What Do You Say When the CEO Asks, “What Did I Get for My CRM Investment?”

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When your CEO asks, “Why haven’t we realized the sales performance boosts we expected when we (insert investment of your choice)

…implemented our SFA system?
…trained our sales organization?
…launched our sales portal?”

How will you respond?

If you (and the CEO) thought that investment was “the answer” to improving sales performance, we have some bad news. There is no such thing as a sales effectiveness silver bullet.

While, there are many different types of organizations that claim they can help you improve your sales productivity, few of these solutions can offer measurable gains in productivity on their own. For example:

  • CRM vendors argue that implementing their software will help you drive more business by providing better structure to the sales process and improving the accuracy of your forecasting.
  • Sales training firms suggest that you can improve your sales fundamentals by teaching a common sales methodology and best practices.
  • Market intelligence firms claim that better and more up-to-date information about market trends and your competitors’ actions will do the trick.

However, companies that have implemented these solutions report that they are not realizing the desired impact of these investments.

And now that you find your firm in this same situation, how will you respond?

Potential Response #1: “We Must Have the Wrong Salespeople”

While it’s true that many executives who feel they have been burned by these investments view missed sales quotas as a performance issue, I don’t necessarily agree.

Perhaps from an ivory tower, one might assume it’s a simple task – selling your wonderful product to customers who must have it. While this might be a reasonable expectation when selling an item that people are familiar with (like a luxury car or laundry detergent), this perspective is dead wrong if you provide complex offerings and sell primarily to businesses. In fact it could be argued that selling B2B solutions is fundamentally harder than any other business model in the market. The basic reality is that you are demanding a lot more from your field selling organization than you may realize, while I touched on in earlier. (See “Are Your Salespeople Stupid” http://www.customerthink.com/blog/are_your_sales_people_stupid)

Potential Response #2: “We’re not meeting our sales team’s needs”

Brutally honest, I will admit. But probably true.

According to the American Marketing Association, 90% of marketing collateral is never used by the sales force. A survey of over 100 IT vendor organizations by Current Analysis (a competitive research and analysis firm), found that the average sales person only spends 35% of their time engaged in actual selling activity.

The rest of their time is spent on a combination of activities including, internal meetings, paperwork, researching customers and account profiling, coordinating internal resources, looking for or creating relevant content to advance opportunities, etc. Before we examine areas to make investments in sales productivity, lets first get a sense for what we ask sales executives to do each day (either intentionally or unintentionally).

  • [u]Understanding the customer’s needs.[/u] Identifying the true customer is challenging enough. With most technology purchases, there are many buyers involved. Business sponsors, IT executives, requirements analysts, financial analysts, enterprise architects, and application engineers are all common participants in an enterprise solution purchase decision. It is almost impossible for a typical sales person to understand the business goals of each stakeholder and translate your offering so that it is relevant to each of them. And, even those that can have to perform this time-consuming activity from scratch for each opportunity.
  • [u]Following up on leads and prospect opportunities.[/u] What happens when marketing passes a lead to sales? All too often these leads only contain contact information and a list of products the customer may be interested in. The sales person who is tasked to follow up on that lead does not have insight into the business goals of that prospect, nor a compelling way to engage in a conversation with them. If given a lead from your marketing organization today, how would you follow up? What would you say when you called the contact? How excited are they going to be to hear from you?
  • [u]Advancing opportunities through the pipeline.[/u] Sales people are expected to continually advance opportunities through the sales process towards closure. Methodologies allow sales executives to focus their skills on various stages of the selling process and define key milestones to help determine how soon an opportunity will close. However, your customers are not making decisions based on the artificial milestones that your organization sets – they have their own buying process and very few sales people have insight into how the customer will really make the decision.
  • [u]Translating product knowledge into business advantages.[/u] A lot of time and energy is invested in training sales people on the functional attributes of the offerings they sell. However, sales professionals lack the personal experience of working with your offerings and have difficulty understanding why the features and functions are important to your clients. Meanwhile, your clients are less interested in the features. They want to know how your products or services will help their business. Since most sales people have difficulty making their offerings relevant to business issues, they rely on the product demo to tell the story and hope the customer will connect the dots themselves.

    Unfortunately, today IT organizations are less interested in technical merits because standards are improving and they have architectural processes in place to help them better understand the strengths and weaknesses of certain technologies. They are much more interested in the elements of the business relationship. For example, they want to know how you can help them implement the solution, how it relates to their business, how you can help them justify it, what you can do the help gain buy-in, and what it will take to maintain the system.

  • [u]Financially justifying investments.[/u] IT investments are under a tremendous amount of scrutiny. Organizations want to know how your offering is going to impact their business, when they will realize that return, and how that investment will impact their budget. Corporate financial metrics, cash flow outlays, and internal rates of return are all examples of topics common in evaluations of technology investments. Yet, most sales people lack the ability to have a meaningful conversation about these subjects – let alone prepare the tools to help your clients perform these analyses.

It’s true that most organizations can improve their productivity with investments in infrastructure. Likewise, they can always benefit from a solid sales process and an occasional fine-tuning of their selling skills. And, no one questions that sales organizations require up-to-date information about market trends and competitor actions. These steps are critical to continuously improving sales effectiveness.

However, the fundamental sales need that organizations rarely provide is relevant, targeted content that is directly correlated to the customer’s buying process and considerations. Additionally, optimum sales performance requires balance across each of the five disciples mentioned. Therefore, the best way to maximize sales performance is to view sales effectiveness as an ecosystem – one who’s governing dynamics are the unique needs of your targeted customers.

Scott Santucci
As a principal analyst at Forrester Research, Scott Santucci has deep knowledge and hands-on experience working cross-functionally with product, marketing, and sales teams to develop innovative and effective integrated programs designed to improve the entire revenue cycle.

