CUSTOMER RELATIONSHIP MANAGEMENT REAL CRM/SFA SUCCESS. Michael Meltzer Techniques That Lead To Success AMT ACTIVE MANAGEMENT TECHNIQUES

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1 CUSTOMER RELATIONSHIP MANAGEMENT REAL CRM/SFA SUCCESS Michael Meltzer Techniques That Lead To Success AMT ACTIVE MANAGEMENT TECHNIQUES 1

2 Abstract If we accept that the technology for the SFA solution is sound and the software does work then what can be the problem? It must be the people tasked with using the SFA. Who really wanted the SFA solution? Was it the sales and service teams at the sharp end? I don t think so. Senior management faced with the tumultuous changes over the last decade have attempted to ensure higher profit margins in various ways: reengineering, downsizing, cutting costs, outsourcing, sweating assets and of course attempting to make their sales efforts more effective. The investment in the whole concept of CRM in the eyes of senior management is based on improving the bottom line and their own tenure People issues are still not easily addressed in a technology and process driven model of the world. But new ways of helping sales teams improve their methods; their relationships and productivity are appearing. There is still no silver bullet but if you can actually get some of it right you have a chance so read on. About The Author Michael Meltzer is the co founder and a managing partner of Active Management Techniques that specialises in improving organisations performance through applying the human aspects and benefits of relationship management in all its forms. He is a hands on partner who has experience spanning general and IT management, financial services, public sector, telecommunications, education and retailing. He has specialised in applying the human aspect approach to support internal and external customer relationship management, change management, customer knowledge and organisational design where innovation and learning can flourish. He is a respected author, sought after speaker, educator, consultant and experienced business manager. AMT Consulting AMT Consulting was formed to offer unique personalised services to organisations that can benefit from the experience and knowledge of consultants, managers, and leaders who have held senior positions that carried P & L responsibility. Innovative thinkers and doers they offer exceptional support to organisations that wish to be successful today and tomorrow. Because of their experience, they understand the problems and the critical success factors associated with introducing new technologies, processes and ways of thinking. This translates into combining the right people, processes, services, and partners required. We help to successfully build the right business case, identify the right approach, support the implementation of your solutions and then support you in realising the benefits of your investments. 2

3 Relationship and Value Management Papers from Michael Meltzer: The Hidden Customer I-CRM The Hidden Customer Take 2 The IT/IS Connection I-CRM for the Information Technology Teams CRM - Making it happen Getting Started Building A Customer Information Infrastructure Business Case Blues (Building A Business Case) Discovering the Value of Customer Information Effective Channel Management Customer Retention, Development and Acquisition for Financial Services Customer Retention, Development and Acquisition For Telecommunications Understanding What Do Customers Value? Are your Customers Profitable (What About ABC) Segment Your Customers Based On Profitability Customer Profitability just isn t enough Integrating the Call Centre with Customer Information Data Mining Dispelling The Myths ALM With A Customer Focus Forms A Virtuous and Profitable Cycle How to Recreate Customer Intimacy for Profit Channel Management the Dilemma Remains Driving Customer Retention, Development and Acquisition in the Insurance Industry (with Chris Saunders) Survive and Prosper by using Customer Information - an Insurance Perspective e-insurance a CRM Perspective What Customers Value CRM managing the Benefits Part 1 CURARE it could happen to you A CRM Approach To Customer Profitability Getting Started With CRM The Intergalactic Data Warehouse Here Today Gone.. Mapping CRM For Success CRM Projects/Programmes Mean Change Data Mining Myth and Magic Version 2 Successful CRM depends on Communications Subscribe To CRM? Making CRM Magical: Using Outcomes Real CRM/SFA Success 3

4 Sales Force Automation or operational CRM as some would define it is really aimed at improving the win ratio of the sales teams and better manage strategic accounts or so we might believe. It is here however that the real problems of CRM implementations have faced their greatest hurdles. If we accept that the technology is sound and the software does work then what can be the problem? It must be the people tasked with using the SFA. Who really wanted the SFA solution? Was it the sales and service teams at the sharp end? I don t think so. Senior management faced with the tumultuous changes over the last decade have attempted to ensure higher profit margins in various ways: reengineering, downsizing, cutting costs, outsourcing, sweating assets and of course attempting to make their sales efforts more effective. The investment in the whole concept of CRM in the eyes of senior management is based on improving the bottom line and their own tenure. However in their rush to the edge of the cliff the lemmings forgot to find out what the outcomes should be for the user or the final customer. Overly compliant consultants hoping to implement multi-million dollar solutions from hungry software and hardware vendors don t make for good advisers. The SFA implementations however were seen by many as a means of improving both the sales teams effectiveness and give oversight to their activities by senior management. Oversight might have been achieved but often at the cost of effectiveness. View Sales Activity Much of the investment in operational CRM has come in the form of better and more ways of looking at sales activity and too some extent tactics. There are numerous reports available and ways of looking at the sales funnel and its makeup. However seventy-five percent of field sales application projects are deemed not to have met expectations. Who believes they have failed? The sales teams that have to use the applications! i Most sales teams claim that the solution they are given is just another burden on them rather than an aide in selling. To be able to feed the admin heavy the SFA s paperwork burden falls on the shoulders of sales, who often have to become the data input clerks. The top 20 percent of the sale teams that tend to produce as much as 80 percent of the sales are the first to find ways of not using the SFA. The next percent that you believe will benefit from the new systems approach by helping them identify the right products for the right customer also finds the systems burdensome whilst failing to meet their real needs. 4

