CRM has Forgotten the R - Relationships.

Sales is broken. Despite billions poured into CRM technology, sales teams struggle to hit quotas. The pipeline is drier than a desert, and the email and Linkedin inbox is full of unanswered, unopened messages from desperate sellers. It’s a paradox: never before have we had more data at our fingertips, yet sales effectiveness is declining.

The culprit? We’ve become obsessed with the M in CRM – the management of data. We’ve lost sight of the R – the relationship. In our relentless pursuit of efficiency and automation, we’ve sacrificed the human connection, the relationships that are the bedrock of sales success.

It’s time to remember that CRM, Customer Relationship Management, is not an Intelligent Relationship Management tool, they are forecasting, pipeline, campaign management, sequencing, or contact databases, and expensive ones to boot. They are not a replacement for genuine human relationships. They are not Customer Relationship Management tools.

It's time to rediscover the power of relationships.

The cracks in the sales foundation are undeniable. In 2023, a mere 28% of sales professionals met their quota, according to CRM behemoth Salesforce. Oh the irony! That's a staggering 72% missing the mark. Sure, there are macro-environmental headwinds, product-market fit challenges, sales skill, and tenure issues, but for the leading vendor of customer relationship management to find that the overwhelming majority of sales teams are wholly ineffective is a damning indictment on an industry, it created.

These alarming statistics point to a deeper issue: inefficiency. Salespeople are spending less than 30% of their time actually selling. The rest is consumed by administrative tasks, primarily managing the deluge of data in their CRM systems. It's Ironic, that while companies have invested over $75 billion in CRM technology in 2023, the return on investment is questionable.

It’s time to ask: Is CRM really helping us sell more, or is it hindering our ability to connect with customers?

The Forgotten R: Relationships

While we've been fixated on optimizing processes and automating tasks, we've neglected the most critical component of sales: relationships. Deep business relationships are the cornerstone of long-term sales success. They’re built on trust, empathy, and mutual understanding.

Transactional selling, focused solely on closing deals, is a relic of the past. Today's buyers are savvy and informed. They want to do business with people they know, like, and trust. Building strong relationships takes time and effort, but the payoff is immense. It's about becoming a trusted advisor, understanding your customers' challenges, and providing solutions that truly meet their needs

The High Cost of Neglecting Relationships

The consequences of prioritizing data over relationships are far-reaching and costly. Every lost deal due to a weak connection represents a tangible financial loss. But the impact extends beyond the bottom line. Poor customer experiences, often a result of neglected relationships, can damage a company's reputation and erode trust.

Conversely, strong relationships are a powerful asset. They can directly lead to:

• Increased customer loyalty, retention, and reduced churn

• Repeat business, and improved cross-sell, and up-sell opportunities

• Invaluable referrals, and advocacy as happy customers spread the word and essentially sell on your behalf

• Improved predictability of the business, less volatility and variance in forecasting and goal attainment.

It's time to recognize that relationships are not just a "nice to have" – they are a strategic imperative for business success.

Building a Relationship-Centric Sales Culture

To prioritize relationships, organizations must cultivate a culture where relationships are valued above all else. This requires a concerted effort from leadership and a commitment to investing in the development of relationship-building skills. In our recent blog post Relationship Economics - A Refresher, we briefly outlined some of the key concepts of a Relationship-centric sales culture. They include:

• Strategic Relationships: be selective about which relationships to invest in, focusing on those that can bring the most value to an organization.

• Quantifiable Value: Relationships should be assessed in terms of the value they bring to an organization. This value isn't just financial but also information, influence, and innovation.

• Portfolio Management: Invest in diverse relationships, balancing short—and long-term returns, and continuously assessing the portfolio's performance.

• Relationship Currency™: There is a give-and-take in the economy of relationships; mutual support, information sharing, and other non-monetary value exchanges that build mutual trust and respect.

• Relationships with Purpose: I strongly advocate for intentional networking that is aligned with personal and professional objectives rather than networking for its own sake. Let me add, “intelligent networking” here, as most professionals abhor small talk!

Building a Relationship-centric sales culture encourages individuals and organizations to think strategically about their relationships, invest in them wisely, and leverage them for mutual benefit over the long term. By creating an environment that prioritizes human connection, organizations can unlock the full potential of their sales teams.

The Future of Sales: Intelligent Relationship Management

Undoubtedly, CRM has forgotten the R - the relationship. In our pursuit of efficiency and data-driven insights, we've neglected the human element that drives sales success. It's time to rebalance the equation.

By prioritizing deep business relationships, sales professionals can differentiate themselves, build trust, and drive revenue growth. It's about moving beyond transactional selling and becoming a trusted advisor to customers.

Sales leaders must create a culture that supports relationship building. By investing in training, recognizing achievements, and aligning incentives, organizations can unlock the full potential of their sales teams.

The future of sales belongs to those who master Relationship Economics. Are you ready to rediscover the power of relationships?