You & Your Salesperson MUST Understand How CRMs Actually Work

If your salesperson is tracking his/her work in a spreadsheet or e-mail folders, your sales process is NOT sustainable. More importantly, it’s not extensible to the rest of the company’s operations and marketing needs.

brands have to manage their contacts on some level, but often it’s not systematic enough to provide actionable insights and support a marketing strategy. You can’t get a gold rush out of penny management. When a company is doing a sufficient volume of business, marketing, or both, it needs a CRM. A Customer Relationship Manager is a software solution for tracking contacts through various stages of the buying process as leads, contacts, and clients.

A CRM Has More than One Purpose

A CRM let’s you:

  1. Track your interactions: You can instantly see all past communications with a given contact, including e-mail messages and notes from phone calls.
  2. Gain intelligence on your business: Reports can tell you, for instance, who you’re succeeding with, who hasn’t been a good match, and what either group has in common.
  3. Suggest opportunities: The CRM tracks ‘deals’ and what leads are probably worth, to let you know where you’ve got money sitting around, unrealized.
  4. Make your data “promiscuous” for marketing: Most CRMs provide some level of integration with e-mail marketing software and social media, so you can reach your audience effectively.

What You AND Your Salesperson Need to Know About CRMs

When I worked as Sales Engineer for a software firm, there were a handful of offenses that resulted in immediate termination. Do not pass go; do not collect a hundred dollars; they just walk you to the door. One was having a lot of paper lying around; we were a paperless office, and paper implied non-sharing of information, which is part of the problem with not using a CRM for sales. The other was contacting anyone outside the company in any form and not updating the CRM.

Mandate CRM Updates for All Employees

Sales leads
A CRM can save your sales team, other staff, and stakeholders from mutual embarrassment.

A CRM is meant to track company interactions, however trivial, with all leads, contacts, prospects, and clients – but also vendors and other business related entities.

Imagine you hold an account manager or Director level position in the company and you reach out to a valued client without even knowing that one of your salespeople, support staff, or another person in the company had done 6 days before. Maybe they and a support person are currently working on a challenging problem together, and one of your customer service people calls to find out how they’re enjoying using your product or service. It doesn’t look like you care; it looks like you can’t get your act together, and that the people who should *know* how they’re doing don’t.

Effective companies make no exception to the update the CRM rule – not for any employee, any reason, and not even for failed contact attempts. A look at how CRMs work is critical to understanding their importance for your business.

Distinguish Leads, Contacts, Prospects, and Clients

crm comparisonsIt’s critical to understand the STAGES a company or individual goes through in your sales process. Different companies will describe them in different ways, and it will differ somewhat between service companies and wholesale product companies, but the overall standard is:

  • Lead: You have their contact information but have not actually achieved a response. You haven’t gotten on the phone, or gotten an e-mail reply.
  • Contact: You’ve made actual contact, by e-mail or phone.
  • Prospect: The result of the initial contact, or an eventual repeat contact is that they have expressed an interest in potentially buying your stuff.
  • Client: You consider them a current client. You can determine whether that’s when a contract is signed, or money changes hands, or whatever.

If you don’t have these logged correctly, you can’t run the reports you need to see where your money (opportunity) is sitting:

Know Where is Your Money Sitting

sales pipeline
When you’re hungry for revenue, it’s easy to find with a CRM.

There can be additional statuses, like “Past Client” and possibly multiple or overlapping statuses like “Affiliate” or “Referral Partner”. But the ones above are the basics. Alternately, you can set their statuses by more elaborated stages of a sale – for example:

  • Contact Made
  • Meeting Arranged (or “Appointment Set”)
  • Needs Discovered (or “Qualified”)
  • Proposal Presented (or “Offer Made”)
  • In Negotiation
  • Closed (or “Won”)
  • Not Won

You can have other statuses like:

  • Unqualified
  • Requested Callback
  • Do Not Contact

This arrangement of statuses is called your Sales Pipeline. As long as your salesperson is entering the potential dollar value of a given lead to the company, a CRM will actually tell you where in the Sales Pipeline your money is sitting – the money you haven’t yet reached for.

Need revenue? Maybe a lot of cash is sitting in Qualified prospects, and you need to get them written proposals. Or maybe there’s a lot of money in some status you’ve created to go before “Contact Made” – like “Lead Entered” and you realize you just need to man the phones! Your CRM is designed to tell you how to make money in sales pipeline reports, which you can automate, or which are often built-in.

