The Complicated Relationship Between SMBs and CRMs

By Chris Smith, writer
Nov 02, 2018
Image Credit: NicoElNino/Shutterstock

CRM "innovations" often complicate the sales conversion process.

There are constantly new customer relationship management (CRM) innovations being implemented, yet these "innovations" only complicate the process of converting leads into actual sales. Learn how SMB owners can improve both financial growth and personal connections with leads all at the same time.

Small businesses employ fewer than 500 people and make up 99.7 percent of the businesses in the United States. Of those small businesses, about 50 percent fail in the first four years because its owners are faced with many challenges that make it difficult to continue operations.

One of the most fundamental of these hurdles is insufficient cash flow. These small businesses often turn to customer relationship management (CRM) software to earn and sustain a higher return on investment. Rather than being the "relationship builder" that it was originally built to be, CRM is now a bloated catch-all playing servant to too many masters. The four reasons outlined below will unlock the truth behind your current CRM software, and explain how it's hindering small businesses nationwide from achieving financial growth.

Reason 1: CRM "innovations" complicate the sales process

When the first CRM system was developed by ACT! in 1986, its purpose was simple: to assist salespeople in managing multiple relationships at once, while also building a database of information on potential leads. Despite the many innovations companies claim they have made to CRM software, none of them have actually improved sales or reduced the stress of the people using them. Even with all the new features companies have included in CRM software, the average conversion rate on a lead in business-to-business (B2B) and business-to-consumer (B2C) industries is 1 percent or less. So why, with all of the innovation around CRM, is the conversion rate still so low?

It’s because even with the new flashy features built into platforms, they all still have the same basic features of slow operating systems – complicated tools and text-based content – making the system confusing and overloaded with unnecessary information. These new tools have been added not for salespeople, but their managers. Because reporting on the sales process has taken precedent over actually improving it, CRM software does not offer the simplicity salespeople need.

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Reason 2: Overcrowded databases

In addition to dealing with the convoluted features in a CRM software, salespeople are also forced to deal with overcrowded databases. Businesses strive to drive sales, so they hire people such as sales development representatives (SDRs) to make sure the right leads end up in a database. However, the problem with hiring SDRs lies in how many contacts they deem worthy of being in the database.

Salespeople are continually adding new leads to CRM systems, which can be difficult for anyone in sales to deal with. Eventually all of those prospect leads morph into scores of data fields, reams of tabs, tags, lists and a blinding assortment of blinking, multicolored sections that demand to be fed new information. Human brains do not have the capacity to personally connect with tens of thousands of leads at a time. According to evolutionary anthropologist Robin Dunbar, the human brain only has the capacity to develop meaningful relationships with 150 people. That being said, human connection and interpersonal communication make a major impact in all facets of life, including sales. With the technologies available today, making those connections is nearly impossible.

A larger database looks great for the marketers charged with generating more leads, but it can be detrimental to the people who are actually using it: the sales department.

Reason 3: Inability to qualify good leads  

In sales, knowing the right people to reach out to and the right time is crucial. With the tools salespeople are using today, knowing who to reach out to is nearly impossible. Research shows that 80 percent of sales require five follow-ups after the initial contact, but 44 percent of salespeople give up after the first attempt.

Salespeople are taught to grow their business by continuously adding new leads; however, they should focus on closing sales with older leads, because those individuals are more likely to follow through with the purchase. The number of leads that roll over to the next year and go untouched are at an all-time high. Salespeople are not able to reach them because they are focusing on new contacts who they believe will lead to more closed deals. CRM software has made salespeople impersonal and stressed as a result of its complicated and ever-changing nature.

Reason 4: Software cannot manage a meaningful relationship

CRM tools encourage users to manage relationships through software – and that's not how meaningful relationships are built. In order to boost sales, business owners need to start seeking out tools that take the "R" out of CRM and simply focus on conversion management. Small businesses should not invest time and financial resources into managing a tool that's meant to manage relationships with potential leads; that is something that should be done in an "offline" human connection. Businesses need tools that will help move existing relationships into closed deals.

What does it take to build a personal connection in a professional setting? Salespeople must start stepping out of their comfort zone and begin asking questions outside of their usual script. It's important to actually listen to sales leads and ask follow-up questions, to not just talk at them but with them. To break down barriers and increase the likelihood of closing a sale, businesses must be willing to treat leads as people and not just as another name in a multilayered database.

Instead of stunting financial growth and personal connections with leads, small business owners should find ways to improve both. It's time to evaluate what is and is not working for the existing business model, starting with taking a hard look at CRM systems. Businesses do not accidentally grow – that's how they fail. Take control of your company's success to prevent it from becoming one of the many businesses that fail in the first four years.

Chris Smith is the co-founder of Curaytor, a social media, digital marketing, and sales coaching company that helps businesses thrive nationwide. As a USA Today bestselling author, Chris has been able to utilize the marketing strategies from his book, The Conversion Code, to grow his company from the ground up. After speaking hundreds of times at conferences and also on his popular podcast Calls with Chris, Chris has made a name for himself and his multimillion-dollar company, in both real estate and sales. Prior to Curaytor, Chris worked with billionaires that lead him to writing #Peoplework with co-author Austin Allison (CEO of dotloop) that raised $73,000 on Kickstarter. Chris’s success as a businessman and unique perspective of the digital world has landed him features in Forbes, Inc., AdWeek and Entrepreneur, just to name a few.
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