In our previous article, Optimizing Sales and Efficiency in Chemical Manufacturing Through CRM Solutions, we explored the important role CRM plays in enhancing chemical manufacturing operations by optimizing sales, improving customer relationships and ensuring regulatory compliance. Now, let’s dive deeper into the next step: setting up CRM effectively.
Three Expert CRM Implementation Tips
A well-planned CRM setup is essential to maximize its benefits and ensure alignment with your business goals. Below, we outline tips for CRM implementation steps and strategies to help you set up your system for success.
1. Adopt a Double Funnel Approach
When setting up CRM, we find that a double funnel approach helps monitor your sales progress and streamline follow-ups with prospects and collaborators. This strategy leverages two key tools in your CRM system: Opportunities and Projects. Linking them together is particularly useful for chemical manufacturer-based businesses where collaborations are a key part of the sales process and new product introduction. By linking projects to opportunities, you ensure that all related activities and costs are tracked from the initial sales stage through to project completion.
Opportunities: Help track potential sales with your prospects and customers. Sales stages can vary but generally include Qualification, Needs Analysis, Proposal, Negotiation, Closed Won, Closed Lost and Closed R&D to monitor your sales funnel and act when opportunities get stuck. By monitoring the sales funnel, you can identify and address stalled opportunities.
Projects: Collaborations often involve complex activities like new product development or introducing your products to a new supplier or customer. Projects monitor resource allocation, such as time, product usage and investments, while providing centralized communication. Tracking collaboration outcomes, such as product sales or new distribution channels, ensures alignment with business goals.
2. Streamline Collaboration Tracking
Collaboration can involve various activities that boost new product development, introduce your products to a new supplier or customer or any other tasks requiring your resources, such as investment, time and products. To effectively track these initiatives:
- Start with an Opportunity: Use an opportunity record to represent the initial collaboration activity. The goal at this stage is to secure collaboration, which may evolve into a proof of concept or a formalized partnership.
- Transition to a Project: Once the collaboration partnership is in place, create a new “sales status” for the opportunity - “Collaboration” or “R&D” - to track the sales. Then add a project to the opportunity to monitor resource allocation, including time, product usage, and investments. A project record facilitates progress tracking, centralized communication, and alignment across teams.
- Close the sale with the Opportunity: Once the collaboration has measurable outcomes, such as increased product sales, successful new product launches, or expanded distribution channels, the sales team can revisit the opportunity record to finalize the sales process according to your established procedures. By linking these records, your sales and product teams can collaborate more effectively, monitor progress using standard sales tools, and maximize your investment in the sales cycle.
Additionally, some collaborations may require tracking R&D investments or expenses eligible for R&D tax credits. A well-maintained project record can help monitor these expenditures accurately. Whether your business invests in these activities or charges for collaboration services, CRM and ERP configurations are essential to ensure proper tracking and reporting.
3. Complimentary Sample Management
Complimentary sample management is a critical aspect of CRM setup, particularly for chemical manufacturers. The provision of samples mirrors the outbound logistics of commercial products, requiring Labels, Material Safety Data Sheets, Bills of Lading, Packing Lists, Certificates of Analysis, etc.
Many companies send samples at no cost, often using a “zero dollar” sales order in their ERP system. Deciding how to account for sample costs can vary based on your accounting policies and the purpose of the samples:
- Marketing Expense: If the samples are primarily for promotional purposes, many companies prefer to classify them as a marketing expense. This helps in tracking the effectiveness of marketing campaigns and keeps the COGS more reflective of actual sales. Sample allocation requires additional ERP setup.
- COGS: Some companies may use a 100% discount approach that will preserve revenue and cost-of-goods-sold (COGS) metrics, especially if the samples are a significant part of their business strategy. This approach can provide a real-world view of the total cost of producing and distributing products.
- Hybrid Approach: In some cases, companies might use a hybrid approach, where the cost of producing the samples is recorded under COGS, but the distribution and related expenses are recorded as marketing expenses.
Deciding the right approach depends on your business goals and financial reporting preferences. In this scenario, we help clients determine the best approach and configure their CRM and ERP accordingly to ensure accurate margin analysis and statutory compliance.
Drive Measurable Outcomes with Proper CRM Implementation
Setting up a CRM system tailored to the unique needs of chemical manufacturers involves more than just selecting the right platform. Thoughtful CRM implementation strategies like the double funnel approach, collaboration tracking and complimentary sample management can make all the difference. By adopting these leading practices, you’ll enhance your CRM’s efficiency, improve resource allocation, and drive measurable outcomes.
If you’re ready to take your CRM implementation to the next level, Withum’s experienced team can help guide you through the process. From strategy to execution, we provide tailored solutions to fit your business needs and goals.
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Enhance your CRM setup with tailored solutions — contact Withum’s CRM and ERP Consulting Services Team today.
