The CRM Challenge: Increasing Sales Effectiveness
Many firms recognize they still have a long way to go to fully empower their sales forces.
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Last month I started to profile the results of our latest CRM marketplace research project, where we surveyed 226 companies regarding the business challenges they faced and the role technology could play in addressing those issues. I pointed out in that column that when we asked the survey participants to identify the top objectives they had for their sales organizations, increasing sales effectiveness was the most frequently mentioned goal.

That response begged a follow-up question: Where do you currently feel you are ineffective? To get that answer, we asked the survey participants to rate their effectiveness in specific sales-related business areas. To do this we gave them a list of 25 functions that sales organizations are typically asked to perform, and we then asked them to rate their own performance in each of these areas using the following scale: 5 = World-Class, 4 = Very Good, 3 = Adequate, 2 = Poor and 1 = Dismal. The figure below highlights the areas, where on average, the ratings were less than adequate.

Sales Effectiveness Challenges

Let's explore what some of these issues really refer to in a little more detail:

Share Best Practices: Companies have a significant asset in their best practices for how to work with clients--sales strategies, qualification techniques, objection handling, presentations, letters and proposals, for example--yet very few companies reported doing a good job of leveraging that knowledge effectively or consistently across the sales force. If companies did share ideas, it was most often done very informally, leaving a major corporate asset under-utilized.

Building Customer Loyalty: Collapsing product lifecycles have often made product offerings ubiquitous, allowing a customer to get the same product or service from multiple sources. This has caused many firms to re-examine their value propositions in terms of turning how they sell and service an account into a competitive advantage. But while this is a goal, the reality of achieving this distinction in the marketplace is still a challenge that few firms reported effectively dealing with.

Support Channel Partners: Many companies reported that they intended to increase their sales via channel partners to generate more business in the future and were finding that the policies, procedures and tools they provided their own sales representatives did not always work effectively when used by the channel. Companies reported the need to greatly simplify their operations if they were going to gain mind share from the channel reps to aggressively sell their products and services.

Ramp Up New Reps: As product lines are becoming broader, and individual offerings are often more complex, getting new reps up to speed quickly is becoming a greater challenge. It is worth noting that in 1999, 66 percent of the companies reported ramp-up times of six months. This year's number has increased to just over 72 percent.

Introduce New Products: As product life cycles collapse, the rate of new product introductions is hitting an all-time high for many companies. This places a huge burden on sales managers and sales reps to find the time to continually get up to speed on these new offerings and take the new messages to the marketplace, while continuing to manage opportunities already in the pipeline.

Forecast Accurately: Forecasting is all too often more magic than science, and for many firms it is black magic at that. Of the companies we surveyed, only 3 percent said their forecasts were always accurate, while an additional 29 percent rated their forecasts normally accurate. Since companies make key business decisions based on their forecasts--resource allocations, manufacturing schedules, raw material parts orders, for example--inaccuracies in projections causes enterprise-wide effectiveness problems for a large number of organizations.

Generate/Qualify Leads: Many salespeople, in order to meet their revenue goals, have to generate leads on their own, independent of corporate marketing programs. Targeting potential prospects and then developing and implementing local direct marketing programs is time consuming and hard to do. Once a potential prospect is identified, the challenge then shifts to qualifying which product or service offering best fits the needs of a prospect, if any do at all, before significant selling resources are committed to the opportunity.

Service Existing Accounts: Earlier we mentioned that salespeople have less and less time to devote to servicing existing accounts; some companies also give themselves low marks even when they do. Salespeople often find it difficult to navigate their own company to get the answers their customers seek regarding their account. This is causing customer satisfaction ratings to decrease in many cases.

Maintain Product Catalog: As collapsing product life cycles have allowed companies to rapidly change their product offerings, for many firms this poses a significant problem with keeping the sales force current on features, functionality and pricing. As customer expectations increase in terms of the product knowledge they expect the salespeople serving their accounts to have, the inability to maintain and access current product catalogues is becoming an issue.

Cross Sell/Up Sell: In addition to constantly changing products, many companies continue to expand their product lines. With so many things to sell, companies report that they are doing a poorer job of cross selling and up selling to their clients. Without easier ways to get the sales force trained on new offerings, firms will not realize their full "wallet share" potential from their customers.

Generate Bids & Proposals: These are two inter-related problems experienced by sales forces: The complexity of the orders themselves, and the number of sign-offs required to approve non-standard deals, are making sales representatives ineffective and inefficient at completing these two critical tasks.

Minimize Discounting: Market pressures are forcing companies to continually justify their prices to customers. When the sales force cannot easily articulate the true value of the products or services they sell, companies report that they are turning to more and more discounting in order to close deals.

Easily Access Information: The issue some firms struggle with is getting the information to the right place at the right time. Two sets of problems emerged here. First, the reps were being bombarded by too much information--a never-ending flow of new product announcements, price changes and competitive bulletins--making it a monumental task to stay current. Also, the information they needed to sell to and service customers existed somewhere in the company, yet they had to spend a significant amount of time trying to find out who had it. In both cases, the need to manage the flow of information more effectively was seen as a major requirement for improving sales effectiveness.

The task of selling today is more difficult than ever before. To meet their business objectives, sales forces have to be empowered in a way that allows them to initially analyze their territories to determine which accounts they should focus their efforts on and then conduct a detailed needs analysis with each of these companies to determine which of their products or services best meet the client's needs.

With this information in hand, they then need to have access to all the resources they require to properly educate prospects on how the company's offerings directly address the issues the client faces and why the company's solution is a better fit than a competitive alternative. In today's tight economic environment, they also need to build a sound business case for why the purchase should be made now, versus being deferred.

Once sales get an order, they need to ensure that it is correctly fulfilled in a timely manner. Following that, they need to see that the account is provided exceptional service so they can build the type of customer loyalty that will generate future business.

Companies that focus on achieving these objectives through their CRM efforts will be in a position to turn how they market, sell and service into a sustainable competitive advantage.

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