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CRM ROI Value is minimum $8.71 for every $1 invested
bEffective’s focus and recommendation for today and tomorrow is that your SaaS business establish, develop and expand upon a revenue growth methodology. As you do so, a critical question will arise. How will your technology investment enable it? Specifically will it enable your customer experience and earning sales, particularly with CRM software solutions? CRM is your Customer Relationship Management application.
As you may know CRM software is the fastest growing software sector in the technology world. It is showing no sign of slowing down and expected to reach over $80 billion as a world-wide industry by 2025. Fueling this growth is your clients and competitors who want access to real-time customer data. They also want it from connecting different platforms, in order to provide a more personalized customer experience (CX).
Nucleus Research is one of the first research firms to study the CRM technology category in depth. They demonstrated through their research ten years ago that you will gain an ROI factor of $5.60 for every dollar invested in this software sector. More than three years later their research raised the ROI value to $8.71. Today if you integrate your CRM with other platforms the ROI continues to climb by another $6.12 when it is integrated with your website, or up to $10.66 when it is integrated with the right effective reporting/ analytics/ business intelligence. If you want this ROI, don’t forget to check out our newsletter.
The results of the CRM ROI value would seem to speak for itself such as:
- Effective sales organizations are 81% more likely to be practicing consistent usage of a CRM or other system of record. (source: Aberdeen Group)
- The average CRM user adoption among sales professionals is 73% and the average ROI period is 13 months. (source: G2’s CRM Software Research, Summer 2019 Grid® Report for CRM)
- CRM applications can help increase sales by up to 29%, sales productivity by up to 34% and sales forecast accuracy by 42%. (source: Salesforce)
- Data accessibility for salespeople shortens their sales cycles by 8-14%. (source: Nucleus Research)
In 2019, the top 10 CRM software vendors accounted for nearly 59.3% of the global CRM applications market. There are more than 200 CRM software vendors in the market.
But should you invest in a CRM? Sure. Is there a CRM solution which will fit your SaaS business? Maybe. Let’s find out how a CRM may be a good fit for your SaaS business.
91% of companies with 10 or more employees have a CRM
CRM Vendors Are Blowing Smoke Up Your ...
Clearly, the technology industry such as the CRM software sector has a vested interest to put a positive spin on the ROI value of their respective solutions (note earlier Salesforce bullet).
But who is not interested in qualified leads to close in a shorten sales cycle by 8-14%? Or how it will certainly help increase sales by up to 29%, sales productivity by up to 34% and sales forecast accuracy by 42%.
What is stopping your SaaS business from achieving the same percentage performance improvement and sparking your potential? Perhaps bEffective recently reviewing a five year old SaaS business’ CRM investment may provide you with a clue about what’s stopping your success. For example, this SaaS business had accumulated CRM data with more than 30,000 qualified leads. These leads were qualified because they asked for a demo (10%) with an expert and modified specific to their situation; or they extensively reviewed their demo (20%) on their own; or simply having downloaded their content (60%) frequently. Upon reviewing their CRM leads data, the goal was to segment (filter) those leads geographically, by industry, by employee size, in order to target more sales, for instance within a shorten sales cycle objective. The results of our review of the SaaS business’ CRM data was challenging given that more than 50% of the data was missing particularly with the mention segmentation focus, where related fields were blank.
How can these fields be blank ? Salesforce’s own “State of Sales Report by Salesforce’s Research Team,” suggest an answer. Or 66% of a sales rep’s time is spent on administrative tasks and activities, not directly tied to selling during an average week? If this is the case, were they not filling in these required segmentation fields? Apparently not since 22% of salespeople don’t even know what a CRM is per Hubspot. This also leads one to wonder how can anyone find the time to shortened the sales cycle as well to 8-14%, let alone any other positive CRM statistics if one is not focus on sales related activities?
Cornerstone of CRM IS Data Quality
The CRM software sector can help you with the issue of data quality. Whether they do or not is up to your SaaS business. The reality according to many studies on data quality which uncovered that found 40% is the average bad data percentage across 750,000 organizations due to, for instance significant duplicates, missing fields, invalid entries, and bad formatting or processing.
Consequences of Bad Data
- Strategically – your SaaS business decides to spend monies in the wrong areas, items or projects
- Functionally – for instance marketing misses new groups to target, while sales and other touch points reach out to the wrong contact or do so for the right contact with the wrong phone number
- Productivity – your team such as sales spend time on the on non sale focus activities as mentioned.
