10 Rules for Fundraising Using a CRM

using a CRM w deals and funnel stages

In my last article, we discussed how fundraising is a sales job. In that vein, let’s now take a look at the number one tool of the effective salesperson, and therefore the number one tool of the effective fundraiser: using a CRM.

CRM stands for customer relationship management [snore]. It’s basically a log of conversations and next actions organized around a list of possible deals. It is an essential tool for developing strong relationships with investors. If you’re raising money, you can’t live without it.

So, what is a CRM?

Above is a snapshot of the “pipeline” in the round we’re raising at Testive right now. This is the ‘deal’ view of my CRM. Each card you see on here represents one possible investment in Testive. Don’t worry about what all the colors and symbols mean, just get a sense of how this looks in action. I’m using Pipedrive, BTW. It works great for fundraising right out of the box.

I love my CRM.

I couldn’t do my job fundraising without it. Actually, it’s probably more accurate to say, I wouldn’t do my job without it. After all, the very first round I raised, I didn’t use a CRM, and it still got done, but it was a BIG MISTAKE. Now that I know a bit more about what I’m doing, I would refuse to start the process without setting up and using a CRM first.

Scott Staiti’s 10 Rules for using a CRM

I sat down with the head of Testive sales and all-around CRM and sales guru Scott Staiti to talk about using a CRM and why, if you work in sales, you need to use one. Scott popped off these 10 reasons to use a CRM in about 2 minutes, so you should think of each of these things as something that is slap-you-in-the-face-obvious to any professional sales person. I’ll follow each of Scott’s tips with some of my own thoughts and examples.

Scott Staiti: guru of using a CRM
CRM/Sales Guru Scott Staiti (AKA: BostonBeerHunter)

1. Focus on listening

Working in sales is all about listening. You have to really understand the person you’re talking to. This means focusing on what they are saying. Here’s the challenge, you can’t focus if you’re trying to remember things. So, if you want to do a good job at relationship building, you need to take notes so that you can free your mind up to think about what they’re saying so you can react to it properly. One of the things using a CRM will do for you is loggin your notes and keeping them organized by date/deal/contact. That way, the next time you talk to someone, you can whip out your CRM and get an up-to-date list of the things you have discussed previously with them. That way you can keep your mind doing what it does best: thinking.

2. Write down your notes

I asked Scott whether using a CRM was really essential. I haven’t had problems with this in my personal life. Can’t I just remember this stuff? Scott laughed that off immediately. “Remembering everything without a written system is ridiculous.” If you’re able to remember all the conversations you’re having, you’re not talking to enough leads. Even if you COULD remember all the conversations you’re having, tracking those conversations systematically will improve your performance because it will allow you focus on better things, such as figuring out next actions.

using a CRM to take notes

3. Use your CRM to set priorities

I love this tip. It’s helpful to keep your priorities straight. When you get out of a great conversation with someone and you’re really charged up, sometimes you want to spend all day working on the next step for that person, but it’s possible that there was someone else who you talked to first, that has something more pressing or important for you to be working on. Using a CRM is a great way to help you figure that out.

Generally, what I do is prioritize people based on the expected value of the investment. Large investors are prioritized over small ones, and conversations that are later in the funnel are prioritized over conversations that are early in the funnel because as deals move deeper in the funnel, their expected value rises because their likelihood of closing rises.

using a CRM to set priorities

4. Keep everything in the moment

Sales is an athletic discipline. You work long hours, and you chase chase chase. It can get tiring. The last thing you want to burden yourself with is trying to remember context and details while figuring things out. Here’s the challenge, sales is riddled with things you have to figure out.

So, here’s a trick that changed my life. Using a CRM, after every conversation, I make the assumption that the other person will do absolutely nothing. I assume they will take no action, no matter what they have promised me. Then, I write down exactly what I will do and exactly what date I’ll do it. When the date arrives, I don’t have to figure anything out, I just look at the list of things to do that day, and do them.

using a CRM to set next actions

5. Use discipline with funnel stages

What I used to do as a fundraising rookie was have a basket of possible investors at different conversation stages. I didn’t have a system for qualifying investors, nor did I have a system for moving them through a process. Not only was this a formula for driving myself crazy, but it made my fundraising process very very slow.

When I first started fundraising, it would often take me 6-months to close an investor. Now, I do it in an average of about 2-weeks. (Plus another 2 weeks for the paperwork and cash.) The biggest thing that sped up the flow was building a concrete process for people to go through. Once you have a concrete process set up, it’s much easier to always keep your eye on the right ball.

Here are the funnel stages that I’m using right now for investors in the current Testive round:

  1. Uncontacted
  2. Contacted
  3. Interested (any show of interest after the first contact)
  4. Committed (this is a written commitment)
  5. Paperwork Signed
  6. Check seen

using a CRM to manage funnel stages

6. Give the right CTA to the RIGHT person at the RIGHT time using a CRM

When I first started fundraising, I didn’t know how to close. I thought that there was something unprofessional about asking people point blank to give me money. Boy, was I wrong. Closing well and clearly is one of the single most important things to nail. When talking with a financial investor, they expect you to do ask for an investment, so if you beat around the bush everyone will get confused or scared and walk away from the deal.

