Episode 40: CRM Basics: How To Leverage CRM Tools In The Sales Process And How To Embrace Them In Your Sales Team
The CRM tool is one of our secret weapons for building strong customer relationships and boosting our business's success. However, adopting one is often easier said than done. For many sales leaders and professionals, the skill required to use a CRM tool effectively doesn’t come about automatically. What steps do you need to take in order to fully embrace CRM tools? In this episode, Sara Murray hits us with the basics of CRM, from what it means to how sales leaders and teams can seamlessly move into full adoption and utilization. Tune in and learn how you can start your CRM journey now!
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CRM Basics: How To Leverage CRM Tools In The Sales Process And How To Embrace Them In Your Sales Team
Our series of hard skills and soft skills continues. In the last episode, we discussed sales forecasts, and now, we're going to discuss another hard skill that supports our forecasting and execution efforts. This is the ability to use Customer Relationship Management software systems, commonly known as CRM. In this episode, we'll explore what a CRM tool is, the difference between a lead and a prospect, and key components specific to a sales role.
What Is A CRM Tool?
At the end of the episode, I'll share six tips that work for me personally when it comes to CRM efforts. This is a hard skill that does not come easy or naturally for me. It's something I have to work on proactively and intentionally. If you're someone who struggles with maintaining databases and finding the time to do it, or if you're a leader of teams and someone on your team is struggling, hopefully, some of these tricks at the end will help you.
Starting with the basics, what exactly is a CRM tool? It stands for Customer Relationship Management. It's a powerful software solution designed to help businesses manage and improve their interactions with their customers, prospects, and leads. At its core, a CRM tool is like a digital hub for all of your customer-related information. This can be found in all areas of business, sales, marketing teams, customer service teams, project management, operations, inventory management, shipping, and production accounting. All of this, in many cases, can roll up into the same platform.
Common CRM tools include Salesforce, Oracle's NetSuite, HubSpot, Microsoft Dynamics 365, Zoho CRM, and Pipedrive are some of the platforms out there. I have used four of these in my career, and for me personally, it's a love-hate relationship, but I am doing the work to make it more heavily balanced on the love side of incorporating technology for maximum effectiveness.
For the purposes of this episode, we're going to keep it heavily focused on how it supports us in our sales efforts. The ability to leverage a CRM tool is going to support you in your prospecting efforts, keep you organized both in your relationship maintenance and opportunity pipeline, help you navigate the sales cycle process to always stay in the driver's seat, and ultimately, better service your clients, which is what we all want. I'm going to break down six key components of a CRM system as a quick overview, and then we'll do a deeper dive into the first two.
The ability to leverage a CRM tool is going to support you in your prospecting efforts, keep you organized in relationship maintenance and opportunity pipeline, help you navigate the sales cycle, and ultimately help you better serve your clients.
The basic feature of any CRM system is, first and foremost, contact management. Who are our customers? Names, addresses, emails, phone numbers, and birthdays? How did they come into our orbit? Where did we first meet them? There's usually a section for notes, and that's a great space to note different pieces of personal information that help you in your relationship efforts. Maybe one of your clients has an allergy to cinnamon. Jot it in the notes so that the next time you show up with pumpkin spice lattes for the team, that person gets a regular latte. This feature essentially serves as your digital Rolodex.
The next tier is lead and opportunity management, also known as your sales pipeline. Think of this as your sales dashboard or control center. It tracks potential deals, their stages, and the probability of closing them. We're going to get into more details on this one in a little bit. Number three is communication history. A CRM keeps tabs on your interactions with your customers, including emails, phone calls, meetings, and appointments. This is super important if you work at a large organization where different teams are interacting with the same clients. Understanding what has or hasn't been shared with the client is going to support the customer in the most efficient way.
I'm not crazy about the CRM tool I'm using in my business, but I appreciate that all of our correspondence is documented so that when I interact with a new person, whether it's a salesperson, customer service, or tech support, they're all pulling in from the same information. I don't have to tell the same story and get a new person up to speed every time.
Marketing automation is another huge component of CRM tools, automating marketing campaigns, managing customer data, and analyzing campaign effectiveness. This is big for our sales forecast. Number five, analytics and reporting. We're tracking key metrics like sales performance, geography, regional sales goals, and quote ratios. How many quotes are coming in? Are we up or down year over year? What is our close rate? Are we on target to meet our goals?
