How startups can build an efficient CRM and sales infrastructure and manage high growth rates

by Sven Soltau and Ivan Murga

“If two startups start with the same business model, the one that starts taking CRM seriously from the very beginning will win the race – because repeat customers are extremely valuable and have a much lower CPA (marketing costs per order). Consciously managing the customer journey and maximizing the customer lifetime value – that’s what CRM is all about.”

There are many different definitions of Customer Relationship Management (CRM) - From our point of view:

CRM is planned, goal-oriented, 360-degree, regular, and uniform customer communication using all relevant channels with the goal of generating new leads, converting leads to customers, and making the customers buy more and more often.

Performance marketing on the other hand, provides a strategy to conduct data-driven marketing. This makes it possible to quantitatively measure performance and, ultimately, success or failure. The measures of this concept are designed for measurable user interactions, which open the possibility of constantly optimizing your campaigns and guaranteeing the best efficiency possible.

For each company that aims to acquire (paying) customers, it is necessary to understand, measure , and consciously steer the customer journey, as this is one of the key activities to be done. Therefore, it is important to realize that CRM and the sales infrastructure are closely interlinked.

In this blogpost we will provide some practical guidelines on how to establish a scalable CRM and sales infrastructure which will enable high growth without losing efficiency.

What are some specific steps a startup can take to optimize its CRM early on?

Implementing a CRM system can be a tedious process. To reduce your overall stress in the setup, it is helpful to follow best practices, carefully plan each step and provide world class user training.

For CRM to be successful, the infrastructure and the organization should be established before the operational hectic of the early phase of any startup begins.

To get you up to speed, a 4-phase model can be applied:

CRM provides powerful tools that an organization can use to be more effective and efficient, but for it to work properly, the organization needs to have a CRM vision and a plan that defines what it wants to achieve with it. The CRM vision helps provide a reference point for the organization’s goals, aspirations, and the strategy it plans to implement.

Once the vision is in place, the next step is the CRM roadmap. This will outline the current state and can answer key questions about the startup's needs. Establish the CRM strategy and specific objectives. Adopt a strategy that is in line with the company's objectives. Take a customer point of view, not a product or account point of view.

Building a CRM infrastructure is all about capturing customer data in a solid database:

• Build a database based on your business model
• Create a single point of truth
• Map the customer journey in the database
• Ensure a high degree of data quality
• Integrate all available data sources and tools
• Build a reporting infrastructure

Do not try to build the database yourself, as this is no easy task and technology has advanced much. There are many standard software systems to help you in the process. Modern tools can usually be connected via API.

To have an ideal organization; system objectives, needs, and essential functioning must be taken into consideration. Create some sort of “CRM Manual” that designers and programmers must adhere to when working on CRM design and development.

Here are some topics for finding the optimal CRM organization:

• Clearly define responsibilities
• Align all relevant stakeholders
• Make sure to avoid silos (business divisions that operate independently) and avoid sharing information, the help of all the team is needed
• Create transparency
• Align the incentive system to your most important KPIs

When implementing the CRM processes and working within the CRM organization, it is important to expect that it will not be 100% perfect from the beginning - an “agile” mindset is necessary. Here are some recommendations:

• Always measure what you do
• Always do AB-testing
• Use a build-measure-learn approach
• Have regular meetings to talk about the reporting and the next action items to improve your KPIs

Building a scalable CRM infrastructure is not an easy task. It takes diligence and can only be successful if management takes a 360-degree look at the company: Here are some success-factors:

a) Create a solid and well-structured database infrastructure that fits your business model

The goal should be to measure every step along the sales funnel in a database. The data-model needs to fit the business model of the company. That way the sales funnel can be measured and optimized on a constant basis. For example, suppose you're a small business looking to streamline your customer service and support. In that case, Monday.com might be a better fit than a CRM which caters to larger firms with more complex sales operations.

Monday CRM is a software that lets you manage contacts and the sales pipeline. In addition, you can track marketing activities, manage client projects, and provide customer support.

b) Develop a high degree of automation from the very beginning

The technological advancement in CRM has been enormous over the last 10 years. One thing has become clear: there is a huge trend towards automated sales and marketing processes. By implementing automated processes efficiency gains can be quite large. This is especially true when it comes to lead generation and new customer acquisition. From account, contact and opportunity management to email workflows, documentation and sales forecasting, the list of automation solutions offered by a CRM tool is quite long.

Here, startups have a big advantage over existing companies: they can take a green-field approach and do not have to worry about legacy-systems and processes.

c) Clearly define roles, responsibilities, and organizational processes

There are many stakeholders involved in CRM. The main departments which should be involved in CRM tasks are marketing, sales, customer support, customer success and IT.

A solid CRM infrastructure opens a world of technology-backed productivity to the entire customer-facing team, but if roles and responsibilities are not clearly defined, it can cause confusion and a loss of productivity.

A clearly defined “CRM governance” is an important key success factor. Here are some questions to ask before setting up a CRM and sales organization:

• Who is responsible for which customer-related task at which point within the customer lifecycle?
• What are the boundaries between marketing and sales?
• How can you build the CRM organization and make sure that data is available, and everyone knows exactly what to do (regular meetings, a good task-management tool, etc.)?
• What are the main CRM KPIs each department should focus on
• (the KPIs should be measured along the sales funnel)?

It is important to provide time, resources, and budget to develop a CRM and sales infrastructure. The above mentioned 4 phases and deep dive should be a top management priority.

It does not come easy, but it is worth it:

• Optimizing internal CRM processes will increase efficiency and save costs
• Automating processes will help to reach the goals with a lower budget and fewer resources
• Setting up a reporting along the sales funnel will ensure transparency

The results will be lower CPLs (cost per lead) and CACs (customer acquisition costs) and a higher CLV (customer life-time value). The company will save costs AND grow faster! Investors will love it.

Did you learn something new? What’s your experience with CRM? Let us know in the comments.