Why You Need a CRM Tool
A business becomes a business when you make that first sale, because before you have a customer, you just have an idea.
That first sale was a pivotal moment in the history of your business!
That first sale is such a triumph! You’ve likely overcome significant rejection and barriers to get to this critical moment. It takes commitment to your idea and a deep belief in why you’re doing it to make it into something real. Something that someone will buy.
Over time, you’ve made more sales than just that first one.
Maybe, by now, most of your sales come from mouth referrals from other customers.
Overall, if your business is growing and sales are coming in, you have a feeling that your sales team is performing well.
If you’re getting new inquiries, you probably have a sense that your marketing efforts are working.
But what would you say if I asked the following questions:
How many new opportunities came in last month? Is that above, below, or equal to last month?
What’s your close rate? How many potential customers become actual customers?
What is the average length of time for your sales cycle?
How much revenue is available in your current opportunities?
How many contacts does it take to close a deal?
All of these questions can be hard to answer if your sales process is run through your phone, inbox, or even a nicely organized spreadsheet.
That’s why we recommend all businesses have a CRM tool.
What is a CRM?
A CRM is a Customer Relationship Management software that helps you track your sales process from the moment you first connect with a potential customer to the time a sale is closed. It provides capabilities along the way to log calls, schedule appointments, input notes, and much more to build a clear picture around the status of every deal.
How your team could benefit from a CRM
Here’s an example I often use with our clients. They mention that they’re looking to add a salesperson to the team to help with a plan for growing the business.
“We want to grow our business by 10% next year, which means adding $250k in new revenue.” This is a great goal to have and the owner likely believes it’s achievable. For the owner, tracking this goal may be done mostly on feel and knowing how the business typically ebbs and flows throughout the year.
For a new team member, they don’t have that sense, they don’t know the business the way you do, so they need a system to help them succeed. And you need one to ensure they’re doing the right things.
Without a CRM in place, the owner will be mostly leading their salesperson off of how things feel, rather than based on reality. This can be frustrating and messy for both parties.
With a CRM, key metrics will be defined that allow leaders to point their teams in the right direction of the actions that lead to new business. For example, if we know your close rate is 25% and we know that you need 4 new jobs in the next 6 months, we know you need at least 16 opportunities for our sales team to be chasing.
Recommended Read: 3 Ways Systems Make Every Business Owner’s Life Better
Other valuable reasons to implement a CRM
You can also include projected revenue within your deals that shows a forecasted amount of business you would need to close to hit those goals. Back to the example, if you need $100k in new business this month, you would see that you must generate $400k in potential revenue through new opportunities. The common adage ‘What gets measured gets managed’ is also a strong sales pitch for having a CRM.
Tracking reasons you closed a sale is great, but tracking why they were lost may be even more valuable. Seeing a report on the common reasons your sales team hears ‘no’ allows you to take action on that feedback and see if any changes need to be made. When you know what’s going wrong, you know what needs to be improved and those actions can be taken to increase your opportunity to make the sale.
A CRM is also a great way to take all the random information floating in your head about your clients, their histories, your prior negotiations and interactions, their quirks and goals, and put it into a nice neutral spot that anyone can access. This is key to taking you out of the day-to-day operations so you can hand things off to your team. If you’re holding those things in your head or going by feel, you’re never going to feel like you can completely step away to focus on other, more important things. This way, everyone has access to both the big picture - as well as the relevant details.
If you’re serious about strategically increasing your sales and profit, a CRM system isn’t a nice extra – it’s one of your most important tools to building a strong business from the ground up. While it might seem like a lot of effort to get one set up, it’s well worth it.
If you’d like to talk more with the team here at Doescher Group about ways to streamline your systems, allowing you to evolve more effectively, we are here to help, or direct you to a trusted partner who can.