5 Talk to Sales Teams? Real CRM/SFA success In many cases the sales teams are not involved in the purchase, design, communications loop or testing of the all singing all dancing SFA. Their first reaction in being brought in for training on how to use it (read key in data) is a burdensome administrative system designed for management with little in it for them. They ask questions like will it tell me who to call on and what will be the best offer, will it make me more commission and or improve my bonus, will it reduce the administrative overhead, can it write proposals for me, help me quote. The answer in most case is no sorry-..-now if you key in the name and address and we can see who you have called on and the pipeline! Failure a Gartner View SFA is often seen by sales people as just another step towards big brother watching their every move ready with a big stick to hit them if they step out of line. Gartner has identified what it believes are the top ten reasons for 80 percent of the failed sales technology (listed below). Obviously the SFA is a failed solution as it is currently implemented. And of the top ten the top five that are printed in bold identify the failures that relate to sales effectiveness issues and the sales teams involvement. Often it is not technology that is required to improve the percent of the sales teams but a thorough grounding in adherence to a solid sales methodology where the processes are sound and workable ii : 1. Projects initiated with unclear goals, metrics and expectations (25%) 2. Lack of commitment from senior executives, sales management and channel partners (13 Percent) 3. Poorly defined or flawed sales processes (15 Percent). 4. Lack of strong end-used salesperson buy-in (12 Percent) 5. Focusing on management needs, with not enough emphasis on sales people and customers (10 Percent) 6. Making do with inadequate resources for development and deployment (8 Percent) 7. Insufficient and Irrelevant Training (7 Percent) 8. Making poor software vendor or ESP selections (5 Percent). 9. Over standardizing (3 Percent). 10. Overly besotted by features, functions or "Cool" technology (2%) 5

6 Further Evidence The Miller Heiman Sales Effectiveness Study is an ongoing worldwide research effort that during 2005, surveyed over 3,400 sales professionals, in 28 industries, with 69% of the companies having 250 or more salespeople. Their findings showed that sales productivity improvements were mainly achieved through better training, particularly in developing the fundamental skills and methodologies necessary to access and win the approval of decision makers. Conversely, CRM/SFA technologies were not regarded as having helped sales organizations either to improve productivity, or to improve sales effectiveness. Specific weaknesses were identified as follows: 50.6% of salespeople agree that CRM isn t helping make their sales efforts more effective. 73.0% of sales leaders aren t convinced CRM is used effectively for helping move sales opportunities through the funnel. 78.8% of sales leaders believe CRM isn t being used effectively to improve account strategy and planning. 78.6% of sales leaders aren t convinced CRM does a good job of defining an effective sales process for their organisation. Process Precedes Technology - Methodology/Process Types Vendor Products Opportunity/ Sales Cycle Executive/ Contacts Account/ Team Channels Sales Management Miller Heiman Strategic Conceptual to Vito Large Account Mgmt. Process Channel PM Mgrs. Coaching for Strategic Holden Power-Based Power-Based Relationship Team Account Planning Power-Based Management Siebel MCS (On Target) Target Account Executive Enterprise Process CHAMP MTAS Huthwaite SPIN Major Account Sales Strategies Effective Partnering Relationships Managing Major Sales Sales Performance International The Complex Sale Solution Controlling the Complex Sale Total Enterprise Account Management Solution Managers Coaching the Complex Sale Value Vision Source Gartner Value Figure 1 Sales Methodologies Grafted on to CRM/SFA Some of the major methodologies that support sales cycle management are identified above in figure 1. They offer a structured methodology for identifying, 6

