You’re Going to Need More Than a Spreadsheet to Make That Sale

Putting points on the board, “scoring” sales and posting results to beat the competition — sales teams are the key offensive players at every organization. And not unlike star forwards on the basketball court, they require sufficient tools and training to be successful in this role. Unfortunately, sales teams are expected to put up big numbers without access to the tools that they need. After 20 years, the top sales performance management tool used by organizations is still Excel.

Given the significant technological advancements that have taken place during the past two decades, it’s incomprehensible that organizations are still using spreadsheets to manage pertinent financial information. I mean, isn’t that what CRM systems are for? Unfortunately, no. Although CRM aggregates a plethora of useful data, it provides little flexibility for building reports, enabling sales pipeline visibility and retaining historical data, forcing sales teams to seek out other options. Enter Excel, a tool that is too flexible, too labor intensive and, surprisingly, too costly for the good of the team.

CRM Is Necessary but Insufficient

CRM tracks heaps of valuable information and goes a long way toward helping organizations keep track of various sales activities and manage customer contacts. Unfortunately, this endless supply of “big data” also makes it incredibly difficult for sales reps to siphon out the actionable information that they need to close deals.

In fact, CRM is one of the few technologies where the target users — the sales reps — don’t want to use it. The reason is simple — it makes their job more difficult. Instead of focusing on selling, reps spend an excessive amount of time inputting information into CRM systems for record-keeping and activity-monitoring purposes, taking time away from high-value activities such as closing deals.

If this didn’t present enough of a challenge, CRM also doesn’t show the pertinent information that reps require, including splits, historical data and accurate sales forecasts. As any rep would tell you, these functions are absolutely critical to understanding sales reports.

For example, if a company’s sales pipeline decreased by US$5 million during a two-week period, is that good or bad? Without historical data, it’s difficult to discern whether the pipeline went down because the company closed a lot of deals or if it decreased because deals were pushed out of the quarter. These two outcomes look the same in CRM systems but mean two completely different things for an organization.

Shortcomings of Excel

So where does this leave the sales team? The inherent shortcomings of CRM systems have led 52 percent of organizations to implement Excel as their primary sales management tool, according to Ventana Research. And while Excel is more flexible than CRM systems, it also creates three serious challenges that have a significant impact on a company’s overall profitability.

  • Human Error: Let’s start with the most obvious: Excel is not an enterprise tool. It’s a well-documented fact that error rates in spreadsheets are huge, and 59 percent of large enterprises use them regularly, according to Ventana. That means multiple people have their hands in Excel — making changes and inputting numbers that change the forecast — everyday.

    Since there is no way to monitor human error in spreadsheets, if one person makes an idiotic mistake, Excel will dutifully average the wrong data right down the line, and no one will know how to correct it, or even know it needs to be corrected in the first place. These errors could potentially go undetected all the way to top executives within an organization. And with a striking 87 percent of chief financial officers using spreadsheets extensively for closing deals financial planning and analysis and budgeting and reporting, one spreadsheet error could have an enormous impact on pertinent company financial reports.

  • Cost: Although organizations think they’re saving money using a tool like Excel, the costs really add up. Due to the additional time it takes to update spreadsheets manually, they can cost companies more money than the deployment of advanced sales analytics. Given that 64 percent of organizations plan to improve sales analytics capabilities in 2012, it’s clear that organizations are beginning to catch on.

    The cost of Excel poses even bigger problems for small companies — particularly venture capital startups. With startups under constant pressure from investors and the board of directors to meet revenue goals and demonstrate the ability to grow a viable business, wasting time building reports could mean the difference between success and failure. Since these companies are already strapped for resources, they cannot afford to have their sales team spending half of their time building reports — they need to be out making sales.

  • Time: It just isn’t possible to get all information needed for accurate forecasting and effective pipeline management into a spreadsheet. The time investment is simply unreasonable. Not to mention organizations must design and update spreadsheets constantly to stay on top of their data. With all the hours spent manually inputting data and updating Excel grids, only 56 percent of a sales manager’s time is spent selling, according to IDC. The rest is devoted to forecasting, administrative duties and essentially pouring over the very spreadsheets that are supposed to make their job easier.

    Additionally, sales managers put their reputations and their professional careers on the line every time they sign their name to a sales report. Unfortunately, this is a catch 22. It is impossible for sales managers to validate every single number in an Excel grid, so they either become complacent or accept that they might be signing their name to a document that contains numerous errors.

    At the end of the day, an organization’s power forwards, the key players responsible for putting points on the board, are spending an inordinate amount of time building spreadsheets rather than selling. As any good coach would tell you, it’s time to adjust the game plan.

In Conclusion

If organizations truly want to improve their top-line results, they need to equip their sales teams with the sales analytics tools they need. Asking sales teams to leverage solutions that don’t address certain problems, like CRM, or create new challenges, like Excel, is setting them up for failure.

No one would send Michael Jordan out on the basketball court without his Air Jordans — why treat sales teams any differently?

Jim Burleigh is CEO of Cloud9 Analytics.

1 Comment

  • The biggest issue we have seen in doing our analysis of the CRM space is that most CRM software simply collects data. No data is given back. Your story highlights a very basic level of human behavior – people don’t like putting effort toward something that doesn’t give something back to them. And so it becomes natural to augment a CRM with something like Excel because at least Excel SEEMS like an easier way to visualize a lot of data.

    The key to getting people to use a CRM system is to have that CRM provide useful data BACK. Meaning that the salesperson can, at a glance, see information like website traffic, email interaction (reads/clicks/etc), event attendance, project involvement, tickets submitted, etc. All of these are useful pieces of information that the salesperson should be able to see automatically. In this way, the CRM provides useful information back to the salesperson.

    Every relationship is better when both parties give. The relationship between the CRM software and the sales staff should be viewed the same way. If CRM software is able to provide value without the salesperson doing something with it, that software is giving effort back to its relationship with the salespeople.

    Affordable software exists on the market today that does this. As your article suggests, salespeople should have access to the tools they need and they should demand that their CRM tools fulfill that need.

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