relates-to:: 07-Projects/TTSU/Articles/The Periodic Table of Tech Start-Ups/README

This document precedes FCST - Forecast Quotas and succeeds 6.1 EXL - Sales Spreadsheet

Definition and purpose:

A Customer Relationship Management (CRM) is a tool that helps companies manage and streamline sales processes. The main benefits of a CRM are:

1. Improved customer contact management: Companies can store detailed information about their customers, contact information, organizational charts, company profiles, quotes (versioning and history). CRM can also handle customer service requests, manage automations to help reduce response time and improve the overall customer experience.

2. Increased sales effectiveness: A CRM allows sales teams to more effectively track leads and opportunities. An opportunity is defined as the potential for an order booking, with an associated amount, a target date and a potential list of products and/or services. A sales stage is defined as providing details about the sales process and an associated probability of closing. Typical stages of a sale and their probability of closing are:

   1. Prospecting (or qualification)
      1. Probability of 10%.
      2. Description: The customer may not have a budget. The product or service has not yet been adapted to the customer's needs. Is it worth the win (cost vs. win analysis).
      3. Exit criteria: answer the above questions
   2. Discovery (or needs analysis)
      1. Probability: 30%.
      2. Description: Understand/identify decision makers. Gain visibility into budget and schedule. Understand the customer buying process.
      3. Exit Criteria: Thorough understanding of budget, decision makers and schedule.
   3. Client (or Proposal) Assessment
      1. Probability: 50%.
      2. Description: Client received the proposal/quote
      3. Exit Criteria: Customer commitment to enter into a business agreement. Agreement to enter into negotiations on terms and conditions.
   4. Negotiation
      1. Probability: 80%.
      2. Description: Negotiation has begun. The objective is to reach an agreement to close the deal
   5. Closed won
      1. Probability: 100%.
      2. Description: The opportunity is closed and won. The purchase order is captured as a new booking.
   6. Closed Lost
      1. Probability: 0%
      2. Description: The opportunity is lost. Capture the reason for the loss. Can be used later in a win/loss assessment or in customer interviews to understand/improve product/sales offering.

3. Improved collaboration between sales team members: With a CRM system, data can be shared among sales team members. Quotas can be assigned. Grouping can be done by region, by account or by sales team organization. The CRM provides a history of the sales process. It can facilitate the transition from one team member to another.

4. Improved data analysis and reporting: With CRM systems, companies can analyze sales data to gain insight into sales dynamics, customer preferences.... Analysis can identify stalled opportunities (lack of activity). Companies can perform analysis based on regions, industries, products or services, individual contributors... Reporting (see dashboard) can help improve communication with other parts of the company (board of directors, management team, engineering, manufacturing, supply chain...).

Overall, implementing a CRM system is an important step for any company looking to improve operations, increase sales efficiency and foster strong customer relationships.

Some definitions

• Booking (sales booking): this is when a customer commits to spending money with your company. The booking is entered when a purchase order or committed contract is received. The amount and month are entered. The sum of all bookings received in month X is the booking for the month. The "Booking to date" is the cumulative amount of bookings received since the beginning of the fiscal year.
• Revenue is the amount billed to customers. Billing is done once the products and/or services have been delivered (and transfer of ownership has occurred)
• Backlog: is the previous month's booking + this month's booking - this month's revenue. It is the remaining amount of commitments to customers.
• Book-to-Bill: is the ratio of the month's bookings to the month's revenue. A book-to-bill ratio greater than 1 is representative of a growing business.

Tools

• Salesforce (paying)
• SuiteCRM (opensource)
• Odoo (opensource)
• EspoCRM (opensource)
• ...