Five Rules for Funding Your CRM Upgrade

In a difficult economy, the financial "powers that be" inside most corporations are understandably wary of spending money on technology projects. But what if your CRM system badly needs an upgrade? Here are the five rules to follow, when pitching the investment:

Rule #1: Focus on real metrics. Top management is going to want to know that the money will be well spent. What better way to prove this than by providing a measurement scheme that’s tied directly to revenue and profit? Rather than talking about the new functionality that you need, explain how the new features will improve real-world metrics, like the percentage of leads that convert to customers, or the average profit per customer. When CRM is seen as a way to manage tangible bottom-line metrics and customer loyalty expectations, it becomes relatively easy to justify some extra expense.

Rule #2: Provide a realistic self-assessment. Before you ask for more money, be sure to assess your organization’s current level of CRM sophistication in relation to current usage patterns. Then analyze how the existing systems support those patterns and how the upgrade will improve those operations. Show top management how, as business processes become more finely tuned through the use of CRM, it becomes easier to set up and measure the various points where the organization makes contact with its customers.

Rule #3: Build a business case. Your top managers are, above all, business people, so they’ll want a business case to justify either a new CRM implementation or an extension to an existing one. A comprehensive CRM business case consists of the following six components:

1. increased productivity and resulting revenue impact,
2. lowered sales admin costs,
3. improved employee morale,
4. comprehensive customer knowledge,
5. higher customer satisfaction, and
6. enhanced customer loyalty.

Ideally, each of these components should be carefully defined for your situation, and a metric attached to each component.

Rule #4: Promise improved forecasting. Let’s face it: forecasting is the big headache for most sales organizations, and the companies who must work with them. Deploying or extending the right CRM system can help you close deals faster, with less wasted time and effort, all of which greatly reduces the risk of missing the forecast. Furthermore, because CRM helps you understand what’s going on, you can adjust your sales strategy before you’ve missed your number. Better forecasting means no surprises, which means a happier investor, which means happier top managers.

Rule #5: Take a big picture approach. A truly useful CRM solution will typically touch sales, finance, supply chain, marketing, and customer service. Therefore, you should identify how your solution will impact the entire organization, rather than just your own team. If you can get other groups to see the value of the upgrade, you may be able to get some funding from them. Fail to do this, and you may isolate the sales organization by leaving them on a "sales only" system, while the rest of the corporation gravitates to other technology.

The above is based upon a conversation with Barton Goldenberg, arguably the world’s leading CRM guru. He can be reached through www.ismguide.com.