Successful businesses don’t stop pushing to outpace the competition. But year after year they also get help from an unlikely source: rivals who take a pass on giving themselves a headstart in the race to sales success.
In business times when everything seems to get measured, certain software tools have proven themselves to be essential sales accelerators.
At the top of the list of sales accelerators is CRM software. Successful sellers have been using it for a long time, too.
CRM is a mature class of business software. It’s impact has been studied at length and it’s hard to read the data as pointing to any other conclusion than that CRM software is an indispensible sales tool. In fact, a series of annual studies conducted by Nucleus Research between 2011 and 2014, reported that for every dollar spent, CRM software generated between $5.60 and $8.71 in return on the investment.
Still, as of 2014, only 50% of small businesses were taking advantage of CRM capabilities according to CRM application developer, Base. That leaves half of small business competitors disadvantaged when it comes to managing leads, identifying the most profitable lead sources, automating time consuming sales tasks, generating accuracy in sales forecasting, ensuring follow-up best practices, and targeting contacts with relevant and timely messaging.
The competitive advantage gained through end-to-end sales management software won’t last forever though.
Market-wide adoption of CRM is growing—and it’s growing fast. The explosion of cloud-based business applications is making CRM software available to even the smallest companies. The subscription software model applied to cloud-based products means that accessing software benefits doesn’t require tough-to-swallow large upfront capital expenditures. Currently, 64% of SMBs are using cloud-based, SaaS software—with an average of three applications deployed per business according to recent market research. By 2017, 88% of SMBs are expected to be using at least one cloud-based application and the average number of applications per business is projected to rise to seven.
Adoption of dedicated CRM has already crossed into the late majority phase. And, it’s probably a safe bet to say that the rise of cloud-based apps will soon push CRM software to the point where only laggards have failed to embrace the technology.
For now, here are five of the top unfair advantages that earlier SMB adopters of end-to-end sales management software systems will have to themselves—if only for just a bit longer:
1. Improved accountability via real-time data.
You can’t manage what you can’t measure. That’s the old business dictum, right?
The problem is that managers at organizations where the software picks up only at the point of order entry simply don’t have much to measure. They certainly don’t have the view into the sales cycle enjoyed by their counterparts at companies running CRM software.
A full sales management software system provides data on every stage of the sales funnel. With access to real-time data, managers don’t have to worry that they’ll get blindsided when collecting forecasts from sales reps who have coasted through the period. They’ll already be able to access data detailing:
- New opportunities identified
- Call activity
- Scheduled meetings
- Proposals submitted
- Opportunity rankings
- And estimates on the likelihood of leads to close.
The ability to capture and measure sales process data is changing modern sales. It’s also playing a big role in determining the winners and losers. The CRM market leader SalesForce noted in their 2015 State of Sales report that high-performing sales times are 3.5x more likely to use sales analytics than underperforming teams.
2. Improved sales forecasting accuracy with predictive analytics.
Less revenue is worse than more revenue, obviously. But that’s only the beginning of the issues when sales forecasts fail to materialize.
Sales projections set the stage for financial planning. An expectation for strong revenue tips the first domino in a chain reaction that often ends with inventory acquisitions, equipment purchases, staffing additions, or even justification for new business development projects. Revenue shortfalls in light of these kind of financial outlays can range anywhere from costly to catastrophic.
Bad forecasting is far from uncommon. Many sales managers have little confidence in their sales projections, but simply lack the data to make appropriate adjustments. In fact, a study conducted by Ventana Research in 2013, found that only 25% of companies using spreadsheets as their primary sales forecasting tool reported being satisfied with their forecasts. Meanwhile, 72% of companies who adopted sales forecasting software claimed that it had improved their forecasting outcomes.
CRM improves forecast accuracy by balancing sales rep estimates with predictive analytics based on historical performance. To say that another way, when sales reps are full of hot air, software that can calculate how much they’ve blown in the past helps figure out how much they’ll probably blow in the future. Similarly, pipeline analytics that capture close rates for every stage of the funnel provide another data point to means to come up with more reliable projections.
3. Better closer rates with best practice sales guidance.
How can sales managers turn hard-won insights about what works and what doesn’t into a team-wide embrace of sales best practices?
The first step is to collect these insights and make them broadly accessible. One of the primary values of an end-to-end sales management system is that it provides a platform not only to document best practices, but a mechanism to encourage or even enforce their usage.
Sales guidance features allow managers to dynamically serve reps information on topics such as the optimal timing of follow-up or how to handle tricky customer objections. Depending on the set-up of the system and what’s appropriate for the type of opportunities being pursued, reps can access guidance on-demand or alerts and notifications can present reps with direction as key events in the sales cycle occur.
The Aberdeen Group discovered that 39% of the best-in-class sellers they surveyed used a centralized repository of coachable best practices, as compared to only 27% among sellers ranked below the best-in-class designation. Even more significantly, companies who used guided selling software averaged 9.9% increases in YoY revenue growth, while sellers without access these tools realized only 5.7% revenue growth.
4. Accurate identification of the most productive training topics.
One of the toughest challenges for sales managers is balancing the time investment of sales rep skills development with keeping salespeople focused on revenue generating activities.
Because training takes reps away from frontline sales activities, it’s critical that training is not only effective, but targeted.
With a capable CRM program, managers can use analytics to select training topics by:
- Investigating where funnel leaks occur,
- Identifying which products representatives are having difficulty closing deals on, and
- Benchmarking metrics for each step of the sales cycle to determine where individual sales reps lag behind peers.
All the way back in 1983, a Harvard Business Review article recognized how sales management software could help managers focus training:
Coaching and training programs begin with an evaluation of representatives’ present skills. Managers will want to know the answers to such questions as which skill improvement will have the greatest impact on a representative’s sales, which skill should be dealt with in the next district training session, and how a 10% improvement in the closing rate would affect the representative’s compensation. Templates can be made to help answer these questions.
5. More time for sales people to spend on customer-facing activities.
When thinking about the basic elements of sales work, the first things that likely come to mind are tasks such as prospecting, networking, meeting with customers, uncovering client needs, negotiating, and managing account issues. But most of the time salespeople aren’t engaged in any of these critical activities. According to the consulting firm Accenture, only 35% of the average salesperson’s time is spent on customer-facing activities.
Consider the time involved in the sales forecasting process:
The traditional approach to sales forecasting relies on the periodic collection of sale projections from sales reps. It’s a tedious process—especially when there is no consistent platform employed to document sales opportunities.
The sales forecasting process often looks something like this:
- Sales reps review their own files to identify opportunities they expect to close and to project close dates.
- Sales reps deliver their individual forecast to managers.
- Managers review opportunities and make adjustments based on their own knowledge and experience.
- Sales managers provide upper management with their team forecasts.
- Management questions sales managers further to get a better sense of the overall confidence in the projections.
CRM software makes much lighter duty of forecasting work.
A fundamental feature of any quality CRM program is the ability to score opportunities and identify their position in the sales cycle. Opportunity scoring means that forecasts are updated continuously. Real-time forecasting provides a far more efficient alternative to the busywork involved in creating periodic forecasts.
Another way to keep sales engaged in direct revenue-generating activity is to minimize the time it takes to create customer facing documents. An enormous amount of redundant data entry occurs in the creation of quotes, proposals, contracts, and invoices. Quality sales management software provides a time-saving alternative by allowing salespeople the ability to convert one type of document to the next, without having to re-enter redundant data.