How does a centralized database generate real ROI? While there are many valuable results from having all your customer, contact, activities, notes and sales history in one easily accessed database, there are at least two ways that it will generate real revenue for your company.
One of the biggest benefits SMP users report is how much easier it is for account reps to prepare for customer calls. By having access to all the important information in one place, reps can reduce the amount of time spent preparing for customer calls by an hour or two per week. What if your reps then made just one more call each week?
An extra sales call per week could result in an additional $12,000 to $16,000 sales revenue per rep per month.
Think about it this way: if your rep is working a $3MM – $4MM territory, averaging 4 calls per day, then the territory averages $3,000 – $4,000 in sales per call. Making just one extra sales call per week can generate $12,000 – $16,000 in increased sales per month. At 20% gross margin, that’s an additional $2,400 – $3,200 new gross profit per week, per rep – all from making just one more call each week.
Territory Size
$3,000,000 per year
Gross Margin
20%
Days Worked/Year
250
Avg. Calls per Day
4
Number of Reps
8
Total GP Gained
$19,200 per month
The second direct revenue driver derived from a centralized CRM database is an increase in the number of proposals generated. The ability to generate new proposals is directly related to the health of your database. It stands to reason that if you have more contacts and their data is accurate, your reps will generate more sales activities and more proposals.
Research from the Aberdeen Group shows that companies with integrated CRM produce 4 more proposals per month per rep than average.
The total number of incremental proposals for 8 reps would be 32 per month. At a close rate of 20% your team will close 6 additional proposals per month. Assuming $250 gross profit per order, the incremental gain is $1,500 additional GP per month.
Current Close Rate
20%
Gross Margin
20%
Average GP / Order
$250
Incremental Proposals
32
Incremental Closed Orders
6
Incremental GP
$1,500
Video: CRM Designed for Distribution
Blog post: The Remarkable Impact of One More Sales Call Per Week
Gross Profit gained from making one more call per week = $19,200 per month
Gross Profit gained from generating more proposals = $1,500 per month
Total incremental Gross Profit per month = $20,700