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How is CRM software increasing sales?

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“Why am I not getting the leads I want?”  

Is this the one burning question that keeps you, a small business owner, up at night?

We’re going to answer that for you. But first, let’s find out what lead conversion is.  

Did you know that a good customer relationship management (CRM) system can increase your sales by 29%?

That’s right…managing customer relationships is good for business.

So what is a CRM exactly?

CRM stands for “customer relationship management,” and the term “CRM” is often used to describe the software used for customer relationship management.

Basically, a CRM is software that allows you to track all of your lead and customer data in one place.

Not only does a CRM support alignment between your marketing, sales, and service teams, it also creates a seamless experience for your future customers.

CRMs may not be right for every organization. However, if your business

  • Is B2B and needs to track longer sales cycles, cross-sells, and upsells OR
  • Is B2C but has a more considered sales cycle (like real estate, jewelry, home improvement, etc.)

…then you can benefit from the adoption of a CRM.

What is Lead Conversion?

Conversion rate is defined by the percentage of people who take the desired action or CTA, which could be anything such as buying the product, signing up for the newsletter, software, or attending a webinar.  

Where Does Lead Management Fall Short? 

As a small business, you must have faced these challenges where sales are concerned:   

  • How to attract the right set of audiences to your products and services?
  • How to convert those people to purchase?  

.In fact, according to CSO Insights, ‘68% of businesses report struggling with lead generation.’ 

Lead conversion for a small business is not easy. However, once you identify the challenges when it comes to lead conversion, you can easily develop a strategy to improve it. For this, sales CRM software for small businesses can help you streamline and optimize the overall sales experience.

To put it simply, CRM manages all the interactions with your present and future customers. 

About 46% of sales teams have reported extensive use of sales CRM software. It is also proved that a CRM system that is implemented correctly can yield an ROI of circa 45% on every dollar invested. 

Now that we have gauged how effective sales CRM software is, let us understand how a sales CRM for small businesses can increase lead conversion and improve sales of an organization.

Why CRM software important for customer

They do not understand nor care that they may have spoken to multiple people within your organization – all with varying levels of understanding about the context of the relationship or their specific needs.

From the client or prospect’s perspective, they are interacting with a singular entity: your business.

A successful company is one that builds strong relationships with its customers. If you’re regularly misplacing your customers’ information (or not recording it at all), then you’re telling them, in no uncertain terms, that you don’t really care about their business. That’s a relationship killer.

That’s where a CRM comes in.

  • Everyone in your organization can view a customer’s journey – from the content they’ve consumed to the emails they’ve sent and received
  • A good CRM can integrate with your other software – like your Content Management System (CMS) or your customer service ticketing system
  • Your CRM can automate follow-up procedures, create tasks for salespeople, and much more
  • CRMs are scaleable, and important customer or prospect information doesn’t get lost when employees leave

How do Sales CRM Software Increase Sales?      

A CRM can help small businesses generate leads and convert their potential leads into long-term customers. It eases the sales team’s work by managing the customer’s data, which in turn helps them build a relationship with the customer.

A CRM helps automate the sales process and ensure that the demos, calls, meetings, and even revenues aren’t falling through the cracks.

With an easy-to-use CRM, the salespersons can filter out the unqualified leads, improve your sales funnel, follow up at regular time intervals, segment your audiences, and eventually make more sales.

Here’s more on what a sales CRM can do for small businesses.

4 key areas to increase sales revenue

Understanding more about revenue practices can help you reach those sweet sales targets.

Customers’ interaction with products and services has changed dramatically, re-thinking the entire purchase funnel for better sales. Businesses must understand how to navigate through the customer-sales processes if they want to improve their chances of conversions and sales success. 

What is sales revenue?

Sales revenue is the revenue generated by a business from selling its goods and services before deducting any expenses. Simply put, any amount you receive exclusively for sale falls under sales revenue. It is a direct result of a company’s sales performance management strategies.

Since every business has defined sales cycles, sales revenue is calculated accordingly either in successive quarters or at the end of the financial year. 

Revenue vs. sales revenue: key differences

The terms revenue and sales revenue are often used interchangeably but shouldn’t be. 

The revenue of a business, i.e., business revenue, is the total amount of money it earns before any deductions on expenses. This amount could be generated through multiple income sources and calculated by adding all incomes (including sales).

Sales revenue or sales, on the other hand, refers to the money generated solely due to selling activities and sales of goods. Calculate revenue on sales by multiplying the total goods/services sold by the price of the good.

What is sales revenue?

Sales revenue is the revenue generated by a business from selling its goods and services before deducting any expenses. Simply put, any amount you receive exclusively for sale falls under sales revenue. It is a direct result of a company’s sales performance management strategies.

Since every business has defined sales cycles, sales revenue is calculated accordingly either in successive quarters or at the end of the financial year. 

Revenue vs. sales revenue: key differences

The terms revenue and sales revenue are often used interchangeably but shouldn’t be. 

The revenue of a business, i.e., business revenue, is the total amount of money it earns before any deductions on expenses. This amount could be generated through multiple income sources and calculated by adding all incomes (including sales).

Sales revenue or sales, on the other hand, refers to the money generated solely due to selling activities and sales of goods. Calculate revenue on sales by multiplying the total goods/services sold by the price of the good.

Both revenue concepts are based on different parameters; two distinct conditions can arise, which can further help to understand the core difference between the two. 

Let’s take a look at these:

1. Revenue can be greater than sales revenue

Business revenue is counted as a result of several revenue-generating sources such as marketing, sales, partnerships, manufacturing, media relations, donations, and subscription/licensing fees. In some cases, this amount will be higher than the revenue generated by the sales teams, as sales revenue comes from a single source.