A small marketing example here on analytics would be to test out which subject line performs better. What's the open rate on subject line A versus B? This is a big bulk of why organizations use CRM tools. The last piece on our overview is integration capabilities. CRMs integrate with other software systems like email. You can easily sync your email to a customer to the CRM’s contact or record. Other integration capabilities can include calendars and eCommerce platforms to streamline data flow.
Key Components Of CRM Tools
The key components are not all-encompassing, but if you're new to the concept of a CRM, that's a nice, simple overview. Diving into the first two pieces there, contact management and pipeline management. In my experience as a sales professional, these are the two most vital elements. Leveraging a CRM tool to keep track of your contacts, essentially the relationships you own as a salesperson, looking at it from both the perspective of your relationship with the account or the company and then the individual contacts within that account.
If you're working with a company or an account, I'm using those words interchangeably here, and there are twenty people who work at that firm. It's helpful to understand those twenty people's roles in the organization. What's the reporting structure? Who works for whom? Who's the ultimate decision maker? If you know that Mike reports to Tina and your main point of contact at the firm is Mike, you can use this information in a couple of ways.
How can you make Mike look good to his boss? That's going to be a deposit in his emotional bank account. How can you also develop a relationship with Tina? Using CRM systems to chart this out and get a good handle on the state of the account is going to support you not only in maintaining the business that you have with them but also in how you can prospect for business within the account you already have relationships with.
Being organized in your relationship management is going to serve you both in how well you're able to build stronger relationships and then find new opportunities, contacts, and departments within that account. As a quick note here, I always add the receptionist or the front desk person as a key contact in the firm. Just because they may not have decision-making authority, they almost always have a plethora of information that if you take the time to build a relationship with them, I cannot tell you how much business I've won because I had a relationship with a receptionist who turned my shoulders and points me in the right direction because I took the time to remember his or her name.
The second thing that we're tracking in our CRM tool that's crucial for a salesperson is our pipeline, all of the concurrent projects, deals, and opportunities that we're working on at any given time. A sales pipeline is a visual representation or framework used by businesses and sales teams to track and manage the progress of potential sales or deals from initial contact all the way through closing the deal. It provides a structured and organized way to monitor and analyze these various stages that potential opportunities or customers go through during the sales process. It's an essential tool. It allows us to forecast our revenue, set our goals, allocate resources effectively, and hopefully identify areas for improvement.
Before I get into that, I want to talk quickly about someone who focuses on prospecting. I get this question pretty frequently. What is the difference between a lead and a prospect? A lead is typically someone who shows an initial interest in your product or service but may not be fully qualified as a potential customer yet. Leads can be generated through all sorts of ways, website inquiries, perhaps we scan a badge at a trade show, social media interactions, maybe they attend a webinar or download something from our website.
We're ideally tracking how those leads come into our space. They usually provide their contact information with a perceived exchange in value. Maybe they need to learn something more from us. They want more details sent after a trade show. They don't want to carry a bunch of literature. They need a spec sheet from our website. Maybe they're interested in a free download we offer or so on. Leads are at the early stage of the sales funnel and may require further qualification or nurturing before they're ready to have a conversation with a salesperson. As a general rule, a lead is created by marketing efforts.
A prospect, on the other hand, is a lead that has been further qualified and is considered a potential customer. Prospects have a higher level of interest or a plan to purchase. They may have indicated specific buying criteria or demonstrated a clear need for your product or service, or you asked questions about their business model and are able to show how your product or service will help support and elevate their business.
Ideally, we're prioritizing prospects for more direct engagement, and we're taking them through the sales cycle with our Seven Crucial Skills For Effective Selling. If you haven't read the miniseries on this show, go check out episodes 9 through 18. The goal is, ideally, to convert prospects into clients. Quick recap here. Lead is a person or a business that has shown initial interest but may require further reevaluation. It usually comes through marketing efforts, while a prospect is a lead that has been more thoroughly assessed and is closer to becoming a paying customer. One of those things that supports this customer conversion is pipeline management.
Pipeline management is one of the things that support customer conversion.
Getting into the key components of a sales pipeline within our CRM tool. The first is stages. The sales pipeline is divided into stages, each of which represents a specific phrase or step in the sales process. Common stages may include lead, prospecting, qualification, proposal or quote, negotiation, and close one or closed loss. The exact stages and names can change based on the organization's sales process, but it's following the client and that opportunity through your sales process.
