BEST PRACTICES FOR CRM GAMIFICATION AND PIPELINE MANAGEMENT

Transcription

1 BEST PRACTICES FOR CRM GAMIFICATION AND PIPELINE MANAGEMENT How to use gamification to ensure you can manage your pipeline by making sure you get quality data, in time, from your salespeople A whitepaper by

2 Contents 1. Introduction How CRM Gamification Works The Six Challenges of Good Pipeline Management Challenge #1: Forecasts are distorted Challenge # 2: Duplicate leads Challenge #3: Stale information Challenge #4: The no-lead sharing economy Challenge #5: Sales people do not lose opportunities; or they won t tell CRM about it Challenge #6: Filling the details is a tedious and unrewarding task Is CRM Broken? Gamification for Pipeline Management Gamification to Implement Process... 10

3 1. Introduction Salespeople are salespeople. They are into selling and into the rush they experience once they close a deal. Would you hire them for a data entry job? Probably not. They would not find any satisfaction there: no competitive or winning instincts are pleased when all data fields are nicely completed. That's for completers, not for competitors. On the other hand, sales managers need real data to make accurate forecasts and manage a realistic sales pipeline. Otherwise their pipeline will rapidly morph into a pipe dream. A Customer Relationship Management (CRM) system can help, but it is not a sales automation platform. It is a 100% useful system to collect data about customers from data about long-lived relational customer interactions to transactional, one-time sales but the data has to be good. Otherwise, we're into the "garbage in, garbage out" problem. In this white paper, we ll take a look at the key challenges sales people face when tasked with keeping their CRM system garbage-free. We ll then show how gamification can be used, simply and elegantly, to address these challenges. After all, we want to keep salespeople and their sales managers happy with work. Gamification, in that regard, is about harnessing of the internal competitiveness of sales people to achieve an updated, rich and insightful CRM system. And some completion satisfaction won t hurt either 2. How CRM Gamification Works Remember we re not talking here about gamifying sales per-se with leaderboards and sales contests. This white paper is all about gamifying the non-sales aspects of CRM so your sales pipeline will be based on quality data that is up to date. The diagram below shows the basics of good gamification for CRM sales pipeline management. A quality pipeline is a function of sales performance but also of quality data that is updated on time.

4 Keeping these three elements in mind, we ll take a look at how the actual game design and game rules for gamification of pipeline management work. Game design and game rules are a way of communicating to employees in a clear, unequivocal manner. Setting game rules (and using a gamification platform to give employees clear calls to action so they can follow a process and get rewarded for the right behavior) isn t just about communication. It also emphasizes corporate objectives and sets expectations; it helps employees learn the balance between two rewarded behaviors that need to be balanced, such as fast service vs the customer is always right. In the diagram below you can see how activities on the CRM can be rewarded in a way that supports timeliness. In the example below, sales people can get a certain score as they proceed down the sales funnel, moving from an unqualified lead through a proposal to closing a deal. Yet, if they perform an action early in each cycle, and update it in the CRM on time, they get the maximum score (points) for that phase. The later they are, the less the score. After a certain time, the available score falls down a cliff and being late results in a much lower score.

5 3. The Six Challenges of Good Pipeline Management Before we go on to discuss how gamification can solve CRM pipeline management issues, let s see the six problems with CRM that make pipeline management so vulnerable to the garbagein-garbage-out problem. But remember, we are not just about rooting out bad habits. We are also about communicating to employees how things should be done Challenge #1: Forecasts are distorted When filling in an estimated expected deal size, salespeople are prone to distort it. Some may over-estimate it and some may under-estimate it. This typical behavior has various reasons. Inexperienced sales reps sometimes over-estimate their performance, driven by exaggerated optimism and over-enthusiasm. In this case, they can t or won t properly assess what they are facing. They may want to set the bar as high as possible in order to please their managers. That may result with too-high expected sales amounts, too-high chances of closing and too-short a sales cycle to close the deal.

