How I started a business with my CRM?

This is probably my shortest article, but it’s also one with a lot of value. A CRM is not just for managing your prospects; it’s used to make business decisions based on data and facts. Do you want to see where I’m going with this? Check this out.

Step 1: We determined the cost per lead (CPL)

For the past year, we have been generating leads for the automotive sector. We have generated up to 1500 leads per week. We generated these prospects through lead generation campaigns on Facebook and by sending emails to the dealership client list. Given that we track everything, we concluded that:

• Our leads cost us between $8 CAD and $25 CAD, across all brands.

• We generate between 0.8% and 1.6% of prospects from our newsletters.

Step 2: We determined the cost per appointment

We are collaborating with a company in the private sales sector in Europe. Initially, we were generating leads only for their events. The trainers on-site processed the leads directly to convert them into appointments. Since everything is tracked, we concluded that if rigorous follow-up is done with the prospects, the conversion rate of leads to appointments (who actually showed up at the dealership) was 25%. Therefore, we were able to determine that the cost per appointment was a maximum of $100.

Of course, this $100 represents only the cost of media placement and completely excludes agency fees and costs associated with phone calls.

Step 3: Determine fixed costs

In the projects we manage, everything is measured, even the executives’ time! I am currently tracking my time in the "Writing" section of the "Inbound Marketing" project in the time management software Harvest. In short, by calculating all of this and negotiating a commission per presented appointment with my team at the call center, we established that our fixed costs were $60 per appointment.

Step 4: Market research

We finally did a tour of Swiss, French, and Quebec dealerships to see what price they would be willing to pay for a qualified appointment in their dealership. We noted all of this in our CRM and arrived at prices that were significantly similar depending on the country. We took a general average.

Step 5: Risk assessment

We calculated the value of an appointment for a dealership minus our advertising placement fees and minus our fixed costs. We had a good margin. We decided to take the risk and "face" a certain portion of the appointments to the dealerships. Let me explain.

We all know the costs related to the project. We know we can get good results and we trust our system. We therefore asked for a small deposit from the dealerships to cover part of the cash flow necessary to start the campaigns and pay the fixed costs. As the risk is very low, we are about to "scale" the business big time (as of September 19, 2019).

No KPI, no cookies.

KPIs are performance indicators. Without the use of a CRM, we would not have been able to measure or project for such a project. In 2 hours of work, I was able to create a product. After about thirty meetings, we determined the price that our clients were willing to pay for this product. Let's say for a total of 50 hours we have a market study, an MVP, and a risk factor for a product that is profitable for both the client and us.

The moral of the story? Implement a CRM, get coached for a few hours, and dominate your market!