Each potential sale ordeal is represented as an opportunity within the pipeline. An opportunity typically has details about the lead. Who is the direct point of contact? What's the company? What is the expected deal value? Are there other companies or individuals that have decision-making influence over that potential sale? What is the stage of the opportunity? Sales teams and sales individuals essentially then move opportunities from one stage to the next as they advance through the sales process.
This tracking provides a clear view of where each opportunity stands and what actions are required to move it forward. We hit on this a little bit at the beginning of this episode, but tracking conversion rates is going to give you many helpful details both in your CRM management and your sales forecasting efforts. If you didn't read Episode 39: Best Tips In Creating and Maintaining Sales Forecast, I encourage you to go read.
We talk about gathering data and where does data come from? Ideally, your CRM tool. By analyzing historical data, businesses can calculate the conversion rates from one stage to the next. For example, if they can determine how many leads convert into qualified opportunities and how many of those opportunities result in closed deals, then these different conversion rates at each step are valuable for sales prospecting.
If you have a ton of incoming leads but struggle to convert them to a prospect, maybe there's not a good product fit or maybe you need to revamp your messaging because that's not hitting with the leads that are coming into your space. If you get to the quote stage, if you close 25% of the projects that you quoted, this tells you a couple of pieces of important information. The first is that you need to fill your sales funnel with four times the amount of opportunities that you need to hit your number, which is a lot.
If your conversion number is 25%, maybe then you can look at whether there are things you can do to increase your close rate, “Maybe we're not articulating our value. Maybe our pricing model is not a right fit for the market.” Maybe a potential goal then would be for you to increase your conversion rate so you don't have to go out and knock on more doors but more efficiently close the doors that you're knocking on.
Another metric to keep tabs on is pipeline health. Sales managers and executives can assess the overall health of the pipeline by examining the distribution of opportunities across stages. What does that mean? If we have too many opportunities in a negotiation or quoting stage and we've neglected to fill our pipeline with new opportunities, then a few months from now, we may experience a gap in quotes because we haven't filled that funnel.
Making sure that we're balanced in all different areas and we're constantly filling the funnel, working deals through our sales pipeline, and then closing. That's going to be a helpful way to visually see all of this data, and then customization. Sales pipelines can almost always be customized to match your company's unique sales processes or, specifically, industry requirements. Maybe certain fields in the software can be named to match the lingo of your own organization or your industry. Reporting and analytics can be tailored and custom-created to adapt the data to your company's specific needs.
How To Embrace CRM Tools
That wraps up key components for CRM tools based on a sales pipeline. As a salesperson, what happens if you hate using a CRM tool or if you're managing a team and you need them to embrace this tool and input the data so that you can efficiently do your job as a leader? I'm going to share six tips that have helped me.
Tip 1) Define your overall goal. Having an understanding of, “How this is going to help me? Why am I doing this?” is going to make it less painful to do the work. Are you looking to boost sales, enhance customer service, hit a certain commission rate, or improve your marketing efforts? Knowing your objectives is going to guide your CRM strategy and efforts.
For sellers who work for an organization or on a team, figure out internally what motivates you to use this tool. Is it showing up as the best possible version of yourself for your customers if using the CRM tool is going to make you service your clients better? If you're competitive, I know a lot of us are, can you use the tool to fuel your efforts and track your progress? Is it to support your boss and help make their job easier by inputting accurate data?
Maybe on the flip side, if you want your boss to leave you alone, but if your CRM is up to date, then they usually leave you be as long as you're meeting your goals. It's going to be different for everyone. For my business, I need a CRM tool set up for future marketing initiatives that I want to launch in my business. I can't execute my vision the way it's formulated in my head without the support of a CRM tool.
That helps me spend time on it because I know I'm investing in my future. Also, as a person paying for it, it helps digest the bill each month because it's a vital part of the growth and scale of my business. Additionally, I have a speaking arm for my business. Tracking contact information and outreach to event planners along with conference dates and locations is going to ensure success in my speaking business. I can't reach out to a prospect in October for a conference that's in November. I probably need to be speaking to that event planner in May or June. Dates, times, and geographies are all pieces of information that are important to track. I have specific pipelines for that so I don't drop the ball in my outreach and it helps keep me organized.
Tip 2) Get help. If you work for a company and you have a support person, you can turn to to get more handholding or understand how to use the software, take the time and do it. Can you make custom reports specific to how you like to learn or receive data? Most of these software systems have a ton of specificity on how you can troubleshoot or reach out for support, whether that's YouTube videos, chat feature, chatbot, or an actual person. I watch YouTube videos all the time and God bless the people who are out there making YouTube videos for us.
