Best Practices for CRM Implementation in Construction

A recent study revealed that only 32% of general contractors use a customer relationship management (CRM) system for sales management, project management, or internal communication. That’s surprisingly low compared to other industries, such as real estate, with adoption rates as high as 72%. 

This article will explain why CRM tools are essential and how effective CRM implementation can fix many of the daily issues your construction business faces. 

The Construction Industry’s Need for CRM Implementation

According to the Bureau of Labor Statistics, the failure rate for construction companies is incredibly high—96% fail within 10 years, and 83% are gone within 20 years. What’s the reason behind these statistics? 

• Prospecting: many construction companies lack a formal prospecting system, so they rely on lead services (e.g., HomeAdvisor), Google Ads, local SEO, and word of mouth. Most of these leads aren’t ready to start their projects, resulting in their inquiries being overlooked in favor of those looking to start immediately.

• Cash Flow: this is a complex problem related to struggles with generating leads and sales. Other common issues include low profits due to underbidding on projects and poor cash flow management (i.e., expenses exceeding income).

• Organization: some construction companies don’t have the necessary procedures in place. They can be disorganized and often lack the data they need to make good decisions (e.g., which projects to accept or reject) or train their teams. This increases the cost of every project. Forget about making profits; breaking even becomes a challenge when construction companies lack proper organization.

• Leadership: leaders who know the business but struggle to lead others often make matters worse. They’re known to choose unprofitable projects, hire inexperienced employees and subcontractors, and implement incorrect systems and procedures.

• Supply Chain Dysfunction: it’s common for material prices to fluctuate. In an economic downturn, those price fluctuations tend to be more extreme. That’s challenging for construction companies with thin margins and inadequate systems.

• Not Following Up: what happens once the sale is finished? What upselling or cross-selling opportunities are available? Do customers need your help with other projects? Are they willing to refer your company to other interested prospects? If your construction company battles with these questions, adopting sales CRM software can help you refine your sales pipeline management.

What Do These Issues Have to Do With CRM Software?

CRM software and its proper implementation help construction companies address each one of these issues. Here’s a brief look at the benefits of sales CRM software in construction: 

• Better Lead and Opportunity Management: if you’re prospecting, implementing a CRM system helps you identify your best-converting lead sources and shows you which sales and marketing channels generate revenue.
• Better Cash Flow Management: not generating the cash flow you need to cover your bills? With pipeline management, you can see which deals are set to close and tally the total revenue. If you’re using CRM for sales management, it should show you whether you’re on target (or not) with precise dollar amounts you can use for resource planning and forecasting revenue.
• Precise communication with teams: Pipeline management is simple when you have a great CRM in place. Everyone gets real-time updates and consistent communication. Turf wars and information silos fade away—all company information is kept in a single platform, and everyone has (appropriate) access to the same data.
• Use company resources efficiently: With a CRM system in place and used properly, you’ll know how to spend your resources intelligently. Top performers, money pits, and unprofitable projects will all rise to the top. Have a salesperson who’s closing 2x more deals? Now, you can assign them more resources. Lost money on the last six government projects you bid on? You’ll know why you need to reject their RFP.
• If leadership struggles with organization, your team will struggle as well. If you’re using your CRM for construction projects, you should have a bird’s eye view of the work being done on each project, showing you who’s doing what, when, and where.
• Your CRM should integrate with your supply chain database, giving your team the critical pricing information they need to build better estimates and eliminate supply chain dysfunction. This enables you to communicate clearly with each team member—estimators, sales reps, project managers, etc.
• Consistent Follow-Up Via Automation in Your CRM. Your sales CRM tools should give sales reps critical next steps, sales collateral and the documentation (e.g., proposals, estimates, contracts) needed to close more deals. If you’re using your CRM properly, everything should be at your sales rep’s fingertips. 

Now that we’ve highlighted the benefits of having a CRM system in the construction industry, you might be ready to implement a CRM for your construction business. Let’s discuss the best practices you need to follow to ensure your team succeeds. 

The 7 Best Practices for Implementing Sales CRM Tools in Construction

Preparation is essential when it comes to CRM implementation. The more upfront preparation you do, the better. Let’s look at some important best practices you can follow during your CRM implementation.

     1. Setting Goals and Defining Your Objectives: 

Good goals are clear, precise, and objective. Great goals provoke a strong emotional response. They pick fights, stimulate intense debate, and shake things up.

• Good: increasing sales revenue by 56%. 
• Great: we’ll increase sales revenue by 56% in Q1 – Q3 to regain our #1 spot in the market; Smith Contractors poached 17% of our customers, and we want to surpass them.

You’ll want to choose the Key Performance Indicators (KPIs) and metrics that are important to you at the start so you know what success looks like internally and externally.

     2. Verify That the CRM you Want Matches Your Goals:

Are you looking to increase sales revenue? Manage projects more efficiently? Do you want to improve internal communication with your team? You’ll want to define your goals and objectives in clear, measurable language.

As a general rule:

•  Operational CRMs are focused on increasing revenue. 
• Analytical CRMs are used to inspect and analyze key areas of your construction business. 
• Collaborative CRMs are primarily focused on internal and external communication. 
• Strategic CRMs offer leadership a 10,000 ft view of the business, focusing on overall performance.
  

