How, When and Why You Should Implement a CRM

Over the years, given my experience in sales, I've had the opportunity to help people who, for various reasons, find themselves in need of developing some type of commercial activity and ask me to consult ​​on sales-related topics, especially when these people aren't necessarily related to this field. This could be micro or small-business owners looking to expand their client base, or people at the management level who need to support their companies' sales strategies, with the goal of increasing sales.

In all these cases, I've been very pleased to confirm that the principles I outline in my book, "El Manual del Vendedor Institucional. La guía completa del proceso de ventas B2B,” are useful for those seeking not only to begin prospecting, but also to begin with an analysis of their current client base and subsequently seek to launch some type of sales strategy to attract more prospects or increase their revenue with current clients.

During this sales strategy design process, it's very common for those involved to begin thinking about the need to create and manage databases around concepts such as client and prospect portfolios, quote management, invoicing, and associated marketing activities. This is where conversations begin about the need for a CRM that enables this information management, considering how it can facilitate the sales department's decision-making process.

Although this is a sound idea for a start, the requirements and implementation methods of this type of tool must be taken into consideration.

To better explain how to set up a CRM, I think it's important to start by understanding what we're talking about. The definition of CRM is Customer Relationship Management, which is a tool that helps us manage the way we interact with our customers. Generally, these are cloud-based platforms that, on the one hand, help us generate databases related to all the parties involved in the business relationship.

Here we find contact names, phone numbers, email addresses, company information, market segments, potential buyers, and types of companies (consortiums, public, government, private, among others). Additionally, one of the main functions is to consolidate information on submitted offers so that the evolution of the opportunity's life cycle can be tracked, from prospecting to the purchase decision, with the closing conclusion: won, lost, or abandoned.

As we can see, these are different databases that can interact with each other and, when data analysis tools are applied, different report formats can be obtained as the information is digested for presentation to a specific audience. This is where things start to get interesting. As we can see, one of the main functions of a CRM platform is to help us assimilate information from existing databases (client and prospect databases, quotes, contacts, calendars and activities, among others), so one of the first starting points is to have some of these databases, or at least have established processes to structure them and subsequently create them on the online platform.

The next step is to have an adequate process for recording and tracking generated quotes. This process is specific to the company, and in most cases, my suggestion is that it be a prerequisite for implementing a CRM. This is because a CRM is a tool that will help the sales department automate processes and track activities. For this reason, it is not advisable to try to develop processes to adapt them to one of the platforms, or worse yet, to try to develop a platform without having structured processes. Generally, when this is done, what ends up is disarray and a large amount of work outside of the systems, resulting in rework, errors, and the perception that a CRM is a complicated tool that increases organizational bureaucracy, with the consequent rejection of its implementation.

I believe this is one of the biggest challenges associated with this type of initiative, particularly for small and medium-sized businesses. Lacking structured processes, there is a tendency to believe that using these platforms will solve these shortcomings. However, it's important to consider that a CRM is just another tool for analyzing information and making decisions, so its usefulness will depend on the skill of the people who use it. When structured processes are in place, which already facilitate the availability and use of information, it will become a very powerful tool, allowing data to be assimilated and presented in a variety of reports that are highly useful for different users and can be updated in real time.

So, having answered the first question, why implement a CRM?, we have the advantages we can gain through proper use of this tool, including:

1. The ability to manage information related to our accounts, such as addresses, key contacts, quotes received, offer life cycle, pending actions, and commitments, just to name a few.

2. Digitization and cloud storage, which makes information available to different users.

3. Generation of reports in multiple formats, such as dashboards or graphs, with the ability to update in real time.

Without a doubt, the main advantage of this type of platform is that it offers the ability to track the life cycle of an opportunity. By understanding the actual status of a submitted offer, it is possible to have a better view of those that can be closed in the short term. This results in better sales closing projections, increasing the effectiveness percentage, known as hit rate, and considerably improving the accuracy of sales forecasts.

On the other hand, regarding when and how to implement it, as I explained previously, defining the timing is just as important as considering the company's maturity in developing standardized processes, which facilitate the implementation of a tool that helps standardize work. With this in mind, we must avoid the mistake of thinking that implementing this type of system will solve problems related to a lack of processes or, worse yet, problems of indiscipline or the vices of salespeople who resist working in an accountability environment for fear of feeling exposed due to a lack of results. Like any instrument or tool, the results obtained depend largely on the skills of the people who use them, so it's important to consider that organizational development must go hand in hand with implementation, specifically the core of people who will be involved from design to daily use.

In conclusion, I firmly believe that CRM is a tool that serves more than just a company's management or senior management. I believe that if a salesperson understands its usefulness and relies on these platforms as an additional element to their work, it can greatly contribute to their productivity and effectiveness. It's simply important to take other organizational aspects into consideration when looking to invest in an application of this type. Otherwise, it can result in a costly expense for the company.