Convincing The CFO To Fund CRM

By Geoffrey James

CFOs no longer assume that technology automatically enhances productivity. Most CFOs now believe that a solid case for return on investment (ROI) must be made before every new CRM investment. To satisfy that requirement, sales managers should work with their CRM vendor to build a compelling case for ROI based on measurable factors that allow the CFO to assess the potential impact of the new technology.

The metric that’s most likely to appeal to CFOs is a comparison of sales revenue before and after the installation of the CRM capability. For example, a strong ROI case could be made if a company with an average deal size of $200,000 expects to have an average deal size of $300,000 after the CRM system is installed. Another attractive metric is before and after cost comparisons. For example, part of a ROI case might be built around the cost savings that result from the creation of an accurate, automated pipeline and forecast report. Before CRM, for example, building such a report might take 10 people a week to complete, but with CRM that same report might be built by 2 people in a single day.

CFOs are more likely to approve CRM-related technology purchases if the expected ROI can be achieved in a single year or, better yet, within a single quarter. The ongoing measurement of ROI metrics is essential because the same top managers who approved the CRM system likely still will be in place when it comes time to assess whether the system has delivered as promised.

Sales groups that make a strong ROI case are likely to find CFOs willing to purchase CRM technology even in tough economic times. Though it takes time and effort, building a strong case for ROI has another important benefit: It makes certain that everyone, from top management to the sales staff, understands the purpose and importance of the CRM system.

The above is based on a conversation with Tom Koulopoulos, president of The Delphi Group, a consulting and analyst firm located in Boston, MA. He can be reached at 617-247-1511 or