Does CRM Adoption Really Matter? 9 Proven Ways to Improve CRM Adoption and Drive Revenues Without Driving Salespeople Crazy

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1 Does CRM Adoption Really Matter? 9 Proven Ways to Improve CRM Adoption and Drive Revenues Without Driving Salespeople Crazy

2 whitepaper Does CRM Adoption Really Matter? 9 Proven Ways to Improve CRM Adoption and Drive Revenues Without Driving Salespeople Crazy A Winning Sales Culture Sales managers who want to attract, create and retain top performers need to create a sales culture that: Allows them to perform autonomously Gives them control over their actions Requires little administrative work Provides support with appropriate technology and tools Supports an atmosphere of healthy and fair competition The success of a sales organization boils down to one thing driving revenue. To run a profitable business, you want to control costs and revenues. But this is easier said than done. While it s easy to predict costs by establishing a budget, forecasting sales is another matter entirely. This is where customer relationship management (CRM) tools can help. They offer sales leaders the potential to measure the value of their pipeline and accurately predict revenue. On one hand, this represents an incredible opportunity for sales organizations to make better business decisions. With healthy sales CRM systems like salesforce.com, competitive companies see what s working in their process, as well as identify and eliminate bottlenecks. This process of continual optimization not only automates the knowledge and best practices of the team s peak performers it dramatically improves forecasting. Instead of managing on hunches, the company executes on predictive science and acts fast to seize opportunities as they emerge in the marketplace. But most sales organizations struggle to motivate their salespeople to adopt sales CRM tools and extract the value they expect. Sixty-six percent of enterprise buyers have only around half of their teams using enterprise software, according to a SandHill.com/Neochange survey. Fewer than 10% have effective usage levels above 70%. Without a centralized repository where your salespeople record their conversations and sales status with prospects and customers, that critical information resides in your salespeople s notebooks or in their heads. Because it s anyone s guess which deals will close by the end of the month (let alone next quarter), such organizations struggle to effectively manage their capital, which can quickly cause them to lose market share, or even teeter on the edge of irrelevance in the marketplace. Read on for the latest strategies from today s leading sales enterprises for increasing CRM user adoption and expanding revenue without driving your salespeople or your sales managers crazy. Do your sales reps spend hours organizing their time and managing prospecting efforts in Outlook and Excel, even if your company uses a CRM system? Do your reps follow up on leads and sales opportunities with the urgency you expect?

3 Can You Risk Low CRM Adoption With This Much Money at Stake? Scenario 1 Users of a sales CRM system pay anywhere from $50 to over $100/month per user. Those costs escalate further when factoring in training and ongoing support. Expense Licensing fees Training CRM admin & other support Annual cost per rep $1,500 $1,000 $1,500 **Assuming 50 salespeople Total first-year investment: $200,000 (Source: Destination CRM) Annual team cost $75,000 $50,000 $75,000 Scenario 2 Another source estimated a cost of $3 million to develop, customize and implement a CRM system for 200 users. Total first-year investment: $1.82 million, including: $300,000 for software license $1.2 million for service, implementation and customization $185,000 for hardware and data center personnel (Source: Information Management) Either way, you re investing between $10 and $15 thousand dollars in a CRM system for each person on your sales team. This does not guarantee adoption, and a slow adoption rate will cost you even more than this. How Much Do You Want ROI on This Investment? Success Strategies 1 Gain Executive Sponsorship Salespeople only take new tools seriously that they see management using, so CRM adoption must be company-wide. Unless even the sales manager s boss actively uses a CRM tool, the company can t expect high user adoption. In a LinkedIn poll, 52% of sales managers said reps don t use CRM like they want them to. Say your company spends $500,000 per year on CRM that s $250,000 you re throwing down the drain! user adoption by supporting implementation and using the tool themselves. Sales Managers What % of your salespeople use your CRM system just like you want them to? Measuring Sales Behaviors & Analytics For example, say a Sales VP generates reports outside of Salesforce. What incentive does a sales manager, not to mention his reps, have to use Salesforce? Take action: Get upper management involved from the start all the way up to the CEO. Make sure you purchase a solution that satisfies your company s most critical needs. What do they want to accomplish? What kind of ROI can they expect? Build an implementation roadmap to achieve these goals. Collaboration at every step positions executive management to drive CRM 28% Under 25% of my salespeople 25% Between 25% and 50% of my salespeople 19% Between 50% and 75% of my salespeople 16% Between 75% and 90% of my salespeople 13% We have % adoption continued on next page

