CRM Advantages & Disadvantages

Written by bob turek
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CRM Advantages & Disadvantages
CRM changes the way sales people and managers communicate, resulting in more time selling. (Jupiterimages/Brand X Pictures/Getty Images)

Customer Relationship Management (CRM) is a software system that helps sales people and managers manage the sales process. Gaining the advantages of CRM is dependent on understanding current CRM business processes, developing future business processes and selecting the appropriate CRM software. Poor execution in any of these areas can result in problems with what should be advantages of visibility, ease of performing and recording sales activities, and changing the way sales people and management interact.

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CRM increases the visibility of what people are doing. Normally an advantage, this can be a disadvantage to some who like to keep information about how they are performing a secret. Managers like to easily see how a given sales cycle is doing, but sales people must also gain this benefit or the system will be perceived as burdensome and difficult to use. A well implemented CRM results in increased visibility of sales activities for both sales people and managers, leading to increased sales and revenue.

Ease of Performing and Recording Sales Activities

CRM software can be misapplied and become a burden to sales people. Selling to a business is different than selling to an individual consumer, leading to a common problem in implementation. In business-selling situations, it is often advantageous to record detailed information about many contact names and many opportunities. In consumer selling, this is much less important. What is more important is that the system help the sales person make six to ten calls within a week of obtaining a lead.

A detailed business process analysis done prior to CRM implementation will clarify the business processes required for business- and consumer-selling situations. CRM software makes it easier to record activities and schedule tasks, which allows the sales person to work more deals at the same time, resulting in increased sales and revenue.

Changing the Way Sales People and Management Interact

Before CRM software is implemented, a sales manager typically monitors performance by constantly interrupting a sales person to get information. Without a CRM system that performs and records activities, the sales person often spends excessive amounts of time finding the information. With CRM, the manager can get most of the information he needs from the system, so most of the communication between the manager and the sales person is begun by the sales person. This communication is more about asking for advice and obtaining approvals to structure and close deals. The result is more time spent by sales people working on sales activities, and more time spent by the manager working on questions from sales people and creatively working out ways to close business.

Increases in Revenue and Continous Improvement

The bottom line is results, and results in sales means increased revenue. This only happens if sales people are comfortable with the system and how it helps them sell and work on more deals at the same time. Care must be taken not to increase quotas faster than sales people are able to keep up. Adequate time to learn and use the system, plus aggressively making changes when the system is perceived to be too cumbersome, is important. A system that is highly configurable by a non-technical administrator, whose job it is to pay attention to sales persons' requirements, is necessary. This provides a continuously improving CRM system that serves both sales people and management.

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