Recently, I had the opportunity to speak at a strategic CRM Executive Summit hosted by Dick Lee and Bill Brendler. The attendees were senior executives trying to get their arms around how to structure their CRM initiatives. During the day, we dealt with a number of high-level as well as tactical issues companies should consider when embarking on one of these projects.
At the end of the day I did an informal Q&A session during which one of the attendees said that while he felt he had a better understanding of what to do when starting a CRM initiative, what he was still struggling with was where to start. With more than 500 players offering CRM applications covering everything from marketing automation to direct sales to call center to channel sales to e-business to customer service to you name it, he wanted some insights into where to begin when setting the priorities for his project.
After reviewing hundreds of CRM initiatives, I believe firmly that you need to start with a problem and then go on to evaluate solutions. So, to begin to answer his question, I used a modified version of a formula that Barry Trailer, a noted sales process expert, shared with me years ago.
[(A x Q) /T] = $
A=Activity Level of Organization
Q=Quality Level of Performance of Salespeople
T=Time Salespeople Take to Perform
D=Distractions from Selling
Barry's basic premise for the formula was that if you wanted to increase the productivity and profitability of your sales organization (represented by $), then you had a core set of variables that you could impact. On the top line of the equation you have A (the activity level of your sales organization), Q (the quality level at which they perform) and T (the time it takes them to do tasks). Improvements in performance can be achieved by increasing activity or quality or decreasing the time it takes to complete a sell cycle.
To this basic concept, after working with many sales groups, I have added the D factor--distraction--as many firms can make significant improvements by minimizing the things that keep sales people from selling more of the time.
My recommendation to companies starting a CRM project is to look at your sales organization objectively and determine what type of problem(s) you have. This will help you define the type of CRM solutions you will then need to consider.
For example, many firms have a basic activity level problem. Their sales reps may need to be working 20 deals concurrently to make quota, but they only have the ability to manage 10 deals in their pipeline at a time. If this is your most pressing issue, you might choose to focus your CRM efforts on increasing your marketing effectiveness by implementing a marketing automation system that would help generate more highly qualified leads for your reps.
Another alternative might be to look at increasing the efficiency of the sales force to free them up to work more deals concurrently. Providing the sales force with applications such as contact managers, lead tracking systems, opportunity managers and the like will give reps access to a wealth of tools that can help handle tasks such as tracking to-do lists, generating and sending correspondence, sharing account information across the sales team and more.
By providing sales people with better leads and then increasing their efficiency so they can work more with those accounts, you can significantly broaden the width of your sales funnel, resulting in more sales.
For other firms, though activity may not be the issue, their reps may have plenty of prospects to deal with. For them, the issue may be the quality of the work the reps do. For example, it may take a sales person multiple calls to gather all the information she needs
to conduct a thorough needs analysis. Or you may find that the completeness and accuracy of presentations varies widely across the sales force.
If you have quality issues in terms of your reps not consistently working at the level you need them to perform, then you may focus your CRM efforts on increasing their effectiveness. You might provide them with interactive selling tools so they make sure they qualify the prospect completely on the first call. You might rollout presentation and marketing material generators so that the sales force can use these tools to create high-quality materials that provide current and consistent overviews of your products, benefits, success stories and the like. The key here is to leverage technology to help provide the assistance and coaching sales people need to perform at a highly proficient level.
Delays in completing selling tasks can also be a huge problem for companies. For example, one computer firm we surveyed last year reported it was taking them on average 12 days to complete a comprehensive RFP response for a customer. This was significantly lengthening their sell cycles. Another common lament across sales forces is that it takes hours or days or even weeks to get answers back from other departments in their company. These delays in getting customers the information they needed to make decisions can delay sales and even cost sales in some cases.
To deal with these time-related issues, you could consider implementing a configurator/proposal generator that can leverage business rules and past responses to dramatically cut down the time required to complete the RFP task. Or you could implement electronic forms for sales, so they can quickly route requests or information to other departments, and have those applications track the status of those jobs. Here again, the goal is to leverage technology to decrease the time reps have to spend completing selling tasks.
Lastly, if your sales force has too many distractions, that can also keep them from selling. For example, how many sales reps spend hours combing over their commissions reports each month verifying that they got paid the right amount they were due because they lack confidence in their company's ability to calculate that number correctly? Or how much time do your reps spend traveling to regional or headquarters offices to attend meetings or training sessions. If you could just recover all the time reps spend on non-sales-related tasks, you could significantly impact revenues.
Here again, technology could play a role. CRM-based commission managements systems are available that allow sales reps to verify quickly they are being paid correctly. E-learning/meeting systems are now robust enough that you can hold sales meetings or training classes over the Internet, significantly reducing time out of the field for travel. Opportunity management systems now can give other departments access to the information they need on deals, so they don't have to keep bothering the reps for that data.
In summary, if you want to decide where to start your CRM initiative, first you need to realize that one size does not fit all. There are dozens of different types of solutions available today, and you have to do some homework upfront to be in a position to evaluate them.
Take the time to determine what your best leverage points are: Activity, Quality, Time, Distraction. Once this is done, go out and find vendors who deal with those specific issues. If you complete this formula for your company, your project will become a lot simpler to manage.