Since 1993 I have conducted an annual research project to tap into the pulse of what started as sales force automation (SFA) and has now evolved into customer relationship management (CRM). Through last year we have profiled over 1,200 CRM initiatives. To determine where the market is currently headed, we recently reviewed an additional 202 CRM projects, surveying the sales, marketing, support and information systems professionals ultimately responsible for these projects. Through these efforts, we have uncovered a wealth of insights into how this dynamic marketplace is evolving.
In this month's column, I want to share some of these insights and discuss what's hot, what's not and what's still missing in CRM software. Hopefully these market trends will help you chart the course for your own CRM efforts.
Key barometers for change in the CRM arena are the tools end users are buying. During the course of this latest round of project reviews we asked CRM teams to identify the specific functionality they were planning to roll out to end users. As the chart above reflects, certain tools are on everyone's implementation lists, while others show up less frequently. Survey findings include:
Opportunity Management is #1-Opportunity management systems (OMS) have worked their way up the chart over the past four years and are now the most commonly cited component of a CRM solution set. This is a reflection of the value the majority of firms see in coordinating the efforts of everyone involved in selling to and servicing customers.
By providing a single repository that contains all the information on each customer and each sales opportunity (both past and present), companies are finding they can increase efficiency and effectiveness enterprise-wide. Firms successfully implementing an OMS are reporting higher win rates as they leverage best practices across the world; higher customer satisfaction ratings as each of their people respond faster to customer needs because they have easy access to client information; and improved communications as employees utilize the OMS as the way to update each other on their work.
Internet Access Explodes-The number of firms wanting to give their sales organizations access to the wealth of information available on the Internet jumped from 43 percent last year, to 54 percent in 1999. But that desire came with an asterisk: Companies do not want their employees surfing the Net looking for the data they need; they want to utilize "push" technology to have information sent to those who need it.
Using push tools, users can set up a profile of the types of information they are interested in: news updates on companies they are working with, product announcements from competitors, changes in government regulations that might impact how they do business and so on. Push tools become digital assistants for employees, making them more knowledgeable and therefore more valuable to customers.
Training Makes the Grade-Providing employee training for sales, service and marketing professionals made the list of top CRM functionality for the first time this year. The delivery of training is taking several forms: integrating sales methodology support into the CRM system to reinforce and enforce a structured sales process; conducting virtual live sales and product training classes over the Internet; and providing self-paced computer-based-training courses students can take any time.
Companies including training systems in their CRM efforts are finding these systems significantly reduce expenses associated with training road shows. In addition, these CRM-based training options help reduce the negative impact many companies are seeing when they implement a virtual office concept. Employees using these systems report they feel more connected to the company and therefore appreciate the investment the firm is making in improving their skill levels.
"Companies do not want their employees surfing the Net looking for the data they need; they want to utilize "push" technology to have information sent to those who need it."
What's Not (But should be)
Configurators-Configurator functionality barely makes the list again this year, with only minimal improvement over last year. Since I hear lots of companies complain about the problems they have preparing and processing accurate orders, I'm amazed that more companies are not turning to a configurator as the answer to that challenge.
The ROIs for companies who successfully implement a configurator continue to be very impressive. For example, an office products firm was able to cut order errors by 42 percent. A computer firm was spending 4 percent of total revenues in service allowance and gratis parts because they were shipping the wrong systems to customers. After implementing a configurator, that problem was cut in half. A medical products reseller increased its cross-selling success rate by 400 percent after implementing a configurator. Perhaps these successes will motivate more companies to consider the power these tools can provide.
Marketing Automation-A year ago marketing automation was the hot new buzzword in the CRM industry, but that interest has not yet been turning into mass-market sales. In several CRM project audits we did recently, marketing automation was not included in the phase one plans-not because of lack of interest, but rather because of lack of resources.
It is true that successfully implementing a marketing automation system requires a considerable time investment from both the marketing and sales departments. However, in terms of targeting prospects, generating higher quality leads and integrating marketing and sales efforts, the payback from these systems is well worth the effort. CSOs need to free up either additional persons internally or dollars to outsource the work externally. Increasing marketing effectiveness is just as critical to a company's long-term success as increasing sales effectiveness, and it deserves the right level of investment.
Point-of-Selling Tools-While we have done a great job over the years in coming up with more and more tools to help sales professionals plan for and follow-up on a call, we are still doing virtually nothing to actually help them make that call. As we continue to expand the breadth of our product lines and the complexity of our offerings, we have to start doing more to help sales professionals make great calls.
The power of point-of-selling effectiveness systems was driven home to me recently when I reviewed an internally developed CRM application utilized by a financial services sales force. Using this system, the reps were able to do a complete investment needs analysis with their prospects. Based on these needs they were then able to generate a comprehensive investment proposal right in front of the client, and then interactively tailor it based on their feedback. Finally, they were then able to print out the proposed plan and close the order. With this system, the company's close rate jumped to over 85 percent-all because their sales representatives had the tools with them during an appointment to make a world-class call. CRM vendors need to expand their development plans to cover this critical hole in their product lines.
Pre-Sales Support Effectiveness Tools-To date, CRM has focused on call center reps, customer support reps and field sales reps. CRM has yet to address the needs of pre-sales support reps. These are the people who most sales representatives turn to for help in closing a deal. While they are critical to winning sales, little has been done to provide them with the tools they need to increase their effectiveness.
Hopefully, knowledge management vendors will respond to this opportunity. If they can create pre-sales query systems equivalent to the post-sales support systems currently in the market, we will see sales support representatives pay for this investment with bigger average deal sizes, higher margins on those deals and increased win rates.
There is a wealth of tools available to CRM teams already today. Add to this all the new e-business technology entering this space and it becomes readily apparent that companies will not be at a loss for applications that help them sell and service more effectively. The key to making any of these systems work, however, is first determining what problem you are trying to solve. Once you do this, you can implement high-quality, commercial-grade software systems to help you meet the challenges of the marketplace.