Do You Need a CRM?
Not every organization needs a CRM, but they are particularly important for Software as a Service (SaaS) companies that have a B2B enterprise sales model. When deciding if you need a CRM, there are a few simple questions you can ask to determine if one is a worthy investment. If you answer yes to one or more of the following questions, your organization should probably invest.
- Is your product available for purchase offline?
- Does your product have a sales-cycle that is longer than a week?
- Do you have a dedicated Sales team?
- Is your product a subscription based model?
- Does your product require customer support?
When considering if your company needs a CRM, think about what your sales process is going to be like. If you are selling a B2B enterprise tool that costs thousands or tens of thousands of dollars, there are some key points in your sales process that necessitate a CRM. Firstly, it’s highly likely you’ll have offline purchases – meaning at least some of your customers will be making the decision to buy based on conversations you’ve had with them, signing a contract, and receiving an invoice. In short, they won’t be simply clicking a button and checking out online. A CRM, like Salesforce, helps facilitate the entire sales process, tracking your first touch point right up to the day the sale is won.
Complex Sales Cycle and Dedicated Sales Team
Software as a Service companies selling to enterprises often have in-house sales teams that work complex sales cycles. The customer lifecycle is significantly more complicated than we traditionally believed to be true 10, even 5 years ago. Customers investigate products months, or even a year before they are recognized in the traditional lifecycle.
It may take 6, even 18 months to close a deal and there might be dozens of phone calls and emails during that period involving multiple employees from both organizations. A CRM enables your Sales team to see those potential customers from their first touchpoint, cultivate a relationship with them, and gain a 360-degree view of their organization and needs.
Not to mention, it will also store all those interactions as part of a coherent system of record to ensure the opportunity moves through the sales funnel efficiently, client requests aren’t forgotten, and in the end the contract represents what was originally agreed upon verbally. Once they become paying customers, Customer Success can use that record to implement what was agreed upon with Sales.
Subscription Based Model
Renewals, especially for SaaS organizations, can’t be taken for granted. “Acceptable” churn for a SaaS company is 5% annually, more on that here. Many companies think they’re ok with a 5% monthly churn rate, even though that means they are losing about 46% of their customers every year. That is not only a huge lost opportunity for revenue, but also a wasted investment of dollars spent on acquisition.
The CAC (Customer Acquisition Cost) invested by SaaS companies means renewals need to be treated with the same respect and gravity as sales. If your product is a subscription based model, ensuring renewals occur should always be top of mind.
A CRM plays a huge role in facilitating the latter stages (service, support, retention, upselling, and renewals) of the sales cycle. Churn kills many SaaS companies. You may have a great product and a great team selling it, but if customers aren’t sticking around, your company will fail. Having a Customer Success team that is actively onboarding and training new customers, as well as reviewing their use and success with the product is key to ensuring renewals occur.
Download our case study on SaaS Customer Success here.
CRM & Customer Success = Renewals
A CRM like Salesforce can integrate with your SaaS product, ensuring the data you have about your users, like how often they log in, what features they use and who is at risk of churning, is available in real time for your Customer Success team. A CRM allows your Customer Success team to proactively detect via workflows, notifications, and automated tasks, which accounts are at risk for abandonment. The Customer Success team can leverage all this information to maximize upsells and ensure renewals occur.
Convinced? Checkout “How to Select a CRM” for advice on how to choose the best CRM for your fast growing SaaS company.