Maximize the ROI from your CRM
Virtually every B2B company larger than 50 employees either has a CRM, implementing one, or possibly switching to a new one. While having a CRM is essential for any scalable sales and revenue management process, how effectively it is configured and used is equally, if not more important than which one you choose. That being said, it is an important decision as to which CRM to purchase and the good news is there are plenty of CRM comparisons available online. There are links to CRM reviews/comparisons on our resources page here.
The decision about which CRM to buy or upgrade to can be made easier by knowing what you really need out of a CRM and how you plan to utilize the system. As with any type of database, the old adage of “garbage in, garbage out” is definitely true with CRMs. Investing the necessary time and energy for initial configuration, training, and ongoing support will directly affect how well it is utilized and ongoing reporting accuracy.
When you think about sales or revenue management, the most important element in understanding the state of a B2B business is the accuracy of your sales pipeline. If you are a small business with just a few sales resources and a relatively small customer base, you may not need sophisticated CRM yet, especially if you don’t have sales or customer success processes in place, a subject for another blog.
The real need for a CRM is when you have multiple departments and stakeholders involved in the customer lifecycle, along with executive leadership, all who need to know what’s going on in the business - marketing, sales, customer success, and account management. This also requires having the right processes and management support in place to drive those processes. In other words, a CRM is fairly useless without well-defined and consistently monitored sales and customer lifecycle processes in place. Conversely, even with good processes, when multiple departments/people supporting the customer lifecycle are not using a CRM for tracking and reporting, it is extremely challenging to measure sales productivity and effectiveness.
Business managers wonder at times if a CRM is worth the cost, both upfront and ongoing expenses. According to a study in Inc. Magazine, for every dollar invested in a CRM, you can expect an ROI between $2.50 to $5.60. That range is impacted by factors such as configuration, training, defined sales processes, accurate reporting, and timely, thorough sales pipeline reviews.
All of which lead to some important questions and considerations an organization should contemplate before implementing or migrating to a new CRM. This is not an exhaustive list, but some important ones to contemplate. Some are based on best practices, and some from my own experience implementing or migrating CRM solutions multiple times over the years.
Know what you want and need to know. One common mistake (which I’ve made), is configuring your CRM, based initially on desired/required fields, and possibly even tied to a relatively well-defined sales process. Unfortunately, that approach typically leads to a lot of rework, as stakeholders begin requesting various information and reports, and the sales team and sales leadership try to track and measure sales progress and key metrics. CRM screens, record types, fields, etc. will be much better designed and configured if you start with your reporting needs first, meaning understanding what the key business drivers and KPIs are that you need to understand the health of your sales pipeline and produce more predictable sales forecasts.
Know who needs customer/sales information and for what reasons. This is somewhat related to number one. In addition to the types of information you need, how are various views of customer data related and accessed Specifically, how are stakeholders in sales, technical support, account management, finance, marketing, and executive management accessing or consuming sales-related data? Each will have needs relative to their specific needs and use cases, how it affects their ability to support customers, and the ability to understand progress against KPIs and analytics for their departments.
What other functionality do you need that may or may not be built into the CRM? Decision criteria for selecting a CRM include what type of business you have, your business model (i.e., B2B, B2C), if you have one or multiple sales/marketing divisions, different lines of business, multiple offerings, and other factors. Most departments or functional areas in the company are also likely using other systems, but still interacting with the same accounts as sales, customer success, and account management. Are some of those capabilities or data points duplicative, or worse case different? How easy or important is it for your CRM to integrate with these other systems? In my experience, it’s very typical to have various systems evolve over time (homegrown and/or commercial applications) to support various areas of the business, making it extremely difficult to create a holistic view of an account. Each functional area has its own unique view of an account, many times without any knowledge, or visibility into what else may be happening with the customer.
Cost considerations. This is an obvious consideration. However, it’s not only the known costs for licenses and initial implementation and training. There are several reasons why various functional areas in a company are using different systems that support customers. Most CRMs can’t support every function (or at least not as well more focused solutions) that is needed across the organization. For instance, if you have a technical support team, they may be using a help desk/ticketing system, i.e, Zendesk. Some external applications integrate with CRMs, but each has its own cost and configuration considerations. What is the cost of integrating these other applications with the CRM? As it relates specifically to the CRM, how much is training and technical support? Of course, large commercial CRM platforms are not inexpensive. There is typically an annual subscription fee for every user in the system. If you have a large group of stakeholders outside of sales, it can be very expensive, possibly cost-prohibitive to provide everyone with a license. What is the cost of licenses and how flexible is the pricing for adding or deleting users? Maintaining multiple customer-facing systems and trying to access and aggregate account information is also a cost but may be a reasonable tradeoff for the additional functionality and lower CRM costs.
How complex is the CRM to configure and implement, and how difficult is it to make changes or reconfigure? CRMs, such as Salesforce, are incredibly powerful platforms with extensive capabilities, plenty of support, and 3rd party application options based on their substantial market share. Additionally, Salesforce has added a significant breadth of functionality through internal development, acquisitions, and via their app exchange, similar to Apple’s. This includes capabilities for marketing, expanded analytics and reporting, help desk/ticketing, product management, quoting and proposals, forecasting, and numerous other capabilities. However, as a result, it is much more complex, expensive, and time-consuming to implement and configure than other systems with less functionality and configuration options. A CRM, especially Salesforce, may also require having a full-time administrator or contractor whenever there are configuration changes or more complex reports needed. So an important trade-off is how much functionality for supporting your business model is supported “out of the box” vs. complexity and costs to customize and/or extend with additional applications?
Other considerations:
Ease of use
Mobile access
Social media integration
Automation
Workflow management
Training requirements
Conclusion
CRMs are incredibly powerful and a must-have for any organization with more than a handful of sales, marketing, customer success, and account management people. If implemented and configured well, in conjunction with well-designed sales and customer lifecycle management processes, a CRM becomes an indispensable part of the business, easily justifying its costs (upfront and annual). The pre-planning ahead of selecting and configuring a CRM needs to be exhaustive and take as long as needed to determine the criteria for selecting the right CRM and ensuring the best possible implementation, configuration, and training. The old adage, “measure twice and cut once” is a good analogy when investing in a CRM.
My recommendation is to select a CRM that is the lowest cost and easiest to configure and use, based on a five-year window; meaning that you have enough functionality and flexibility to support your business for at least five years based on your projected growth. If your company’s growth significantly exceeds expectations and your CRM can no longer support the business, you may need to migrate to a more comprehensive platform, but generally speaking, that is a good problem to have.