When a company first starts out, the money isn't exactly rolling in. Startups devote all of their cash to their product — and make do with the equivalent of duct tape on the operations side.
This means customer and contact management is often tracked through spreadsheets. When you only have a handful of customers, it seems logical to simply pop their information into a spreadsheet and share it with the one or two salespeople on staff.
Let’s break down some of the advantages of using spreadsheets to track customer and contact information.
Advantages of Spreadsheets
1. They’re free.
For most businesses, spreadsheet software is readily available and often free. Whether your company uses Microsoft Office and can easily access Excel or runs on G-Suite where Google Sheets are readily available, most people with an internet connection can access a spreadsheet.
2. They require minimal training.
Whether you’ve used a spreadsheet to manage your personal finances, or have spent countless hours building pivot tables for previous roles, chances are you’ve had some hands-on experience using spreadsheets. Outside of building complicated formulas, recording information in spreadsheets is fairly intuitive and does not require intensive training to get the hang of. This makes spreadsheets an accessible option for teams that are scaling fast and don’t have time to train new employees to use complicated software.
While spreadsheets may be sufficient for startups in the very early stages, these advantages are often short-lived. Over time, spreadsheets can become more trouble than they're worth.
Even for a small company, managing customer information through spreadsheets is at best unproductive and at worst downright dangerous for a variety of reasons. Now let’s discuss some of the disadvantages of using spreadsheets to track customer and contact information.
Disadvantages of Spreadsheets
1. Spreadsheets are difficult to share internally.
When the sales team is comprised of one person, a single customer contact spreadsheet will do just fine. But what happens when you start hiring additional reps to meet demand? Sharing and updating a single master spreadsheet across an entire team can become a logistical nightmare fast.
2. Spreadsheets are easy to share externally.
As opposed to a dedicated system that requires access to log in, spreadsheets can be disseminated to anyone, anywhere with the simple send of an email. This makes it scary easy for a disgruntled or dishonest employee to share leads and customer data with external contacts (read: your competitors).
3. There’s no clear indication of who's working on what when.
Establishing an orderly system to divvy up leads and customers when you're working from spreadsheets is tough. Not to mention that unless you train your reps to take meticulous notes and follow a rigorous documentation process, there's no indication of who last reached out to a customer or prospect, what the content of the message was, and when the interaction took place.
4. Multiple versions of the truth.
Everyone might start out working from the same data ... but it probably won't stay that way for long. Every time a rep makes a change to the master spreadsheet, they'll need to upload it to a central repository for the edits to be communicated to the rest of the team. And if they forget to do that? Uh oh. Before long, you'll have several versions of the "single" spreadsheet — all with slightly different data. How will you know which one is right? That's quite a messy sales process.
It's hard enough compiling all the various versions of a spreadsheet into one master copy, but then managers have to assemble meaningful reports based on the data. As anyone who has ever tried to report from Excel knows, it's not for the faint of heart. And the more complex your data, the harder reporting becomes.
7. No easy data visualization.
Sure, users can create charts and graphs in spreadsheets. But "create" is the key word. Assembling any kind of data visualization in a spreadsheet is time-consuming and frustrating. Managers could opt to skip the visuals altogether — after all, they're not necessary. But presenting a spreadsheet rows and rows long is guaranteed to make reps' eyes cross.
8. Critical customer data is at nature's mercy.
Data that lives solely on your company's servers can be lost forever if a natural disaster strikes.
9. Critical customer data is at everyday life's mercy.
Data that lives solely on individual computers can be lost forever if your laptop takes a tumble or gets doused in coffee. Hey, life happens.
10. No connection with marketing systems.
Granted, your company might not even have a marketing automation system in place. But if it does, and the sales side of the house is operating on spreadsheets, there's bound to be crossed wires and miscommunication. A lack of integration means that customers and prospects might receive redundant information... or none at all. Neither of these scenarios translates into sales.
11. Managers can't manage.
To effectively coach and mentor, sales managers need to have visibility into the daily actions and pipelines of their reps. Too bad this is all but impossible to do through spreadsheets. Both reps and managers will quickly become frustrated with the seemingly endless cycle of uploading, downloading, attaching, and emailing.
12. No mobile access.
Mobile access to sales systems has been proven to increase rep productivity — by as much as 24%, according to some estimations. But regardless of the other virtues of spreadsheets, they're not exactly mobile-friendly. Dragging out a laptop each and every time you need to enter or change customer data gets old in a hurry.
13. Hard to scale.
Once your company -- and your customer list -- starts growing, sales spreadsheets will need to as well. However, the bigger the spreadsheet, the more likely it is to contain errors and broken formulas. Not to mention large spreadsheets are exponentially more unwieldy for users and administrators alike.
Using Databases Compared to Spreadsheets
Databases are programs that are designed to store, organize, and retrieve data. In sales, the most common type of database used is a client relationship manager, also known as a CRM. Let’s compare working with a database to working out of a spreadsheet.
1. A database serves as a central resource.
A CRM database is a tool that stores all of your client and customer contact information in one central place that can be easily accessed by your entire team across multiple devices. This system can organize all of your contact related data included emails, phone calls, and live chat with customers and prospects.
2. Seamless integration with other software.
Additionally, a CRM database can be seamlessly integrated with your company’s other business systems, including marketing software which can help improve synergy between your sales and marketing organizations, ensuring your prospects don’t receive the same information or get missed altogether.
3. Easy to scale for growing companies.
Spreadsheets are effective at storing basic quantitative data and are often maintained manually. On the other hand, databases are more effective at storing qualitative data, which is why they are ideal for complex businesses with a large customer base or complex sales process. Databases often have automation capability that helps organizations save time on manual entry.
For companies that are scaling, or rapidly acquiring new customers in a short period of time, upgrading from spreadsheets to a CRM database can help your company sell to more customers in an efficient manner.
As we mentioned above, the main benefit of using spreadsheets to run your sales operations comes down to two main factors: They're free (with a Microsoft Office or G-Suite implementation), and they don't require training.
These are certainly valid reasons — especially for a small company without cash to burn or training resources. But I'll let you in on a little secret: