Too many reps do not adopt CRM & vendors are detached from customer performance

STRIKE ONE: Adoption. It’s one of the biggest challenges that CRM companies face. Various sources online cite a stat by CSO Insight suggesting that 43% of CRM customers use half the features that they pay for. This ultimately means that a company spending a million dollars a year on their CRM is losing over $500K in value.

Moreover, in a study widely cited by publishers such as Forbes and Entrepreneur, high CRM adoption by salespeople was only achieved by 46% of companies in 2018, which is only marginally better than in 2013 when it was 37%.

From our experience adoption issues are driven by three main causes: 

1) Lack of motivation from sales reps 

2) Insufficient training 

3) Poorly designed user experience and interface 

Given our experience growing a successful mobile-first CRM and building deep expertise in what drives sales performance and rep motivation, we’ve focused much of our attention on solving this CRM adoption problem. 

*Source 

But there is a second problem that plays an equally important role from the sales admin perspective.

STRIKE TWO: Detached Outcomes. Most CRM companies are detached from the challenges & goals their customers originally came to them hoping to solve and achieve. This produces a misalignment of objectives between both parties, often leaving CRM companies indifferent towards the outcomes of their customers. This observation is supported in the Harvard Business Review, which reports on a meta-analysis from a dozen studies that an average of one-third of all CRM projects fail completely. They conclude that CRM companies miss the mark in helping companies because they are too often used for inspection (e.g. progress reports etc.) rather than creating improvements in the sales process and increasing revenue. This conclusion is supported by findings from the Miller Heiman Group showing that only 25% of salespeople agreed that their CRM actually enhanced their productivity.

Meanwhile, most CRM vendors would still get paid regardless of whether or not their customers were successful. We’d call that STRIKE THREE.

Outfield is one of the first performance-based CRM companies amidst a rapidly growing $58B market

The global customer relationship management (CRM) market size grew to $58 billion in 2021 according to Fortune Business Insights and has been growing rapidly at over 10% per year. It’s projected to grow at an even more significant rate over the next decade to $128 billion in 2028. CRM is also the third fastest-growing segment in all of enterprise software according to the 2020 Gartner Market Share Analysis, which reports comparable market sizes and trends to Fortune Business Insights.

The CRM market is also highly segmented with hundreds of CRM companies operating in the space. Consequently, Outfield regularly acquires customers who have left many of the longer-standing CRM companies in search of a better CRM solution since “big company CRMs” have been growing stale. Additionally,  nearly two thirds of the market is controlled by companies each with less than a 2% market share while the majority of the remaining companies maintain a 5% or less share. Segmented markets such as this with no dominant and highly-rated contender are prime markets for innovation and disruption. 

As a result of these market conditions, a shocking amount of allocated resources coming from CRM customers are going to waste. 43% of CRM customers use less than half the features they paid for. Outfield aims to reduce that waste and our understanding of the problem led us to a performance-based model, which aligns our revenue growth potential to the goals of our customers.

The initial targets within this market are companies that have been hit hardest by poor CRM adoption and outcomes. These companies also tend to have a significant percentage of Millennials in their workforce. Their generation makes up half of the American workforce and will jump to 75% of the global workforce by 2025. Millennials are a big gaming generation. As a result, they are also the most reactive to systems that reward performance using game mechanics, which are rooted in behavioral psychology. The increase in their workforce dominance only increases our potential for success.

Industry competitors have thus far been unsuccessful at addressing low CRM usage and adoption by salespeople. We believe Outfield is becoming one of the world’s first performance-based CRM company to change the game. We’re developing a solution rooted in game-theory and behavioral psychology to deploy intrinsic motivators that incentivize users not only to use the system, but also to improve themselves and increase their productivity. Here’s how…

We are motivating sales reps by making it more rewarding to improve & perform well

Sales reps should not simply use a CRM because their manager tells them to; rather they need to be using it because they want to. But why would sales reps want to use a CRM? Let’s look at the sales persona. Salespeople are competitive, like to help customers find solutions and are driven to win. Salespeople like to be recognized for their performance, and the best salespeople want to master their craft. These characteristics were magnified recently for us at Outfield when we launched experimental performance-based features and studied the feedback.

In 2018, we launched the experimental version of LeaguePlay™, a gamified CRM add-on. It quantified sales rep productivity into performance points within 4 categories: hustle, diligence, preparation, and leadership. 

