Tell me you haven’t operated before…

….if you loathe the idea of a customer relationship management tool (CRM).

I was once told a tale (unverifiable) about an executive’s dislike for CRMs. It’s understandable to:

• Be neutral or indifferent to CRM, as there are often other operational problems/challenges to manage.
• See it as a necessary evil — part of operating a growing business and company which has outgrown spreadsheets as a means of tracking information

but to dislike CRM so principally and adamantly — when the executive wasn’t even going to be the one to use it — this was puzzling to me. It suggested that there was zero actual operating experience of scaling a b2b business from hundreds to thousands of customers, and from a smaller sales team to hundreds (or more) salespeople.

But then I wondered, maybe I was biased and needed to think from first principles about why CRM tools aren’t a waste of money, and are helpful. So here goes three points:

1. Why care about a CRM?
2. Why hate a CRM?
3. So what?

Photo by Lukas Blazek on Unsplash

Why care about a CRM?

You can slot in “partner” instead of customer, or any term is used for an external party (“user”, “client”), but I am referring to a tool that manages pipeline for customers/clients/users/partners. A tool that:

• Provides a historical record, via data storage. Source of truth on what’s happening with a customer or partner over a period of time, key contacts, their contact info, relationship mapping, past deals etc.
• Streamlines processes, via enabling people to track leads, opportunities, automate follow ups, send marketing emails, and see the end to end processes for deal closure. More sophisticated functionality includes, showing customer insights, linking to the news, suggesting outreach emails (~AI)
• Enables reporting and forecasting, via data analysis to observe trends in pipeline, note patterns, take early action, all of which impact revenue! [1].

I can’t imagine trying to operate a (larger) business, without having some overview of the metrics. Caveat — of course spreadsheets work for a while and can fulfil many of the needs above, if you are able to:

• Keep the data updated in one place
• Simplify inputs to minimize sales time updating it ie sales time priority is on selling, not data entry
• Use the data to make forecasts or decisions e.g., our pipeline looks weaker than what we like for September, do we need to adjust something

So it’s not a yes immediately to CRM software, but it’s a yes in the future when the customer base grows.

Why hate a CRM?

Here, I’ll brainstorm reasons to hate a CRM, other than someone lacking operating experience in a B2B business (where there’s clear revenue downside if you don’t have consistent metrics visibility).

1. Inflexibility of some CRM software: It often means you just have to accept whatever set up / data input fields your vendor has, even if it doesn’t quite fit your use case.
2. Costs: CRM software often is expensive, and can be difficult to set up and maintain.
3. Painful and tedious data entry: This is valid and most felt by the working team. Sales is already busy, and data entry is an extra step. If the tool is not well rolled out with support, then data inputs will be bad, which also then means poor analysis.

All these are realistic concerns, and could lead to feeling like an investment into a CRM tool is not worth it.

So what?

I don’t sell CRM software, so I hope that this seemed a bit less biased than coming from a sales rep. To be fair, I believe a sales rep could walk you through a Return on Investment (ROI) calculator to justify why such a software could be the right choice for a business as it grows.

Overall, a spreadsheet tracking pipeline is a good start to getting the data to have view of the business, and way to know data fields you really need for your analysis. And if the business grows, there comes a time where a software tool becomes necessary [2]. That is a good thing! That now there’s a business with large enough a customer base where investing into a lightweight CRM tool (and maybe more in the future) is now worth the investment. So, I hope that one does not hear about a CRM and immediately feel repulsed. It has its value, and has its value especially as you grow and operate a larger, more robust business.

[1] For example, using win/loss data

[2] Plus keeping customer data in a spreadsheet over time — might run into data privacy issues.