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ROI from CRM

Are Your Hunters, Hunting or Farming?

Brian Gardner No Comments

How can focused account profiling promote business growth?

Last week during a CRM roundtable webinar I hosted with MCAA, we discussed ways to use CRM data to make better business decisions. One of the hot topics was Account Profiling and how using a 4-dimensional approach can help grow your business volume with focus on where your sales team should spend their time. You may say, “We have a profiling system and we grade our accounts.” In my experience, the information is usually only 1-dimensional; basing it off current or the past years business volume and not growing volume. This is where the 4-dimensional approach becomes invaluable.

There are other variables you could use to determine Target Accounts, but I am a believer in keeping it simple so here are four areas you can consider in determining if an account should be a hunter account or farmer account. Profile the account and answer these questions.

  1. What is the Current $ Volume?
  2. What is the Potential $ Volume?
  3. What are the Current Product/Services the account buys?
  4. What are the Potential Product/Services the account might buy?

Let’s first start with the current and potential volume:

Current $ Volume:

Consider a grading scale of A, B, C, D for each account. Example: A = >$250,000 year, B = $150,000 to $249,000 year, etc.

Potential $ Volume:

Use a similar grading scale as Current $ Volume. As an example, ABC Chemical is currently buying $50,000 a year from us, but potentially could be buying $250,000 a year. That would put ABC Chemical into the CA matrix category. C for Current $ Volume and A for their Potential $ Volume.
Complete the exercise and you should have all the accounts profiled and organized by category groups.

Category Examples:

  • DA = Currently a D, but Potentially an A (High-Growth Target Account)
  • BB = Currently a B, but Potentially a B (Maintain Account)
  • CA = Currently a C, but Potentially an A (High-Growth Target Account with Leverage)
  • AA = Currently an A, but Potentially an A (Key Account)

(See the sample worksheet below)
(download the worksheet here)

This will give you laser focus based on if the account is an account positioned for a hunter (growth) or should it be handled by a farmer (maintain). So what are the first accounts you should focus on for growth? The CA accounts. These are currently doing some business with you and have the potential to be an A account. The CRM system can be set up to help you make sure you are staying focused on these growth accounts. So, if you have CA accounts with no new activity or touches within the last 30 days, this is a red flag and the sales team should be refocused.

Where does the 3rd and 4th dimension come into play? Start with your CA accounts and now dive a little deeper and list the current products/services you are selling them and then list the potential products/services. To start with take 1 potential product and create a “proactive” opportunity in your CRM to help you manage the process for winning this business.
While discussing this, the comment was made by a participant: “Another dimension to consider would be clones of existing customers. Shouldn’t we use those as prospects?” Absolutely, as they say, ‘Birds of a feather flock together’! One should also consider tracking accounts by industry and application. Taking past sales or service successes and carrying them into similar applications is a great way to promote growth in other accounts, and this matrix can be set up in the CRM.
Using this approach can create a structured process to make sure your team has the right people pursuing and maintaining the right accounts. Outside Sales can focus on growth accounts and allow Inside Sales to focus on maintain accounts by using the 4DAP (4 dimensional account profiling) system and taking ‘subjective’ out of the equation. In a nutshell, you want to make sure you don’t have hunters doing the farming!

Visibility – The WHY That Helps Drive Your ROI

Brian Gardner No Comments

I’ve found through my talks at different meetings typically 70-80% of those in attendance are using some type of CRM within their company. And that only 10% feel they are getting ROI out of their CRM. One of the factors that lead to success is setting the stage for WHY from the beginning…including getting management buy in.
Visibility is a key component in showing “why” you’ve chosen a CRM. Think about this…we all have visibility of the back end of our sales, via the ERP we are using to quote and process our orders. BUT, do we have visibility on the Front-End? This is where the CRM tool comes in to play and it is huge in helping to manage visibility of our leads and opportunities.

One of the tools within a CRM is your dashboards and these offer outstanding visibility and help support “why” with your sales team! In my experience CRM success and visibility comes from creating a dashboard that is your leading indicator and promoting this to your sales team as such. How are you managing your business? How do you know if you are reaching your sales goals? Most companies will answer, the back-end bookings and order history data. That’s good…keep doing it, but within CRM we can create what I call Load Input Goals. That’s where we’ll set up a formula to determine what kind of input do you need to reach your sales goals. There is a formula that I use and we can imbed that into the CRM and set up a dashboard to view that.

