- October 21, 2017
- Posted by: Walter Fawcett
- Category: CRM, Innovation
The term CRM (aka “Customer Relationship Management” software) has been around for more than two decades. Most business owners and executives have heard the term and may have been told they need to use CRM in their company. But many don’t know what a CRM system really does and why they should consider investing in one.
The bottom line is that as a company matures, consistency of process and access to reliable data are essential for sustained growth. Put another way: to grow, companies need control and visibility. This is the core purpose of CRM.
Sounds great…but let’s make it practical. Below are five reasons why every company should use a CRM.
Reason #1: Pipeline Visibility
Companies invest heavily to develop good leads that need to be nurtured. Without CRM, managers and executives have no pipeline visibility outside of sales meetings and hallway conversations.
Information about deals in process is hidden in spreadsheets, emails, and even just the heads of salespeople.
In contrast, a well-implemented CRM tracks follow-up dates, actions, and communications to keep your sales team organized and management informed. CRM will alert your sales team of the proper time and method for follow-up. Plus, managers can easily spot neglected opportunities in real time.
With CRM, you will be able to track deals throughout the process. Increased visibility leads to better discipline and higher win ratios. Just one or two extra wins per salesperson can be enough to justify an investment in CRM technology.
Reason #2: Central Database of Company Contacts
Usually, a company’s contacts are among its most valuable assets: the entire universe of its customers, prospects, and other people it does business with. Companies without CRM rarely have a single location to store information about business contacts.
Instead, this essential information about clients, prospects, and vendors typically lives in the accounting system, is buried in multiple spreadsheets, or remains unorganized in the email system. Without a central contact database, companies will grow at a slower rate and are exposed to changing business conditions.
Done properly, CRM serves as the master database for all of a company’s contacts. This becomes the foundation for tracking sales activities, marketing communications, and other important interactions between the company and external parties. CRM makes vital information highly visible throughout the company, which enables growth and consistency.
Reason #3: Faster Access to Sales Reports
Companies without a CRM rely on manual processing to generate sales reports. Not only is this time-consuming, error-prone, and inefficient, it also means that managers are relying on stale data for decision-making.
A CRM can generate these reports automatically, in real time, and on a predetermined schedule thus eliminating the labor to create and distribute the information. This saves money and eliminates information gaps that kill deals.
Additionally, real-time reporting can serve as an early warning system. With access to accurate real-time information, managers can identify and address small issues before they become company crises. Better information improves salesperson performance, identifies gaps in training, and uncovers changing market conditions. All are essential ingredients for consistent, sustainable growth and increased company value.
Reason #4: Easy Transition During Turnover
Without CRM, individual salespeople are in control of critical sales information. If a salesperson leaves, information about deals in process or key contacts walks out the door with the salesperson. This is a risky position for management to be in.
A well-managed CRM flips this situation. Deals, contacts, and activity history are highly visible in CRM. Having access to this information helps identify behavior that indicates poor performance and/or worker disengagement. Both of these are early warning signs that can point to the departure of a salesperson.
If a salesperson does leave the company, transitioning work to the replacement is significantly easier and faster.
With just a couple clicks in the CRM, the deals and activity history are reassigned—and your new salesperson is off and running to preserve deals and relationships.
No longer must managers dig through Excel spreadsheets and thousands of emails to figure out what to give the new guy. In fact, the cost savings from a single salesperson transition can often pay for your entire CRM investment.
Reason #5: Measure Marketing ROI
Marketing activities are a major investment for most growing companies. Without a system to track marketing responses, it’s virtually impossible to know what works and why. As a result, many marketing decisions are made on hunches without much data to back them up.
Tracking marketing activities and results is a core capability of CRM. This provides management with better information to understand how different marketing programs impact sales behavior and profit.
Once you get started tracking the basics, there are many advanced tools (including marketing automation) that can really turbocharge your marketing performance and drive further business growth.
The Bottom Line
There’s a reason CRM software sales have nearly tripled since 2010 and are soon expected to approach $20 billion in the U.S. alone. It’s because a well-implemented CRM application can have a massive return on investment. In fact, Nucleus Research pegged the ROI for a CRM system at $8.71 per dollar spent in 2014.
If your business does not use CRM or has a failed implementation, contact Fawcett Technology Advisors today for a free consultation. We can show you how to transform your business by unlocking the power of CRM.