6 Inexperienced sales reps may also not comprehend the scope of the potential opportunity that can be developed, and may aim too low and leave money on the table. In these cases, deal-sizes in the CRM will be reduced (while the complete opportunity may be realized later on, with proper guidance and some mentoring). Experienced sales reps may present a different challenge. While they re expected to be better at grasping the scope of opportunity at hand, their sophistication may result with aiming too low if they wish to lower management s expectations; or with aiming too high, when they are concerned with their overall sub-quota performance and wish to pacify their managers. In this case, gamification is used to reward data quality. Sales people can be rewarded on becoming better at estimating deal size and sales cycle length. This can be done by comparing early stage forecasting with eventual closed deals Challenge #2: Duplicate leads Duplicate leads are a hassle for many companies. Eliminating them takes process and time. Technology can help, too. When implementing a marketing automation tool, you may eliminate part of the problem. But that may not suffice. In many companies, lead deduplication is a task for the inside-sales team. What are the organizational implications of NOT de-duplicating your leads? Duplicate accounts that were created twice during lead-conversions Split ownership of leads and accounts (different reps own the different leads/accounts) Addressing the same lead by more than one rep Waste of time when trying to merge all of the above, compared to simple lead deduplication that could have been done in the first place In this case gamification is used both for data quality and timeliness: game rules can set high scores for timely and accurate data-cleansing. You can compare reports to show potential duplications at point A and later on, at point B Challenge #3: Stale information Dealing with dead leads, meeting updates, and opportunity updates may be a tedious task that is not attractive enough for sales reps. The fruit of such tasks are usually realized in the long-run, but a sales manager needs them to be addressed at all times.

7 In three months time, when you plan a campaign that deals with unresponsive leads it s imperative that your records indicate when the last communication attempts were made and what was the result. In six months time, when you wish to recover a slow opportunity (sometimes started by another sales rep) it s important that you can browse through older meetings and learn about the dynamics of past communications. Meeting summaries that were entered within three to five days of delay are much poorer in insights and analysis as opposed to fresh data entry. In this case gamification is used to ensure timely data entry Challenge #4: The no-lead sharing economy Ceding leads to a centralized CRM is not an intuitive activity for a sales person. Leads they "brought with them", either from past sales jobs or from a recent convention, may literally lie in a drawer until the sales person decides that lead has become ripe. Obviously, this causes many leads not to be uploaded on time or at all, not to be exposed to the organization and not to be shared with teammates. In other cases, a sales person has a lead they cannot address for reasons of geography or product and they may still not pass it on to a peer. In this case, gamification rewards data entry. You can set the game rules to reward sales people for entering their own leads (with potential lead-source differentiation) and perhaps an extra reward for leads that were shared early-on, and that turned out to be good ones.

8 3.5. Challenge #5: Sales people do not lose opportunities; or they won t tell CRM about it Sales reps hate marking an opportunity as close-lost. Inexperienced reps may not know when to cut their losses. They can let the opportunity linger for years if not forced to do otherwise. Experienced reps may fear indicating that an opportunity is close-lost, for obvious reasons. It may attract negative attention. It may imply they have failed and hurt their statistics and commissions; and they are going to be asked to provide explanations. As a result, inactive accounts and abandoned opportunities are held in the system indefinitely. They stuff the pipeline with potential revenue that will never be realized and unnecessarily expand the company s prospecting database. All this makes it difficult for management to focus on the right opportunities. In this case, gamification rewards timeliness of admitting to lost opportunities. It isn t a reward for a deal, but a reduced reward (in points) can work. While some scoring should be given for lost opportunities (in order to encourage prompt data-entry), a significantly reduced scoring will be offered to those who finally admitted their loss a long time after their last activity in that account Challenge #6: Filling the details is a tedious and unrewarding task Updating the various entities in CRM can be tedious work and may lack a structured process. A sales person can wonder where do I put my notes attached to the opportunity, the contact or the meeting. A sales rep may think that mandatory fields are redundant. Other important fields that aren t marked as mandatory can be missed. Updating multiple records may require jumping from one record to another and from one entity to another. Most CRM systems do not use a clear process with a pre-ordered sequence for entering the data. The lack of a structured process, together with sales reps lack of interest in data-entry work results in poor, partial and sometimes obsolete data. Let s look at a sales executive, operating in the financial industry who has spent the last working week, on the road, covering 3 or 4 countries in Europe. Our rep has met with 3-5 clients (or prospects) a day, making close to 20 meetings with 20 organizations. She can t wait to be home! During the week she must make sure her manager is educated about few of the clients. The manager is about to meet them early next week; the support team should be aware of the complaints she has heard about; the professional services team needs to assess upsell opportunities; the inside-sales rep she s working with must complement her trip by making follow up calls and setting up next set of meetings; and her peers, addressing Asian subsidiaries of the

