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CSO survey predicts tough year, but cost-cutting found in CRM technologies

2010 may be another rough year for sales, according to CSO Insights, Inc’s annual survey. But the findings show that focusing on CRM and other technology can help cut costs and has measurable results.

2009 was a rough year for those in sales – and 2010 may not be much better, according to CSO Insights Inc.’s annual...

sales performance survey. But focusing on CRM technology could be a key cost-cutting strategy, the survey found.

First, the bad news. While economic recovery may have begun in 2009, not all sectors are seeing the benefits. According to the U.S. Bureau of Labor Statistics, unemployment continues to hover at around 9.7%, and the CSO survey found that many companies’ budgets aren’t back to pre-2008 levels.

“To me, the No. 1 [takeaway] is the numbers confirm what everybody thought: 2009 was really tough and there’s just no getting around it,” said Barry Trailer, partner and co-founder of the sales consultancy firm, headquartered in Boulder, Colo., and San Francisco. The firm conducted its annual Sales Performance Optimization at the end of 2009, surveying more than 2,800 companies across a variety of industries.

And if you think 2010 will be a lot better, don’t count on it. Companies cut back drastically in 2009, producing good results, but you only get one chance to make those cutbacks, Trailer said.

Employees are hearing a common but unsustainable refrain, Trailer said: “‘We’re expecting you to do everything with nothing.’” 

One area where companies can focus their cost-cutting strategies is their CRM technologies, said Jim Dickie, partner and co-founder of CSO Insights.

“There’s a lot of technologies out there, especially with cloud computing, that are reasonably priced,” Dickie said.

He encouraged companies to take advantage of the CRM technologies they may already have.

“Take a look at the investment you’ve already made,” he said.

Data from the survey shows that many companies are pleased with their CRM technologies, especially with those using Software as a Service (SaaS). Sales reps using SaaS CRM rather than on-premise CRM report higher rates of satisfaction – with 82% reporting they are either “satisfied” or “very satisfied” with SaaS, and 72% reporting they are either “satisfied” or “very satisfied” with on-premise.

Slightly more firms this year have reported that they are using sales analytics – 16.9%, up from 15% last year -- and many firms reported seeing great benefits from using CRM technologies. Nearly 57% say it has improved sales rep/manager communication; 45.6% say it has improved forecast accuracy; and 37.3% say it has reduced administrative burdens on sales.

Coming up with the money to invest in new CRM technologies could prove a challenge, however, as surveyed companies reported that their budgets remain tight because sales remain low.

The numbers bear out Trailer’s observations: When there’s no more fat to trim, the losses are going to come from somewhere. In 2009, only 51.8% of firms surveyed replied that their sales reps had made their quotas – down from 58.8% in 2008. This is the largest drop in the study’s history.

In addition, 67% of the respondents said they were cutting back on lead generation money, and only 12% said they were investing in new technologies, including CRM, to help reps.

“Something’s got to change,” Dickie said.

What managers need to think about in 2010, he said, is how their current decisions will influence their future. Budgets now are tight and turnover is low, but managers should consider how they are “mortgaging” their future.

Once the downturn ends, there will be more hiring, and the best sales reps are going to find the best opportunities, Dickie said. If a firm continues to ask its reps to do more with less, it may find itself in dire straits once the economy rebounds.

“The pressure of a bad economy is that it forces you to make some decisions that are short-sighted,” he said.

More initiative needs to come from the top, with all departments on the same page, Trailer and Dickie agreed. They said that sales departments need to fight for more resources, but marketing and senior management need to see a clear reason why.

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