Why you don’t need a CRM (and what you should do instead)

The first time the Boeing Model 299 took to the air in a public demonstration it crashed.

It was 1935 and on paper, the plane was far more capable than the competition; it could carry five times as many bombs as the army had requested; it could fly faster than previous bombers and almost twice as far. But the plane was a hugely complex beast. The pilot had to manage a vast array of instruments, systems and constant-speed variable-pitch propellors. It was the oversight of one step that caused the plane to crash, killing two of the five crew members. The Boeing model was deemed, as a newspaper put it, "too much airplane for one man to fly." The army air corps declared Douglas's smaller design the winner and Boeing nearly went bankrupt.

The air corps still ordered a few aircraft from Boeing as test planes. And it was here where a group of test pilots devised a series of checklists that allowed them to successfully fly the plane. This eventually led to the B-17, or Flying Fortress as it was later known, becoming one of the Allies' distinct advantages in the Second World War.

The plane was a hugely capable, complex system. And that almost caused it to never become the success it did.

The lure of powerful tools

I was talking to my friend Anthony yesterday, and he mentioned that he had signed up for a trial account of HubSpot. Anthony felt that he needed to keep better track of his prospects, and HubSpot is one of the big boys. Its features cover blogging, landing pages, email, marketing automation, lead management, social media, and a lot more - a hugely capable system.

It's never been easier to build a business. We have easy, online access to systems like HubSpot, accounting systems like Xero or WaveApps, social media tools like Buffer or CoSchedule and analytics tools like Google Analytics that will tell us more about our prospects and clients than we ever thought possible.

But all of these tools come with a hidden price - the learning curve.

The more capable the system, the bigger the learning curve. It's a bit like a B-17 Flying Fortress; the more features, the more difficult it becomes to get what you want from the system. You not only have to learn how to set everything up, you also have to learn how to use the system correctly to get what you want from it. If you get it right, the results are awesome, but you have to invest a lot of time to get there. And you may spend more time than you imagined keeping it all up to date.

What Anthony needs is not a CRM - he just needs to be able to keep better track of his prospects.

What do you really need to do?

All of us need to keep track of our prospects. At some point in time we're going to try and find something to help us do it better - I've done this and I'm pretty sure you have too. A Google search for "lead management" brings up the big boys; Salesforce and HubSpot are top of the list, so we start down the rabbit hole looking at these systems and all the riches they promise at the end of the rainbow.

But wait a second - these systems are of course very capable, but we haven't really decided what we really need. So before we spend hours and hours reviewing and comparing and signing up for trial accounts, we need to take a step back.

Make a list of what you need and the problems you need to solve.

Anthony is a business coach who specialises in helping technology professionals speak business so they can make more sales. He doesn't have (or need) a huge prospect list or client base. His products are not complex and his sales process is not convoluted - but it is highly interactive and personalised.

When I spoke to Anthony he felt that there were some things he needed to get better at. As his business grows he needs to keep track of more leads and prospects, juggle more appointments in his calendar and make sure his clients get the world-class service they deserve.

So we made a list of what Anthony really needs:

• always follow up with prospects as promised;
• never let a lead get cold;
• qualify potential clients early;
• always have enough time to deliver a world-class service; and
• make optimal use of his time for marketing, sales and delivery.

This is not a complex set of requirements (and happen to be very similar to my requirements for delivering the coaching part of my business). Do these requirements warrant investing in something like HubSpot (even the free plan)?

The minimum effective dose

In his book The 4-Hour Body, author Tim Ferriss coins the term minimum effective dose:

Minimum Effective Dose (MED): the smallest dose that will produce a desired outcome

Like me, Anthony is a solopreneur. If you're reading this, chances are you are a solopreneur, freelancer or small business owner. We all have the same amount of time to get stuff done, but we're alone (or with a small team) - we need to do all the stuff a bigger business has to do, but within the same time and with less resources to do it.

So we have to adopt the principle of the minimum effective dose in everything we do. We can't afford to spend more time on anything than it takes to produce the desired result. It's tempting and sexy and interesting to use the very capable tools out there, but we always have to measure the effort against the outcome and ask ourselves - is there a faster, easier way to get this done?

So what is Anthony's minimum effective dose?

A better CRM for Anthony

I love index cards. In particular, the ruled 4x6 index cards available from almost anywhere. I use them for jotting down ideas, making notes, outlining articles (like this one), keeping checklists and recipes. As it happens, Anthony likes index cards too.

So in about 5 minutes we designed and implemented a CRM system for Anthony based on index cards: one card per prospect with their name at the top; a checklist on the front to make sure he doesn't miss anything in his sales process and keeps track of his commitments; and notes on the back.

By the time we finished talking, Anthony's job was to make sure he has each prospect on a card and decide how to sort them. I don't know what he decided to do, but here's here how I would sort my cards:

• one pile for leads I have to do something with this week;
• another for action next week;
• another for action later; and
• a last pile for cold leads.

Using this system, I need to sit down once a week (I do my planning for the next week on Friday mornings), go through the list of cards for next week and plan when I'm going to do what, check the next week (in case there are long-lead items I have to take care of) and finally run through the "later" stack to see if there's anything I need to do or move to a different pile.

Even with a hundred active prospects this is only 20 to 30 cards per pile; reviewing them all once a week is incredibly powerful and keeps you on top of all your leads.

You don't need a CRM (and what you should do instead)

The system I described above took about 5 minutes to design and will take about 30 minutes to implement (to make sure we have all current prospects on cards). Sorting them would take another 10 to 20 minutes. Reviewing them weekly will take anywhere from 30 minutes to an hour (even with a hundred active prospects).

So an hour to implement the system and an hour a week - and you have a capable and weirdly fun CRM system in use.

The moral of the story is that you don't need a CRM system - you need to keep track of your leads, follow up at the right time and have information at your fingertips. In Anthony's case (and in mine) a set of index cards is all we need. It is the Minimum Effective Dose (MED) that gets the desired result, with the minimum investment in time and money you can possibly imagine. And it is very effective - as long as you use it.

You don't need a CRM system. You need to
- keep track of your leads,
- follow up at the right time and
- have information at your fingertips.

So before you jump into a CRM system (or any other system for that matter), take the time to sit down and make a list of what it is that you're trying to achieve. Then think about the Minimum Effective Dose (MED) that will give you the results you need.

It may turn out that you do need a CRM system after all - if you have a team of sales people and/or hundreds of leads this may turn out to be the best solution. But in many cases your problem can be solved a lot faster and cheaper using a simpler solution.

Summary

Here's what we covered today:

• We have easy access to highly capable systems, very often at low cost.
• Highly capable systems come with a commensurate learning curve.
• Before investing time (or money) in any system, make a list of what you're really trying to achieve.
• Then find the Minimum Effective Dose (MED) that will deliver the results you need.

It may turn out that you still need a ready-made system, but in some cases your solution may be a lot simpler (like index cards to keep track of sales prospects), or you may be able to get away with something easier and faster to implement (Trello is effectively a system of index cards online).

What you can do now

The story of the B-17 Flying Fortress is from Atul Gawande's book The Checklist Manifesto: how to get things right. This is one of the must-read books for anyone running a business of any size; you can find more information here.

Tim Ferriss probably needs no introduction; he is a self-described walking human laboratory with a range of publications behind his name. More information on his blog here.

And whatever you do, try to resist the temptation of jumping on the "big tool" bandwagon until you've clearly decided what you need - and the Minimum Effective Dose you need to get it done.

Published with permission from Anthony. You can find out more about him here.