented’ architects that crave data or the sellers of larger more complex [detailed] CRM solutions.

As a consistent top 1% seller in fortune 500 companies, I can unequivocally attest to the fact that too much of my professional face-to-face customer selling time [where sales are made] was sacrificed to filling out too many and unnecessary data reports. One could point out that computers have made CRM easier to monitor. I counter that with the logic in the early 1980s when I was selling photocopiers and network printers were introduced. It was believed that copier volumes should go down because computer printers would reduce the need for copying. The reality was, computers produced exponentially more data and printers produced exponentially more ‘originals’ that drove copier volumes and costs through the roof.

The Bottom Line:

CRM is essential and is here to stay. It is integral to sales and corporate success. There is no argument that too much of anything is bad. The danger with CRM is it is often designed to meet the needs of those who are detail oriented at the expense of those who are not – sellers… the lifeblood of any organization! So, how do you know if your CRM programme is right for you – is not hurting sales? Look at your sales, and then… ask your sellers!