Is there value in CRM?

Subscribe to updates

What is the value of a CRM? This can be difficult to answer as it ranges greatly based on the business and the fact that CRM can mean a lot of different things. However, in almost all scenarios there is a primary benefit. It is designed to provide knowledge–knowledge of your market, customers, team, and processes. When done right, CRM will provide you the information you need to sell to your market smarter, satisfy your customers, coach your team, and create repeatable processes. However, none of this comes from simply buying the software.

The difference between highly successful and average organizations and teams is small. Think of any race you have ever been a part of or seen. The difference between winning and being the 5th, or forgotten, can be hundredths of a second. Business is not any different. Small impactful changes lead to winning, while lack thereof can lead to fighting for table scraps. Unfortunately, most of these small changes are not intuitive and sometimes difficult.

We recently had the chance to lead a peer group of business owners in a discussion about CRM. They were from a variety of industries that sell different products and services; however, they were all able to identify common benefits as well as struggles with CRM. This article will provide some of their insights into the value CRM can provide, what you must do to succeed, and some tactical best practices to get started on now.

The Market Share Scenario


CTRAX Why do you use a CRM?
Client To keep track of customers
Client Are you serious? For lots of reasons
CTRAX What’s a really important one?
Client In case someone leaves or gets promoted we have history
CTRAX Does your team see value in that?
Client Some I guess….no probably not
CTRAX Were there any other reasons you started using it?
Client We lost some sales to customers
CTRAX Did you find out why?
Client In some cases, yes. They said we had not been out to see them. One said we never followed up with them after the previous sale. They said they have seen our trucks pass by many times.
CTRAX Based on that, why would you say you are using a CRM?
Client To make sure our customers are happy and we do not lose sales
CTRAX What do you want?  
Client I want 65% market share and customers that rave about us
Client We get better discounts, opportunities to grow, I make more money, and this business becomes what I want it to be. One that provides great value to our customers.
CTRAX Does the rest of your team know this?
Client ……I think so
CTRAX Do you know what you need to do to get 65% and raving customers?
Client We need to call more customers and prospects
CTRAX Is your team busy?
Client Yes everyone has a lot going on  
CTRAX So how will you make more calls?
Client …not sure
CTRAX Do you think everyone is getting done what they should in each call?
Client No…not even close
CTRAX So will making more of these calls really increase your market share and get raving customers?
Client No probably not
CTRAX Has your market changed?
Client YES!
CTRAX Do you need to do business differently now?
Client We have to fight harder for the business and show more value
CTRAX How do show value?
Client Every situation is different, everything is more complex and requires more people to sell


Insight #1 – If you can’t explain it, neither can anyone else
If you were to ask any organization why they use a CRM, the answer will vary greatly. If you ask people within the same organization why, you will also get a variety of answers. In my most recent interviews, this was the case in all but a few scenarios. The few who showed consistency in their answers, were able to state it quickly and clearly. They could also tell you what they do that contributes or helps. As you would expect, the adoption of CRM as an approach to business, not just an application, is far higher in these organizations.

Insight #2 – It’s not an insurance plan
We have spent many years with organizations and their systems deciphering what provides value, what doesn’t, and how they should move forward. After different levels of involvement in hundreds of implementations, we figured out a simple way to predict whether an organization was headed down the right path or not. If your goal is to “track” to protect from loss (i.e. someone leaves or is fired), it’s going to be a tough road ahead. CRM can certainly provide protection, but it cannot be your driving reason to implement.

Insight #3 – Do not make ANY assumptions
“We don’t have enough time”…This is hands down the most common justification for not implementing a lot of things well, or at all. The reality is no one ever has enough time. It is about what you choose to do and how efficiently you go about doing it. If you do not know, for a fact, how you and your team spends their time, you are guessing about the strategies that will improve it. Everyone sees things from their perspective. You cannot always take their word on what is happening. You must see it firsthand.

Insight #4 – Not all things are created equal
It’s not enough for management to be able to know what a proper call or contact should be with a customer. They aren’t and shouldn’t be the ones making them. If your team cannot tell you the objective of every contact they make and the value they will provide to a customer, there is room for improvement. Pushing people to make more contacts, without first knowing how good and efficient the contact is, will not increase sales, market share, customer satisfaction, etc. Every team member has different skills and weaknesses. A blanket rule for how many calls they should make will not necessarily make the poor, average, or above average performer better.

Insight #5 – It’s about what you do with information
“Our people won’t use ’it’”…The most common reason we hear this is no one really knows why they are using “it”. Leadership and upper management have their reasons and had several meetings about it, but it is still unclear. Without consensus (understanding and agreement), team members come to their own conclusions about what you are trying to do. More often than not, they assume the worst, even when completely wrong. If you are not using information provided by your team to help and develop them, they will resist providing you what is requested.

Insight #6 – CRM is a moving target that should change with your market
When was the last time a project you were involved in went exactly as planned? They do happen, but it’s rare. A very successful business owner and friend once said he felt like the bigger the project plan, the bigger the disappointment. What he went on to say was there were always unexpected hurdles or problems, unknowns, that would send ripples through what was thought to be such a well laid out plan. What he observed was there was very little value in long-term project plans that do not have the flexibility for change.