Since this is not my zone of genius, this is an area where I outsource support in my business because setting up and learning on the backend functionality isn't my ultimate goal or where I want to spend my time, but using the data that comes out of it to manage the business effectively is the goal. I source outside support for that nitty gritty stuff.
Tip 3) We remember that data quality matters. If you put garbage data in, you're going to get garbage data out. Tip 4) Give feedback. Especially, if your organization is requiring you to use the tool, give feedback in a constructive way that ideally helps other people who may be struggling with the same thing. For example, maybe there's a manual field that's always slowing you down in your data entry. Is it required? Can it be eliminated as mandatory? Pass that feedback up.
Data quality matters. If you put garbage data in your CRM tool, you're going to get garbage data out.
Would you be more efficient if you had a certain report or if their information was presented in a certain way? Usually, our colleagues and our people building the dashboards that aren't in the field are not rushing from meeting to meeting in an outside sales role. They're doing their best, but if they don't get feedback on how it's working or not working, they can't continue to make it more efficient for you to use. Everyone wins if the CRM tool is successful, and those teammates want you to have ease using the tool. Remember that when you're providing feedback. Make it constructive and useful.
Tip 5) Create time in your schedule for CRM management. This one is huge. This is especially important if you are a team leader. Set realistic times for client-facing activities as opposed to administrative tasks for both you and your team. If you want your team to have accurate and thorough data, are you giving them enough time to do it? If you want this much detail in your CRM system, that may mean possibly decreasing your sales quota if they don't have the reasonable time needed to meet both goals. Ideally, if the database is helping us close more deals and stay on top of opportunities, that trade may be worth it because we may be closing more deals and filling that funnel with more efficient opportunities.
I struggle with this as a hard skill, but it's because, as I mentioned in my outside roles, I'd spend my morning doing admin tasks. I'd pack up the car and all of my paperwork for a day of meetings, and then I'd be driving all day in LA traffic between clients. When I get home, you have to follow up on everything you discussed during your day. Like a human, I also wanted to exercise and spend time with my family and friends, prepare a nice dinner, and not spend all of my evening hours entering CRM data.
How can we weave this time into our workdays more effectively? Can you build time after each meeting and block it off as your calendar to enter your CRM data right there in the car or the lobby before you drive to your next meeting? During the meeting, can you take notes on an iPad keyboard or find ways to take notes electronically? I'm a big fan of writing in my notebook. This transition has been difficult for me. I still do a hybrid of both, but I've been making a focused effort to keep my notes electronically. I do find that my organization has increased because I'm able to access the data that much faster.
The last tip, for both individuals and team leaders, can you gamify usage of the tool? For me as an individual, if I have a task I don't want to do, like entering my CRM details, I usually give myself rewards to look forward to. I know it's silly, but it helps me focus. If I want to get to a 6:00 PM yoga class, “Can I focus, remove distractions, put my phone in the other room, and get this done now?” If I want to take a bath, watch a TV show, or go get an ice cream, I'll look at the task in front of me.
In this example, it's our CRM data. I look at it as a quick errand I have to do on the way to my ice cream. I also use an application, a free app on my Mac. It's called Flow. It's a simple little timer. I'll work for 25 minutes without distraction, and then I get a five-minute break. It is super helpful to keep me focused. For a team leader or for a full sales team, maybe you can create friendly competitions or incentives for CRM usage.
I understand that this is part of the job and it's a requirement for our roles and people should do their jobs. If you can make it fun, recognize and reward those who are consistently using the tool effectively and ideally, how the team is performing as a whole, that's going to change the game on how people show up to use it.
Personally, I am not competitive with other salespeople in an aggressive sense. I'm not motivated by beating my peers. I know a lot of us are and zero judgment there. For me, and maybe this is something I need to work on, I'm motivated by the idea of not letting other people down, especially my customers and my teammates.
Ensuring that I met my forecast and that my CRM input supported the success of the team, that's something that worked for me. I did my piece because I didn't want to let my team down. Understand what motivates you and your team, how you connect with your boss on these efforts get alignment there, and build incentives and communication around that motivation. It's going to change your relationship and how you use the CRM tool as an asset as opposed to a hindrance.
That wraps up our CRM tool's hard skill. I hope this episode served to give you a better understanding of what it is and how to make the most of it. Remember, this is one of our secret weapons for building strong customer relationships and boosting our business's success. Thanks for tuning in. I'll catch you in the next episode.
