Should you use CRM for sales pipeline management?

Many organisations manage their sales pipeline using a CRM system; to help them win more orders. But should you go down this route?

How sales pipeline management adds value

You first need to consider whether real value will accrue to your business from doing it at all.

•   Pipeline management enables sales managers to use data about their opportunities to help them mentor their sales teams. They can win more sales more efficiently, by reviewing their opportunities; concentrating on winnable deals and avoiding spending time on those going nowhere.

•   It gives key people in your business a forward view of future sales. People working in areas like human resources, commercial, finance and operations can see what new business is about to come in. This avoids surprises and enables them to take more timely actions. This results in less last minute rushes to get projects off the ground and delays in closing deals.

•   Sales and marketing strategies can be improved by analysing your sales data to see more clearly where you are succeeding (for example which markets are expanding). This will enable you to allocate your resources more efficiently.

•   Visibility of your sales pipeline reduces the impact of single points of failure within your organisation. For example it enables business owners to loosen their day-to-day control over their business. It also avoids you missing out on business opportunities, due to key people not knowing about them.

These things might not apply to your own situation (for example if you are a distribution or retail businesses your sales cycle might not be long enough to warrant it). So if you don’t need these things, don’t do it!

Why you must be disciplined

Without discipline in entering and updating your sales opportunities in your CRM system, you are unlikely to achieve all the expected benefits from pipeline management. There is a real danger you may spend more time discussing the validity of your opportunities, rather than on working out how to win business from them! To avoid this you will need to be disciplined with data entry - your sales team will need to be up for it.

To make it work, managers should use their sales pipeline visibility as a tool to mentor their team to achieve targets. Sales people must not feel they are being spied upon through management or it being used as a stick to “beat them up”: as this is counter-productive.

Why use a CRM tool over a spreadsheet for pipeline management?

You may already manage your sales funnel but not using a CRM system (for example using a centrally held spreadsheet with sales people logging to enter their opportunities). A low cost option is often a good place to start; however functionality using other methods is limited:

•   It is very difficult to record all of the information you need to know about an opportunity in a spreadsheet (for example notes) without it becoming unwieldy.

•   It will only show the current position of each opportunity and no history. There will be a temptation to erase unsuccessful deals from the spreadsheet: instead of learning from them.

•   There is limited access to other customer information like the history of previous successful and unsuccessful opportunities.

•   The benefits to people outside the sales team from having access to the pipeline data will be limited.

Conclusion

If installed and used properly pipeline management using a CRM system can add real value to your business. However a pipeline management process is not needed for all types of business. You need to determine if having it in CRM is really going to add value; then have the discipline of using it properly to achieve success.