- Technology – your SaaS business continues to depend on technology which is not enabling your revenue growth approach
Less than 40% of businesses have a CRM adoption rate over 90%
User Adoption IS Critical To Data Quality
Never mind ensuring the right CRM implementation, if users misuse your CRM investment. Your CRM and its data is essentially useless. Effectively user adoption mirrors what’s missing in your SaaS business such as:
- Users hate learning new technologies
- Prior technology implementation failures leads to resistance to try again
- A 2020 flavor, a user forgets ‘how-to’ use your CRM working remotely or it is not mobile enough to use
- Your revenue growth methodology is not understood by all or there remains divergent goals within your organization to address or
- Your CRM is not the central ‘customer information’ repository and split between other siloed systems with marketing (for personalized email), service (for help desk goals), or production (for delivering customer orders) functions
- Your CRM does not enable the sales function workflow e.g. calling out directly from screen or their perspective of doing the work or
- Worst of all, users wonder why to adopt when your business leaders and managers don’t make use of the CRM’s meaningful potential for revealing trends, uncovering opportunities and more that may be directly contrast to your go-to-market premise.
Only 45% of organization use CRM to store their lead and customer data per Hubspot
Necessary CRM Features For Data Quality
If you have standalone CRM with no internal priorities or ability to capture the customer experience. Then it is likely you don’t have the following features:
- Understandable, intuitive and easy to use interface
- Supports daily workflow for enacting business revenue growth strategy
- Integrates and aggregates customer data from all touch-points in the organization
bEffective brings experience with over hundreds of CRM projects. If you wish to avoid the smoke mentioned, then let us know. Meantime check out our newsletter for hints.
There Are No Such Thing as a Quick (Start) Fix
bEffective is here if your goal is to achieve consistent revenue growth, year over year. If so, you likely know that building, executing and improving upon your SaaS business’ revenue growth strategy is a long term play.
Similarly, your investment in the technology promise must equally supports this long term plan. For example, how will it address complicated and comprehensive issues that both data quality, user adoption and workflow represent?
Customer Touch Points
To create the customer experience where you gain customers, earn sales and improve revenue and do so cost effectively signals aggregating and integrating all customer touch points into one system i.e. CRM.
Sales gets engaged every time, when they understand that they drive the execution of your SaaS business’ revenue growth strategy. Your CRM investment becomes a natural enabler in such a situation to provide them with whatever is required to build a relationship with the customer and become their ‘Trusted Partner.’
Your CRM investment must provide the workflow structure that reflects your revenue growth strategy, as well as flexibility to address the art of the customer relationship building. This means the various customer experience functions have a part to play from marketing engagement campaigns through to product/service delivery.
Back in 2017, CIO Magazine reported that an average of 33% of CRM projects fail. Anecdotally it would seem to be much larger. Perhaps given the monies invested in a CRM project many organizations chose not to admit failure.
The very nature of the technology promise and CRM solutions specifically serves a lot of masters: C-suite, marketing, finance, service, production, and oh yeah sales. You can imagine the resulting CRM specifications, diluted project and all of which will be available in the year 2180.
Your First KISS
This is why your CRM needs to go back to the KISS principles, or Keep It Simple S*.
Marketing begins with first name, last name and email with opt-in to your business newsletter or something similar. Marketing adds-in title, direct dial, address and company as it develops the prospects’ interest. Upon the prospect expressing interest, sales takes over to qualify as a possible opportunity and so on. Every one of your business functions are accountable for their part of the customer experience data set. The end result is you gain measurable performance indicators along the way: How long does it take to develop prospects’ interest. Once interest express how long does it take to become an opportunity.
However too often these indicators are used to inspect rather than improve. If you check indicators to inspect number of activities, number of calls, and so on then you missed out on the potential of your CRM investment. Soon after fake data will impact your data quality.
To avoid data quality corruption, use the indicator to establish if you are in fact targeting the right prospects. If your revenue growth strategy was all about serving global enterprise at $500 million and above in three specific industries. Yet your indicators highlight prospects and closed business are with $250 million enterprises and in three different industries. Hello! It is time to create new strategies and maximize opportunities.
Believe it or not there is more. But KISS in phase one, gets you the basic analytics. Once you expand into phase two, you really begin to establish consistent revenue growth.
You’ve read our promise, for the challenge you may be facing along with the ‘how to’ solve it.
bEffective offers services to help your SaaS business establish its revenue growth methodology in whole or for the module you need help to improve upon.
Should you wish to do it for yourself, then check out our resources menu for ‘how-to’ solve the challenge mentioned above as well as others in this area of our website. Keep in mind the research and science dictates the ‘right’ revenue growth approach needs to be built in sequence, integrated and more for achieving the promise percentage, dollars through to consistent cash flow.
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