CRMs are expensive. They cost companies between $1,200 to $3,600 per seller per year. Despite the cost, there is widespread agreement that companies require CRM technology for their sales organization. I conducted a snap poll on LinkedIn, and 82% of respondents said CRM will continue to be important in the years to come. Yet, when I do pipeline analysis for B2B sales organizations, less than 5% of sellers use all the CRM stages to manage their deals, and over 60% of long cycle opportunities are created the same quarter they’re closed. Companies are paying a lot of money for a tool that their sellers don’t use.
Emerging sales technology providers have noticed this and are delivering solutions that provide a user experience that is built to optimize seller execution. For example, they have single panes of glass that organize all the information a seller needs into an easy-to-use interface. CRM interfaces are not at this level and are becoming a source of truth that enables companies to have all their data in one place so they can take advantage of these “seller friendly” tools.
Companies are buying into CRM as a single source of truth, but another set of tools has emerged that not only stores contact and account data but dynamically updates and enriches it with important information such as contact role changes, company performance data, and many other attributes. Having a static database that demands companies manage data on their own is no longer the best way to support a company’s single source of truth. Most times, CRM may no longer be the best overall solution, and it’s getting squeezed from both sides by providers with better offerings for the use case CRMs are built to solve.
How long will it be until companies use only these new technologies and eliminate the CRM expense? That may sound far-fetched, but some small and medium-size businesses are already doing it. Going down this path would eliminate the largest expense in the company sales tech stack while also allowing them to reinvest those funds into value-add tools and additional seller incentives or just add it to the bottom line.
I don’t believe companies will always need the version of CRM that exists today. Established CRM vendors will need to improve and enhance their solution to stay relevant. However, CRM vendors are well funded, so they will not let themselves become irrelevant. In addition, many of the emerging sales tech vendors have CRM vendors as investors. The big question is whether a new entrant without the technology deficit of current CRM vendors will emerge with a streamlined solution that better supports sales and surpasses CRM as the must-have tool in the sales tech stack. With such an innovative environment currently in place, I think this is highly likely.