At the most basic level, CRM is a tool for changing the behavior of a company's customer-facing personnel. Sadly, the tool is often mistaken for the goal, as if simply installing the system would improve customer coverage. What's missing from most CRM implementations is a structured process for analyzing how sales processes and sales channel roles should change in order to exploit the new functionality that CRM solutions offer.
In a recent survey of 48 Fortune 500 sales, marketing and IT executives, The Alexander Group, Inc. (AGI) found that less than half were reaching their stated CRM objectives of improved revenue growth, sales effectiveness and customer loyalty. The AGI Survey provides a clue to why so many CRM implementations are failing. The key problems are sales channel process-related, not technology-based. The challenges ranking highest were managing sales channel resistance to change (63 percent); restructuring sales processes and roles (56 percent); defining new business information requirements (44 percent); and measuring CRM solution performance (33 percent).
Given product parity today, channel integration is usually a major justification for implementing a CRM solution. In theory, channel integration allows a company to both provide the multiple channel options that today's customers demand, and to leverage each channel's unique strengths. One example of this is using telesales for lead qualification and then handing off leads seamlessly to the appropriate field sales reps.
However, channel integration requires detailed planning on two fronts. The sales coverage model must be redesigned so that sales channels align with the buying processes in the targeted market segments. At the same time, specific sales processes and roles must be restructured. Both fronts are typically neglected and, when attempted, are fraught with difficulties. For example, there is typically a lack of clarity around customer buying processes in the first place that prevents identifying new sales coverage priorities. There is often resistance from sales channel owners to compromising their control of customer segments or sales activities. Companies also typically lack the channel performance data needed to identify and design productivity improvements.
The AGI survey showed that successful CRM implementers first spent time redesigning their sales channel strategies and sales processes. They also invested in configuring their CRM applications to support these redesigned sales processes, rather than trying to use the applications "out of the box."
The successful firms essentially took a "process-by-process" CRM planning approach that focused on understanding and improving the allocation of specific sales activities by sales channel. For these firms, some sales activities were shifted between channels, some were eliminated, and some new activities were created. In addition to ensuring that new CRM functionality supports specific sales coverage goals at the process level, this approach also allowed the successful firms to more easily calculate a CRM-related return on investment (ROI) for each sales process.
Companies need a structured approach to organize and build consensus on sales channel redesign. Unfortunately, many CRM project managers often default to an IT-led planning process that overlooks and under-analyzes sales process redesign. The problem is that these personnel lack a structured approach chartered by senior management that will help them integrate the different participants such as sales, marketing, finance and IT, whose input and buy-in is crucial.
Without such an approach, companies suffer through political battles among their internal functions and channel owners. As a result, they end up relying on their RFP processes and on the CRM vendors themselves, to identify the high potential opportunities. At this point, they have lost control of their investment.
The SalesChannel Fusion (SCF) approach is uniquely suited for CRM planning. SCF forces the CRM planning team to focus on the basic elements of sales process and channel productivity. It is named for its "building blocks" character, which, like nuclear fusion, describes a process that combines the smallest elements in new ways, to release a burst of new energy.
The SCF Approach has three interrelated elements. First, there is the "Chessboard" framework through which the CRM planning team evaluates segment buying needs and value, as well as required sales channel changes. This forces the discussion to the level of specific sales process steps, such as identifying opportunities, writing proposals, closing sales and managing accounts.
Next, there is the "Productivity Analytics" through which the team benchmarks current and potential channel productivity by analyzing productivity building blocks, such as sales time allocation, opportunity conversion rates at each step of the sales process, average purchase value, sales process duration, that can be translated to an ROI.
Finally, there is the "Process" that ensures that the right voices are part of the coverage planning process in the right logical order. Functions such as marketing, sales and systems, and organizational levels such as sales reps, sales managers, executives, customers and partners should be represented.
The elements of SCF include sales activities (which ones get done and who does them), sales resource time (where time is spent and by whom), cost of sales (how can activities be done more efficiently), customer buying process (how can the sales process best align with customer buying processes) and revenue per sale (where and how much can we cross-sell). Once understood, these elements can then be recombined in more productive ways through CRM.
SalesChannel Fusion will help you ensure that CRM is a means, and not an end. To succeed in CRM, senior management needs to deliver the message early and often: CRM is a tool, and only a tool. It is designed to help sales and marketing leadership improve sales coverage effectiveness in covering target prospects and customers. When CRM functionality is not selected and configured to support specific sales processes it becomes a waste of invested capital, of sales productivity and as a result, of revenue.