By Bob Sullivan
Expert Author
Article Date: 2008-06-26
Last year I visited the president - a very worried president - of a company whose lead sales rep left and took along $2M dollars worth of business. That is a hefty chunk of change for any business.
The company had no CRM system in place. The president had decided it was too expensive to allocate .03% of their budget to purchase and be trained on a CRM system. However, it was okay to let 8% of their $25M annual sales walk out the door. I wonder if he would feel the same about if a $2M piece of machinery was stolen overnight from the shop floor. I am always amazed at companies that do not consider their customer/prospect information as important of an asset as their equipment.
Without an effective CRM system, each rep maintained their individual account information and customer relationships the way they saw fit. The sales rep owned the relationship, not the company. In addition, without a CRM system there was no opportunity for sharing or leveraging the information throughout the company.
Just imagine what a president with CRM could do when senior rep departed:
• Drop an email to every customer thanking them for their loyalty and assuring them that the transition to their new account manager would be short and that he/she would be available during the interim
• Call every account with an outstanding proposal to let them know that he/she would be handing their account personally
• Reassign prospects at the qualified stage to in-house sale reps for follow up
• Have marketing increase communications to these accounts
• Monitor the accounts for any signs of defection
As you evaluate a $2M hit in lost business, be sure to add in the cost you paid to acquire and retain those customers over the years.
How well are you protecting your customer/prospect informational asset?
What costs more? Having, or not having a CRM system?
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