Is your CRM System a Sales Prevention System?

Most sales organisations have some sort of CRM system in place. Many have made significant investments in the system. Yet simply implementing CRM – just like just running a sales training course – offers no “magic wand” for improving sales performance.  In fact the energies expended on them are often wasted.  

Time after time, we come across Customer Relationship Management solutions that bear little or no relation to how a vendors’ most promising prospects actually buy, or what the vendors’ top performing sales people actually do.

There are 5 danger signs that indicate that a CRM system is actually behaving as a sales prevention system:

1. Unhelpful Stage Definitions

CRM deal stages (often implemented “out of the box” using CRM system defaults) are based on sales person activity, rather than tangible evidence of what the prospect has done or committed to do.  Deal status is often based more on hope than reality.  The resulting mismatch between sales perception and what’s actually going on in the prospect’s decision process is a primary source of inaccurate sales forecasting.

2. Give – Get Imbalance

Sales people are expected to give far more in terms of data entered than they ever get back in terms of feedback received.  The problem is frequently compounded by the data falling into a “black hole” with no evidence it is ever subsequently used by management for any practical purpose.  Sales people need to believe that the information they enter is used by management to help them improve their chances of winning.

3. Poor Forecast Accuracy

Sales forecasts - particularly at the detailed level - are all over the map.  Even if the projected headline revenue number is achieved, the way in which the number is made up bears little relationship to the deal by deal forecasts, and relies on heroic selling rather than intelligent use of resources.  CSO Insights estimate that detailed sales forecast accuracy for the average company is now less than 50%.

4. Static Sales Process

 The sales process and stage definitions that are reflected in the CRM system are static rather than dynamic, haven’t been reviewed or changed for ages, and have failed to take account of changing market conditions, buyer behaviour and sales best practice.  This failure to adapt to changing conditions is often particularly striking at the bottom of the funnel, during the prospect’s decision making process.

5. Failure to Reflect Prospect Decision Making Process

Many CRM and associated sales forecasting systems have failed to capture the nuances of today’s risk-averse prospect decision-making process.  Even after a vendor has been told they are the chosen solution by the decision team, most organisations now submit proposed expenditure – even if already budgeted – to a rigorous review process that all too often results in a decision to do nothing or to spend the money on a completely different area judged to be of higher priority.  CRM systems must reflect the difference between being chosen and the subsequent steps involved in approval.

Avoiding Sales Prevention

How have successful CRM users managed to avoid these issues?  By basing their CRM process around a clear understanding of who their best prospects are, and how and why to buy - and by embedding the customer decision journey (example below) into the system.  

In addition to having the discipline (and the common sense) to only collect information that is of clear value in tracking the buying process and managing sales efforts, these CRM champions have established clear stage definitions and dynamic sales processes, and many of them have benefited from (amongst other initiatives) well researched prospect profiles, systematic opportunity scoring and sales playbooks.

As a consequence, they can boast near-universal levels of sales adoption of the CRM system - and are getting real payback from their efforts in terms of shortening sales cycles, increasing win rates and improving forecast accuracy.