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Steering the Sale
Guided selling applications can automate the process of steering a customer to the product that's right for both them and for the manufacturer. But they don't come cheap and require serious institutional self-enlightenment.
For the rest of the September 2001 issue of CRM magazine please click here
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Want to sell more? Ask the right questions to learn what your customer needs, and provide the right answers in the form of a product that's a rock-solid match for those requirements.

The process is reasonably straightforward in personal relationships, but difficult in automated or semi-automated selling environments. Traditionally, software has lacked the sophistication to do much more than pigeonhole buyers based on transparently obvious qualifying questions, many of which employed so many technical or unfamiliar terms that they were nonsensical to the target audience.

Some companies have attempted to compromise by presenting a comprehensive configuration tool, and it would be difficult to argue that companies like Dell have been unsuccessful. Still, a configurator is not by nature a consulting beast, and while configurators can help ensure that customers do not ask for the impossible, they often raise an even greater degree of confusion about terminology and utility. Just because a configuration is compliant with a manufacturer's specifications does not mean it is optimal to the buyer's needs.

Plugging the gap are a wave of tools broadly known as guided selling applications. Although wildly different in appearance and sophistication, guided selling generally combines the front-end interactivity and sensitivity to customer needs with the robust back-end logic of a configuration enforcer. Guided selling applications are being used to sell everything from consumer electronics, to financial products, to heavy industrial equipment. In some guises, they are relatively light tools that may require just a few multiple-choice questions to guide a customer to a short list of proper recommendations. In others, guided selling tools are the constant companion of a sales executive, who sits down with a customer for a lengthy needs analysis, plugging in exacting specifications and generating an on-the-fly enterprise implementation plan.

"You're empowering the user to configure the product to what he needs," says Sheryl Kingstone, Yankee Group program manager. The alternative to guided selling when it's needed most is not pretty. "If you're trying to close [a sale] online, and the customer gets confused and stops doing it, you've lost out on that sale." That propensity to confuse, or under-educate, is one of the factors that makes a poorly crafted e-commerce experience fall short of the service level of even the least-informative big box retail staffer.

The trick is capturing and replicating enough knowledge to make an interactive sales experience a reasonable proxy for a top-notch consulting sales associate, which should still be on call for the concerns databases just can't anticipate. "If more of the process and sales can be conducted over the Web, the people with a higher level of technical knowledge, the people that actually need to be in a face-to-face situation can be generating revenue instead of fixing errors," says Vanessa Fox, senior analyst at AMR Research.

Car or Truck of Your Dreams
BMW is making liberal use of guided selling, and they seem to be doing something right. Internal surveys claim that a hefty 85 percent of BMW North America customers use its Web site. Not surprisingly, the company tries to capitalize on that opportunity by presenting the most comprehensive sales tools available.

BMW's Virtual Center, powered by technology from Selectica, has offered sample vehicle configuration for years. But configurator tools are commonplace in the auto industry at virtually every manufacturer site as well as a host of third-party information providers. Last year, BMW added a guided selling front-end to help consumers narrow their search from nearly 30 models to the status symbol of their dreams. Every car is displayed in a grid, and users are able to lock in preferences, such as desired body style, price range or driving priorities (luxury, high performance or spaciousness, for example). As the criteria are highlighted, only the autos that fit the standard remain visible, until, with luck, one lonely yet perfect model remains. Customers can then proceed to the configuration page with a greater degree of confidence in their choice.

Although it is still impossible to order a vehicle directly from a manufacturer, Carol Burrows, e-business manager at BMW North America, says the tool has been invaluable in streamlining BMW's sales cycle. Buyers can e-mail configurations to the BMW dealership of their choice from the site, or print a detailed configuration summary to mull over at the negotiating table. "Consumers come into the showroom very well informed with a good idea of what suits their needs," she says. "It gives them the ability to engage in a very directed conversation with the salesperson."

Beyond autos, transportation and construction equipment has been a favorite target of guided selling integrators offering guided selling tools to front-line sales staff, because such heavy equipment is usually sold through very traditional channels, yet requires intricate customization on countless options. "The sales associate hasn't memorized everything he needs to know about every model ever made and typically doesn't necessarily have the product knowledge and level of sophistication to make the best recommendation 100 percent of the time," says Alex Lustberg, vice president of product management for guided selling vendor Firepond.

