CRM for Professional Services
CRM for Professional Services
This is another of a series of posts we'll do exploring how to best setup a CRM system to fit a specific organization's needs. A few specific business challenges to keep in mind when looking at setting up CRM for professional services organizations, and a few suggested approaches when modeling the system are outlined below.
Key Challenges
Capturing the right early and late stage sales metrics that are most indicative of how the sales team is performing - Most of the services organizations we work with have quite a few metrics they live by around their operations. They tend to track staff utilization, average bill rates, and revenue in the pipeline. However, the most successful organizations also have a couple of key additional metrics that they keep a close eye on to evaluate the true health of their pipeline. This depends a little bit from organization to organization, but there are a couple of common elements.
First, a great early stage sales metric is one that is indicative of both effort from the sales team as well as basic effectiveness. One good example is the number of first face to face meetings within a targeted prospect. It serves as a great early stage metric because it's easy to measure, it's aligned around targeted accounts, and it shows both effort and effectiveness because it relies upon not only making calls, but also getting the prospect to accept the meeting.
Second, a great late stage sales metric for a services company almost always is indicative of the sales rep having gotten the prospect far enough into the process that they are engaging directly with the delivery team in some way. For a recruiting firm, this could be a client interview. For a design firm, this might be an office visit and presentation with the creative director and team. This type of late stage metric tends to be much more indicative of success than is tracking the quantity of proposals. That is because it demonstrates the prospect's commitment, and it measures whether the sales rep is creating an environment where prospect is really getting comfortable with what they are buying.
Designing the system to accurately forecast service revenue based on both when the deals will close and when the revenue will occur - All the major CRM systems do a pretty good job with providing sales pipeline reports, but for services organizations there's a need to go beyond the out of the box reports in order to get good clear visibility into how the revenue will actually spread over time. It's this type of detailed month by month forecast that really allows an organization to make choices about staffing and hiring, and it needs to be a key consideration when working on the design of the CRM application.
Making the decision about whether CRM will be used to manage resources and projects - Many services firms have a wide array of tools to support their business. An ERP system or Quickbooks for financials, a hosted or homegrown timecard tool, perhaps a database or Excel tracker for managing consultant staffing, and they complement this array with a CRM tool for sales. In my experience, organizations implementing CRM should make a fundamental choice about how deeply they want to use CRM to manage the operations side of their business. Regardless, it can be a great sales tool, but CRM also has the capacity to be their primary system for managing staffing, tracking project time, and managing recruiting. The benefits of doing this are significant as this increased focus on CRM drives improved adoption, data quality, and creates one place to go for quality metrics. The downside of this approach is that the implementation will be more complicated and will require a larger investment in the platform.
Key Suggestions
Keeping these key challenges in mind, here are the top 4 things I've seen Services firms do with their CRM systems in order to deliver a tool aligned with the business that will enjoy a high degree of adoption.
Model opportunity sales stages to be aligned with your key metrics - Once you define the most critical early and late stage sales metrics for your organization, it is critical to build the right naming conventions for those metrics into the Opportunity form, and it is equally critical to effectively train the sales staff on what those stages mean.
Leverage custom objects for forecasting revenue over time - The major CRM packages allow you a great deal of flexibility in modeling your business. One key component that services firms need to focus in on is how to best setup products and custom objects in order to capture not just the total value of the deal, but how the revenue will be spread over time and how resources will be engaged. It's this type of planning around resources and timing that will allow the CRM data to serve as a cornerstone for forecasting and resource planning.
Managing operations within CRM - Above we mentioned the need to make a fundamental choice about whether it's relevant to use CRM for operations. I believe the most successful services firms do decide to turn their CRM system into a core business platform that manages their operations functions like recruiting, resource management, and time tracking. This doesn't have to happen all at once. However, by setting out this vision, and conducting a full design during the initial implementation an organization is setting itself up for success as the features can be rolled on one at a time (i.e. forecasting in phase 1, resource allocation in phase 2....), but it ensures that the right choices are made early with the core system to allow for the full vision to blossom over time.
Integrate with the ERP System - Many times this level of integration is put off during an initial implementation, but my experience is that connecting these systems early helps keep the CRM data quality high and it provides a nice productivity enhancement for the sales and back office teams when compared with passing around emails and Excel files. Further, it provides the sales team a much greater degree of visibility into invoicing and billing which allows them to be proactive in engaging with customers who may be in jeopardy of falling behind on payments.