CRM Success? or Failure?

“What does it take to make my CRM project a success?” I get asked this question all the time by executives that I meet.  They are usually either, (a) contemplating a new CRM (Customer Relationship Management) implementation or (b) trying to figure out how to make an already implemented system more ‘successful’. My blunt answer isn’t what they or you want to hear. Most companies, after all these years, still don’t see the success they are looking for.

I’ve been selling the promise of CRM for years. I’ve made it my career and I’ve drunk the cool-aid as well if not better than most. The results vendors and consultants will quote when trying to close a deal are indeed dramatic. And some, a few, companies will get those results, but not most.

Why? Because our eyes are bigger than our stomachs. Consider this statistic: 42% of CRM functionality is unused. This is the first challenge. Most CRM software contains more functionality than a company needs or can use.  Time and time again, companies choose a CRM solution with capabilities they couldn’t imagine when they started the process. Just think about the other tools on your desktop.  How much of the functionality do you use in MS Word? in MS Excel? Do you even know what the functionality is that you are not using?

CRM requires a tremendous amount of change for an organization. It is a change in behaviors and expectations. Too often it requires more administration for the sales team without a clear benefit from the effort. Most organizations are not up to driving the change that is required over the duration of a long period of time.  Other priorities start to intrude.

In a recent survey of several hundred companies nationwide regarding their focus on customers revealed that two years ago, the percentage of companies that put themselves in the category of “extremely” customer-driven was 48 percent. Today, it’s 63 percent, and looking into the future two years down the road, 81 percent say their organizations will be “extremely customer-driven.” (NFI Research) If this is true, it should help companies improve their success rate with CRM as a stronger ‘customer-driven’ culture aligns well with CRM.  But I am skeptical.  As they say, we cannot all be above average.

So what hope is there for the rest of us, being companies of mere mortal capabilities? Be realistic and honest about what your company is ready for. Perhaps be a little more than honest, be skeptical – you’ll end up closer to realistic after being wooed by the various CRM solution vendors. Second, make sure you know what will make the biggest difference. If you are only going to implement 60% of the solution, you want it to be the right 60%.

Sales Management: Selling to Your Sales Team

Last week I had the pleasure of attending a Business Marketing Association (BMA) lunch where John Maples, vice president, sales, PepsiCo/Quaker Foods and Snacks spoke about Pepsi’s business-to-business sales and marketing efforts. It was an interesting talk and insightful to hear how their business-to-business efforts with convenience stores, Starbucks and sports franchises are coordinated with their direct to consumer marketing. After listening to John for a while one could hear that there was a definite trend in the way Pepsi approaches its businesses sales, which is to say that they do NOT leave it up to the power of their brand, but they do a lot of what John described as “a best practices spreading” approach.

Each instance of this “best practices spreading” had a similar plot line. Pepsi had a goal and some ideas for achieving that goal, one example might be selling oatmeal through convenience stores. The next step was to find an outlet that was willing to work with Pepsi. With this partner, they could test the idea and measure the results. Only after there were measurable, quantifiable results, could the real selling begin. Armed with these results Pepsi then shared the results with other outlets to explain the benefit of the new program and concept, in this example, increasing sales by having oatmeal beside the juice and coffee. In this way, Pepsi was able to test each concept and scale quickly because they had the insight and the facts to support their proposition.

Not only is this a great example of using data in business-to-business sales but it is a great example of how to approach transformation of a sales organization, whatever you are trying to get your team to do.  When I work with sales teams, I am frequently working with sales managers, or those outside of sales who are entirely frustrated with trying to get the sales team to change their stripes.  When I have been successful it has been from following a plan very similar to Pepsi’s.  Start by understanding how your change is going to impact the sales team.  How is it going to help them with their goals?  Find somebody, or multiple somebodies, to test the concept on. Measure the results.  Learn from the process and make adjustments if you need to.  Then and only then, when you are armed with the results, go out and ‘sell’ the new approach to your team.

Strengthen the Relationship Between Sales and Marketing – Part 3: Build the Process

So you want to strengthen the relationship between Marketing & Sales?

