WHY have a CRM System - What's the point?

“Most owner managers can tell you WHAT a CRM system is.  Quite a few will tell you HOW it’s supposed to work, but very few can tell you WHY you should have a CRM system.”

Jerry Sandys is the founder of Evorio and is a visiting fellow at the Cranfield School of Management as part of the Business Growth Programme. Here Jerry explains the fundamental reason why a CRM is so important.

To gain competitive advantage, every owner manager needs to know exactly what’s going on at any given time.  Which member of their team is speaking to which contact about what?  The owner manager’s  objectives will be for the business to successfully complete tasks correctly and collect the GM from each activity as quickly as they can, time and time again.  If the GM is 40% they want to collect as many 40%s as possible in the year, this is what I call VELOCITY.

So RETURN on their investment or shareholder funds is GROSS MARGIN multiplied by VELOCITY.

In order to maximise their GROSS MARGIN, the owner manager will be seeking to improve each of the following areas:

  • Growth – what do I need to invest in?  People, products, markets.
  • Margin – you must be laser like with your margins.  If they change you must know why.
  • Velocity – project milestones, project starts, completions, service response times.  How fast you are at completing things and starting the next.
  • Customers – who am I retaining, what is my order cycle time, what is my pipeline, how many new ideal ones do I need?
  • Cash – contract terms, debtor management, outsourcing, cost control, purchasing.

To maximise VELOCITY you need a CRM system.

A properly installed CRM system sits on the process of who is talking to who about what.  It enables the owner manager to ensure their team, sales, marketing and delivery are spending the company’s resources on maximising the customer VELOCITY of the business.

This is WHY every owner manager should have a CRM system.  Without managing MARGIN and VELOCITY, they simply cannot maximise growth.