Growth Curve

Now that small and medium firms are adopting CRM in record numbers, there’s more need than ever to be certain that the money spent on CRM results in real sales growth. The first key to accomplishing this is integrating CRM effectively into the sales environment. Second is integrating CRM effectively into your sales-training efforts. Third is integrating CRM into the larger financial plans and budgeting process of the larger organization. To help our readers understand these three key issues, we asked six experts to give us some practical advice (see sidebar, Our Panel of Experts). Here’s what they had to say.

Selling Power: What is the major challenge today in making CRM a productive and integrated part of a sales group’s sales environment?

Barton Goldenberg: People, process and technology – in that order. We’re working with one customer now to upgrade their sales force automation (SFA) system that was adopted in 1999 but is sputtering, because the sales force does not perceive any benefit. The reps feel that the system only benefits Big Brother, so they have resisted using it, despite encouragement from their sales-management team. Even if the sales personnel are ready to use CRM, they won’t be able to use it effectively unless there are good customer-facing business processes in place (e.g., an easy way for customers to place an order, make a complaint or determine the status of their order). Only when such processes are in place, and reps buy into the value of those processes, should a company turn to CRM.

Anthony Wooten: The major challenge is alleviating any perceived user complexities, as well as showing users what’s in it for them. Some people still view CRM as a tool mainly for reporting to management. While this is always important, making daily tasks easier for sales reps is the real draw. A well-deployed CRM system will capture the best of both worlds, by enabling business-process automation that aids sales reps daily while also rolling up information into required management reports. In order for CRM to be accepted as a productive part of the sales environment, you must be able to adapt workflow on a user-by-user basis, which may mean personalizing steps in a sales process. It could also mean getting a quick snapshot of the pipeline while simultaneously reporting key-account status to management with a hyperlink click.

Denis Pombriant: Many organizations have trouble because they don’t teach CRM to their reps. Management might tell the reps about all the product features, buttons to press and when reports are due, but they don’t fundamentally change their approach to selling, so CRM can be used effectively. In order to have an effective CRM software implementation, management must pay attention to the sales methodology.

Brad Wilson: Getting salespeople to use the application regularly and effectively has been a key challenge in CRM deployments. Salespeople want to spend their time selling, not entering data into a complicated CRM application. To help them do this, Microsoft CRM presents what we feel is a more familiar and natural experience for sales reps, because CRM simply becomes something that you do while you’re checking your mail and sending messages to prospects and customers.

Dale Hagemeyer: First, the CRM solution has to make salespeople more productive and help them sell more. All too often, CRM systems are loaded down with functionality designed to provide sales management more visibility to top management. If that is all there is to the system, then there will be major turmoil before the CRM system will be used. Beyond this, the CRM solution must mirror how real sales reps actually sell. The only way to do this is to get consensus on a process and get the appropriate level of input from the sales organization during the design phase.

Paul Petersen: IT support is a huge challenge, because it forces sales managers to go outside and work with disparate systems that are outside of the sales process. The vexing reality is that few IT systems and CRM systems are tied to each other or to marketing systems or to other data sources. This creates a silo effect that makes it difficult to integrate CRM into the larger organizations. Remember, sales is just one part of the larger business process that results in revenue and profit.

Selling Power: How can sales teams best integrate their CRM implementation with sales-skill training and motivation training?

Wilson: Sales organizations need to invest more time in developing better selling skills and strategies, and less time in teaching their people how to use a CRM application. Unfortunately, that concept has more often been breached than observed. There are only so many days that sales managers can take their sales reps out of the field. Sales managers must make certain that CRM application training doesn’t use up all of the time that would be better spent on real sales training.

Hagemeyer: The most overlooked aspect of integrating CRM into sales training and methodology is incentive and compensation management. Every CRM system should have a dashboard element where sales reps can check compensation and commissions. It can be very motivating if the first thing that reps see when they boot up their system is their to-do list, their correspondence and their commissions. Sales reps, like most people, crave immediate gratification. Quarterly or monthly commission statements sent through the mail separates day-to-day activities from the commissions that those activities generate. Note that just having a stand-alone system to check commissions isn’t enough. Salespeople should be able to interact with the system and get answers to the following questions: How many sales calls must I make to achieve quota? How many orders do I need for that trip to Maui? Salespeople don’t want to see this a month later; if it is truly an incentive-management system, tell them now!

Wooten: We believe that integrated CRM and sales training is best delivered through the channel, that’s why we’re a 100 percent channel-driven company. Our partners do more than implement systems; they perform needs assessments to learn the unique requirements of each customer. This not only identifies which CRM system they will recommend, but also helps our partners identify firsthand the level of training needed to encourage user adoption. Only an experienced channel partner can bring this to each customer’s table. For example, a partner focused on financial services can go into a brokerage firm with the necessary technical and industry knowledge to generate and execute an effective implementation and training plan.