4 2 Refine Your Sales Process Only 42% of sales forces have a documented sales process, according to the Sales Benchmark Index. Of that percentage, fewer than 12% actually execute it in the field. You prevent your team from successfully adopting CRM if your sales process is flawed (or nonexistent) but you create a firm foundation for other strategic, revenue-generating tools when your sales process is solid. To diagnose your sales process health, ask yourself these questions: Does your sales process match your customers' buying process? Does your company have an organization-wide definition of a lead? Do your salespeople know when a lead converts to an opportunity? What processes have you set in place to show salespeople how to convert opportunities into a sale? Remember technology is only as good as the process it automates. Unfortunately, most sales managers aren t skilled in aligning people, process and technology. If your company suffers from low CRM adoption, you likely lack a clearly defined sales process, or aren t truly committed to managing your business based on that process. Eliminating choke points and reducing sales cycle drag is a very fast way to gain widespread CRM adoption. If a CRM system can simplify, and in some cases automate, selling cycle activities, then users will leverage the system in an effort to reach quota and simplify their lives. WALTER ROGERS BAKER COMMUNICATIONS 3 Achieve Buy-In From Salespeople In general, salespeople won t adopt what they haven t helped create. They need to know what s in it for them. What can be highly effective is training, educating and motivating your sales force in a way that guides them to gradually uncover the benefits of user adoption themselves. Ask your salespeople what frustrates them about the current process for accessing and updating customer data. What do they want more of? What can you improve? Always remember to quantify what sales reps can expect to gain: more closed deals, bigger accounts and larger bonuses. The first question you need to ask is, How do we make a business process easier for you? says Tim Acker, Sr. Director of Business Solutions NA at Ingram Micro, Inc. Tim recently implemented Salesforce CRM within Ingram s selling team of over 1,800 associates and has adoption rates of 90%. continued on next page

5 4 Offer Effective Training Continually Trying to train reps in a single day is like getting them to drink from a firehose. Baker Communications, a firm specializing in CRM enabled sales transformation, offers multi-week behavior transformation services that build specific skills for CRM success focused explicitly on identifying, maturing and closing pipeline. As Baker clients can attest, a long-term view of behavior transformation pays off. It is not unusual for them to achieve a 20:1 ROI or better as a result of Baker's services. Great CRM users aren t built in a day. You ll see better results with targeted, continual training and support that help reps see what adoption could mean for them. 5 Start with Minimum Functionality Just as training shouldn t happen in a day, it's best to teach new parts of your CRM tool one at a time. Focus first on functions that will quickly benefit sales reps, such as creating sales reports. Later, work up to more advanced features. "CRM adoption is a journey," says Walter Rogers, CEO of Baker Communications. Here are his four phases of adoption, which your organization should expect to encounter: Stage 1 Collaboration, account, opportunity and contact management. Get accurate data in the system, leverage Chatter to collaborate internally and with customers/partners and become proficient in using the basic functions. Stage 2 Manage forecast and pipeline. Once accurate data is in the system, managers and leadership can then improve the accuracy and predictability of their pipeline and forecast. Stage 3 Execute sales missions. Once forecasts and pipelines are reliable and predictable, teams are ready to proceed to execute targeted sales missions that exploit specific market opportunities, such as re-activating customers or competitive attacks. Stage 4 Strategic agility. Sales teams automatically recognize and leverage their CRM to not just react to market conditions or management imperatives, but to create their own desired future and end state. 6 Measure Everything Data is your lifeblood in a CRM system. For example, say you re not meeting your forecasts. If your salespeople have accurately recorded each interaction with every prospect, you can easily drill down into the available data. (Salesforce s reporting functionality is very effective in this area.) Perhaps you discover your reps are ranking opportunities incorrectly. Once you know this, you can calibrate and refine your sales process by institutionalizing better organization-wide definitions and training. In other words, when your salespeople document all of their customer interactions, the CRM becomes management s tool to improve accuracy across your sales process. The continuous process from the CRM s data stream gives management predictive visibility into what they need to do to get the results they want. Take action: Before implementing your CRM, select and clearly define Key Performance Indicators (KPIs). These metrics will tell your sales team what is most important. A good KPI must: Be measurable Help determine competitive advantage Provide for further measurement and analysis Effectively gauge future performance continued on next page

