Growing a business in today’s economy can be a very difficult task to overcome. There are tight budgets, strict sales quotas, unreasonable deadlines, and one hundred and one ways to raise your bottom line. The trouble with growing a business is not only finding the next best innovation to grow and scale your business efficiently, but also to justify these changes monetarily. Many times throughout your decision process, you will ask yourself how you assign a value to a change that is not only unknown to you, but something that may be a completely new concept for your business as a whole. The first step to crossing this void is to analyze your business from an outside perspective.
Do you have a defined sales process?
Can you predict your revenue a month from now? How about next quarter?
Do you have an accurate sales pipeline?
The first step to measuring your business and answering these questions is to look into a Customer Relationship Management (CRM) platform that is best suited for your business. You will want a CRM that is easily customizable to fit your sales process, works smoothly with your business workflow, and one that can be easily integrated with all other aspects of your business.
You may want to work either directly with the CRM provider or a cloud service brokerage in order to determine the proper platform suited for you. It’s also important to research best practices and important change management techniques, common practices that are usually provided by cloud service brokerages. Working with either party will ensure that these systems are smoothly implemented and you receive the results you are looking for.
Now for the important part of this discussion, placing a monetary value on your CRM engagement that will determine if it’s the correct next step for you. Though these statistics may be theoretical by nature, they should not be overlooked for their relevance and accuracy.
Let’s begin by discussing the current efficiency within common businesses from the perspective of a sales representative. Imagine they use a spreadsheet or email client to track all of their contacts currently, do not track phone calls collectively, nor does their sales manager have access to the sales representative’s activity unless he/she asks them in person.
On any given day, the sales rep begins making calls out to current prospects. Then, with a pen and paper, they are crossing names of the list and jotting down notes about each phone call and conversation started. The sales manager approaches the rep and asks for a report on how many contact touches they have had before lunch that day. As a result, the sales rep physically has to stop what he or she is doing for 5 minutes in order to count up all of the individuals who have been reached, manually calculate the percentage of contacts unable to be contacted, contacted but not interested, or contacted and interested. The manager then asks to send him or her an email with all of the rep’s notes from interested prospects. The rep takes another 15 minutes to consolidate all of these notes and send them over to the manager.
What if this happens twice a day, every day of the week? That’s 40 minutes out of every day that every one of your sales representative is not able to focus on their job! Each of those 40 minutes are wasted time, especially when there is a way to track that work automatically.
Next, let’s look at the process of a sales manager and presume that the company in question currently has 6 sales representatives. Managing sales can be a tough, emotional task as selling can be fairly inconsistent. Each manager will spend a majority of their time reporting and keeping their representatives on task. In this scenario, the company has one manager and does not have a centralized process of tracking prospects and sales activity. Remember from before that the manager takes about 5 minutes per sales rep to go out and ask them to report all of their numbers. With 6 sales reps, that’s 30 extra minutes each day that is spent working on reporting rather than building material to help the representatives. Once the tracking data is gathered, it will take another 30 minutes to enter this information into a spreadsheet for the Director of Sales or the CEO. This report will help them analyze where the business is and make educated decisions to improve the company.
Adding it all up
How much lost time could be regained using a centralized CRM? We lose 40 minutes daily for the sales representatives to begin taking notes and keeping tally. If each sales rep is paid roughly $25 per hour and there are 6 sales reps, each spending an unnecessary 40 minutes per day, the company is potentially losing $100 per day. That's about $500 per week, and $26,000 per year.
It’s also important to take into consideration the amount of time lost by the sales manager. If each sales manager loses about an hour per day, and makes roughly $35 per hour, the company is spending $175 per week for him or her to complete these tasks. Take the $9,100 spent on the sales manager’s time and add that to the $26,000 spent on the sales representatives’ time, and we’re at a total of $35,100 spent every year on unnecessary tasks. (The equations for this are explained below.)
Although this example focuses on one specific benefit of real-time reporting when working with a CRM system, there are many other benefits not mentioned here. These benefits save time and help everyone in your company focus on what they do best, rather than the daunting task of data entry. Help your business focus on whatever you do best, work collaboratively in a real time environment, and raise your bottom line.
H = Hourly Salary
T = Time lost per day (in minutes)
Weeks in a Year (including holidays) = 52
Days in a work week = 5
W = Cash spent or unnecessary work.
Equation for both positions:
T/60 x H x 5 x 56 = WOriginally published on December 12, 2013