The key to mass production of customer and prospect relationships is data velocity and data consolidation.
Posted Oct 18, 2004
CRM technology offers companies the possibility of applying mass production techniques to the acquisition and retention of business customers. Instead of relying heavily on representatives to handle most of the communications, B2B companies can orchestrate an array of contact methods to solicit customers and prospects and to move them efficiently toward a purchase decision. Because these interactions affect major areas of expense and revenue production, small increases in efficiency can make a big difference to growth and profit.
The challenge B2B companies face when going to market is the complexity of business buying behavior. When investigating a product or a service, business buyers contact vendors multiple times over weeks or months. Multiple people may participate in the decision process, interacting with marketing and sales and even customer service and product support. Contact methods may be any combination of phone, mail, Web, face-to-face, email, or fax.
The cost, scalability, and effectiveness of each of these methods of interaction can vary significantly. Likewise, some of these customers and prospects are not sure they want to buy anything. Others may take a long time before they reach any conclusion. Others still are ready to purchase. Of those who make a purchase, some will place a small order every two or three years while others will purchase millions of dollars in orders year after year. This variance in purchase probability and revenue potential spells the difference between efficient or wasteful allocations of go-to-market resources.
Unfortunately, far too many companies--including those with millions of dollars invested in an array of CRM tools--use decentralized, manual processes to determine the next, best step after each of these market interactions. And often, the default answer is the sales representative. That is, marketing and post-sales dump massive volumes of unqualified inquiries into sales and then complain about the lack of follow-up. Even when companies use lower cost and more scalable resources to qualify and nurture these prospects, little effort goes into aligning this output with the revenue capacity of each channel.
In either case, when companies do not provide direct sales channels with a sufficient volume of qualified leads, the representatives must use their revenue capacity to hunt for and develop opportunities rather than close them. Using a high-cost, hard-to-scale resource to do a set of high-volume, low-probability jobs wastes money and robs companies of growth potential.
When indirect channels receive insufficient volumes of qualified leads, resellers will generally give most (if not all) of their capacity to other vendors, including competitors. This outcome increases the cost of supporting the channel because low-mindshare resellers fail to generate the critical mass of business necessary to operate without substantial hand-holding on each deal and on each implementation. Thus, both sales and service support costs soar, creating a poor expense-to-revenue ratio for the indirect channel. Often, channel churn is also high, compounding the problem.
B2B companies, however, face many challenges when attempting to apply a more strategic economic model for allocating go-to-market resources. First of all, the sheer volume of interactions with the market each day makes manual processing cost prohibitive and hard to scale. In larger firms, for example, tens of thousands of customers can visit the corporate Web site on any given day. Second, B2B customers and prospects can wander into sales, marketing, customer service, and/or product support throughout the purchase process. Often, multiple CRM systems exist in each department, creating disconnected islands of customer and prospect information. Outsourcing customer interactions to third-party providers can further complicate the problem. So do merges and acquisitions. How then can B2B companies efficiently coordinate these go-to-market interactions?
While a single CRM platform can help, the key to mass production of customer and prospect relationships is data velocity and data consolidation. That is, data from external systems and various internal ERP and CRM systems all connect to a central "hub" or database. By establishing enterprise-wide data standards, B2B companies can achieve the necessary data velocity between systems. This approach also necessitates a centralized, just-in-time, automated set of data hygiene and data distillation processes. With this approach, B2B companies can automate the evaluation and delivery of the next, best step in the pre-sales dialogue and mass produce customer relationships. Mass production techniques, in turn, can reduce the cost of demand generation, increase the conversion of inquiries into sales, and improve sales productivity in direct and indirect channels.
About the Author
Dave Green is the president and cofounder of PipeAlign. He can be reached at Dave_Green@PipeAlign.com
Leading the Way
Getting sales leads into the CRM system has long been the most ignored element in sales and marketing automation.
Understanding the Multichannel Customer
Managing the Voice Channel
With incomplete information, some hazards can be deadly.
Sponsored By: Marketo and Real Magnet
Sponsored By: Jacada, Avaya, Confirmit, inMoment and BoldChat
Sponsored By: Genesys, Avaya, Verint, and Aspect
Sponsored By: Informatica
Sponsored By: Verint®, Confirmit and inContact
Sponsored By: Verint
The Immersion Approach That Helps Customers Make and Implement the Right Technology Decisions