Expert Advice

The companies that develop and market CRM technologies orient their own fortunes around the methodologies and software that comprise this comprehensive business transformation and management strategy. Gauging the success of these tools and techniques by their own CRM adoption strategies, CRM vendors are part laboratory and part paragon, with a healthy dose of plain old necessity--the cobbler's children may have weather-beaten shoes, but no one trusts a CRM vendor that can't speak highly of its own customer management success. CRM magazine investigated the depth of CRM expertise and adoption at the companies selling the technology by interviewing executives at several leading developers, ranging from large, traditional vendors to up-and-coming hosted providers. And just as their products differ, so do their strategies for CRM success. Standard Operating Procedure CRM vendors may have a discount on software, but when it comes to strategy they are no different fundamentally from any other firm. Most have gone through an evaluation process to clearly identify their customer interaction points and have devised company-wide strategies to ensure that the experience is a positive and learning one. "We have implemented customer-centric selling. On a customer-retention level we have an account management process where we contact our customers with prioritized touch points," says Jonathan Tang, president and cofounder of Salesnet. Salesnet checks in with its most valuable customers for new opportunities or potential support problems on a weekly basis, but ensures that even bottom-tier clients receive personal attention from an account manager at least quarterly. He credits the strategy with lowering attrition to less than 1 percent. "In almost every business decision we are ingrained to ask, How will this affect my customers? Do that, and you're going to make better business decisions," says Bryan Smoltz, director of product management at Onyx. NetSuite CEO Zach Nelson will open the door to his internal CRM processes to win a customer. "I don't use a demo account, I use my actual live account on the system and show them my sales today, my leads today, and the drill-down," he says. Demonstrating the real results helps lower the barriers to acceptance and adoption for customers, who can see exactly how the product's workflow fits into a real-world business. Another way vendors build acceptance is through personal attention. SAS Institute's customer interaction center boasts not only an inside sales team, but a customer advocacy group that acts as liaison between clients and SAS staff. "They're working closely with customers to make sure they are getting value from the purchase that they made," says Paula Harpham, customer relationship manager. "We're giving them someone who can foster a relationship, and take feedback and turn it into actionable information." Some companies insist on field-testing every new feature internally before it reaches a customer process flowchart. "We are the alpha tester for every new product we go to market with," says David Dahlberg, senior director of demand generation for Siebel. As is recommended for any enterprise CRM deployment, Siebel first uses a pilot group of advocates and power users to test cutting-edge functionality--roughly 10 percent of a given user group--and hammers out any kinks before rolling out the new features to the entire company on a two-month cycle. Keeping Friends Close Staying close to customers has always been a tenet of CRM. For SAS founder and president Dr. Jim Goodnight, this meant becoming a more integral part of the sales process. "Recently he took over our sales group in the Americas to ensure he could have more regular interaction with customers," Nelle Schantz, CRM program director at SAS, says. "[Jim] has always had a lot of involvement from an R&D standpoint, but he realized he wanted to get closer to our customers." As a programmer Goodnight also developed the attrition algorithm the company uses to identify potential defections in its customer base. Goodnight is not alone in using CRM analysis to improve customer relations. "We have built a knowledge base in our organization that maps out our interactions so that other people can use [those strategies]" rather than relying on person-to-person email, says Anthony Lye, president and CEO of ePeople. The knowledge base cuts down on duplicated effort, because employees can share problem resolution strategies in a single location. "We used to collect a ton of information on customers--too much information," Salesnet's Tang says. "We streamlined data collecting, so now salespeople are only seeing the information they need to see. And we've cut down the number of steps in the [sales] process." Nelson takes pride in the additional benefit of using the reporting capabilities of NetSuite to keep internal technology staffing costs light. "We have 300 people with two IT guys, because [I said], 'Here are the ten key performance indicators, set up the reports to support that.' We review them every week in staff meetings, which allows us to not hire armies of IT guys to generate reports." Adoption Challenges Even CRM champions sometimes question the effectiveness of new initiatives when first proposed. Hilarie Koplow-McAdams, senior vice president of Oracle's OracleDirect telesales operation, has logged more than 16 years with the company and played a lead role in internal CRM implementations. When the company wanted to enhance and automate processes in the telesales group aimed at improving the fulfillment and commissions process and marketing insight, Koplow-McAdams had her doubts. "I was skeptical, because my