Are you making the most of your CRM?

By Chrishan de Mel 

Peter Drucker’s words “You cannot manage what you don’t measure” are as relevant today as when they were first recorded. You also cannot measure what you don’t track, and whatever you don’t track, the ability to recapture those data points will diminish over time. 

In the space of sales, business development, and customer success, it’s common for organisations to use a customer relationship management (CRM) system to track progress. While there are many tools out there such as HubSpot, Salesforce, and Sugar, each with its own features based on your budget and requirements, the ability to manage prospects through the sales pipeline is a core functionality provided. In this article, I will explore the advantages of using a CRM and why using it well can help you better manage your business development activities.


Advantages in using a CRM

There are many advantages to digitising your customer relationship management process. Considering the customer acquisition aspects, it allows a sales and business development team to collaborate and track progress in a common place. It enables the company to maintain a ‘single version of the truth’ in terms of performance and forecasts. It provides a platform to record day-to-day sales activity and consolidate the data to provide visibility on the sales pipeline. The system can also be extended to manage customer service tickets and obtain 360-degree visibility on customer engagement.

The business uncertainty caused by the pandemic was a trigger to digitise the sales process and make better use of tools for many companies. My team at 99x has also gone through the same transformation process during the pandemic period. Historically, 99x grew through a combination of referrals and organic growth, which was adequate to meet our business expansion targets. However, as the impact of the pandemic became more apparent, so was the need to have a more quantitative process to optimise the deal pipeline. The number of deals captured, and the level of activity recorded vary based on the types of prospects handled, deal size, and time taken to take a prospect to a sale. In the case of 99x, it is in a business-to-business (B2B) setting where the prospects are typically software product companies, also known as Independent Software Vendors (ISVs). The deal size or ticket size is quite high, with a lifetime value between $ 2-5 million as the duration of a customer engagement can span over five years. The time taken to close a deal can vary between 2-6 months. This results in a smaller number of entries on the CRM system, typically less than 50 updates each month. 

In contrast, a pipeline handling business-to-customer (B2C) prospects with a deal size of between $ 10,000-50,000 annually, and a shorter conversion time, say 2-6 weeks, will have a higher level of activity on the CRM, with easily hundreds if not thousands of entries tracked each week.


Managing the deals pipeline

Most CRM systems will provide you the flexibility to define the stages of your deal pipeline and associate a level of probability of closure at each stage. The total number of deals and their associated probabilities will provide you with a more objective, accurate sales forecast. Typical stages of the deal pipeline include Suspects, Leads, Prospects, Qualified, Contracting, and Closed – Won, or Closed – Lost. Based on your requirement, you can even create a stage called ‘Closed – Qualified Out’ to indicate prospects that you intentionally choose to not explore further based on factors such as deal size, geography, or required competencies. 

It is important that the sales team members are clear on what constitutes a prospect at each stage and the preferred outcomes that move it to the next stage of the pipeline. For example, a deal in the Prospect stage must have had at least one meeting with the interest to explore the next steps. A deal in the Qualified stage implies that there is an identified need, where the prospect sees the value of synergies in engaging your services. A deal in the Contracting stage has progressed to where a contract or services agreement with financial considerations has been exchanged, with terms being negotiated.


One version of the truth

Having the pipeline stages clearly understood among the team will prevent your sales team from producing overly optimistic forecasts (i.e., on the assumption that every prospect is a conversion) or sandbagging as a less optimal way of managing performance expectations. The HubSpot blog introduces sandbagging as “where a salesperson slightly holds back their deals to undermine their forecast and lower management’s expectations. They ultimately close or report those deals later – typically to give the impression of overperformance”. Ensuring the sales team consistently uses a CRM will provide you with a balance between these extremes and more accurate performance indicators.


Marketing qualified leads and sales qualified leads

It’s also important to be aware of two other terms – Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL), and how these would be identified and tracked within the CRM. An MQL is a lead who has interacted with your website, downloaded content, attended a webinar, signed up for a demo, or engaged in a combination of these activities that indicate a higher level of interest in your product or service.  Based on a trigger or a score, such leads can be then moved to the sales funnel to be explored further as a conversion. 

Similarly, a SQL is a leader who has entered the sales funnel and meets the criteria to be converted as a customer. Using the pipeline stages identified earlier, all the leads handled by marketing initiatives can be tracked as ‘Suspects’ and moved to a ‘Leads’ stage once they become an MQL. You can choose an arrangement that works best for your company based on the type of offering, level of activity, and updates. Some CRM tools provide automation to move leads along the next stages of the pipeline based on pre-set thresholds or conditions.

There’s always a better way

In conclusion, whether it’s in Microsoft Word, Excel, or any other off-the-shelf software product, we typically use less than 20% of the features and functionality built-in to accomplish the bulk of our daily tasks. I can challenge you that this percentage would be even lower in how you use your CRM! The ability to align your sales, marketing, and business development efforts, provide more visibility of progress, and become more objective in your performance reporting are all advantages when using a CRM. Over time, you will be able to derive additional metrics to measure and manage your sales pipeline with more predictability than ever before.   


(The writer is the Chief Marketing and Corporate Affairs Officer at 99x and spearheads marketing activities while supporting business development and customer success initiatives. He is an accomplished practitioner with over 25 years of experience in the tech industry with complementary roles in programme management and corporate consulting. Before joining 99x, he was the Executive Director of SLASSCOM. His industry experience includes banking and financial services and global IT services with Virtusa, Societe Generale [SOCGEN], Nations Trust Bank, and Union Bank of Colombo)