3 COMMENTS

  1. You state that “It is almost impossible for a typical sales person to understand the business goals of each stakeholder and translate your offering so that it is relevant to each of them.” Why, then, isn’t the vendor sales and marketing team acting as a catalyst to “bring together” the decision makers and help them focus their goals in terms of their company’s and customer’s goals?

    While each stakeholder may have different activities to perform and different “outputs,” they all should have company and customer strategies and goals as the focus of their goals. Since we all know how well each department communicates with each other, vendor sales and marketing could work with the client stakeholders to understand each other’s perspective thus enabling the coordination of their differences. This coordination will help solidify a coherent sales message that all can understand. Also, if each customer (or customer group) has unique needs, it’s not only important to find them but also find out why they’re unique. They won’t be easily uncovered with product and feature questions.

    If sales wants to make their products relevant to their customer’s issues and considerations and marketing wants to uncover unique needs (usually based on the issues) then they need to learn what they are. This and the facilitation of the coordination mentioned above are best done by asking customer stakeholders non-product questions about, e.g., their sub-strategies, how they describe their customers (and the differences each one has), non-product needs (like more training or better communications from management or customers and what they need to hear), and resource needs (like time and infrastructure). By formulating the right set of questions, those that are used to discover what really matters to customers, I believe customers will be compelled to engage in the ensuing conversations. Knowing that what really matters is not your products and their features, answers to these questions will produce the relevant content to advance opportunities.

    Make questions about customers, not the vendor! And make it so customers believe vendors know something about them and are interested in learning more. A side benefit to this is building trust. Another side benefit is learning about untapped opportunities.

    Maybe the sales and marketing team can start by learning about the decision making process and who’s involved. That’s a non-product question. And it seems important.

    This a great article, Scott. It shows the need for change in learning what information is needed in today’s customer centric world. It shows the need for tighter relationships between sales and marketing. And it shows the need for “new” activities from both. One can’t provide the same type of training, develop similar “tools to fix the problem,” and communicate transaction based information and expect different results. That’s just working the edges of the same system, not taking into account the new “ecosystem.”

    Jonathan Narducci

    CornerStone Cubed
    Creating Positive Change

  2. Scott

    Another great post.

    Reading through your post then re-reading it again, I can’t but help think that you are far too easy on CSOs who don’t deliver. And CMOs by implication. If these executives have implemented an expensive CRM system without understandihg exactly where value was going to come from, without harvesting the benefits from the very start of the implementation and without keeping the CEO fully informed about progress, then I would say they were simply not up to their jobs. There are far too many CXOs out there who are happy to take the big bucks home, but who writhe evasively in their seat when the buck stops at their desk. Business doesn’t need these sort of CXOs. They should be fired, and without any golden parachute. That was the easy answer.

    You hinted at the harder answer in your post. The CXO should also be the Chief Improvement Officer in their domain. In other words, they should also be responsible for their staff applying the tried and tested Kaizen method to improve their business. As those who have experienced the amazing results that Kaizen delivers will tell you, Kaizen is a simple step-by-step process: That identifies the problems that occur, looks at the real roots of each problem, sets targets to resolve them, and only then then identifies what must be done, implements appropriate solutions, measures the results and sees how close they are to the targets set earlier. Toyota has made over 20 milion improvements to its business over the past 40 years though Kaizen. And continues to do so each and every day. Look where it got them. Wouldn’t you like your company to operate a bit more like Toyota?

    Much of business isn’t rocket science. If it was, CXOs couldn’t do it. But all CXOs would benefit from applying a but more management science to their work. Like Kaizen for example.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Readability Index: 11

  3. Graham and Jonathon – I am pleased you enjoyed the post, but I am happier you added some of your thoughts to the discussion. I have “religion” that architecting a company into a ‘value engine’ that systematically delivers real value to its customers is the key enabler for large companies to achieve breakthrough performance in today’s rapidly democratizing markets. Both of you have given me really good ideas to consider.

    I think we (as a community of people dedicated to customer-centered businesses) have 3 major problems to overcome.

    1)Customer-centered business doesn’t feel achievable by most executives. Most think the term is too vague, think their company already is customer-centric, or its just “consulting speak”. The few that truly understand it can’t afford the time to change (their organization, their systems, their processes, their skils, etc) or else they worry they will miss a quarter and then be on the defensive with Wall Street.

    2)The vendors in the space are ignorant about what really needs to happen. We all know you don’t achieve “customer-centricity” by aligning only sales and marketing, training the sales force how to talk to executives better, or implementing more technology. There is a formula for execution that is required, and managing that ecosystem is tough for people whose entire background is developed in one silo.

    3)There are too many variables to manage and there lacks an effective framework to understand them. Jonathon, you wrote an excellent piece about how words matter. We all know that the words you use to set the charter of a project are very important, but people don’t think through these details well enough. Graham rightly points out (all the time) that while change may be envisioned at an executive level, it gets carried out in pieces with folks who run the project.

    Therefore, I think the best thing to do would be for us, as a community of thought leaders, would be to start defining what this ecosystem looks like, what are the hierarchical layers of related projects that need to be accomplished, what the processes are to follow these, how to measure and manage performance, and what skills are required. Without focus to our collective wisdom, I worry we are all doomed to more projects in pockets, rather transformational efforts.

    I will close on a thought by Graham. “Business isn’t rocket science.” I agree. However, business is complex, and companies have made their businesses overly complex by trying to find simple solutions to tactical issues and the result is almost complete chaos where it matters – the point of sale.

    Perhaps we should try to arrange a time to talk and start getting a common ground. I would love to take this conversation off line with either of you (or anyone else who thinks deeply about these issues).

    Great stuff, thanks a lot.

    Scott Santucci

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