Voice Of Authority
Of course, encapsulating more information than even a seasoned sales veteran can process in a never-fail software application is not exactly easy, either. Just building a comprehensive configuration and order system is a challenge, in large part because few companies have their important product and pricing data perfectly aligned. "They have them in spreadsheets, legacy systems, billing and order management systems...implementation of [guided selling] takes a long time, it's costly, and it's very complex," says Steve Bonadio, Meta Group program director. "You might have 100,000 components that have to interact in different ways, or for a health care plan for a large company there might be thousands of elements you have to map out...it's not easy."

Many industry watchers describe the guided selling process as "making recommendations like your best salesperson would." That sounds so appealing on the surface it almost obscures the daunting prospect of identifying, codifying and automating the process of turning needs into recommendations and determining a thorough-yet-easy interrogation process to reach the optimal configuration.

"You are forced to standardize your process and the criteria by which you will recommend a solution, but that's actually good news," says Ron Czinski, vice president of marketing and services for guided selling developer Cybrant. Czinski, who earlier in his career was responsible for teams of configuration engineers, recalls the inherent problems with ad hoc optimization. "If I gave a problem to five engineers, I would get five answers--two would be excellent, two would be acceptable...and one might even be wrong."

As part of Hewlett-Packard's (HP) guided selling program (see sidebar below), the company holds focus group meetings made up of software vendor liaison engineers, configuration specialists, field technology consultants and sales representatives. "The focus group agrees: This is what a proposal looks like [for a given configuration], this is how we're going to do the sizing, and we get consensus across the board," says Charles Young, solutions technology team manager.

While many companies with complex products, including HP, do not consider their guided selling application to be the last and only word in the sales process, applying the same standardization to the entire enterprise pays dividends.

Even if the largest deals will still be sealed through traditional channels, being able to model and support the most complex product or service offering in a guided selling application can help make ongoing service and incremental sales that much more efficient to handle on the margins. "If you're selling major manufacturing equipment, you still might sell by shaking a guy's hand on the other end to close a $1 million deal, but the sales cycle doesn't stop there," says Matt Duncan, vice president of corporate and solutions marketing for CRM developer Pivotal. "It doesn't mean he won't come back 6 to 12 months later and want to reconfigure something, and because it's already in the [guided selling] process, they can order additional services and parts online that accurately fit both the specifications and needs of the larger installation."

Buying What They're Selling
The last thing anybody needs is a high-minded notion that causes widespread strife as the organization struggles to standardize recommendation criteria only to wind up with a higher cost of selling and a lot of exhausted individuals. "Traditional CRM systems have done a great job in terms of leveraging operational efficiencies, but at the end of the day, these have been 'Holiday Inn' applications, used by the salespeople to keep track of what they did that day and not necessarily helping them be more effective in spending time with customers," Firepond's Lustberg says. "The payoff [of guided selling] is in revenue, rather than operational efficiency--you sell more and sell better, because it's real time to the customer."

How much more, or better, depends on the scenario. "For non-complex products with discrete components, where the rules are easily mapped, like [build-to-order] PCs, you can save 20 to 30 percent in sales cycle time, although not necessarily with a 20 to 30 percent reduction in sales staff," Bonadio says. "When you get to more complex products, it varies dramatically." Bonadio highlights the ease of integration with back-end inventory management and billing cycles as an important factor in the overall potential benefit of a guided selling system.

The ability to tie in the rigid accuracy of a configurator with the guided selling aspects of identifying the best possible solution should not be ignored as an efficiency booster. "Some companies have order error rates from 30 to 60 percent for complex goods," says Calico spokesperson Kelly Bayer Rosmarin, which typically results in either the need for intricate error-checking services or requires carrying higher inventory levels to compensate for mistakes. "Our customers are telling us this is a real problem."