LeaguePlay™ then consisted of a simple weekly competition to see who could achieve the highest performance, winner take all. The results were stunning. Not only was it our fastest growing feature, it also sparked a flood of customer feedback, engagement, and ideas. So we dug deeper with case studies and a 50-page White Paper where we interviewed one hundred sales managers on their results when introducing game mechanics to their sales organizations. 89% of sales managers reported that sales productivity rose when gamification was incorporated into their sales execution. Employee morale also rose 90% of the time when sales managers used strategies based on game theory. Further, managers reported that their sales reps who were of the millennial generation were the most responsive to gamification.

Based on these results and the barrage of customer feedback, we are currently expanding this traction into a high-fidelity performance + reputation based system that not only aligns our goals with customers, but also motivates sales reps to improve, compete, and use their CRM comprehensively.

How does our performance-based system work? First, our customers have the option to select a payment plan that features a low base price compared to standard CRM pricing. Outfield then only gets paid more when customer goals are met and they achieve successful outcomes. Salespeople are wired to think about their comp plans in terms of base salaries combined with variable pay. And that variable pay is based solely on their ability to drive results. So it’s not a stretch to think that CRM vendors should be compensated in a similar fashion. CRM companies profess all day about how they’ll help you increase sales…well prove it!

This performance-based pricing model creates a win-win relationship between Outfield and our customers. Thus, not only is the proof in the pudding, so is significant revenue potential because we end up getting paid more than standard CRM pricing when our customers succeed. And when they are successful, then they are happy to pay us a bonus.

From a product standpoint, our CRM automatically sets up a tailored performance system that managers can then adjust to match up with their team’s roles, KPIs, activity cadence, and any other important workflow unique to their team. Then we apply innovative mechanics rooted in behavioral psychology and game theory to motivate sales reps to buy in and produce. For example, both upward and downward social comparison mechanics can be applied to boost engagement. The Zeigarnik effect can also be applied to boost productivity since it makes you feel like you are on the cusp of completing something and completing things releases internal tension. These are just a few examples, and we apply positive habit-forming mechanics such as these both to everyday workflows such as goal setting and progression as well as bigger ideas within LeaguePlay™. 

Our performance-based strategy goes far beyond our initial experimental weekly leaderboard, which after a while began experiencing what’s known as leaderboard burnout. We solve this problem and expand our system by adding multiple ways to improve, compete, and win each week so reps can find what works best for them. 

For the complete view, see our LeaguePlay™ User Journey. This solution has been fully designed and is now in the development stage. We’re building the functionality into the current platform and testing it in our staging environment as we progress. 

We have been releasing this functionality in three phases. Phase 1 released a month ahead of schedule in November 2021, which laid the groundwork for our expansion toward performance-based CRM with the goals system and making the performance system fully customizable by team managers. It has also enabled us to begin the rollout of the performance-based pricing model. Phase 2 and 3 are up next as shown in the timeline image below.

In summary, our solution is a true win-win partnership. Customers win since we match CRM pricing with successful outcomes. Sales reps win because they are able to use CRM to help them improve, compete, and win. And Outfield wins because we can grow our company into a significant market opportunity and solve a real problem. Technically that’s 3 wins, but win-win-win is a bit of a mouthful. Ultimately, we’re in this game to crack these problems. There’s no more room in our playbook for sales reps to be indifferent about CRM.

We’ve innovated and are solving what competitors have fumbled

From its inception to evolution, Outfield has caught what other CRM companies missed. There’s a unique opportunity to change the game and align managers, sales reps, and CRMs like Outfield. Our focus on a performance + reputation based system inspired by game theory and behavioral psychology sets us apart from competitors. We serve as both a partner in operational success and as a software service. Unlike our competitors, we help our clients meet goals with respect to their business and CRM. 

League Play is the extension that introduces the gamification elements into Outfield. Eventually, we believe this tech will be integrable with all top CRM platforms expanding our addressable market and solving the user adoption problem across various CRMs, well beyond just the Outfield CRM platform. We have already begun building integrations of League Play into Salesforce and Hubspot. Imagine the growth potential if the League Play technology was spread across all the top CRM platforms. 

Outfield has grown to a team of 20 with in-house engineering, design, sales, and marketing. With client companies in over 50 countries paying for access to our platform, we reported just under $1M in revenue (cash accounting method) last year and have been covered in top media outlets like Forbes and Inc.

And the accomplishment we are most proud of so far? We’ve been able to obtain this level of success as a bootstrapped startup, meaning to date we have funded our growth with our sales as opposed to traditional investors like venture capital.

Within the next five years, we plan to champion a new way to approach CRM as we have game-planned above.

In baseball, outfielders are overlooked until they completely change a game with one catch. We’re hustling to make that catch for the CRM market and every player on the field.