6 7 Break Old Habits Fast Your sales team may be accustomed to using other CRM tools, or even spreadsheets for managing customer relationships and storing important information. You need to break these habits as soon as possible and replace them with new ones. Incentive here is key. Many sales organizations see incredible results when they use sales contests or SPIFs, especially with tools specifically designed to increase CRM adoption. Contests should be designed to motivate teams to encourage achievements and focus on dashboards to see where salespeople rank in relation to the rest of the team. To learn the four elements of high impact sales competitions, download LevelEleven s Sales Contest Toolkit. Crucial KPIs for Measuring CRM Adoption Salespeople are resistant to change, often because they don t see what s in it for them Lead volume, response time and conversion Quota to pipeline ratio Year-over-year pipeline trend Pipeline by stage, value and age % of quota attained by month/quarter/year Year-over-year sales trend Forecast and average variance Revenue and gross margin trend in top 20% of accounts Velocity of top 20% of opportunities Gross margin and gross profit trend Source: SPARK! ebook 8 Give Consistent Feedback Sales managers need to consistently inspect what salespeople have been doing. These results should be public, so reps can see what results their peers are getting. This taps into salespeople s competitive nature and desire for recognition. Salespeople will respect what a sales manager expects and inspects. Use CRM data as a coaching tool to increase your close rates with deals that are in progress. If salespeople record the progression of their sales accurately in your CRM tool, managers can refer to the status of current deals to guide reps through what the next step of their sales process should be. The reports and dashboards found in Salesforce are particularly good for team meetings and one-on-ones. Gerhard Gschwandtner Selling Power continued on next page

7 9 Choose the Right Apps A CRM is not an isolated tool. It s an ecosystem of applications that drive sales effectiveness approximately 1,442 sales specific apps at the time of this writing, to be exact. However, choosing the right apps can be tricky. Some of the newest applications are designed to promote specific sales behaviors by implementing motivational initiatives, such as competitions. When you re considering such strategic initiatives, use the guidelines below to make sure the applications you select will deliver the level of CRM adoption and by extension, higher earnings that you want. Effective applications will: Be easy to use This is most probably when the applications are built directly on the CRM platform that you use. If an application looks and feels like the rest of your CRM s user interface, your team will be more likely to use it. Motivate peak performance The gain of using your CRM system should outweigh the pain of a steep learning curve. For example, when you implement a sales contest, offer an award that appeals to your team. Incentives vary by the person, but especially by the age group, so factor your sales team s age into the reward you offer. Automate wherever possible Increase your team s productivity levels by automating mundane tasks wherever possible. You ll also enjoy fewer errors manual tasks are prone to 10% human error rates, according to Gartner research. For example, certain applications auto-populate all of a prospect s information during the sales quoting process. The tool can also make product bundling recommendations, enable auto-signatures and standardize company pricing and logos. Increase CRM user adoption Leading companies enjoy startling results from new applications that target CRM adoption rates with competitions, or give reps real-time visibility into their progress toward quota. Make sure such applications provide easy-to-read dashboards of results. Encourage collaboration Encourage and implement suggestions from your user base, and watch adoption take off. During the first week of its fifth Salesforce implementation, Ingram Micro incorporated the sales team s top 10 ideas. Their adoption rates skyrocketed to 90% within the first month, as compared to rates of 40% from prior implementations. conclusion To improve forecast accuracy and lead sales teams that operate at peak performance, sales managers must execute a comprehensive implementation strategy to encourage widespread CRM adoption. This includes a customized platform that offers motivational incentives for company-wide adoption by incorporating user needs and ideas, offering continual training initiatives and tracking key metrics. A key component of executing these actions items is effectively using available applications to promote desired behaviors and higher earnings via competitions. Of my reps, those who utilize salesforce.com to run their day see instrumental gains in productivity over their peers such as twice as many calls per day. They also give 25% more presentations to prospects via video conference." Todd McCormick PGi

8 SOURCES Whitepaper: How Today s Sales Managers Are Creating Highly Motivated & Successful Teams, Lisa Gschwandtner, Editorial Director, Selling Power "Three Ways Sales Management Can Execute the Sales Process," Sales Benchmark Index SPARK!, Walter Rogers, President & CEO, Baker Communications Crunching the Numbers: What CRM Implementation Costs, Information Management Editorial Staff CRM How Much Will This Stuff Cost Me? Jim Dickie, Managing Partner, CSO Insights Interview with Walter Rogers, President & CEO, Baker Communications, March 2012 Interview with Tim Acker, Sr. Director, Business Solutions NA, Ingram Micro, Inc, March 2012 Interview with Gerhard Gschwandtner, CEO, Selling Power, March 2012 About LevelEleven LevelEleven develops enterprise gamification and CRM solutions that help sales and other managers keep their teams focused on the right things. The company s flagship product, Compete, is a salesforce.com app that gives companies new ways to motivate salespeople to make more calls, book more meetings and close more business, which in turn spikes adoption of Salesforce. Originally developed by digital engagement leader eprize, Compete debuted at Dreamforce in September 2011 and launched as its own company, LevelEleven, in October Compete is the most popular gamification app in the Salesforce AppExchange, and clients include Comcast, InsideView, OpenTable, the Detroit Pistons and Dominion Enterprises, among many others. LevelEleven is based in Detroit, Michigan and part of the Detroit Venture Partners portfolio of companies Broadway St., 3rd Floor, Detroit, MI linkedin.com/company/leveleleven