9 bank she has met with must be filled-in with regards to her meetings and clients plans. In order for the sales exec to fill-in all the notes and details that were accumulated during the week we must encourage her to do so, and reward her. In this case, gamification rewards timeliness and completeness. Besides the designated scoring she gets for updating her meetings, opportunities, account details etc she will be overrewarded for completeness and timeliness. Moreover, if there is no open case associated with that account she will deserve a special bonus score! 4. Is CRM Broken? Some industry pundits claim that all of the above means CRM is broken. That is not true! If you think about it, you can take the problems listed above and break them into two main issues both associated with CRM being a data repository issues: 1. CRM is a great data repository, but it requires accurate data to be any good for pipeline management. 2. CRM is a great data repository, but it lacks process. 5. Gamification for Pipeline Management CRM is a great tool for any business. Can you imagine a radically better way to keep track of all customer interactions, before, during, and after a sale? How could you do a pipeline analysis without it? Yet it is important to be aware that CRM delivers a partial solution. It s an excellent data repository that helps collecting, capturing and presenting the company s big picture. It lacks, however, the business process and human motivation that sales people critically need. When the words "sales" and "gamification" are used together, what we imagine is a leaderboard, the classic game mechanic used to reward salespeople. Leaderboards are about competition. But gamification today is changing and maturing. Using competition alone (and doing so with brute force) doesn't work well in some cases, and data entry and customer updates are a case in point. That is why many gamification providers are taking a less competitive and more process-centric approach. Gamification is about giving your employees a dashboard that indicates what's important to the organization.

10 Gamification is a great tool to encourage the "smaller" actions, such as sharing leads and clearing duplicates. It can be used to reward correct forecasts and even the designation of a "lost" status to a deal. Points can be assigned for good housekeeping tasks, including sharing leads, clearing duplicates, and correct forecasting. You can even give out points for prompt notification of a dead opportunity. You should assign more points to items that matter the most. If correct forecasting is a critical issue, put the emphasis on that and offer high points. If the elimination of duplicate leads is something that would be nice to have but not critical, put fewer points on that. You can also award "karma points" for sharing leads or supporting other people's sales with their product knowledge or past experience. Gamification can even be used to create balance. For example, people can be rewarded if they both sell and help with the data housekeeping and be rewarded less if they do just one thing. Whatever you do, think about the behavior you want to encourage and not about amorphous "metrics" that look good but matter less. If you wish to compliment your inside-sales team, on meeting their quota in lead qualification and meeting-setting (and you re hesitant to commit financially, since deals were not closed yet), gamification based rewards rewarding make an excellent solution. 6. Gamification to Implement Process If your CRM system lacks process, gamification can be used to give people clear calls to action instead of giving out points and ranking employees. Use it to direct them to what to do next on the system. In this respect, gamification is not an external leaderboard or reward system glued on top of a CRM system. It can be the missing link that turns a data store of customer data into a processoriented application and supports continuous optimization, giving managers information they can trust. Because when gamification is integrated with CRM, salespeople get clear and consistent calls to action that remind them to qualify leads, send quotes promptly, share leads, and update forecasts. After all, we want a sales machine that hums. And when gamification is done well, it's the oil that makes it operate at full speed.