  • Step 1:  Establish and build agreement on common goals, then…
  • Step 2: Define roles and responsibilities, finally…
  • Step 3: Build the process for working together

I discussed the importance of establishing common goals and defining roles and responsibilities in my last two posts and consider these initial steps to be the hard work of building a strong foundation.  Step 3: Build The Process, is now about doing the hard work of building the house on top of that strong foundation.  The framework for building this house has three components to it.

Outline the process / operating model

Simply put, we need to define how the work gets done. What steps will be taken and in what time frame? Think of it as a checklist.  On NPR this week there was an interview with Dr. Atul Gawande during which he discussed his research about the power of checklists in manufacturing (Boeing), aviation (citing Capt. Sully who landed the USAir flight on the Hudson River last year) and operating rooms. Having a process, a checklist, can help in almost any situation by clarifying for everybody involved what needs the happen in what order.

Establish metrics Establishing metrics goes hand-in-hand with building out your core processes. How are you going to measure your results? How are you going to set expectations and know if you met them? How are you going to identify what is working and what is not? When you are determining what to measure, keep your overall goals in mind.  You metrics should related to your goals.  If you are trying to expand your customer base, you would be better off to measure the number of new customers instead of say revenue per customer.

Close the feedback loop Finally, make sure that marketing and sales continue to provide feedback to each other. To be successful this is going to be an ongoing and iterative process.  If you are going to be successful then you need to build a close-loop process. What this means is taking the results from the work that you have done and using it as feedback into the next iteration. Capture your lessons learned, you success and your failures pour this information back into Step 1.  Revisit and refine your goals, your roles and review the processes in your business.

Good luck with growing your business in 2010.  Making continuous small changes everyday in how you work together will add up to a big difference.  Even if you think things are going well.  Isn’t this a great time to take a moment to talk to you counterpart and validate that you share common goals.  It’s a great place to start.

Strengthen the Relationship Between Sales and Marketing – Part 2: Defining Roles

Last week I started a conversation about how to improve the relationship between sales and marketing because I am of the humble opinion that these two functions should be working collaboratively within your organization.  It can be dizzying to try and define what marketing is versus what sales is.  I’ve heard every definition imaginable and most are feasible, although not necessarily in agreement with each other.  In Part 1 of this series, I talked about defining goals as the starting point for a solid working relationship.

Today, I would like to talk about DEFINING ROLES AND RESPONSIBILITIES

Okay, so perhaps you are sitting there thinking, “Hey, what’s the big deal?” And, in part, you are right.  It isn’t a big deal to define roles and responsibilities for about 80% of what you do. It is sales’ responsibility to call on customers, to get contracts signed.  It is marketing’s responsibility to develop and execute marketing campaigns, to work with creative to design promotional material.  The challenge is that last 20% or so where collaboration and cooperation make all the difference.  It is the last 20% where things are no longer black and white but some shade of gray.

  • What is marketing’s role in helping to generate and qualify leads?
  • What role does marketing or sales play to define what a qualified lead is?
  • What is sales responsibility to act on leads? or provide feedback on the leads being provided?
  • What is sales role in strategic marketing decisions? And, is sales committed to taking time out of the field to participate?
  • What is marketing’s responsibility to go out on customer calls with sales to understand the customer and the sales reps world better?

It is this last 20% that will define how marketing and sales will work with each other.  When was the last time that you had an explicit conversation with your counterparts to discuss this?  Did you come to an agreement?  Did you write down your agreement so that you could reference back to it later?  Did you commit to what you agreed to, or slide back into old habits after the meeting?

Both establishing goals and defining roles and responsibilities are about opening up the lines of communication.  Good communication is the foundation of most solid relationships. Sales and Marketing are no different. Good communication is a simple concept.  Achieving good communication, and reaching agreement on these areas is not at all simple.  In fact, reaching agreement may require major negotiation.  My hope here is to provide a logical progression of topics to cover, so that progress is made and negotiations do not stall out in a total impasse.

