The promise of CRM is being realized, but not all companies see technology as an integral part of their sales excellence plans.
For the rest of the September 2003 issue of CRM magazine please click here
We have been conducting our annual Sales Excellence State of the Marketplace research initiative over the past two months. This year's survey was our most comprehensive yet, as we benchmarked more than 1,500 companies worldwide. Across this group of small, medium, and large firms, we measured 83 aspects of how effectively (or ineffectively) their sales teams are performing today. One aspect of the study that is particularly interesting is the impact that technology is having on improving sales excellence.
The study revealed the fact that not all companies see technology as an integral part of their sales excellence plans. Of the organizations surveyed, only 69.8 percent stated that they had formally evaluated CRM solutions, and of those only 53.8 percent reported purchasing an application. Many of the firms that did not invest in CRM technology looked to other options for improving their sales performance, such as hiring additional salespeople, focusing more resources on channel development, or investing more in sales and product training for their teams.
Among the firms that did purchase and implement a CRM system the results were varied. The pie chart below represents the ratings these companies gave themselves regarding the impact that CRM is having on their ability to sell.
The promise of CRM is being realized, but only by a minority of the firms that have invested in these systems. Only 27 percent of the companies we surveyed stated that they were achieving significant improvements in their sales performance as a direct result of their CRM technology investments.
On the positive side, this is the highest significant performance improvement rating we have seen in the eight years we have been conducting this survey, and conversely, the 17 percent rating for no improvement at all is the lowest we have seen. But the other two numbers are disturbing.
The fact that 44 percent of the firms reported only achieving minor improvements will spark debate about whether the CRM glass should be viewed as half full or half empty. I will only buy into the half-full claim if a company tells me that it started the initiative with the full intention of only achieving minor improvements. From having done hundreds of project reviews I can guarantee you that that has never been the case.
The other number that is cause for concern is the 12 percent of firms that couldn't provide an assessment of the impact their CRM initiative had. Granted, some of the systems may not have been in place long enough to make a determination, but the more likely reason for the companies' inability to give an answer is that they never had a clear picture of how they were selling to begin with. They have nothing to compare their current performance against.
So, what's the bottom line? The figure to focus on is the 27 percent of respondents who have seen major improvements. These are companies that are fundamentally changing how the game is played in their marketplace. As they continue to successfully leverage technology to make significant improvements in now they target, acquire, and retain customers, they will force their competition to respond in kind, or face the prospect of selling at a severe competitive disadvantage.
Jim Dickie is a partner with CSO Insights, a Boulder, CO, benchmarking firm that specializes in researching how companies are optimizing the way they market to, sell to, and service customers. Contact him at www.csoinsights.com
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