A Transparent Sales Process is Good For Everyone

lead contact prospect client
A CRM means never having to ask a salesperson what they’re doing today.

The other thing that pipeline does is MOTIVATE your salespeople. That’s because they can actually SEE where their commissions are sitting, and a pathway to getting there. Salespeople don’t make phone calls or send e-mails for their health. They do it because the CRM is saying there’s a pile of valuable leads sitting in one of those categories.

Also, they know the stakeholders are running similar reports from the same data. The transparency a CRM brings can help kick effective salespeople into high gear. It’s not just the ‘data’, either. On a CRM dashboard, you as the stakeholder can see who is doing what: “Jim added contact Jane Doe. Sarah updated John Doe status to ‘in negotiation”, etc.

Salespeople want to have goals, but not be micromanaged. A CRM can provide the transparency you need to supervise the process, while freeing your salespeople to be effective, so you keep relationships with your sales team strong.

You Can’t Measure Sales Without Statuses

high performance salesperson
Good high level data depends utterly on small, micro-updates to your CRM contacts as salespeople and staff interact with them.

You can’t run reports on sales team performance, unless the entire employee base is meticulous about ensuring statuses are current whenever you contact someone or attempt contact. You need to know when they need help, tools, or guidance – the key to that is making sure people take the small pains to set statuses and other selectors in the CRM.

You can’t avoid embarrassing duplicate contact attempts, and customer handling fiascos if you don’t know when your salesperson reaches out to someone, or is in negotiation with them, when you’re being introduced by another party or the person reaches out one of your other contact addresses of calls in. You also don’t know what percentage of your contacts fall into what category, and make good business decisions, if the salesperson isn’t updating those categories.

That’s why it’s critical that when you answer a phone call or e-mail, you instantly pull up the data in the CRM. And it’s why most CRMs make part of the process automatic for e-mail and web forms. Phone calls to a cell phone might require updating the CRM from the mobile app, immediately after the call, just like in-person meetings. But there’s another important reason to stay on it, and always use statuses:

A CRM Helps Segment Your Marketing E-mails

E-mail Marketing Best Practices
You don’t segment your e-mail marketing list? A CRM will streamline that process.

You probably want to send different e-mail blasts or other content to leads vs. contacts vs. prospects vs. current clients. And what about past clients? If you have multiple types of revenue (e.g. one-time services and recurring subscriptions), you would almost surely want to segment your e-mail list and send different marketing content to those types of audiences. Statuses can let you do that. Most CRMs will let you create more than one kind of status. For instance: Relationship: Past Client, Type: Fixed Fee. At MadPipe, we say, “The opportunities are always in the gap.” A CRM can show you the places where more revenue is possible among the different types of contact records. On top of that, most CRMs integrate with e-mail marketing software like MailChimp, to let you send the right thing to the write group. You can even have statuses like “do not contact” that you can set it up to skip in your marketing efforts.

Log EVERY Medium of Contact or Attempt

Sales Lead Activity
A CRM integrates the otherwise disconnected stream of calls, in-person meetings, e-mails, support tickets, contracts & proposals, and even social interactions.

Most CRMs let you log distinct contact types within each company or individual contact record. This is important for running reports that validate your process, but also because different contact types require different data. Contact types might look like this:

  • Phone Message Left (select phone number)
  • E-mail Sent (auto-inserted date and e-mail body)
  • LinkedIn Message Sent (auto-inserted date, manually paste message body)
  • Phone Call
  • In-Person Meeting

Or this:

  • E-mail Attempt (Date)
  • Phone Attempt (Date)
  • Phone Contact (Date) – Notes from Call
  • E-mail Contact (Date) – Automatically Imported E-mail Thread

A CRM ties together ALL contact types into one stream, one flow, one history, and one mutually informed set of interactions. That includes in-person meetings, support tickets, social interactions, and even contracts & proposals. Having the CRM know each time a contact is made can give you data on how many contacts it’s taking to close a prospect or maintain a client, so you can adjust for the expense.

Log the People Who Don’t Respond

That brings up another issue. Salespeople get a lot of leads that don’t respond. What’s the point of updating your CRM for those people? The answers are simple: you want to track those percentages in reports, so you can look for patterns or examine lead sources and lead generation methodologies to refine your sales efforts. You also want to eventually not duplicate those efforts, and rule them out for future contacts. It’s also CRITICAL for identifying when you’re reaching out to the right company but the wrong person. That brings up another issue:

Don’t Mix Companies and Individuals

Capsule CRM
If you screw up your CRM contacts by conflating person with organization, you’ll have a mess to fix. Some CRMs know, sooner or later, someone will do it – and provide a “convert to” button to switch them back and forth.