Questions to consider:

  1. Are you clear about the desired result you want in your organization?
  2. Have you clearly identified the key strategies to get there?
  3. Have you tested your strategies with the intention of changing them based on what you learn?
  4. Is what you ask your team to input aligned directly with the strategies?
  5. Does your team understand how what they input helps them and the company?
  6. Are you using everything team members input to help or improve their skills?

Top producing organizations are clear about what they want. They concisely identify what must be measured. Define it, monitor it, and provide valuable feedback to their team to improve. Common focuses are on sales calls and quoting. Quoting is typically too late in the process to coach and improve your team. Contact is of course critical, but all too often we see managers without an understanding of what is really happening in the field. They think they know, but they are rarely correct when we start digging in. If the information you are getting from your team is bad, not worth reviewing, it is usually caused by one of two things.

  1. Team members don’t not understand why and do not see value in giving you the information.
  2. They simply are not doing the work. They are not calling the prospects or making quality calls to customers.


Getting Results – Where should I start?

We’ve developed a CRM Adoption Process to answer this exact question. A key component of this strategy is to first assess your current situation starting with the quality of contact, which can be done through one-on-one interviews and ride-alongs. The next step is looking at the rest of your sales process to identify areas for improvements. Since time and resources are typically limited to complete something like this, we will elaborate on a easier solution to implement and test that many organizations find beneficial.

CTRAX If you are happy with a team members sales do you care about how many contacts they make?
Client No
CTRAX What about if they are getting all sales from existing customers?
Client Then yes, I do care – they need to be creating new business
CTRAX Do you know how often opportunities are or are not identified on a call?
Client No idea
CTRAX Do you have an idea who might be the most effective at finding them?
Client I would assume it is my top producers but I do not know

To sell more you must sell more to existing customers, convert competitive customers, and or create new ones. Creating new ones can be difficult, if not impossible, so that leaves it to selling more to existing and converting competitive customers. In the quest for increased market share, there is one factor that is more important than any other, early identification of opportunities. If your team is finding opportunities and finding them early, you have a chance. If they are not finding them, there is a different problem.

We need to emphasize the word EARLY because this is the key for a few reasons. Most organization we interviewed are extremely reactive. They move from the hot deal at the moment to the next. When customer are in purchasing mode, they are price sensitive, not a place you want to be. This leads to lots of negotiation and lower margins. Identifying opportunities as early as possible and moving them along prior to purchase gives you time to understand what customers need when they are willing to share it. They will not divulge the information you need to provide value and close a sale during price negotiations.

Accounts (customers and prospects) fall into one of two buckets. They are in a buying cycle, meaning you have some idea about their next purchase, no matter how far out, or you don’t know. Top producing organizations work on both buckets to take advantage of the high times and minimize the low. To illustrate this point let’s look at an oversimplified sales funnel. All of them no matter the industry start with some form of contact.

  1. Contact (proactive or reactive) – Your organization initiated contact via your team or marketing efforts, or the account reaches out to you. Proactive contact could be any form of contact letting the account know you still exist and want to do business with them.
  2. Deal – An account is assessed for an opportunity to buy. Either something is identified, or they go back into the contact bucket to be contacted again or receive marketing promotions.
    1. Negotiation – This typically involves pricing, configuration changes, etc. to result in a purchase, lost sale, or the account does nothing. A lost sale or nothing could lead to finding another opportunity, or they go back to “contact” outside of the buying cycle.
  3. Fulfillment – Is follow through on the deal by completing setup, services, and delivery.
  4. Follow-up  – This can involve many steps, sometimes complex, to ensure customers are satisfied and you get the opportunity to sell to them again. At this stage, further opportunities are identified, or they go back into the contact bucket.

Bucket 1 = Contact – You do not have any or enough information to identify an opportunity
Bucket 2 = Opportunity – The potential to sell something and a time-frame has been identified

Opportunity  or Deal management alone can provide knowledge to improve:

  • Coverage – It can tell you who is or is not being contacted well enough to find an opportunity
  • Forecasting – Predict what your market is doing before it happens
  • Marketing – Target qualified candidates in campaigns
  • Effectiveness – The information you need to understand and improve your team

If you want to start getting more out of CRM, try looking at one thing: how many opportunities does your team find. If they are not finding them, you need to look at what is going on at the point of contact. If they are not closing them or they are taking too long to close, there may be an issue with how they handle customers during the deal. Large numbers of organizations have no idea what is going on during these stages and are amazed what they find when they look into it.

Ask your sales team to load all opportunities. They should be updated as things happen and reviewed weekly to create a plan or next step. Top producing organizations take it a step further. Management sits with them each week to review the opportunities and plan. There is only one goal, management is there to provide insights the team member may not have thought of. The discussion must provide value to further encourage the team member to be prepared. A sales manager’s number one priority should be to improve their team’s skills.

  1. Account Management – Stay in touch with customers and prospects (bucket 1)
  2. Opportunity Management – Identify opportunities and manage the sales process (bucket 2)
  3. Target Marketing – Quickly assess and reach out to more accounts

The Value of Proactive Contact

Identify opportunities and manage the sales process

Executing Marketing Strategies

Is there value in CRM?

Leave a Reply

Your email address will not be published. Required fields are marked *