Coming next week, the final installment: “Strengthen the Relationship Between Sales and Marketing – Part 3: Build the Process”

Strengthen the Relationship Between Sales and Marketing – Part 1: Common Goals

I am always amazed when I am out talking to sales and marketing leaders at the nods and grunts of understanding that I get when the topic of discussion turns to the tension between sales and marketing.This is an unfortunate state of affairs and may be worth some effort in 2010 to improve. The team that is wasting energy on internal fights and squabbles, isn’t the team headed to the winners circle.

Do you have agreement on GOALS?

Starting at the top of the organization is there agreement on the overall organizational goals? on the goals are for both marketing and sales? In the abstract, it may be an interesting intellectual exercise to debate if marketing should be working on brand awareness or lead generation (or both); if sales should be focused making this quarter’s numbers or bringing customer intelligence back to the organization (or both). Within your company, though, you need to make some decisions and make sure that everybody is on the same page with priorities and assumptions.

I learned the importance of agreeing on goals back when I was in grad school.  We had a quarter-long consulting project that culminated our first year of study. When the teams were formed, one of the critical questions our faculty adviser recommended we asked ourselves was, “What grade do you want to achieve?”.  It sounds trivial, but as it turned out, it was extremely helpful to get this basic goal out on the table early. How much time and effort did each of us want to put into the project? Was the project a priority or was job hunting?  Was graduation the goal or receiving academic honors?  If one team member is aiming for “survival” so they can focus on other priorities, there is going to be conflict with the team member who wants to be top of the class.  The only way to resolve this is to get it on the table early and agree on a plan.  This is a simple example but hopefully it illustrates how agreeing on goals and expectations early is the foundation for a strong working relationship.

Going back to the work of marketing and sales it is important, and not just an interesting intellectual exercise, for the head of sale and the head of marketing to come to agreement on their collective and individual goals.  As with the team project in grad school, if there isn’t agreement at this foundational level then any efforts to build a collaborative working relationship are doomed. Get the new year started on the right foot.  Sit down and talk to your counterpart and find out if you agree on the underlying strategic goals.  If you don’t, work on negotiating an understanding that you can both commit to.

Coming next week:  “Strengthen the Relationship Between Sales and Marketing – Part 2: Defining Roles”

Is There Innovation In Sales?

“Is there innovation is sales?” This question came up last week when I was downtown meeting with a group of sales executives and business owners. Actually, the question was “Why isn’t there innovation in sales?”  In this day and age of social media and digital marketing the question shocked me. There are profound changes happening in the way people gather information to make decisions. Of course there is innovation in sales.

For starters, I would argue that any good sales person will innovate and is innovating all the time.  Last week my blog was about process and perhaps these sound like two different arguments.  They are not.  The sales process encourages innovation.  As an artist has a process for creating a work of art (sketches are created, colors are tested, before the final piece is created).  A sales process enables a salesperson to innovate. What innovation will improve the results I get? Does it work better to call, to email, to do it within 24 hours, within 48 hours? A good sales person, a good sales team, and a good sales manager is following a process and is always looking for the innovation which will make a difference in what they do.

Now, to give the person who asked this question credit, I had another conversation with a senior sales executive recently that illustrated why so many people have the perception that the sales team is only interested in quarterly quotas and only capable of executing tactics. Here we are sitting in December, getting ready for a new year, and when asked about his goals, all this executive could share was his sales goals.  He had no plans for improving the level of performance of his team, nor could he identify any road blocks – technology, skills, sales process or methodology – that needed to be addressed. I was amazed that as a leader in his organization he was not thinking deeper or harder about how to move his team, and the company forward.

I may be in the minority on this but I view marketing and sales as partners on a continuum of how companies connect with and communicate with prospects and customers in order to generate revenue.  The marketing function works on branding, building awareness with the purpose of generating leads. Once a lead is generated, the sales function works on nurturing that lead through the sales pipeline to close the opportunity.  With this view, any company who believes that sales doesn’t have to worry about what is going on with social media and digital marketing is putting their revenue at risk.  As more individuals use the internet to gather information and build relationships with companies and organizations, this will impact the role that the sale team has, it will impact the sales process, it will impact how customers relationships are nurtured.

