If your dream home is 5 miles from the nearest paved road, what would the true cost be to purchase and get “value” from a Ferrari? Well, if getting “value” from a Ferrari is taking advantage of the handling, acceleration, and car’s appearance the rough up front cost for the Ferrari would be as follows:
* Ferrari = $250,000
* 5 miles of pavement = $4,000,000
After you have made the up-front investment your maintenance costs per year would then kick in:
* Ferrari = $12,500 per year
* 5 miles pavement = $100,000 per year
The point being:
- No one with 5-miles of dirt road outside their front door would consider buying the Ferrari without first considering the cost and time associated with building a new road.
- The cost of the Ferrari pales in comparison to the cost of the infrastructure (road) that will enable you to take advantage of what the Ferrari has to offer.
- Ongoing maintenance of both the Ferrari and the road need to be considered
While the above scenario is admittedly absurd, I would argue that this very scenario presents itself each and every week in sales and marketing organizations around the world. Surprisingly, most organizations either do not consider, or ignore, the fact they have varying degrees of “roadwork” to do before they drop their money/budgets on a Ferrari!
That is, a great number of sales and marketing organizations budget for and then spend significant amounts of money on the latest CRM, SFA, and lead automation solutions (read Ferrari) without taking into account the processes, infrastructure, and people (read road) needed to maximize value.
In my experience there are (3) primary drivers for why this seemingly inexplicable behavior continues to repeat itself over and over again within marketing and sales organizations.
- “Roads” (lead lifecycle management processes, staff, discipline, and infrastructure) typically take more time, money, and labor to build & maintain. In addition, after all the hard work to successfully build the “Roads” they are not very easy to “show off.” The “Roads” do not actually do anything or deliver anything they make the doing and delivering more efficient, faster, and consistent.
- “Ferrari’s” (CRM, SFA, Lead automation solutions) have enormous marketing budgets behind them driving brand, market demand, and interest. As the saying goes, there is not an easier person to sell to than a sales person and no one easier to market to than a marketer! “Roads,” on the other hand, are not feature rich, web enabled, tools supported by flashy sales presentations.
- Lack of time & “Budget”: The Average CMO tenure is still well under 2-years. In 18-months he/she can pull together an ROI and implement a CRM,SFA, or lead automation system in hopes of demonstrating their value to the executive team. There is little chance the CMO can fully evaluate the current condition of their “infrastructure,” make the significant investment (multiple’s of the Ferrari), and deliver measurable ROI in less than 18 months. To be fair to the CMO, most have their hands tied by head count limitations and ill conceived budget constraints that make doing the right thing, fixing infrastructure, all but impossible.
Regardless of the initial quality and performance characteristics of any software application or piece of equipment without the implementation of supporting processes & execution of a proper maintenance plan performance and reliability will consistently deteriorate over time.
While the previous statement is not an epiphany to be sure, most of the marketing & sales lead management systems that are implemented today seem to ignore this simple fact. The end result is that many marketing and sales leaders are left spinning their wheels in the dirt wondering why their high performance, feature rich, systems are not delivering as promised!
I like the Ferrari analogy.
Are you suggesting that many organizations throw resources into buying marketing and sales bells and whistles because they can, rather than because it’s required to execute strategy?
It’s a common trap (done it myself, and watched it being done!) In project management-speak, we sometimes call it “Gold Plating.” So easy to do, in the name of having the “latest and greatest,” and “cutting edge technology.” Then reality hits when we realize that we lack many fundamental prerequisites to make our plans go. “Why didn’t the salesperson tell me that my back end architecture can’t support his company’s software? Could it be that he was only interested in his commission this quarter? No way!”
But the fundamental question to ask is:
“Can our current capabilities enable our business strategy?”
(e.g. “Our strategy requires us to implement a global supply chain.” Guess what! Without the right software, telecomm, and architecture in place, you’re not going global. The strategy won’t work–so don’t place people in situations in which they–and your company–can’t succeed.)
Many companies I’ve worked with don’t just have capability gaps, they have chasms. Great visions, but they’re riding a bicycle when they truly need a Ferrari. Still need to get around the world in a hurry? The strategy is not simply doing nothing. The decision is whether to face facts and change the strategy (because the organization is unwilling or unable to allocate resources to achieve it), or to provide the resources to enable it.
Andrew,
Thanks for the post. My post intentionally left out the point specific to a new marketing & sales system being needed to execute strategy versus a a fun piece of technology that does some cool stuff. That argument is the topic for a book not a Blog.
My main premise is probably a bit more cynical in that I believe many sales and marketing leaders today buy new SFA,CRM, and lead management systems as a cure all to their people, process, and technology shortcomings. In some ways I view the current SFA,CRM, lead management system implementation boom as an equivalent to the ERP implementation boom in the early 90’s that was targeted at solving the worlds supply chain management problems.
It is the frequency and volume of organizations that fall victim to “gold plating” in the marketing and sales space that is so astonishing to me. Either they cannot see the chasms within their organization or they feel helpless in terms of their ability to close the chasms or affect change in strategy. To be fair, I guess we all have our weaknesses in this area. I keep buying new golf equipment to play better golf but it is my swing and lack of practice that really needs the attention and investment!
Brian Steel
VP Sales & Marketing
Performark
http://www.performark.com