When you’re new/weak at closing, many of the early troubles can be fixed with a list of scripts, and using a CRM will help you figure out which phrases to use a which times. If people are interested, I’ll write a post later with some of the scripts I use. (Let me know in the comments if you want this.)

Two scripts that I use for closing in different situations:

Watch for how each of these is appropriate for different people in different stages of the funnel.

(A) For people that are uncontacted, I almost always reach out by email, usually following on a warm introduction by someone else. The last line of the  email is always the exact same thing: “What’s the best way to get on your calendar?” That phrase is how I ‘close’ for a meeting. Said another way: For deals in ‘uncontacted’ the next step is always to ‘close for a meeting’.

(B) For people who are in ‘interested’, I usually have a phone call where I give a pitch on the business. In that call, I’ll usually use the phrase “does this sound like something you would be interested in?” That phrase is how I ‘close for a verbal commitment’. For deals in ‘interested’, the next step is always to ‘close for a commitment.’

7. Manage your emotional expectations

Most of the people I advise on sales practices are new at sales. Often, they are in a sales job, but they don’t think of themselves as a sales person. New sales people often have a tendency to count-their-chickens-before-they-hatch. This has a bad side effect: it makes people slow down. They think, ooh, here comes a deal, I’m going to focus on that deal and see if I can get it to close. That’s the wrong mentality. So few deals close, that it’s important for you to constantly allocate time to meeting new people.

My experience is that if you are meeting enough new people, most other problems fix themselves eventually.

Keep your drive and hunger up!

In order to keep your drive and hunger going, it’s important to manage your expectations of what is going to happen. You can do this using a CRM. Everyone’s experience varies WILDLY on this, but my personal experience is that about 50% of people move from contacted to interested, and about 50% move from interested to committed. The other stages have nearly 100% conversion. (If folks are interested, I’ll happily do a post on my actual funnel stats for several funding rounds. Let me know in the comments if that’s interesting.) Put another way: about 3/4 of the people you meet with will pass.

The lesson: talk to more new people. Until your round is done and over, you should be regularly talking to new people. “I’m sorry, we’re out of room,” Is one of the most satisfying emails to send out, but until you’re there, get out there and meet people!

8. Focus on activities that generate sales

When you’re dealing with a pipeline that has a long lead time, such as fundraising, it’s hard to track sales productivity. That’s because you might work hard, doing the right things, for two months before you get any investments in your business. So, how do you measure productivity?

So, how do you measure productivity? Simple. Using a CRM, you measure ‘activities’. Activities are a count of things you do that you believe move people along in the process. Sending an email is an activity. Jumping on a call with a prospect is an activity. The more activities, the higher your productivity.

When I work with new sales people, the first thing they all need to do is 10x their activity count (or more). They’ll often spend all day obsessing over sending 1 super awesome email. Turbocharging their process is much more about driving their activity count up than it is about crafting better messaging.

Using a CRM is a great way to count and track activities, and thereby manage your productivity better. If you see your activities count dropping, you’d better start asking ‘why?’ pronto.

9. Learn the right signals over time

If you’re new to fundraising or any sales discipline, you’ll likely have bad instincts regarding the signals you get from prospects. Don’t worry, that’s normal. The important thing is that you start documenting the signals you get, so that you can start learning in a structured way.

We talked earlier about good listening and about taking notes, here’s one of the places where that pays off. Using a CRM, when you go back to review your notes, you will start to spot patterns that you couldn’t otherwise have seen. For example, one of the patterns I have discovered is that when an angel investor says that they’re interested, but they want to show the deal to someone else first, that they will never close. It took me months of heartache to figure that out. I used to do tons of homework for people with that request. It was a huge burden. Now, I accelerate the “brush-off”. (If you want to know how a ‘brush-off’ works, let me know in the comments and I’ll write a piece about it.)

10. Delegate activities to other people

Lastly, a truly great managed process will inevitably require you to work with other people. I was never able to build a manageable fundraising process without a good coach. I simply can’t do it all by myself. Almost all great sales people have a manager and fundraising is no different. Well, it’s a little different because if you’re a CEO, you don’t really have a direct boss, so you may have to really work hard to get yourself a manager or coach or admin, but if you do, you’ll be glad you did, and using a CRM, you can get them up-to-speed in no time! Spoiler: the first thing they’re going to do is look up your activity count and give you some grief about it. Don’t be too hard on yourself, it’s inevitable 🙂

Thanks for reading. Would you do me a favor and let me know what’s on your mind in the comments? I need some inspiration for what direction to take this series on fundraising. Thanks in advance.

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