The problem with CRM systems is that they aren’t built on methodology. They’re just a system of record.
5 min read
Opinions expressed by Entrepreneur contributors are their own.
Sales of software solutions are booming, and nowhere is that clearer than in the world of customer relationship management (CRM). Once thought of as a tool that was exclusively for massive enterprises, CRM is now considered an essential buy even for small businesses.
Companies of all sizes are implementing CRMs earlier and earlier, and that shows in the numbers: Last year, Salesforce, the largest provider of CRM solutions, increased its revenue by 26 percent.
That massive uptick in CRM implementation was largely attributable to the fact that organizations are approaching CRM as a tool to improve top-line performance. CRM systems promise to track, manage and analyze all customer interactions to help drive sales. Entrepreneurs see CRM as a cure-all for their sales efforts, and they can’t buy it fast enough.
But before you spend your own startup’s limited IT budget on CRM, consider this: Purportedly, CRM systems are meant to help your salespeople. But, get this: Your sellers aren’t adopting CRM at nearly the same pace that you’re buying it.
In 2013, 37 percent of sales teams reported widespread use of CRM systems. Today, five years later, that number has increased only to 46 percent, according to the 2018 Sales Operations Optimization Study from CSO Insights.
With so much investment poured into CRM, why aren’t more than half of salespeople using this tool to increase win-rates? Here’s why …
Why CRM systems aren’t improving sales performance
The arrival of cost-effective, cloud-based CRM in the late 1990s, from companies like SAP and Oracle, transformed the way that sales organizations budgeted for IT. Since that point, CRM has increasingly expanded its footprint in the corporate space and shows no signs of letting up anytime soon. Yet, 20 years later, new studies show that fewer salespeople are making their quotas, and win rates are declining.
Here’s why CRM investments fail to deliver:
CRM is focused on executives, not sellers. From the outset, CRM was designed to give management teams better visibility to data and pipeline revenue — a job that it does exceptionally well. But, for users on the front line of sales (i.e., sales reps, managers and coaches), the CRM experience has been less rewarding.
Related: 4 Ways You’re Misusing Your CRM Data
CRM management takes time away from selling. While this software was envisioned to drive productivity, fewer sales leaders and salespeople report that they’re realizing those benefits. Too often, unwieldy CRM administration activities take time away from selling activities, and CRM becomes a distraction. In some cases, a recent study found, sales reps were spending two-thirds of their time on administrative tasks, leaving only the remaining third for actual selling.
CRM doesn’t deliver real-time insights. Sales teams feel challenged by the amount of data that is required of them and is available to them — and much of the data has dubious accuracy. Sellers need that direction. They need specific guidance about how to improve the likelihood of a sale.
Sellers aren’t opposed to using technology in the sales process. In fact, they’re hungry for it. But those people expect technology, in a tangible way, to improve their actual work of selling. However, what actually drives sales results is behavior, and what facilitates world-class behavior is a methodology. The problem with CRM systems is that they aren’t built on methodology. They’re just a system of record.
How entrepreneurs can rethink their approach to sales technology
Modern sales organizations are recognizing that CRM alone isn’t enough for their sales teams. To help more sellers win more deals, organizations need technologies that more directly address the individual performance needs of sellers and their managers.
Increasingly, sales operations, sales executives, sales enablement and IT are collaborating to design sales tech stacks which combine a range of tools with, and around, the CRM. In order to stay competitive in your own crowded market, you should implement a sales analytics platform that:
- Supports sales methodology: Innovative sales technologies will help sellers engage with methodology by making it an everyday part of selling activities. Look for solutions that are backed by a central sales methodology.
- Drives seller actions: These sales analytics platforms will suggest specific actions sales reps can take to improve win rates and create deeper relationships with customers. Empower your sales team to consistently make the best move to move deals forward.
- Provides value to sales teams: Instead of viewing technology as a burden, sales teams will approach technology as a necessary resource because it will help them do their jobs more effectively. Give your sellers a CRM solution that was intended to help them specifically.
At the end of the day, companies may still have to struggle to get salespeople to actually use their CRM. But the good news is, we’re learning. In many years of working with sales organizations, I’ve found that most are in search of better technology and that the ones willing to take the leap — Safe Foods and Outland-Carillion come to mind — see an immediate return on their investment, from leveraging analytics and methodology to driving seller actions. Isn’t it time your company was one of them?