Any experienced sales person knows that you might get a “not interested” from one person at a company, only to get a “Hell yes!” from a different person in the same organization. It’s imperative that you properly update your CRM to distinguish TYPES of contact records – almost always Company and Individual. The first time you reach out to someone, you enter the company record first, THEN add the individual record to the company record. Later, if you get a lead within the same company, you merely add that individual to the already existing company. This way, again, you can run reports at will, on either a company level or individual level, depending on the data you want.

Stakeholders Are Blind Without Reports

sales reports
You can’t plan, if you can’t predict how much money is coming down the pipeline, and if you don’t have reports telling you the average close rate.

If you’re getting that CRMs are also hugely about REPORTS, you’re spot on. For the salesperson, they’re about efficiency. For the stakeholder, they’re about seeing where the un-gotten money is sitting, how close we are to getting it, how salespeople are performing, how effective lead generation is, and where your marketing efforts can support your sales efforts and vice versa. It’s ALL about the data. And, again, your CRM reports will be skewed or useless if you don’t impose the discipline of using the CRM properly across the board.

The good news is that, when you’re too busy even to run reports, many CRMs will do it for you – either in the form of automated reports that e-mail you, or a dashboard that you configure once, and it shows all your updated numbers at a glance when you log in.

Notes Are REQUIRED For Verbal Contacts

sales notes
“Tends to be conservative – make sure when interacting, you do not make any interesting remarks.” | “Please note this Customer is a key reference account. If there are any startling issues, please notify the VP of Care.”

The power of notes is critical. Most CRMs these days can auto-populate contact records with any/all e-mail exchanges your company has, as long as everyone who interacts with the public is using the CRM. Don’t go it cheap and try to give everyone your owner login; prepare to purchase multiple user seats, or you’re sabotaging the system. Also, one of the key things the CRM tracks is who did what, and when. There’s no accountability without individual logins. But there’s also no accountability without notes.

When someone has a phone call or in-person meeting with a lead, contact, prospect, or client, the proper place to keep notes is NOT in one’s personal notebook, on post-its, or even in a shared google doc. It’s in the CRM. Everyone on the team needs to know the nature of any other conversations, and any critical data, decisions, and statuses arising from them.

That said, entering notes should be MANDATED – actively required, not passively suggested. If your team is having verbal conversation of any kind, however small, require that it be noted with any key points, in the CRM. If the conversation is 30-seconds, note it. If it’s an hour conversation, have notes from that. Once you allow inconsistency, it’ll spread; and there are too many reasons to list why your company needs a record of the *substance* of every interaction outside its employee base. This will also allow you track the efficiency of conversation as a factor in optimizing your company. If there are a lot of 40-minute conversations, there should be enough substance in the notes to justify that time. If not, why not?

Even Contractors Might Be Users

If you have contractors, use the CRM to log even those communications, where possible. It will not always be possible when the contractor is deeply integrated on the team, and conversations are frequent and open-ended. Slack is better for that, or e-mail if you’re still stuck managing teams with that. But you can still log important conversations that should be kept on file, like changes in how you work together. It could save your butt in a labor dispute or liability issue, etc. If contractors are sales or marketing people or “client-facing”, get them a ‘user’ seat to your CRM.

Using Gmail Is Not Enough

social media crm
Nimble CRM uses a social inbox that integrates e-mail and socal

It might seem like keeping everything in a web-based company e-mail system like Google Apps (or Gmail) is sufficient for record-keeping and archival purposes. After all, google search is FAST. You could then just put “essential” data into spreadsheets. However, it’s not recommended.

What happens when a salesperson moves on, and someone else steps in and needs to have ORGANIZED access to a past lead database, or risk spending weeks duplicating or wasting contact attempts? Likewise, what happens when you have more than one salesperson working leads. Fluidity in the team REQUIRES a CRM.

