CRM: System of Record or System of Engagement?

As part of the design of Sales Mastery’s 2022 Sales Performance Scorecard (SPS) survey, we solicited input from our external advisers about which kinds of data to gather for this year. As this is the 25th anniversary of the introduction of CRM, one suggestion was that we re-explore how the technology is currently being leveraged by sales organizations, and whether it is having a meaningful impact on sales results. Seeking not to initially overcomplicate this analysis, the question we asked in the survey was this: Is CRM used within your company as a system of record for collecting and storing information on customers and prospects, or is CRM used as a system of engagement for optimizing connections with customers and prospects?

Once we received 500-plus responses to the survey, we did a data snapshot that resulted in a near 50-50 split between those two camps. A key insight surfaced when we then compared the sales performance of both cohorts by looking at the outcome of forecast deals, as seen in the following chart.

In this time of economic and political uncertainty, as most sales organizations are looking for ways to optimize sales performance, the significant difference in win rates was striking. In looking at win rates, we are not focusing on finding more deals, but rather closing more of the deals a sales organization has already found. The delta between the system-of-record and system-of-engagement groups is nearly 30 percent. If a system-of-record sales organization was able to make the changes necessary to have CRM become its system of engagement, the impact on revenue performance would be significant. But that then poses this question: What are the differences in CRM usage between these two groups?

When CRM is employed primarily as a system of record, the most used functionality are tools such as contact management, account management, opportunity management, and pipeline management. When we asked sales organizations to share the top three benefits generated by using CRM as a system of record, the most common answers were that it reduced the administrative burden on sales professionals; it improved communication between salespeople and sales managers; and it streamlined the forecasting process.

Clearly these are useful improvements, but what they really represented were increases in sales efficiency. Realizing that sales teams also face effectiveness challenges, sales organizations need to not only look for ways to free up time for salespeople to make more calls but also leverage technology to help them make great calls.

If you are currently underleveraging CRM as merely a system of record, explore ways now to start moving toward turning it into a system of engagement. And if you are already in the system-of-engagement camp, ensure that you are aware of all the capabilities that are available to your sales teams, and that they are fully trained on how to integrate those into their daily workflow. These are evolutionary changes to how you are already selling, and ROI generated by successfully doing so more than covers the effort required to make this shift.

Jim Dickie is a research fellow at Sales Mastery, a research firm that specializes in benchmarking case study examples of how companies are leveraging technology to transform sales. He can be reached at jim@salesmastery.com or at @jimdickie.

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