Has CRM Lost Its Revenue Mojo?
At a recent forum session in New York, a particular topic of conversation kept coming up: “What value does CRM really create for companies?” That’s hardly a surprising line of inquiry these days—in fact, ahead of the meeting I’d prepared a response by going back through six years of data from our annual Sales Performance Optimization (SPO) Study.
In 2005, when we asked survey participants to list the top benefits they derived from their CRM investments, “increased revenues” was third on the list. A year later, that response dropped into fourth place, and a year after that into fifth. So where is it today? Below is the benefits chart from the 2010 SPO study. You have to go way down on the list—to the ninth slot!—to find “increased revenues.”
So has CRM lost its value as a revenue-enhancement tool? Before you jump to that conclusion, let me share a story with you. (I’m going to show my age here, so bear with me.)
My first car phone—back in 1985—was the size of a shoebox, but I didn’t care. On my 45-minute commute, I could call my sales reps while driving and they’d provide me their updated forecasts. Back then, that kind of improvement in communications represented a massive innovation; drive time became useful work time.
Fast-forward 25 years: What was once innovative is now the status quo. Have I been singing the praises of mobile phones the way I used to? Of course not. In fact, if I venture too far into the Colorado wilderness, I’m likely to get really agitated—the signal fades out and I suddenly can’t call anyone! The nerve!
But something happened a couple of weeks ago that reignited my interest in my mobile phone—an unexpected round of innovation. We started using a service that allows me to call into our CRM system and dictate voice messages. The recordings are automatically transcribed into text, which I can then append to contact records as notes, forward as tasks to other team members, send as emails to research clients, and so on. No more tedious data entry, no more delays—just talking. Finally, another huge innovation—and one I can attribute to my mobile phone. [Editors’ Note: For more on the benefits of innovation, see the January 2010 edition of CRM—The Innovation Issue.]
Now consider the perceived value of CRM: The management of opportunities, contacts, and forecasts may have seemed innovative 10 or 15 years ago, but those features haven’t qualified as “innovations” in quite some time. They’re simply part of what we do. As a result, CRM’s value for many sales organizations may have been marginalized.
But our project-benchmarking efforts over the past year revealed that some firms have continued to innovate. These organizations found creative ways to use their CRM systems to increase the efficiency and effectiveness of sales reps—and they’re the same organizations where “increased revenues” sits atop the list of CRM-related benefits.
If your firm isn’t one of the fortunate ones, reassess what you’ve been doing with your CRM solution over the past year or two. [Editors’ Note: For a look at CRM assessments, see the Reality Check column in the April 2010 issue.] We often find that companies are realizing only a fraction of the potential that CRM provides. One yardstick you can use is the recency of your latest innovation: Gauge how long it’s been since you last tweaked your CRM to optimize reps’ workflow. The longer it’s been, the more likely that you’re overdue.
Start innovating now, and in a year CRM may be your new best friend all over again.
BENEFITS FROM USING CRM:
Improved Sales Rep/Manager Communications --- 56.9%
Improved Forecast Accuracy --- 45.6 %
Reduced Administrative Burden on Sales --- 37.3%
Improved Best Practices Sharing --- 21.4%
Reduced New Sales Rep Ramp-Up Time --- 20.3%
Improved Order Processing Accuracy --- 18.0%
Improved Support of Channels --- 16.9%
Improved Win Rates --- 16.6%
Increased Revenues --- 16.3%
Shortened Sell Cycles --- 14.9%
Other --- 10.1%
Increased Margins --- 5.6%
Source: CSO Insights' 2010 Sales Performance Optimization Study
Jim Dickie is a partner with CSO Insights, a research firm that specializes in benchmarking CRM and sales effectiveness initiatives. He can be reached at jim.dickie@CSOinsights.com.