CRM and Other Sales-Prevention Devices

by Dave Stein, CEO, ES Research Group, Inc.

Sales vice presidents, managers and team leaders have always been on the lookout for shortcuts—streamlined ways to get to the end game and close more deals. That makes sense, after all, since closing more deals is the name of the game. And that’s why, over the years, technology has seemed like such a godsend.

First, PC-based contact-management software like Outlook replaced the old Rolodex and paper tickler file. Products like Goldmine and Act added more capabilities, tracking sales leads, automating callbacks and even producing sales letters. Sales-force automation systems came along next, adding more features and enterprise-wide reporting and analysis.

About a decade ago, customer relationship management (CRM) systems emerged, to give companies the ability, as the name implies, to manage customer relationships "holistically" and more efficiently. CRM systems opened everyone’s eyes to the value of a sustained relationship with a customer and helped everyone understand that it costs four times more to win a new customer than to keep a current one happy.

CRM systems weren’t designed with sales in mind

The problem is that CRM systems were designed for and marketed to people not in sales. They were managers in post-sale functions, meaning customer service, customer care, marketing and especially top management.

Sales managers wanted to use a CRM system to track deals in their pipeline. But salespeople on the street had no real incentive to use the CRM system or to keep it up-to-date. Field salespeople got fuzzy answers to the question, "What’s in it for me?" And of course, that’s deadly for acceptance or compliance with anything, much less something that takes time away from the selling process.

Many of the advantages and benefits of the original sales automation software were actually lost as CRM took over, because salespeople were asked to use tools that had no inherent benefit for them, only for their management. Thus, CRM tools became sales prevention devices.

Although millions have been spent by sales vice presidents and others who thought CRM would be a panacea, ES Research Group estimates only around 50 percent of the CRM software seats sold in the last 10 years are still in use.

OUCH --

 

A lot of sales vice presidents and managers still ask for advice on getting their salespeople to fill in all of the information their CRM system requires. The short answer: Give them some results from the CRM system, and you won’t have that problem anymore.

Add-ons add value

Some companies understand this problem and are finding ways to provide salespeople on the street with guidance, knowledge, best practices and approaches that help them sell more effectively. Big surprise: Companies doing that are not having trouble getting their salespeople to comply. Because there’s something in it for them—it can help make more money.

One example: A product called Dealmaker from The TAS Group sits on top of Salesforce.com software, and serves as a buffer between the CRM software and the sales reps. Dealmaker provides them with a lot of tools they can use to sell more effectively. In return, those salespeople input the information that sales managers, customer-service managers and marketing managers need.

Companies using add-ons like Dealmaker are getting compliance rates approaching 100 percent rather than the 30 to 40 percent range typical with CRM systems.
That’s the best way to measure value: Do the sales reps use the software and update it the way they should? What’s the compliance percentage?

It is a bit of a surprise that Salesforce.com, the pre-eminent CRM product in the marketplace today, turns out to be relatively valueless to the sales force on the street without add-ons that give them an incentive to use it. But that’s why sales managers are forced to look for ways to improve compliance. After all, without daily or weekly updates from the field, how can they give top management accurate sales forecasts?

Questions they ask: Should we penalize our people for not updating Salesforce.com every week? Do we hold their expense checks? Do we dock their pay? Should we go the other way and give them a bonus for filling in all those data fields? These conversations have been around for as long as Salesforce.com has been on the market.

You can’t automate chaos

Salesforce.com is a good product. It does a lot of what it promises to do. And it’s been updated often over the years to fix earlier problems. But you cannot automate chaos. To be effective, Salesforce.com or any other CRM system has to be tailored to represent or model an organized and disciplined sales process that’s already in place. It should dovetail with specific phases or steps that salespeople follow to win a deal.

Unfortunately, lots of sales vice presidents and managers have bought in to the idea that Salesforce.com, SAP, Siebel (an Oracle product) or another CRM system would solve all of their problems. But CRM systems are not a panacea, and installing one right out of the shrink-wrap doesn’t deliver the results they expect. To get the most out of CRM, the fundamental sales process needs to be clearly defined and structured.

Salesforce.com, to its credit, has developed a network of alliance partners, and brought them together at a place on the website called AppExchange. There you can find all sorts of products that integrate with Salesforce.com and give salespeople tools they really need to get the job done. Dealmaker is one of those, but there are many others. Many are tailored to the needs of specific industries, such as pharmaceutical sales.

The next level: Sales 2.0

An emerging technology called Sales 2.0 finally gives salespeople what they really need to excel. It merges the best of CRM and sales force automation with Web-based tools that field salespeople can use to collaborate with colleagues, in-house experts at their companies, and even customers.

Like Web 2.0, or "whatever 2.0," Sales 2.0 is a concept, not a product. You cannot buy anything called "Sales 2.0" off the shelf. At ES Research, we think Sales 2.0 technology will continue to evolve, and ultimately include the same kind of social and business networking capabilities you see in FaceBook or LinkedIn.

Some companies are already moving forward with systems that offer Sales 2.0 functionality. One is called InfoTollgate, and another, SellingEdge from OutStart. These on-demand, Web-based tools can deliver real-time information to the salesperson about pricing, the competition, the customer or their industry, even the best ways to win a deal—all with a keystroke on a PC, laptop, PDA or cell phone. These companies are just ramping up, and over the next year or two, sales leaders will have access to even better Sales 2.0 technology.

If a salesperson needs institutional knowledge now, it’s very difficult to track it down. Sales 2.0 technologies give your sales force access to discussion forums, profiles, outbound communications, and full integration with the institutional knowledge in your company. In fact, the most successful salespeople often develop their own networks within a company so they can tap into information when they need it.

This new generation of sales-enabling technology will change the sales process. Sales 2.0 can take a lot of air out of the sales cycle and provide customers with answers and even solid quotes on the spot. It makes team selling and customer collaboration much more effective, cementing customer relationships in a new way. Even sales training will change. You won’t find salespeople looking at a talking head in the front of the room. You will see them viewing training modules on iPods or PDAs while sipping coffee at Starbucks. In fact, that’s already happening.

Watch this new software category closely, and be ready to capitalize on it–ahead of your competition.

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Dave Stein is founder and CEO of ES Research Group, Inc., a service that objectively evaluates sales methods, training providers and tools. Through Stein’s past work as a sales consultant, coach and trainer, he has a unique view of sales methodologies, sales training approaches and the cultural as well as business changes required for corporations to excel at the sales function. Author of the business bestseller "How W inners Sell," Stein is quoted and recognized in leading business magazines and websites, including Fast Company and The New York Times.

CONTACT DAVE
ES Research Group, Inc.
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