August 10, 2023
By Jim Dickie, research fellow, Sales Mastery

Writing Checks for CRM, or Writing Invisible Checks

As we enter the home stretch for sales in 2023, for many companies the planning is now under way for 2024, as they put together the strategies and tactics for achieving new (and likely higher) revenue targets. When beginning the budgeting process for sales enablement technology for next year, let me suggest a reality check approach for helping to determine the right level of investment to consider.

To start with, before you give any thought to 2024, take an honest look at what you did to enhance your tech stack in 2023. Based on the economic uncertainty we have been living with the past couple years, many sales organizations either under-budgeted what they really should have spent on CRM this year, or they underspent the budgets they did approve. I get that in the face of doubt about customer spending levels in 2023, many CFOs decided that they would ramp up checks going out only after they saw checks coming in. But before you apply that logic to your 2024 budgets, you need to go through a financial exercise.

For this next step, consider how your sales organization performed this year compared to expectations. From the preliminary data we have received as part of the 2023 Sales Performance Scorecard study, companies that underspent on technology to help optimize the performance of their sales teams experienced one or more of the following outcomes. Average deal sizes decreased, no-decision rates went up, discounting increased, renewal rates went down, customer satisfaction ratings went down, and more.

Once you have surfaced the areas where your sales organization underperformed this year, I want you to forget about the physical checks you did not write for technology and consider the “invisible checks” your company did write. What’s an invisible check, you might ask? Let me explain. Each of these areas where you are witnessing poorer performance in 2023 versus 2022 has a cost associated with it. Higher no-decision rates mean your win rate went down, more discounting means lower margins, higher customer churn means lower customer lifetime value, etc.

The end result is that all through this year, your company has been hemorrhaging money, but in these cases, no physical checks showed up in your firm’s bank statement, so the cost went largely uncalculated. But if you take the time now to estimate the total of those invisible checks, you may well find that that cost was an order of magnitude more than what it would have cost you to give the sales force the technology they need to increase their efficiency and effectiveness in a tough selling environment.

I wish I could tell you the future course of interest rates, or what a recession will look like, but that is far beyond my ability to predict. But what I do know, based on 20-plus years of doing primary research on sales performance, is that if you again apply the flawed logic of only considering physical checks in your new budgeting process, you are setting your company up for underperforming again in 2024.

A wealth of innovations has been happening in the sales enablement technology space, especially in the realm of AI for sales. To compete effectively in the marketplace, your sales teams need to have access to the latest technology for optimal execution of every stage in the sales process. So take the time to make informed choices about when to invest early versus postponing those technology enhancements. Once you fully understand the real ROI that spending more on tech now will generate, the choice to do what is necessary to help sales teams thrive next year will become clear.

Jim Dickie is a research fellow for 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 @jimdickie.