“3 percent of executives said that their organizations were ineffective at managing their sales pipelines. That’s another way of saying that their companies waste a lot of time staring at pipeline reports, but their effort doesn’t yield any increase in sales performance. ”Sales Management Association
The problem it seems for many small businesses and larger companies, is the tension between time spent on forecasting versus monitoring the actual heath of your sales pipeline, which can mean the gain or loss of an extra 14% in revenue according to Forbes Magazine.
Further, surveys by the Sales Management Association reveal that less than a third of companies did not see ROI from their sales technology investments in 2014, which encompasses CRM implementations and customizations.
If as a sales manager you’re are spending more time discussing and probing probabilities and deal sizes rather than immersing yourself in the health of your sales pipeline and how they can direct more deals to closing, you are probably going to see a declining sales performance.
Your choice of CRM technology directly impacts the equation above, especially if the software is complex and non-institutive. Additionally no software in the world can help any sales manager if he or she has not clearly defined the sales processes prior to the CRM implementation. This may be especially true for a small business or startup, which faces overwhelming challenges in becoming profitable in its first three years.
However, in recent years a few leading players in the CRM space have pioneered a new class of database systems (especially suited for small businesses) that integrate the best features of the Balanced Scorecard approach we wrote about in an earlier blog.
In this approach, the CRM system seeks to balance financial metrics with non-financial measures, including customer satisfaction, to provide a strategic approach to organizational performance. In particular, the CRM will recognize the importance of RETAINING a customer, based on the business principle that it is 5x more expensive to acquire a new customer than keep an existing one.
Getscorecard, for instance, pushes this concept to the limit by providing a leading metric known as a Health Score (with supporting auto-task features) giving managers and sales force a visual mechanism to track customer satisfaction and ensure no client slips through the cracks.
These powerful features forms part of a broader pipeline manager that allows sales leaders to manage their entire sales processes within a single view using a drag and drop interface.
These two features alone allow a sales manager to move away from only using sales numbers as the magic metrics, which is not always the optimal way to drive lead-to-sales conversion.
In fact, the largest driver for sales orders may be the time it takes to respond to a customer. Inc Magazine reports that leads receiving a call-back in two minutes or less were four times as likely to convert to sold as an average lead. Some companies may take up to as long as 36 hours to respond back to a customer, a result of a prioritizing follow-ups over new leads.
While most CRM systems in operation today give you the ability to manage activity, including logging calls and emails, they lack a degree of sophistication in allowing a company to implement automated follow ups that will free up sales reps to focus on responding to new leads.
This is the key rationale for Getscorecard’s sales task automation that allows a sales manager to setup up automated processes including follow-ups. For instance, if the customer Health Score drops below 80% set up a task for the account to be contacted by the account manager.
These new approaches are giving the small business sales manager more intuitive, effective methods to track his sales force and more importantly his customer. While all companies should strive to define their sales process prior to implementing a CRM, the pipeline automation described in Getscorecard allows a manager to quickly set up rules for automatically keeping in contact with the customer. This will get you closer to that extra 14% in revenue mentioned in the opening paragraph of this blog.