A prospect recently sent us an article stating you DON’T need a CRM early on. Where we disagree with these folks… actually, let’s rephrase. We wholeheartedly disagree. Let’s start by saying no successful startup likely said “Our initial success was due to cost savings by managing our data in Excel”.
As a Salesforce Consulting Partner, when we came across the article by HotProspect, we were intrigued to know more about their reasoning. Let’s breakdown their main argument.
The main issue with adopting a CRM before you’ve fleshed out your initial sales process through trial and error is that it causes you to guess about a lot of things that won’t become clear until you’ve gotten a handle on the basics of your sales model
This argument would hold some ground, if company maturity would be a guarantee of CRM proficiency. However, that is not always the case. Actually it would be much to the contrary: companies that adopt a CRM at a much later stage are not only equally susceptible to a poor implementation, but they have to deal with additional expenses for standardizing all of the data that existed thus far.
HotProspect might not have ever dealt with this (often too frequent) scenario, which is why they recommend companies that:
Spreadsheets are the ultimate early stage CRM system
This is so factually inaccurate that it’s difficult to even begin with this one, but let’s focus with a simple scenario (easily to relate) to show how much more expensive it can be to adopt a CRM system later on: If John maintained his spreadsheet differently than Ryan, while Dave has three different versions of the same spreadsheet on his computer, it can take dozens of hours (hence thousands of dollars) to standardize all of that once a CRM is implemented.
And spending more money unnecessarily is bad, right?
And it gets worse. Not only you’re spending more money, but you’re making less money as well: according to Gartner, in 2011 alone, an estimated 600 billion dollars were lost in revenue due to bad data. That’s “billions” by the way.
The Proper Solution
Adopt a CRM. Plain and simple.
And KEEP it simple: Trying to implement too much at the beginning stage of a company is not an implementation best practice. Keeping it simple helps ensure User Adoption (and keeps implementation costs low). As a startup, don’t fall victim to paralysis by analysis. Many times you will have to make decisions based on information that’s presently available.
One thing is certain: the more time you spend poorly collecting and managing data, the more difficult and costly it will become in the future when you do make the jump to a CRM.
The Better Solution
Adopting a CRM is a must at the earliest stage of your business, even if you work for yourself. But it doesn’t have to be the expensive route. Many CRM providers today offer a scalable platform: you can start with the least expensive versions that’ll fit reasonably even within startups with the tightest of budgets.
Most importantly, make sure that you select a platform that is scalable: reasonably priced to begin with, and that can be upgraded to more powerful versions in the future. Here’s a common example why: We commonly experience customers switching from ACT! to Salesforce.com. ACT! has its own database, and its data cannot easily be exported in Excel to migrate over to Salesforce.
Going with options that leave you with no room to grow later will likely incur you costs when it comes time to upgrade.
The BEST Solution
Beyond the proper solution, there’s an additional step to consider: With any CRM, there are a vast number of ways as to how it should be set up within your organization. Although no one has the budget to build
Engage a consultant to pave the way for your CRM strategy. This isn’t your $10,000+ implementation. You simply need a blueprinting session to have them understand your initial processes, your long-term goals, and recommend a strategy to follow. These sessions usually take between 3-6hrs between meetings and documentation, and the investment can save you thousands in data cleanup in the future.
Additionally, several companies offer a Quick-Start package, which allows you to get a simple implementation to ensure that best practices are followed while quickly getting you and your team up and running (and trained!)
Conclusion
If cost is an extreme factor, then make sure you can remain within your budget, although based on our solutions described above, our recommendations revolve around this: a small investment into a proper system and implementation now can save a huge investment into correcting data and re-implementation later on.
Also, keep in mind that this investment will not be immediate: In a recent study conducted by IBM, they indicate that traditional CRM solutions can have an ROI as long as 3-5 years. However, the longer it takes you to make the investment, the longer that ROI will become.
More importantly, regardless of industry, CRM adoption is growing at an alarming rate. Where five years ago it was a luxury to have a CRM, today it’s almost a necessity.
In 2013, in a survey conducted by B2B specialists BuyerZone.com, it’s been indicated that 50% of companies with less than 10 employees were already using some sort of CRM.
If your organization (no matter how small) has yet to adopt one, you are likely behind the curve. Still think you shouldn’t adopt CRM?
Sources
Standard practice would usually recommend that the source article would be hyperlinked, but I wouldn’t bother. It’d be borderline irresponsible to backlink this article and allow Google to potentially rank it higher on organic Search Engine Optimization queries. The article is called “Sales for Startups: Don’t Waste your Time on CRM… Yet!”.
Instead, we will publish the links to the sources for our statistics used in this article (from reputable organizations):
https://www-935.ibm.com/services/uk/gbs/pdf/SMW03042WWEN.PDF
https://www.gartner.com/doc/1755519/cfo-advisory-data-quality-overview
http://www.buyerzone.com/leads/resources/b2b-lead-generation-2013/