7 analyzing and closing complex, multi-decision-maker, value-driven, competitive sales situations as solutions or transactions. The most exciting thing about these processes is that they are all being attached to new SFA solutions either by being fully integrated or as add-ons integrated through API s. MS CRM incorporates a version of solution selling that is integrated into the latest release. The sales management process is at last being addressed through tool sets that enable the manager to coach, inspect and analyze standardized sales processes; recruit, hire and train salespeople and undertake performance assessments, career counselling and business reporting. These new tools allow the sales managers to become proactive and enable them to do their real job of supporting the sales teams to become more professional, successful and achieve the desired ROI rapidly. To support the sales teams you must go beyond sales administration as outlined above. There has to be an account management processes that offers a set of consistent approaches to the development, growth and retention of long-term, customer-centric relationships with the key, major or mass-market accounts that the company has or wants. Contact management must be of a quality that enables the development of strategies for maintaining and enabling executive-level decision-making relationships. But the derived information should make as much use as possible of data that the company already has. The data will come from billing, service, warranty, direct mail files and any other system that is storing customer relevant data. The information must be in a form that allows senior managers to be successfully involved when necessary. The technology must be robust and available wherever the sales team needs it. Where is the Real ROI? The sales application pyramid identifies the technologies that really add value to the business and they are to do with serving the customer and supporting the sales process. The base of the pyramid will save cost over time but its customer facing activities that generate revenue directly. Figure 2 7

8 These newer tools make use of the web to deliver their unique benefits. Even the CRM/SFA that was in the past only available for in-house installations are now being offered on hosted services by organizations such as Netsuite, MySAP CRM 2000, Pivotal, Salesforce.com, Salesnet and Siebel OnDemand. Each solution currently offers different levels of functionality and support for the sale teams. Some offer easy integration by third parties that enable the sales teams to really get the benefits that CRM SFA has been promising but not delivering. Some of the sales methodology vendors like Millar Heiman have started integrating their offering into the hosted solutions. This integration by Miller Heiman includes: Strategic, Conceptual, and Large Account Management Process methodologies that enables the sales teams to strengthen their approach and improve their close rates. In addition these types of solutions can be used to introduce a consistent sales process throughout an organization. They also help in the identification of the strengths and weaknesses inherent in every sales force, and then they can help ensure the cultural imperatives are shared through a range of training programmes. Sales Tools Figure 3 Building for Success Many of the tools identified in figure 3 have been available for many years in various forms. Some of the most dynamic tools however have only been available since the turn of the millennium. The sales teams want tools that can speed up their ability to see and close more customers. Instead of tools to close sales their management gave them administrative overhead. Instead of using customer analytics to identify opportunities they used them to measure success or failure and then not very effectively. Newer tools available in-house or more often today hosted can make all the difference. These tools are integrated with the SFA systems to offer functionality and benefits that we can see at the pinnacle of the pyramid in figure 2. A particular offering we have come across recently that adds considerable value in both the face to face sale and in a web environment has been from Webcom that identifies with layer 4 and 5 in figure 3: Sales configuration, quote management, proposal generation, order management and interactive selling. 8

9 Websource from Webcom Real CRM/SFA success There are a number of new products that are changing the way SFA operates. These products are focusing on the actual sales time a sales person spends with the customer in support of improved sales productivity and relationship building. Many of these products are available for in-house and on a hosted (ASP) basis. An example of one the newer breeds of tools to improve one on one productive time is the WebSource sales configurator. It enables sales to move forward from the contact centric admin focused SFA model forward to a more interactive and guided selling approach. This type of service enables part of the sales process to be automated and enriched. Supporting sales in their interaction with customers it can speed up the quote to cash cycle that pleases both the sales teams and their managers. It enables the reduction in the cost to deliver, an aid to planning, resource management and cross-selling. The WebSource sales configurator is a web application available to anyone (i.e. customers, sales people, or channel partners) with a web browser. The configurator walks the user, customer and or partner through the process of specifying a product by description. Based on these selections, the WebSource Configurator engine produces, in real time, all pertinent specifications, prices, and fulfilment lead times. This product can also be taken in house. WebSource supports the guided sales process as the configurator interactively guides a customer ably supported by direct sales or the webs interactive capability, step by step through the selection process, mapping their needs to product options and features. This process simplifies the complex product/service choice enabling customers to easily choose the right product or service they need. They get the right quote, for the product that meets their exact needs, their requested date of delivery and all the documentation online in real time. Let Me Close a Sale An aspect of a good SFA that always delight sales teams is to receive that piece of insightful information that helps them close sales more quickly. Many SFA s include analytics of some kind most of which help management but there are elements of guided sales analytics creeping in that really can help sales be more effective. Through the analysis of what has worked and what did not the sales process can be honed but with insight gleaned from the enterprise customer knowledge infrastructure the one call sale is very possible. 9

10 With the introduction of tools that improve sales force methods, increase productivity and speed up the sales process we are just beginning to see the promise of CRM/SFA become a profitable reality. Michael Meltzer i Ed Thompson VP research Director Technology Powered Sales Productivity - Barcelona ii Ed Thompson VP research Director Technology Powered Sales Productivity - Barcelona 10