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The Real Cause of CRM Stagnation
Buyers and sellers need to speak the same language: business, not technology.
For the rest of the November 2002 issue of CRM magazine please click here
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There has been much concern voiced recently about the future of the CRM. Revenues for many vendors are flat, pessimism regarding the value of technology high, and some industry leaders are now claiming CRM as a concept is dead. How quickly things have changed from just two years ago, when CRM was touted as the ultimate solution to all the sales, marketing, and support challenges we face.

Is all this doom and gloom justified? Does CRM truly have no meaningful place in business today? Based on a four-month long research effort associate Barry Trailer and I have conducted, the answer is a resounding no. CRM does in fact represent the answer to many of the challenges companies are facing. The issue is that most sales and marketing executives are at a loss as to how. As the warden said to Luke (played by Paul Newman) in the classic movie Cool Hand Luke: "What we have here is a failure to communicate."

Barry and I talked to the heads of sales and marketing of hundreds of firms. These companies ran the gamut from giants like General Electric and Hewlett Packard to firms with $10 million in sales. During these interviews, we probed extensively into how their operations were currently structured, what they felt were weaknesses in their current performance, and how they were dealing with those problems.

What are some of the challenges that need to be overcome? The business leaders interviewed discussed optimizing marketing hit rates, getting new salespeople to full productivity sooner, improving cross-selling and upselling, selling value to avoid the margin impact of discounting, and improving support to create more customer loyalty, just to name a few.

How are they planning to deal with these issues? They are changing their hiring profiles, spending more on training, implementing structured processes in sales, marketing, and support, placing a monomaniacal focus on gathering metrics regarding all aspects of their operations, etc. Clearly, they are investing a lot of time, effort, and money to deal with these problems--but in fewer than 10 percent of the cases did they mention making significant investments in technology as part of their plans.

When we explored why this was the case, it was interesting to note how often we heard comments related to confusion regarding where technology could help, and where it could not. The disconnect was best articulated by an executive who said, "I speak the language of business. I have talked to several CRM vendors, and I am not sure what language they speak, but it is not business."

I understand this concern. I recently spoke at the DCI CRM conference in New York, and looking back to the discussions I had with many vendors, what they speak is the language of technology: "We are OLE DB compliant, we are .NET-centric, we are ASP-based versus in-house hosted, blah, blah, blah." Let's be honest, this means nothing to a typical vice president of sales or marketing. You could base your solution on stickpins and voodoo dolls for all they care, just as long as you deal with their issues.

So, I beg to differ with those touting the demise of CRM. But with that said, the CRM industry will not get back on track until the vendor community starts calling on end-user executives, really taking the time to listen to their challenges and their needs, and then presenting how the vendor's systems will solve those problems. Until that level of communication occurs, stagnation will continue.

Jim Dickie is managing partner for Insight Technology Group, a Boulder, Colo.--based benchmarking firm that specializes in researching how companies are reinventing the way they market to, sell to, and service customers. Contact him at jimdickie@aol.com

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