world was contact management and forecasting. I wasn't getting into the complexity of working more with marketing, or with the back-office goals the company was trying to resolve," she says. Success changed her tune. "After it went live I became a big believer," she says. "What I had before was contact management, which would tell me how much of a product I sold. What I have now is mission control, so I can see what the pipeline looks like and I can integrate into the different selling channels of the organization." The benefit to OracleDirect, according to Koplow-McAdams, was a move "from an historic to a predictive view of the business," and a better understanding not only of performance and pipelines, but also of the true profit/loss structure of the operation. "We certainly would not have been able to see conversion rates relative to labor and the utilization of our sales engineers," she says. "I had no idea how much effort was being expended." Who's in Charge? Not surprisingly top CRM executives were routinely named as the ultimate authors of their company's customer strategies, and they themselves hailed their management control panels as invaluable tools. "I have dashboards in my system that will show me things like sales activity, how many opportunities we have in a certain area, or what step a certain deal is at in our process, and who's working on those deals...so I know what I can do with a stagnant deal," says Salesnet's Tang. "I don't have to wait until the end of the month or until salespeople come in and tell me they're behind. I can go in and proactively coach the activities in the pipeline." "Every Monday and Tuesday we look at reports in NetSuite on our sales forecast, marketing leads, and marketing conversion rates, all generated right out of the system," Nelson says. He steered the design of the product to avoid problems he had running marketing organizations in the past, where detailed reports on marketing performance took months to create. "We could never tell what converted. Now, literally, I push a button on the dashboard and I can see today what generated a sale and what direct mail campaigns aren't working." Nelson also makes midstream changes in the company's sales and commission structures. "Your [sales] process needs to quickly adapt, and we've modified our system once a month" to optimize performance and incentives. Beyond the CEO's desk, some CRM vendors are on the lookout for employees who can work in a customer-centric model. "It's important when we hire to have someone who has done a consultative sell in previous experiences," Tang says. "We need someone who can go in, ask the right questions, and present something that works for [the customer] and for us. I ask a lot of problem-solving questions [in interviews.]" A more challenging climate for technology sales has caused some CRM companies to rethink who their true customers are, and to hire accordingly. "Traditionally [SAS] has sold more deeply into the organization. We were more focused on the folks who have statistical backgrounds," Harpham says. The company has widened its hiring net to pull more employees from broader business experience so that they in turn can help SAS talk to more line-of-business users. Lessons Learned Despite the evolution of CRM development through customer feedback, some features are born of necessity for the vendor itself. When NetSuite wanted to offer tiered levels of customer support, that feature had to be added to the product, which then became a perk for customers. "Some of our best product ideas come from our own use," Nelson says. "And if it doesn't work for us, it isn't going to work for another 300-person company." Siebel's Marketing package was developed in large part through communication between the design team and Siebel's marketing groups. "We look at our internal processes and incorporate those best practices into product direction," Dahlberg says. Of course, CRM firms and their employees are not always perfect proxies for the real-world scenarios faced by customers of CRM applications. At the end of the day most CRM vendors are specialist technology firms with a somewhat narrower range of processes and considerations than the global business community. So one highly internal implementation should never be taken as proof that a specific solution or approach will work for your business without careful consideration. It may, however, make a good negotiating point to insist that any vendor-provided implementation staff put the same care and diligence into your training and customization as they did for the deployment in their own company--especially when working with them on the strategic aspects of an initiative. "They understand strategy, but it depends who you speak to. Speak to [the vendor's] professional services organization, and you're going to get more about how the technology can help with the strategy you're trying to achieve. But they are not going to come in with business process reengineering expertise" like a high-end consulting firm, says Sheryl Kingstone, CRM program manager for the Yankee Group. Onyx's Smoltz agrees: "We've tried to package up some of the thinking and concepts [we have learned internally] into our strategic services offering, but we're not trying to take the role of a Big Five consulting firm and do change management for six to nine months," he says. "They all say they use their own technology," Kingstone says. "If [a vendor] talks about being able to close the whole gap, from first contact to contract to cash, the question to them is this: Can they do that?" Jason Compton is a Wisconsin-based freelance journalist who extensively covers CRM and related strategies