CRM’s role in aligning sales activity with opportunity…

January 26, 2014 Richard Boardman

As I mentioned in my last post, I’m in the process of fleshing out some of items on the ‘99 ways to get more from you CRM software post’, where brevity was a necessary constraint at the time.

Item fifteen was about share of purse, and there was a bit of a back story which I didn’t get to tell. At that time we’d recently helped a client, who sold largely through a network of resellers, undertake some analysis about where their salespeople spent their time and how well that aligned with the areas of greatest opportunity.

We used the CRM system to track how frequently their resellers were being visited, and looked at each reseller in terms of both level of current spend, but also, importantly, their estimated spend on similar products supplied by competitors.

As a result, for example, you could see that reseller X sold £50,000 of our client’s product, but £500,000 of a competitor’s offering, giving a share of purse of 10%, and reseller Y who sold £50,000 and no products from competitors giving a share of 100%.

In principal you might have expected sales activity to align well with both current sales, and potential sales. In other words the sales team would spend more time with resellers where current spend was high, but also with those that had the potential to grow because they were selling high volumes of products from a competitor.

The reality was a little different. There was some correlation between sales activity and higher spending resellers, but even this was a little erratic, with some very successful resellers receiving virtually no attention at all (and some very unsuccessful ones soaking up a lot of time).

More troubling was that the relative potential of a reseller seemed to have very little impact on the level of sales activity. In other words salespeople were spending as much time with accounts that had very little scope for growth, as they did with ones that had very high potential.

In order to help address the mismatch, the CRM system was rejigged so that current spend, potential spend, and current share of purse data was tracked in the system, and updated each month. Reports were set up to allow salespeople and their managers to easily see how well their activities were lining up with the areas with greatest potential for growth.

The heightened awareness of potential, backed by changes in the CRM system, helped the client balance out activity and grow sales, much of it as a result of increasing its share of purse, significantly cutting into the sales of competing suppliers.

The concept of tracking activity against potential to see how well it aligns, then trying to improve it over time is interesting, and has lot of potential applications not just in traditional commercial settings, but also in the non-profit world, for example tracking the alignment of stakeholder management activity in terms of which contacts were considered to be most influential.

The results of this sort of analysis can be quite eye-opening, and mismatches seem to be surprisingly common. The good news is that they can be relatively easy to fix, and, as in the example above, CRM technology can have a key role to play.