For years, I’ve been encouraging business owners in the trades to purchase Customer Relationship Management (CRM) systems. Lately, I’ve had some owners ask if the CRM is actually adding value for buyers. The answer is almost certainly yes, but of course it depends on what you put into it and what you use it for.
I spoke with Darien Harris,
Revenue Operations Wizard for Titan Wizards, a two-year-old company based in Fort Worth Texas. Titan Wizards is a premium partner with ServiceTitan, which has connected businesses with CRMs since 2012. I often recommend ServiceTitan and Housecall Pro as CRM systems because they’re powerful tools for home services companies of all types. Here’s what Darien says about CRMs:
Why do companies need a CRM?
Every company spends time keeping track of data, from costs to inventory, purchasing to billing, to schedules and customer service calls and reminders. CRMs significantly reduce the man-hours needed for these tasks, so a contractor’s team can spend more time building and maintaining customer relationships.
Most business owners in the trades became successful because they focused on growth and CEO-level tasks. They want to achieve operational efficiency by automating as many daily, routine tasks as possible. A CRM system can take on those tasks.
Why does a company need a company like yours to implement a CRM?
ServiceTitan is the gold standard of home services CRM systems; they’ve spent years studying every function of a home services business so they can build features into their platforms that make life easier for the staff and the owner.
But that also creates complexity, and it can be challenging for a company owner or his leadership team to get the system set up. So ServiceTitan refers customers to companies like ours to set up the system, oversee data input, and onboard employees and super users. In that way, we’re a lot like the QuickBooks certified accountants who customize a company’s accounting system. They make sure the software tracks and files the information that goes in so the company can access it anytime and in any way they need.
Which feature of ServiceTitan will provide the quickest Return on Investment for an owner?
One of the biggest returns on investment for a service company is accurate job costing. If the data in your system (whatever you’re using) is not up to date, or used in the right way, you lose money. Either you’re bidding too low on jobs and not making a profit, or you’re bidding too high and not getting the job in the first place. It’s a lose/lose situation.
Entering the data from inventory, your price book, and tracking costs can be easy, if tedious, but setting up the system and connecting everything on the back end of the system is complex. Our staff is certified in every function of ServiceTitan, so what would be overwhelming for a business owner is simply what we do every day. We also provide long-term support for companies who want it. That means they can talk to the expert who designed the system when they have a question or a problem.
How does a CRM add value for a buyer who is acquiring a company?
The CRM itself isn’t valuable, per se. It’s the efficiency that it can provide that makes your company more profitable and thus more valuable. Buyers want to be able to access information about the company and trust that the numbers make sense, and a CRM allows you to answer data-based questions during diligence quickly and with confidence.
When a strategic buyer, such as a private equity firm, acquires a company, they often need to integrate several brands and multiple locations within the enterprise. CRM systems provide the means to do that more easily and help the larger company replicate financial and other functions across all the companies. That also makes the merger easier and more efficient, which is valuable to a buyer.
Patrick here again. If your company is still doing things the way you did 20 years ago, even ten years ago, you’re definitely leaving money on the table. That’s true even if you’re not planning to sell the company in the next couple of years. A CRM can be worth the investment of capital and hours it takes to implement it. However, it’s not the right fit for every business. Before choosing a CRM, it’s important to consider the size of your company, your budget, and your staff’s ability to effectively use and manage the system.
