The value of CRM in a down economy 

You must ask yourself what changes you have made to your business to adapt to the current economic climate. If you cannot answer this question you may be behind the eight ball. The current climate is not that of previous years and not where we will be in the future, we are in a period of transition and must change our businesses to adapt.

CRM is one strategic initiative that can help your business adopt change quicker and with less disruption. It will not only help you make necessary changes now but will position you to capitalize when things turn around. 

We work with many businesses each year to help them plan and execute their CRM initiative. We interact with business leaders across many different industries facing different challenges. Most have some commonality today; weathering the current economic storm and preparing their business for when things turn. In this article we have put together a few CRM related strategies that can help businesses survive and even thrive in these times.    

Most experts agree that in a downturn it is very important to put an emphasis on existing customers, selling more to existing customers can create cheap growth. It is also a good time to examine customer profitability account-by-account and rank your customers. A CRM system can help by segmenting your customers and creating processes for cross/up selling into these accounts.

Make the most of every opportunity! In these challenging times where the buying universe has shrunk it is more important than ever to make sure your sales team is proactively managing every sales lead that is generated. In challenging economic times buyers shop more to try and get the best pricing on just about everything they purchase. As a result we face more competition. If you are not proactive in managing sales leads your competitors will be.

It is also more important now to know the outlook of the business on a monthly basis. This allows us to make well informed decisions. Without a central place to manage sales opportunities this can be a difficult task. Most CRM systems will offer a robust opportunity management system with pipeline reporting, some also offer sales process coaching as well. Our CRM system automatically emails us a monthly report showing bookings vs. costs for the current month and shows us a weighted pipeline for the next 3 months. This report is a valuable tool for knowing where we are at today and where we are headed over the next few months. It also allows us to adjust to the pipeline, if 90% of the pipeline is in early stages we focus more energy and resources on moving deals ahead and less on prospecting.

Improve your close rates - Another way to increase revenue is to improve your sales teams close rates. For example let's assume you have 25 opportunities in your pipeline. If your average gross profit on a sale is $5000 and your average close rate is 50% you could generate an additional $12,500 if you improved your close rate by 10%. The best part about this is you have not added any costs to obtain this additional revenue. Do you know your sales teams average close rate? CRM systems can shed light on this important metric and help you measure improvements.

Market more cost effectively - Bootstrapping is important in the current climate but cutting marketing too much can hurt sales. Look for ways to more cost effectively market your products and services. A CRM system can help you dig into your customer data and create very targeted marketing campaigns. For example identify customers that have not made a purchase in X months and offer an incentive. Another example would be to identify all accounts that have purchased a specific product or service and market a synergistic product or service. 

Know what is working - I can look in our CRM system and easily determine exactly how many leads each marketing campaign has generated and the amount of sales each campaign generated. This allows us to continually manage where we spend our marketing budget based on campaign performance.

If you can't measure it you can't manage it - We have seen an increase in the amount of requests for custom reports. If you already have a CRM system in place but are underutilizing it now may be a great time to enhance your system.  Many businesses implement changes without a way of measuring the results. In times like these a panic mentality can set in causing business leaders to make rash changes. If you are planning on making changes make sure you have a way to measure the changes you implement.

These are just a few examples on how a properly implemented CRM system can help you through this tough period.

If you are interested in exploring how CRM could benefit your business contact us for more information. You can also learn more about the CRM services we offer.