Be prepared for a serious investment of time and money if guided selling makes your organizational radar. Incorporating the entire inner workings of a manufacturing and sales process into a single framework takes serious work, and while it may be possible to reap early gains, the true benefits will require patience. For example, application designer BigMachines, which specializes in guided selling tools for heavy industry, claims it can have a limited pilot program running in as little as four to six weeks for a particular product line. Consensus accounts indicate that anywhere from 3 to 12 months or more is typical for a thoroughly integrated and tested guided selling solution. While many companies were reluctant to share any pricing data whatsoever for this story, six-figure sums were commonly quoted.

Resistance is Futile?
Sales force resistance to even relatively minor administrative software tools, such as early SFA apps, has been legendary. Don't be surprised if guided selling applications are sometimes greeted with venom instead of veneration.

Niles, Ill-based Halo Branded Solutions learned this lesson twice. The company, a manufacturer of customized promotional products, acquired dot com competitor starbelly.com in May 2000 to gain access to the latter's impressive array of front- and back-end automation software. Although starbelly secured very few customers in the heavily competitive market, visitors armed with nothing more than a digital logo image could design and order products to their exact specifications with very little human intervention. Halo, according to analyst reports, had been unable to home-grow such a system due to objections from its sales staff.

As it turned out, Halo's sales force had one more coup up its collective sleeve. After the acquisition, much of starbelly's customer-facing technology was scrapped, including the ability to independently design and create branded products. New customers must still make an old-fashioned appointment with a Halo salesperson, ensuring their ongoing role as gatekeepers and ultimate owners of the business. The net result of these back-to-back achievements? Halo's first-quarter revenues are down 16 percent year-to-year (with Q1 2000 a pre-merger period) and expenses, on the whole, are up. The company's CEO was reassigned in February 2001.

Of course, Halo's hundreds of account executives had a valid, if self-interested, point--one very real potential outcome of a guided selling application is to cut the roster. Consider a major manufacturer of mainframes and industrial automation equipment that engaged Calico to streamline its sales process with a guided selling tool for the field staff.

"They used to have three engineers and one salesperson on every call, because configuring the product took so much engineering expertise," Bayer says. Calico's application enabled the manufacturer to send out just one engineer instead of three.

"It didn't replace the sales force. It's changing the composition of the sales force and reducing the cost base," she says. What happened to 66 percent of the sales engineers if they're not out making sales calls? "Lost their jobs, probably," she concedes after a pause. Clearly, making a multimillion dollar sale of a highly customized product will require interpersonal contact for some time to come, but employees can often smell the impending redundancy of a large number of marginal-value positions from a great distance.

For those that remain, however, guided selling can be a powerful tool. "If I talk to any of the best salespeople, 80 percent of their time is spent doing fairly repetitive things, and it's that 80 percent we're looking to automate in a guided selling system," says Jim Wilson, product director at guided selling developer Cincom. "If you have a broken leg and you have a crutch, it doesn't replace your leg, but it helps you perform. [Salespeople] need to look at these technologies as a way of providing a cognitive prosthetic--it helps customers make better decisions. It doesn't replace intelligence."

Cybrant's Czinski believes that the advantages are simply too good for smart companies to ignore. "If you can accomplish something in 30 minutes which took 30 hours worth of effort and it's better quality and more pleasing to the customer, it's going to be hard to shut that one down."

Beyond the Bulldozer
Reared in the nuts-and-bolts world of heavy lifting and weaned on high-tech projects, guided selling applications are moving into the mainstream. "It's clearly moving beyond the complex build-to-order environment and outside of manufacturing," says Meta's Bonadio. "The thrust now is toward service-based businesses: financial services, telecommunications."

In particular, Bonadio sees guided selling as a perfect match for the insurance business, particularly at the B2B level. Compared to the complex industrial projects configurators and guided selling applications have historically addressed, "it's equally difficult to build a health plan for a company."

Yankee's Kingstone believes that integrating guided selling with offline sales processes will take some time, as will the realization of the full potential of the software. "You need a robust knowledge base that learns from multitudes of experience, and most of that is not going to happen until we get more information about the online buyer," she says. Still, guided selling represents the latest step towards the goal of unifying the quality and depth of service across multiple sales channels, including online self-service and face-to-face collaboration.

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