     3. Clean and Prep Your Data:

You’ll want to make sure that the data you transfer from your current system to your CRM is clean, accurate, and free from duplicates. Create a plan to safely and completely transfer all your data to the new CRM safely and completely.

     4. Get Your Team’s Buy-In Ahead of Time:

If you don’t give your team a chance to weigh in, you won’t be able to earn their buy-in. When you ask for your team’s opinion, you provide them with an opportunity to share their thoughts, feelings, and objections. It does not mean you’re seeking their approval or agreement. You’re not looking for consensus; you’re allowing everyone to clear the air.

     5. Rally Your Team Behind The Objectives:

 If you’re clear on your goals and objectives and have earned their buy-in, you’ll find getting your team to commit to them much easier.

If you’ve done this right, you should see:

• More engaged employees
• Team members who are more willing to use your CRM tools
• Follow construction CRM best practices.
  

You can also consider using incentives on the backend to motivate and reward your team for using the CRM as intended.

     6. Measure CRM Performance:

Use your KPIs to measure your sales statistics before and after the CRM software implementation.

Are you seeing consistent growth and improvements in the areas that matter most to your construction company? Do you have an administrator responsible for the maintenance, troubleshooting, and updates needed to keep things running smoothly?

     7. Follow CRM Best Practices Consistently:

These CRM best practices are simple.

• First, choose the right CRM and customize it for your needs. 
• Second, onboard and train your team appropriately. 
• Third, identify any bottlenecks in your processes that prevent you from using your CRM as intended. 
• Finally, take the time to integrate your CRM with the tools you’re already using and automate repetitive tasks.

Now that we know what the best practices for implementing CRM software for sales management are, we can move on to why it’s so important for construction companies to follow these best practices. 

Why Your Business Should Follow Best Practices for CRM Implementation

Many companies that attempt to adopt a CRM system fail.

According to CIO magazine, analysts estimated that 18% to 69% of company projects fail. This happens for various reasons—low user adoption, cost overruns, data integrity issues, technology limitations, etc. 

However, Scott Edinger from Harvard Business Review states that the confirmed failure rate is closer to 90%. 

He outlines why most CRM projects fail to help the companies using them: 

“The primary reason they miss the mark in helping companies increase revenue is that CRM systems are too often used for inspection — to report on progress, improve the accuracy of forecasts, provide visibility, predict project delivery dates, and provide a range of other business intelligence—rather than creating improvement in the sales process.”

Improving the sales process and helping your sales team succeed should be your primary goal when implementing CRM for construction companies.  This goal is also why following best practices in your CRM implementation is so important. 

There is another issue when it comes to implementing sales CRM software in the construction industry. Many employees and subcontractors in this environment aren’t naturally tech-savvy.

CRM Implementation With a Tech-challenged Team

If you want your CRM implementation to be successful, you’ll need your team’s buy-in. But if your team is tech-challenged, they’re much more likely to fight you. 

How can you earn their cooperation? 

First thing first: address all of the elephants in the room. Be kind, helpful, and respectful by acknowledging the facts: You’re asking them to do something they don’t know how or don’t want to do, and it’s necessary to get the results you need.

Here’s how you can make this transition as smooth as possible for them. 

• Choose a User-friendly CRM: 

Choose a CRM that’s tailored to the construction industry, making it simple, easy to use, and intuitive. Most people aren’t as tech-challenged as they believe. They have smartphones, tablets, and computers, so they have a lot of unconscious knowledge.  

• Begin With the Basics: 

Don’t flood your team with a laundry list of tasks and to-dos. Instead, start with a list of critical tasks—adding contacts, sending an email, how to follow-up, etc. Focus your attention on building habits around your CRM first. 

• Give Guidance and Support:

Provide your team with the onboarding, education, guidance, and support they need. Make requesting help a simple, easy, and reliable process. The easier it is to get help, the faster they’ll adapt to the changes you’re asking them to make. 

• Accept Automation: 

Great CRMs provide you with a level of automation—they learn from you, telling you what to do next. They automate repetitive tasks, taking busy work off your hands and keeping you focused on high-profit activities. As always, keep it simple. Start with one or two automation, and then work up from there. 

• Rely on Relevance: 

Many CRMs allow you to customize your dashboards and reports. Give your team simple, need-to-know information. Avoid flooding them with unnecessary data, charts, and reports. Simplifying their message makes it easier for them to focus on the details that matter most. 

• Reward Your Rainmakers: 

Use the carrot-and-stick approach to incentivize performance. If you’re working with employees who are outperforming their peers, reward them publicly. If you’re dealing with poor performers, work with them privately.

Add as many benefits and rewards as possible to those who have bought in and are entirely on board. 

Pipeline CRM: a Leading CRM for Construction Companies

As we’ve seen, implementing a high-quality CRM can fix many of the issues your construction company struggles with daily. With the right approach, a robust implementation plan, and the right sales CRM software, you can give your business a fighting chance and the framework it needs to win. 

Consider trying Pipeline CRM, the leading construction CRM designed for builders and contractors. This user-friendly system is highly customizable and can be easily adopted by your sales team thanks to its intuitive interface and our exceptional customer support. We’re dedicated to assisting your team with software implementation every step of the way.

Sign up for Pipeline CRM software to get started.