Pombriant: Motivation training is an oxymoron; either you’re motivated as a sales rep or you should be in a different line of work. Sales-skill training is training a sales methodology; the training and methodology must be joined at the hip or neither will work. The training also needs to go beyond the sales team, because the whole organization needs to be on board.

Petersen: CRM technology can help support an effective sales process and can help encourage all sales reps to follow that process. A recent study of firms with and without CRM showed that companies with CRM had higher sales effectiveness because the CRM-armed companies followed their sales process more easily,
resulting in higher forecasting accuracy. Sales managers should make more use of forecasting and opportunity-management tools to coach their sales teams, to identify important deals and to conduct periodic coaching reviews.

Goldenberg: CRM functionality goes hand in hand with sales-skill training and motivation training. For example, let’s say that a company adopts a new sales pipeline management process. Typically, that company will train sales reps on the value and impact of the new process, how to do it, how it benefits the sales rep and the company and so forth. In this scenario, the CRM solution comes in behind the sales-skill and motivation training, providing the tools needed to optimize the new pipeline-management process.

Selling Power: How can sales managers obtain funding for extending their CRM implementations? What’s the trick to getting top management to fund such projects?

Wooten: The best way to do this is to assess your organization’s current level of CRM sophistication in relation to current usage patterns, and then analyze how the existing systems support those patterns. As business processes become more finely tuned through the use of CRM, it becomes easier to set up and measure the various points where the organization makes contact with its customers. When CRM is seen as a way to manage tangible, bottom-line metrics and customer-loyalty expectations, it becomes relatively easy to justify the extra expense of front- and back-office integration of CRM systems.

Petersen: Sales management should take the initiative and lead in supporting sales processes and technology that improve sales effectiveness, such as CRM. With improvements that lead to increased revenue, the executives can’t help but notice and be called upon to provide more financial support.

Pombriant: When CRM is seen as a way to maximize the return on customer (ROC), management has an instant understanding of the need for a better solution and the business justification to act quickly on CRM funding requests. If you want top management to buy into a bigger implementation, you must think bigger than the needs of the sales team. Become a leader in making the company successful, and you’ll get the budget and resources that you need.

Goldenberg: A solid CRM business case is the only way to get top management to fund a CRM implementation or an extension to an existing one. A solid CRM business case consists of one or more of these six components: 1) increased productivity and resulting revenue impact, 2) lowered sales administrative costs, 3) improved employee morale, 4) comprehensive customer knowledge, 5) higher customer satisfaction and 6) enhanced customer loyalty. Each of these components should be carefully defined for your situation and a metric attached to each component.

Wilson: Deploying or extending the right CRM system can help you close deals faster, with less wasted time and effort. In a sales organization, you want good news to travel fast and bad news to travel faster, so that you can adjust your sales strategy before you’ve missed your numbers.

Hagemeyer: First, you should take an enterprise view of CRM. A CRM solution will typically touch sales, finance, supply chain, marketing and customer service, so you need to get them involved in the process. Identify how a solution will impact the entire organization rather than jump the gun to fund some quick fix out of your own sales budget. If you try to go it alone, the resulting solution will not provide the same benefit and may isolate the sales organization by leaving them on a sales-only system, while the rest of the corporation gravitates to other technology. Second, you should build a business case based on the cost reductions and incremental revenues that the organization should expect, in order to justify the expenditure.

– Geoffrey James

Our Panel of Experts

The Vendors:

Anthony Wooten is the vice president of Mid-Market CRM Product Management for Sage Software. Phone: 1-800-628-6583. Web: www.northamerica.sagecrm.com

Brad Wilson is the general manager for Microsoft CRM. Phone: 701/281-6500. Web: www.microsoft.com/Business Solutions/CustomerRelationshipManagement.mspx

Paul Petersen is the senior director of GoldMine Channel for FrontRange Solutions Inc. Phone: 1-800-776-7889. Web: www.front range.com

The Analysts:

Dale Hagemeyer is a research director for CRM at Gartner Inc., the world’s largest high-tech analysis and market-research firm. Phone: 203/964-0096. Web: www.gartner.com.

Barton Goldenberg is president of ISM Inc., a firm founded in 1985, which focuses on CRM research, market analysis and consulting. Phone: 301/656-8448. Web: www.ismguide.com

Denis Pombriant is the managing principal at Beagle Research Group, a CRM analysis and consulting firm. Phone: 781/297-0066. Web: www.beagleresearch.com