The GOOD news is that many CRMs like Base CRM integrate gmail or google apps seamlessly into the CRM. So you don’t have to adopt a whole new system, can still do things in Gmail that you’re familiar with and like, but the CRM still works. Don’t just consider e-mail integration, though; consider what KIND of integration it is:

Not All E-mail Integration is the Same

CRMs tend to work one of two ways with e-mail. 1) You have to forward a copy of every e-mail you want to get recorded in the CRM to the CRM, which  will then get parsed out to the appropriate contact record (a process you can automate, if you like). 2) Integration is seamless – when you pull up a contact record, it already has all the e-mail exchanged with that contact (it has pulled it right off the e-mail server, with varying degrees of speed). One reason I like Base is that that process is fast. Speed is important since, when someone calls in, you want to instantly put that name into the CRM and see everything recently done or communicated, arranged by date, etc. That brings up another best practice:

Pull it Up First, Keep it Up Always

CRM Training
Streak figures you’ll be in e-mail, so it puts the CRM in your e-mail!

Your CRM should be open in a tab at all times (for every employee that communicates with potential/actual clients). Some CRMs 100% get this and make it so you can use base as BOTH your e-mail client (integrating seamlessly with Google Apps, Gmail, Outlook, etc) AND your telephone (allowing you to click to call any contact directly within that contact record, automatically logging the call). Some will even record the call and attach it to the contact history for that record, making your life even easier. And that brings us to the final points.

There is No Perfect CRM for Your Business

Every CRM has weaknesses and strengths. You will NOT find a perfect mix. There will be tradeoffs. Nimble has the best social integration. Pipedrive is stellar for salespeople with the best visual layout of the sales pipeline and is a drag & drop beauty for managing it. Base has crazy good e-mail integration and is fast. Intercom has amazing customer service tools that integrate with your website, especially for product-based companies.

e-mail and crm marketing
Some CRMs you’ll love, others you’ll hate; the right one is probably a CRM that you LEARN to love.

The best article I’ve ever read on this, by Mikita Mikado of Quoteroller (another stellar tool), confirms EXACTLY those four options. There are plenty of other great CRMs, and I don’t mean to disparage them. I’ve used Batchbook, which has crazy good Mailchimp integration; if you’re doing a lot of e-mail blasts and list building, it’s a great choice. I’ve taught webinars on Zoho CRM, which is traditional but EXTREMELY configurable, and the clear choice if you want to develop automated workrules. MadPipe also works with companies that use SharpSpring, which provides amazing (not always accurate, but as good as it gets) business intelligence, and Ontraport, which is all about integrating the sales CRM and marketing (e-mail marketing is built-in, for example). Contactually is *like* a CRM for the solo executive who needs to maintain relationships but isn’t going to do sales. The options are amazing, but NONE combine all these things in the way some of us wish they would.

Despite being a disbeliever in perfection, I am still looking for my perfect CRM; if I ever find it, I will definitely let you know. Meanwhile, I use Streak, because it does what I need for my business model. It’s like Trello, only more CRMish. When I scale again, I may change. But I LIKE Streak, so they’ll get a chance to keep me, even then!

Fit the CRM to Your Existing Toolset

SOME of your choice is going to be based on what INTEGRATES with a given tool. Look at their integrations list and price per user as key aspects in the decision. That said, integrations with most web-based software tools and most CRMs is possible with simple web-based automation tools like Zapier and IFTTT. Those are like LEGO® connectors for software.

And now for the bonus…

18. How a MadPipe Sales Director Helps

Understanding CRMs, how to use them effectively, and how it all fits together with your sales and marketing is part of what MadPipe is all about. You aren’t supposed to come with all of that experience or insight built-in. So, get help with it. MadPipe can give you strategy, guidance, and leadership in this and other areas, depending on your objectives, so you don’t waste months building the wrong system and have to jettison and replace it. If you’re willing to get your team on board and do what it takes, let’s partner and build the momentum that generates success. Reach out with the contact button and let MadPipe show you how Everthing Flows to Your Door.™

Daniel DiGriz

Daniel DiGriz is a corporate storyteller and Digital Ecologist® at MadPipe, which provides creative direction, marketing leadership, and campaign direction for firms that want a stronger connection with their audience. A Digital Ecologist® applies strategic principles from both natural and digital ecologies to help organizations thrive across multiple ecosystems. Daniel hosts podcasts, speaks at conferences, and his ideas have appeared in Inc, SmartBlog, MediaPost, Forbes, and Success Magazine.
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About once / month, corporate storyteller and digital ecologist® Daniel DiGriz weaves together interesting business stories, analytics, & examples for organizations committed to achieving their goals.


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