I am a huge believer on trending input…how old is the data in our pipeline? In the dashboard example above their total pipeline $ which is great to track, but that does not tell the entire story. The opportunity input trend show how the team is performing against Load Input Goal. If you are trending below the red line (Load Input goal) this is your leading indicator for future bookings. Let the sales team manage this! In doing this, you are giving them the tool to keep their eye on the ball. I believe it’s not just about “pipeline”, it’s managing the trend for the load input goal, I think a great dash board to manage from.

New Load Input vs. Pipeline:

Pipeline is NOT the same as New Load Input!

Pipeline = Total Open Opportunities

New Load Input = NEW Opportunity identified

Need to put focus on New Load Input #’s.

Sales Goals = Base Business + (NLI x Hit Rate)

*Hit rate is the moving target. I have asked a lot in the industrial market “what do you think the it is?” and I typically get an average of 25-35% as Hit Rate. So, if you really are not sure, start with that…it’s not an exact science.

You should be getting buy in from your salesforce if you work with them to come up with the Hit Rate. By doing this, you are giving them a tool to own and grade themselves. Get the sales team involved early in this! Allow them to have visibility of their business and drive it. During an association webinar a member offered this insight, “If the CRM dashboard and measurements aren’t treated in the same respect as your operational dashboard and KPI’s on a daily, weekly, and monthly basis you will not get out of it what you could”.  I could not agree more! Visibility is a key component to success.

Be sure to visit our resources page for more information on “Load Inputs” and other valuable downloads. Sign up for our e-newsletter to receive blogs from the new series right in your inbox, and be sure to follow us on social media.

CRM is a Revenue Generator – Not a Cost

Brian Gardner No Comments

Many companies, including industrial manufacturers, distributors and representatives tend to view any kind of technology investment as a cost. Part of that stems from the need to budget the investment, which is typically done under the eye of the CFO.

Man with box cleaning out desk

How to Predict (and Prepare for) Sales Team Turnover

Brian Gardner No Comments

The July-August 2017 issue of Harvard Business Review reported on a new study aimed at predicting which salespeople are most likely to quit.

Skeptical senior businessman standing in boardroom

How to Get Executive Buy-in for Your CRM Initiative

Brian Gardner No Comments

Last month, I conducted a webinar on ROI from CRM in partnership with Modern Distribution Management (available on-demand here). Among the questions I received: “What tips do you have for bringing the executive team on board after purchase?”

What Millennials Want: The Latest Tech – Including CRM

Brian Gardner No Comments

We’ve all heard plenty of statistics about how the millennial generation is impacting distributors from the buyer side; the trends of millennials being more likely to buy products online and of millennials having growing influence in B2B buying have attracted plenty of attention.

Feb. 7 Webcast Preview: 3 Critical Focus Areas for Long-Term CRM Success

Brian Gardner No Comments

Managing CRM according to the status quo will only yield status-quo results. I’ll be presenting three focus areas you can focus on for long-term success with CRM in my upcoming Feb. 7 webcast with MDM.com. It’s free: Register today.

The True Power of CRM (Hint: It’s Not About the Tech!)

Brian Gardner No Comments

The most common CRM-related problems I’ve found for companies over the years revolve around sales processes. For example, most industrial sales organizations are giving nonqualified leads to the sales team with no follow-up process, resulting in wasted effort.

The CRM Audit: A Systematic Approach to Getting ROI from CRM

Brian Gardner No Comments

It’s easy to get overwhelmed by CRM.

But rather than let technology get in the way of better process, I’ve learned that the most effective way for industrial sales organizations to get the most from CRM is to approach it systematically— with sales process top of mind.

3 Ways Culture Can Make – or Break – a CRM Implementation

Brian Gardner No Comments

The No. 1 reason I see that companies aren’t getting ROI from CRM is culture. This isn’t surprising: Many have 10, 20 or 30 years of culture under their belts, and bringing CRM in is a big change. They’ve been successful without CRM, so why should they change?

It will take time, but you can clear the culture barrier.

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