Sales needs to innovate.  Some companies are innovating their customer relationship process.  Companies that do not innovate their sales process are gambling their future.

Great Conversation on Sales Process

The need for a sales process is a topic that I have commented on here and I am sure will continue to comment on in the future.  Today, I would like to link to a couple of other blogs that have touched on the subject in the last week.  Both of which I thin make some good comments.

The first blog was written by David Brock, ‘But We Have A Sales Process”. To quote David, “Without a process, selling is like taking a random walk through the forest—you never know where you’ll end up. A well-defined sales process provides a clear roadmap of the most effective and efficient means to facilitate the customer in their buying process.” I don’t want to steal all his thunder but the blog is worth a read and make some good points.  If you think you have a sales process, assess if your sales team is actually following the process. If you are using the process that came embedded in your CRM system, have you adapted it to the specific needs and lessons learned by your sales team?  If you want it to be a relevant and meaningful process, make sure it fits your needs.

The second blog that I would like to bring to your attention is one by Dave Stein, “More Excuses For Not Doing The Right Thing About Sales Effectiveness”.  Dave starts by giving us a definition for the sales process which is NOT synonymous with your sales methodology.  A sales process does not stifle creativity!  A process will actually enable and support creativity. Think of the most creative members of our community – painters, musicians, actors.  They almost all follow a process when creating great works.

Use your sales process.  Keep it simple and embrace it.  It will help you take the mystery and unpredictability out of your work.

Thanksgiving Proclamation By President Obama

What began as a harvest celebration between European settlers and indigenous communities nearly four centuries ago has become our cherished tradition of Thanksgiving. This day’s roots are intertwined with those of our nation, and its history traces the American narrative.

Today, we recall President George Washington, who proclaimed our first national day of public thanksgiving to be observed “by acknowledging with grateful hearts the many and signal favors of Almighty God,” and President Abraham Lincoln, who established our annual Thanksgiving Day to help mend a fractured nation in the midst of civil war. We also recognize the contributions of Native Americans, who helped the early colonists survive their first harsh winter and continue to strengthen our nation. From our earliest days of independence, and in times of tragedy and triumph, Americans have come together to celebrate Thanksgiving.

As Americans, we hail from every part of the world. While we observe traditions from every culture, Thanksgiving Day is a unique national tradition we all share. Its spirit binds us together as one people, each of us thankful for our common blessings.

As we gather once again among loved ones, let us also reach out to our neighbors and fellow citizens in need of a helping hand. This is a time for us to renew our bonds with one another, and we can fulfill that commitment by serving our communities and our nation throughout the year. In doing so, we pay tribute to our country’s men and women in uniform who set an example of service that inspires us all. Let us be guided by the legacy of those who have fought for the freedoms for which we give thanks, and be worthy heirs to the noble tradition of goodwill shown on this day.

Now, therefore, I, Barack Obama, president of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim Thursday, Nov. 26, 2009, as a National Day of Thanksgiving. I encourage all the people of the United States to come together, whether in our homes, places of worship, community centers, or any place where family, friends and neighbors may gather, with gratitude for all we have received in the past year, to express appreciation to those whose lives enrich our own and to share our bounty with others.

In witness whereof, I have hereunto set my hand this 20th day of November, in the year of our Lord 2009, and of the independence of the United States of America the 234th (year).

President Barack Obama

CRM: Critical Success Factors

Customer Relationship Management (CRM) has always existed. At its heart and as the name declares, CRM is about managing customer relationships. Companies have been doing that in some form for as long as they have been in business. During the 1990’s companies began to leverage technology to enable new approaches to managing their customers. The promise of CRM technology is simple: higher close rates, shorter sell cycles, more efficient sales process, and increased customer satisfaction.

Unfortunately, eager anticipation quickly became disappointment when it became apparent that CRM technology alone could not deliver the value promised. Some CRM research firms report that nearly 70% of CRM implementations fail to deliver measurable benefits. In contrast to these dismal stats however, IBM research has found that companies that focus on and prioritize critical activities actually increase the likelihood of CRM success by more than 70% – flipping the ratios. So there is hope and reason to look at CRM seriously for improving the performance of your organization.

