Accurate CRM Measures to Automate Business Growth
World famous management consultant Peter Drucker is often quoted as saying, “You can’t improve what you can’t measure.” Yet many businesses depend on forecasts and sales systems that are far from accurate. When sales data is unpredictable, business revenue is inconsistent. Inconsistent revenue is a threat to the existence of a business.
Constant Shift of the Sales Environment
Sales forecast reports are a large part of sales managing. They are used for many things such as monitoring an individual sales person’s performance and coaching for improvement. It also opens ways to enable competition between sales people. Many companies can miss may not realize how beneficial these numbers are on the executive level of business.
Cash Flow Projections and Business Growth
When a business is growing, keeping cash available for expansion is the number one concern for the entrepreneur and CFO. The more you grow – the more cash you need. To adequately plan for growth, the business needs to make projections about the cash position of the company 30-90 days in advance.
The more accurate your sales forecast, the quicker your business can grow. A projection that is too low may leave you under resourced and keep you from capitalizing on opportunities. A forecast that is too high could cause you to allocate too much resource and leave you with too much staff or inventory. Profits will be down either way.
What Should be Measured?
Typically, profit improvement comes from three areas of a business. You can cut costs, increase prices or manage productivity. CFOs call the third way the “magic bullet”. If you can get more done with the same resource, profits and cash flow improve.
One good way to improve productivity is to measure the steps in the sales process. You can start with online CRM, you can break down each step. Here is a simplified example:
- Number of cold calls made or emails sent
- Number of appointments or proposals
- Number of closings
With these three key numbers, you can begin tracking your sales process. If you know that 100 cold calls lead to 10 appointments and 5 of them close, this is great data to use in your sales forecasting.
Take data gathering to the next level and measure the six or ten steps of your sales process and the predictability of your forecasts become very useful. It becomes easy to detect the weak points of the sales process and put corrections into place that can greatly increase profits.
Sales forecasting can give business owners eye-openers for business growth. It is really powerful information that can easily increase revenue by 10% or more with just a few adjustments. As part of our Business Growth Series, we have dedicated an entire segment to discussing ways to use your sales forecast information at the executive level of your business. You may even learn a few things about getting more money from the bank…check it out.