Is your CRM System Still Acting as a Sales Prevention System?

Most sales organisations have some sort of CRM solution in place. Many have made significant investments in the system. Yet simply implementing CRM – just like just running a sales training course – is no “magic wand” for improving sales performance.  In fact the energies expended on them are often wasted...  

By the way, I wrote the first version of this article nearly two years ago - and the striking thing is that I’m still coming across CRM implementations that bear little or no relation to how their most promising prospects actually buy, or what their top performing sales people actually do.

But it’s not all doom and gloom. I’m pleased to have been able to observe a growing number of companies who can prove that their investment in CRM is actually starting to pay off.

But there remains a lot of room for improvement. So here are 5 danger signs that could indicate that your CRM system is actually behaving more as a sales prevention system:

1. Unhelpful Stage Definitions

Progress through the CRM pipeline stages (often implemented “out of the box” using CRM system defaults) is based on the sales person’s activity, rather than tangible evidence of what the prospect has done or committed to do.  Opportunity status is often based more on hope than reality.  The resulting mismatch between sales perception and what’s actually going on in the prospect’s decision process remains one of the primary sources of inaccurate sales forecasting.

Recommendation: base your CRM stages on key milestones in your prospect's buying decision process

2. Give – Get Imbalance

Sales people are expected to give far more in terms of data entered than they ever get back in terms of feedback received.  The problem is compounded by the data falling into a “black hole” with no evidence it is ever subsequently used by management for any practical purpose.  Sales people need to believe that the information they enter will be used by management to help them improve their chances of winning.

Recommendation: Show how the information you are requesting is going to be used to the benefit of your sales people

3. Poor Forecast Accuracy

Sales forecasts - particularly at the detailed level - are all over the map.  Even if the projected headline revenue number is achieved, the way in which the number is made up bears little relationship to the deal by deal forecasts, and relies on heroic selling rather than intelligent use of resources.  CSO Insights estimate that sales forecast accuracy at the detailed level for the average company is now less than 47% - worse than tossing a coin (and even worse than it was two years ago).

Recommendation: Ditch the CRM provider's percentages - get your sales people to allocate each of their opportunities likelihood of closing into commit, upside, long short or future quarter. Track actuals against forecast, and progressively deal with the most common sources of error.

4. Static Sales Process

The sales process and stage definitions that are reflected in the CRM system are static rather than dynamic, haven’t been reviewed or changed for ages, and have failed to take account of changing market conditions, buyer behaviour and sales best practice.  This failure to adapt to changing conditions is often particularly striking at the bottom of the funnel, during the prospect’s decision making process.

Recommendation: Regularly review your CRM stage definition to ensure that they reflect your prospects' most common concerns and motivations at each step of the process.

5. Failure to Reflect Prospect Decision Making Process

Many CRM and associated sales forecasting systems have failed to capture the nuances of today’s risk-averse prospect decision-making process.  Even after a vendor has been told they are the chosen solution by the decision team, most organisations now submit proposed expenditure – even if already budgeted – to a rigorous review process that all too often results in a decision to do nothing or to spend the money on a completely different area judged to be of higher priority.  CRM systems must reflect the difference between being chosen and the subsequent steps involved in approval.

Recommendation: if you are involved in lengthy, complex sales cycles with multiple stakeholders, ensure that your system captures the complexities of typical approval processes.

Avoiding Sales Prevention

How have successful CRM users managed to avoid these issues?  By basing their CRM process around a clear understanding of who their best prospects are, and how and why to buy - and by putting the customer decision journey at the heart of the system.  

In addition to having the discipline (and the common sense) to only collect information that is of clear value in tracking the buying process and managing sales efforts, these CRM champions have established clear stage definitions and dynamic sales processes, and many of them have benefited from (amongst other initiatives) well researched prospect profiles, systematic opportunity scoring and sales playbooks.

True Sales Enablement

In short, the top CRM implementations are seen as sales enablement systems, with near-universal levels of sales adoption. Better still, they are getting real payback from their efforts in terms of shortening sales cycles, increasing win rates and improving forecast accuracy.

So - is your current CRM system a true sales enablement system, or still seen as no more than a sales administration tool. And if the latter, what are you going to do about it?