IBM along with The Economist Intelligence Unit completed a survey of 373 organizations to understand what factors had the biggest impact on successful CRM implementations. Their research identified the following five factors as having the biggest impact (70-74%) on success and also presenting the biggest challenges:

  • CRM strategy and value proposition development – What do you want to get out of CRM?
  • Process change – What do you need to do differently after CRM?
  • Change management – How do you deal with the fear and reluctance to use the CRM system?
  • Governance – How do you make sure the new processes will stick and quality data is entered into the CRM system?
  • Budget process management – How much is too much to spend on CRM?

Isn’t it interesting that these are all related to strategy, the organization, change management, and business operations (process)? Technology doesn’t appear on this hit list. Marketing, Sales and Customer Service executives take note.  We can learn from those who have gone before what the keys to success are if you want your CRM system to add value to the organization.

CRM should certainly not be looked at as the next ‘hobby’ of management.  It is a serious undertaking that takes a sustained commitment from the entire organization.

What are you doing to get ready to implement a CRM system or improve the performance of the CRM system you have already implemented?

Your Sales Process And Buying Process: In Sync?

Let me tell you a story.

A couple of weeks ago, I reconnected with a former co-worker. After being out of touch for several years, we had a great conversation catching up on the paths our respective careers had taken.  At some point during this conversation, the topic of office space came up and she offered to introduce me to her contact where she is leasing space.  I’m only starting my search but thought this sounded like a great opportunity.  If she was happy and could get me in touch with a helpful person that would be great.

During the next week I had a phone conversation with somebody, a meeting was set-up for me to see their space and, getting a little excited and curious, I did some research on their website. It is important to note that instead of inviting me to tour the office where my friend was located, I was instead invited to tour another downtown location.  I was a little disappointed but figured it was a detail that could be worked out.

I arrived as scheduled on the day of the appointment. From this point on, the sales process went completely off the rails. Instead of being greeted by “Kathrine” as scheduled, “Peter” met me and told me that Kathrine was on vacation.  Peter was a nice enough guy, but he wasn’t familiar with the office and had to ask for assistance to give me a tour. The information that I received during this visit was almost exactly the same information that I had found on their web site, and nothing more.

My frustration with this experience has only grown as time has passed.  A dozen little miss-steps because the sales process and my buying process were not in sync add up to a missed opportunity.

  1. A warm referral is depersonalized: We all like to hang out with our friends. Why during the process of receiving my referral and recommending properties, didn’t anybody acknowledge or suggest the same location as my contact? What a great opportunity to have a truly unique offer? Did their CRM system not allow for this information to be captured? Are locations with more capacity pushed to the top of the list or are incentives given to push these properties? Whatever the cause, the results were cool lack of personalization.
  2. Lack of new information = no value from visit: In other entries on this blog I have written about how much executives are using the web to do research. I was no exception. During a down moment, when I was getting excited about the opportunity I had read their website. Poked around it, familiarized myself with some of the amenities and different programs. Having done this, it was infuriating to take time out of a busy day, a busy week to simply be given the same information.
  3. Do you want my business? Where is the follow-up? I took time out of my schedule five days ago to visit your property. To me that is a big buy signal because time is my most precious resource.  There has been no follow-up to get feedback, see if I have questions or even to see if I want to move forward.

This experience reminded me of how important it is to get the sales process in sync with the buying process.  From the first step of understanding where the referral came from to being unable to expand on the knowledge I had found on the website it felt like the buying I wanted to do and the selling of the facility were out of sync. The unfortunate result is that instead of feeling like I was getting a fair price from a place I was predisposed to like. I know feel annoyed and underwhelmed and will go shop for alternatives. I would have been happy to have an excuse not to shop for different options, there are other ways I would like to spend my time.

How do you align your sales process with your customers buying process? Have you been able to incorporated customer needs into the sales process? Or is it driven only by corporate needs?