2. Sales revenue can be greater than revenue

If you’ve had a particularly great sales quarter or year, chances are the revenue received on your sales may sometimes be higher than the business’s total revenue. This mainly happens with companies selling only one product with little to no additional inventory.

It is easy to confuse both of these terms since most revenue often comes from sales due to the transient nature of other income sources. Thus, it is essential to remember that sales revenue should be defined as a subset of business revenue and is not the same thing.

What forms part of a business’s sales revenue?

We’ve established that sales revenue is income generated through sales. But what is included within it? 

Any business will usually have two sales revenue streams: gross sales revenue and net sales revenue.

1. Gross sales revenue

It encompasses the total billings received on sales made. This is similar to the gross revenue because it is calculated without deductions on sales returns and allowances. Think of gross sales revenue as the total cost to the company (CTC) when employees are recruited.

2. Net sales revenue

Net sales revenue is a more realistic profit measure as it is the revenue generated after making all deductions. Think of the net sales revenue regarding employees’ “in-hand” salary after several tax subtractions.

Paying attention to these can give you a good idea of how your sales reps are doing and source of the revenue. You can gauge which areas need to be worked on to align with the company’s financial model.

How to forecast sales revenue through income statements?

You’re probably familiar with income statements and their importance for expense management for a business.

Income statements help businesses in deciding whether they can make profits. You can generate profits either by revenue increase, cost reduction, or a combination of both. These factors also reflect the effectiveness of the financial strategies to see if they result in the expected outcomes.

A regular income statement consists of some or all of the following variables:

  • Net sales (sales revenue)
  • Cost of sales
  • Gross income
  • Operating expenses
  • Operating income
  • Other expenses
  • Interest expenses
  • Pretax income
  • Taxes
  • Net income

All of these affect a company’s profitability.

Sales revenue is the first item on an income statement; all other items are dependent on the value of the sales revenue. Forecasting the net sales from the report can be done in three different ways:

1. Comparative growth

A simple method of forecasting the sales revenue is modeling it as a growth rate from the previous years. This is helpful as a direct comparison can be drawn to identify how much sales growth has occurred through historical values. An easy way to understand this is to consider the net sales of a year as equal to the year’s sales revenue before it multiplied by one plus the growth rate.

2. Factor in economic metrics

Sales revenue can also be forecasted by accommodating macroeconomic metrics that impact numbers such as the operating country’s gross domestic product (GDP), consumer price index (CPI), employment indicators, etc. Through this method, sales revenue can be predicted to depend on a regression-based formula based on the input of the year’s economic metrics.

3. Quick currency values

The third way of forecasting net sales is by modeling it as a simple dollar (or preferred currency) value. This type is used when there is a need for a quick forecast of sales revenue and is inaccurate in its estimates.

Picking a forecasting method depends on the business requirements and decided timeframes. Regardless of the method chosen, sales revenue forecasting through income statements is an effective way of understanding what is working and what isn’t to plan for the future accordingly.

Four key areas for increasing your business’s sales revenue

Boosting sales revenue is fundamental to an organization’s business and management functions. Here are four main areas to focus on for increasing your sales revenue stream.

1. Goal identification and setting

Defining business objectives is the first step towards boosting your sales revenue cycles. While this may seem like a rudimentary step, goal identification can help plan for the future and achieve short and long-term targets. 

A business can only meet goals if teams across the organization are aware of where to go and how to get there. Leveraging proper tools and metrics such as key performance indicators (KPIs), project management software to break down desirable outcomes into actionable items can help measure progress regularly. Setting targets that depend on short periods (monthly, quarterly) is a good starting point for sales reps to stay engaged and on top of their game.

2. Invest in customer communication

Customer insights can prove more valuable than some of the most advanced analytic tools. Businesses can get first-hand information on improving processes by paying attention and spending resources on talking to the person they’re selling to. Collect customer feedback in the form of surveys, referrals, and ask them to review your business online.

Having multiple communication channels (email, text, social media) is an excellent way to gain knowledge about customer experience and indicates you are receptive to all kinds of feedback.

According to PWC, 80% of companies now focus on omnichannel communication strategies to target customers and boost traffic and sales revenue.

3. Upselling your products

Encouraging customers to upgrade to more advanced products (upselling) is another way to increase sales revenue. This works well for customers who are loyal and trust your brand. Upselling also provides a personalized experience that is high on relevance and convenience. 

In addition, product upselling increases the average order value from one customer (AOV) and a customer’s lifetime value (CLV), improves overall profit margins, and betters customer satisfaction across the sales cycle.

4. Refine pricing strategy

Understanding product dynamics is key to navigating the sales revenue process. Pricing strategies usually dictate revenue and profit margins and require regular reviewing. Leveraging customer data and factors such as competitor prices and market demand can help decide which price points will drive the most profits.

Perfecting pricing strategies takes time as businesses constantly change their business models, sales goals, and market shifts. Ensure that you’re making data-driven decisions for maximum profitability.

Growing sales revenue takes time and effort

Every business wants to increase its sales revenue, but it’s more straightforward thought than done. Sales revenue is the first element considered when determining a company’s net income. It is the starting point for any company to estimate critical business calculations like earnings per share and cash flow.

Sales revenue drives business decisions and enables them to stay viable in the long run. Having the knowledge to increase revenue through sales promotes growth and financial stability to forecast the future.

Read our more blogs:- https://www.providingedge.com/uncategorized/strategies-for-business-growth/

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