Sales Technology Stack Part 2: The CRM

By Vishal Sunak

Welcome to part 2 of a multipart series on the Sales Technology stack! This section is focused on Customer Relationship Management (CRM). As discussed in Part 1, prospecting tools play a major role in allowing a sales rep to self generated leads to fill their pipeline. And activity tracking provides situation awareness to know how a prospect is engaging with your emails and consuming your content. Let’s do a quick review of the Sales Technology Stack and what this blog post will focus on:

Customer Relationship Management

I’m going to assume that you’ve heard of CRM technology, so I will spare you the introduction and dive into the good stuff. One thing I will say about CRM technology generally is that its here to stay and it's growing, massively. Its coupled directly with the growth and adoption of cloud-based, software as a service (SaaS) applications.

The CRM market is massive. There are major players that are doing billions of dollars of revenue to serve the needs of large enterprises companies and numerous smaller players that provide simpler or niche offerings. So why are CRMs so popular? The answer is simple: data provides knowledge… with knowledge you can get insight… and with insight, you can make more money. Simple as that.

A few other factors contributing to the CRM boom:

  • Integrations with other SaaS applications (financial systems, marketing automation, etc)
  • Marketplaces for 3rd party vendors to develop their own technology on top of the CRM platform
  • Rise of mobile applications providing instant access to cloud applications

The factors listed above can allow for CRM to serve many different constituents such as Finance, Customer Success, Support but I believe that the main “customer” of a CRM is a sales team.

So how does it work? You simply buy a CRM and stare deeply into a crystal ball to see your future revenue increase 10 fold? Well not exactly. Let’s dive deeper into the main areas.

Activity Logging

As I mentioned, data is the key so in order to have data make you smarter capturing consistently it is extremely important. Generally activity logging takes shape in the following forms:

  • Calls
  • Emails
  • Product Demos
  • Meetings

Once your sales team is logging these activities, trends can be established in relation to deals that are being closed. For example, how many demos it takes to close a deal (this is called “turn rate” in the industry). That’s a potentially valuable metric to help make your sales engine repeatable and predictable.

Leads

We talked about the importance of leads as it relates to prospecting tools in Part 1 of the Sales Technology Stack. As a quick refresher, the goal of marketing in general is to provide sales with leads. A lead, just like in a scenario with a detective, is an unqualified opportunity. If you were investigating a crime (say a famous art heist) and you got a tip about a potential suspect, you wouldn’t say the crime is solved. You’d still have to go and check it out for yourself. Leads in a business setting are the same. Sales receives leads from marketing and also self-creates leads with prospecting in order to identify potential customers and deals. From there the first creation of a potential customer that is left for the sales rep to qualify by using a qualification framework. Most CRMs are going to have a lead object (or something similar with a different name) that is the basic unit of a unqualified opportunity.

Opportunity

Every CRM has some way converting a lead into the next phase (the deal) and having a way of tracking the stages of the deal. The deal phase is usually called an 'opportunity'. Tracking the status or stage of each opportunity allows a sales leader to have insight into revenue that could potentially close, and applying a probability of closure to each opportunity. This is called 'pipeline forecasting' and is critical to understanding the potential revenue that could be generated each month.

Accounts and Contacts

Because the CRM is the central repository for all sales related data, Accounts are used to define a single customer and putting all the information related to that customer in a single object. So usually opportunities are associated with an account, this way you can track all the open/closed deals. Also, if the sales process involves multiple people, accounts also have a related object called 'contacts'. This allows a sales rep to create an individual record for each person. This is critical to running a business - having one set of truth data about a customer and knowing who to contact.

Documents and Contracts

Using a CRM with opportunities, accounts and contacts is a great practice and will help you enable a successful sales process. Along with the tracking of opportunities, CRM can also store information related to a contract agreement or a quote that is being used in a negotiation.. Its important to know what documents have been sent, the versions, and also what terms were agreed to (because in many cases it varies from deal to deal) and attach this at the account level. Using a tool like LinkSquares can create, negotiate, send and sign sales documents all in a single platform so you know exactly what was sent and agreed to.

Analytics

The value of CRM is being able to capture the data and then create reports, tables, charts to visualize the success of your sales process. Many CRMs come with a reporting capability, but there’s also a boom of 3rd party vendors that specialize in business intelligence and analytics. Reporting enables a sales leader to be able to see the pipeline of deals ready to close, productivity of sales reps and report on key business metrics like revenue. One example of a visualization that a CRM can provide is a funnel graph. Because opportunities follow a linear path, it's great to look at the pipeline of deals grouped into three main categories based on the probability to close.

Conclusion

CRM can be a great tool for a sales team. The more data that is captured along the sales process, the easier it is for a sales leader to be able to predict, forecast and report on key metrics like revenue. But it doesn’t end there, other functions like Finance, Customer Success and Support can also utilize the data known about a customer to help with their roles within a company. The end goal for using a CRM is to be able to have one set of truth data that is easily accessible and consistent.

If you haven’t already, check out Part 1 of this series on the Sales Technology stack and be sure to sign up to get updates on the development of the LinkSquares contract negotiation tool.

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