As we enter into the true "new millennium," I want to take this opportunity to forecast some of the major changes I believe will happen during the next year. Making predictions is a tenuous science at best, but I feel fairly confident that the following will occur over the next 12 months and that these trends will again alter the course of the marketplace.
1. Process starts to Drive Technology
For years when we at Insight Technology Group have done our state of the marketplace survey, when we ask CRM project teams what recommendations they have for other companies embarking on similar initiatives, they always say the same thing: Analyze your processes first.
During the past year, it has become apparent that this is no longer a suggestion, but rather a mandate for success. Organizations that jump on the technology bandwagon, without first analyzing how they market, sell to and service customers, are experiencing failure rates four and five times higher than those firms who do their process homework first.
The major trend that I see turning this problem around is the aggressive entry into the CRM marketplace of sales process management firms. Siebel Systems' purchase of On Target was a demonstration of the value that CRM vendors are placing on ensuring their customers get their processes optimized before they start rolling out technology. 2001 will bring about many more alliances like this.
Miller Heiman, for example, has long been viewed as a leader in training sales forces. The company's strategic account sales methodology is an operational standard for companies across many industries. Based on its process prowess, Miller Heiman is rolling out a series of innovative services to its clients to help them not only assess their sales process needs, but their CRM technology requirements, as well.
I expect other sales process firms to follow Miller Heiman's lead and help their clients complete the process analysis task early in a project so that the CRM team makes better product choices based on a clearer understanding of what problem they need to solve.
2. Sales Efficiency Tools Give Way to Effectiveness
When companies do analyze their processes first, they often find that they have been focusing on solving the wrong problem. They have been trying to increase the efficiency of their people, when they should have been tackling the issue of how to make them more effective.
With the emergence of a new breed of sales and marketing effectiveness tools from companies like Conjoin, Ventaso and ShortCycles, CRM teams now have many more weapons at their disposal to deal with the effectiveness challenges they face. These tools are designed to help the average rep do a great job at mission critical tasks such as needs analysis, product configuration, ROI justification and proposal generation.
As companies start to see the true potential that these systems can deliver, I believe buyer expectations will become much higher. End user firms will no longer settle for simple efficiency tools, such as contact managers, opportunity managers, lead tracking systems and the like, but will expect their CRM vendors to deliver tools that make a difference in improving the effectiveness of their staffs.
3. We Dive Deeper into Vertical Solutions
As we focus more on effectiveness, a second demand CRM project teams will make of their solutions providers this year is to deliver more vertically oriented solutions. Many of the efficiency challenges facing sales people today are common across many industries, so they can be addressed with general purpose applications. But the effectiveness problems are not so easily solved.
A system designed to fundamentally allow a consumer-packaged goods sales person to more effectively deal with their customers would be of no use to an insurance sales rep. And an insurance-focused system would not be helpful to a telecommunications sales force. Dealing with effectiveness issues requires a deep understanding of a given market, and a one-size-fits-all attitude toward developing CRM products does not work.
The CRM vendors that grab the lion's share of the sales this year will be the ones that can demonstrate that they have solutions targeted for the audience and the marketplace that end user sales reps are selling into. Those vendors that miss this market shift will find themselves quickly left behind competitively.
4. The Real Sales Problem Gets Solved
Another major shift in CRM project thinking will be expanding the scope of the project. For the past several years, the focus of most CRM initiatives has been on providing tools that help sales people plan for and follow-up on sales calls. In 2001, we will deliver systems that help them make the sales call, too.
The technology that drives this market move is the reintroduction of pen-based PCs. Fujitsu has been the market leader in this space for a year or so, and its new model 3400 is the perfect box for taking on a call. It is like a PDA on steroids--full Windows capabilities, large display form factor, gigabytes of storage, a full Pentium processor, all in a package around 3 pounds. IBM is also re-entering this market with a pen-based PC.
Chubb Insurance and McKesson have started to roll these types of systems out to their sales people and are generating great results. Using a CRM system from MobilePoint, their sales reps have access to all the information they need to respond to any customer inquiry during the sales call. The advantage of never having to say "Let me get back to you on that" because you don't have the data you need with you during a call will become a key competitive edge.
5. Helping Sales Managers Becomes Key
My final insight into 2001 is that we will expand our desire to increase the effectiveness of our sales forces beyond just thinking about sales reps, to include their managers, as well.
The task of sales management has also become much more complex over the past decade. The ratio of reps to managers has been on the rise. The average tenure of a sales rep has been on the decline. The number of sales people working remotely has been increasing, decreasing the ability of sales mangers to coach their people. And all this has been happening at a time when revenue and margin expectations are increasing and the need to forecast business accurately has become an imperative.
Based on this need, I think that solutions focused on sales management effectiveness will be extremely well received. I look to systems like those from Market-Partners and Ockham Technologies to drive the demand for a new breed of CRM applications. These systems will help sales managers identify best practices, anticipate marketplace shifts, identify at-risk sales people early enough do something about the problem, ensure our commissions programs are motivating people to do what we really want them to do and more. Solving these problems will make success more predictable and replicable.
I cannot see this marketplace slowing down any time in the foreseeable future. The road ahead will be filled with new technology advancements to be understood and new project pitfalls to be uncovered and dealt with. Hopefully, you will find CSO Insights useful in dealing with both these challenges. For 2001, I wish you good luck and good selling.