CRM Performance: Nothing is Gained by Running

Greater productivity, access to data to enable informed decisions, process automation, and standardization and improvement of the customer experience are just some of the benefits and promises that follow the implementation of a CRM tool. The investment may seem daunting at first, but the potential for gain is even greater.

A CRM project is a strategic initiative whose many impacts will benefit the entire organization. This article discusses the time savings and return on investment that a CRM solution can deliver to your business.

Time

What would you do if you had another hour to spend with your customers? Better targeting and more custom offerings for marketing? More effective human contact for customer service? A centralized view and access to key performance indicators for directors? More time to spend on commercial activities for sales?

It’s not magic, but with a good implementation strategy, your CRM solution could free you from low value added activities so you can focus on more important and strategic responsibilities.

An analysis by Mark Ellwood, from Pace Productivity, reveals that vendors spend only 22% of their time on sales activities. You read it right: too busy with administrative tasks, meetings, order processing and other activities, sales professionals typically spend less than a quarter of their time “selling”!

Understand this, sales managers: if the members of your team start their sales activities Monday morning at 9:00 a.m., they will have completed everything the next day by about 10:30, in time for the coffee break!

A CRM strategy supporting the sales process could benefit a sales force by automating some tasks, simplifying the qualification process and automatically calculating forecasts. A reallocation of effort could allow sales reps to spend more time on sales—and if they spend more time “selling”, revenues should follow.

That logic applies not just to sales professionals, but consequently to management teams. Once a CRM solution had been implemented in his organization, a client manager, responsible for national sales, told me that we gave her back her Sunday afternoons! In fact, before the CRM tool arrived, she would spend a good half of her weekend consolidating her team’s sales data, in preparation for her weekly meeting on Monday morning with the company president.

With the CRM tool, she only had to consult the different dashboards to access the key performance indicators. The calculation data came mainly from the information entered by her team spread around Canada.

Implementing a CRM strategy, process and solution is no guarantee of successful sales, but it gives sales professionals the chance to spend more time on “money-making” activities for the organization. 

Financial benefits

Talking about a CRM investment means talking about the “return” on that investment (ROI). Several references exist on calculating the benefits associated with a CRM solution, numerous calculation methodologies can be found, and there are even online tools that can help you properly estimate ROI. Related studies are also available (for example, a study by Forester in 2011 mentions a ROI in the order of 243%).

Though the contexts may seem similar, I feel that every situation, every business problem, is different, and I shy away from generic approaches. We’re talking here about managing the relationship with your customers, what drives your products, your culture, your customer experience and your services.

So I suggest that you make your own calculation based on the intimate knowledge you have of your business, tour team and your customers.

I generally suggest that my customers follow the six step approach below:

  • Identify estimated revenue gains and expected cost reductions.
  • Identify the costs associated with software, professional services, change management and recurring items (subscriptions, maintenance).
  • Identify non-material gains (customer satisfaction, differentiation, information access, trends).
  • Determine a realistic (and viable) period of time for measuring the results.
  • Develop a status quo scenario for the same period of time.
  • Calculate the cost/benefit ratio for the CRM scenario and measure the difference against the status quo.

This exercise will let you evaluate your approach, as well as validate or establish your objectives and your budget, thus guiding you towards your choice of service provider and the solution you will adopt.

Software

The solution will obviously have to meet your business needs. Collecting requirements and inventorying the processes to be supported is a key step not to be neglected. Don’t hesitate to seek help in this venture, many independent firms or consultants specialize in this area.

Professional services

Choosing the firm that will provide consulting services related to the implementation of your CRM processes, strategies and solutions is a crucial step in your project’s success. While the selection criteria for the solution must be clearly defined, the same is true for the provider. The company’s reputation, its team, its history, its references and its specializations must meet your project’s objectives and deliver the expected benefits.

Of those criteria, I feel that “the team” is the most important. The implementation team must be competent, deliver the expected value and demonstrate sensitivity to the issues specific to your company’s context. The team must not only be made up of experienced consultants, dynamic recruits, resourceful subject matter experts (SMEs) and diligent managers, but it must especially prove that it corresponds to the values held by your team’s members. 

Challenges

You’ve identified the potential gains, calculated ROI and selected your solution and provider. You’re ready! But be careful. Watch out for the pitfalls you will run into along the way. Many CRM projects have faced their challenges and struggled to deliver the expected benefits. My colleague Patrick Gouin recently published a two part article describing a way of avoiding the pitfalls involved in implementing a CRM solution. Please take a look at it and put it in your favorites because, besides being well written, the advice it gives might prove very useful!

Many major challenges await you. One of them concerns the ability of your company and your team to absorb the new approach. I don’t just mean the change management program that should accompany your CRM approach, but ambitions that may be too great and deadlines that may be too aggressive.

A step-by-step approach makes for a smooth transition and helps improve the existing culture. Be modest at the outset and add processes and functions at an acceptable rate. Plan, adapt and publicize the implementation of new functions. If a function generates interest, exploit that; if a process seems too complicated, try to adapt it or simplify it.

Keep in mind the words of Jean de La Fontaine: “Nothing is gained by running”. In the end, your CRM approach will give your organization many benefits.

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