8 Enterprise Strategies That Stick

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When searching for big CRM ideas that can stand the test of time, the phrase "easier said than done" comes to mind. Customers, analysts -- even vendors -- say there really is no "secret sauce" to CRM -- and if there were, a business would be wise to keep that tucked away from competitors. Interestingly enough, "What works with customer service?" is often a more difficult question to answer than "What doesn't work?" So we decided to work backward from there -- and some solid strategies emerged.

What is a strategy, anyway? Too many companies don’t seem to know, says Sean Combs, cofounder of Silverdale, Wash.-based Steelhead Productions, a supplier of corporate trade-show exhibits. It’s more than just a tip or a metric, he says, adding that customers, when asked what strategy they have in mind going into a conference, will often respond with nothing more than a puzzled look.

The following eight sticking strategies -- presented in no particular order -- may not seem like rocket science, yet they all can be applied to any size business, in any location, and in any time period. Do these require money? Well, vendors and analysts might tell you so, but a lot of times a reordering of priorities is more important than a reorganization of the wallet.

However, nothing really comes for free. “I still hear from companies that can’t say whether they’re customer-centric or not,” says Rob Bois, an analyst with AMR Research. “We’ve done research around [that] and spending for customer management and customer satisfaction -- and there’s a correlation there.”

Bois notes that there are inside and outside approaches to CRM strategies. “It’s hard to fix the outside problems before you fix an inside issue,” he says. Tactics for improving customer-facing situations often garner more attention, he adds. “If you try to expose best practices externally, but internally they aren’t in sync, it’s just going to be a horror story.”

1. Be Transparent
This doesn’t mean letting your customers see every internal recipe and working part, but it has a lot to do with building customer trust and loyalty. For Combs at Steelhead Productions, being transparent means letting customers know ahead of time what they’re getting for what cost. Upfront invoicing builds trust, he says, especially due to the variable cost outcomes that are familiar to everyone in the trade-show industry -- and which often led to budgetary haggling that ran counter to a trusting relationship. In the old days, clients had to leave wiggle room in their budgets for unexpected costs; with the upfront model, clients can be forthcoming about how much Steelhead can really spend. “We’ve realized when you look at the cost of prospecting and landing new accounts, it’s much cheaper to keep clients than to constantly pursue new ones,” he says.

Bois addresses a different aspect of transparency: the notion of community. There are two kinds of communities, he says -- captive and noncaptive. A noncaptive community is one created by a user or third party, which a company or brand participates in from a distance. A captive community is one expressly built by an organization to mine information and to listen to feedback and end-user comments. In the latter case, Bois says, “there’s a temptation, when someone writes bad things about you, to overstep or eliminate that because you don’t want people saying bad things.” That’s a temptation companies have to avoid acting on, he says. “In the long run, the goal is to demonstrate you’re open and you’re being transparent, and ideally you can follow up and get involved in the community.”

Transparency also allows companies and brands to extend support or act as service providers. “It all ties back to listening to the customer,” Bois says, citing as an example communities run by companies (such as Dell) that involve consumers in the generation and development of ideas. He warns, though, that no company can simply bank on a single instance of having made changes based on customer feedback. There needs to be a continual conversation.

2. More Listening, Less Lip
No company will ever say it’s not customer-focused. But how do you tell if an organization really has the customer’s interests at heart? Bois points out that everyone talks about being committed to the customer experience, but only those who actually respond to complaints and feedback truly are. Customer satisfaction surveys, he says, are an example of lip service and inaction.

“Companies will administer customer satisfaction surveys on some ‘per’ basis -- twice a year or once a year. They do this to satisfy their own consciences to reassure themselves that they’re listening to customers,” he says. “But very few companies actually do anything with results when they get results.” Many surveys, he says, are amorphous -- simply measuring on a 10-point scale, making it difficult for companies to know what to fix. Once companies receive feedback, he says, “they only [act] when there’s [an] indication that there’s a problem. And the first thing they do is rationalize. That’s the first thing that shows they aren’t really customer-focused.” He recommends that companies turn to the Net Promoter Score, which correlates more accurately to business processes. [See Influential Leaders, September 2007, for more on the NPS and its creator, Frederick Reichheld.]

According to Bois, sometimes all it takes is a sympathetic ear to increase customer satisfaction. In one case, he recalls, a disgruntled customer called a software company’s support line, complaining that a certain product was not performing the way he expected it to. A representative from the company’s product-development department returned the customer’s call, first listening to the man’s issues and grievances with the product. The software developer explained that the feature referred to by the customer was not intended for that specific use. He continued to explain that the company would soon be releasing a new product to better serve that specific need. The customer left the call with a changed attitude and restored faith.

3. Align Sales and Marketing
“The biggest mistake a company can make is not having enough open communication and not working together as a team,” says David Politis, senior vice president of sales at Vocalocity, an Atlanta-based provider of Voice over Internet Protocol equipment. Vocalocity uses Salesforce.com for the beginning of its sales process, but when inadequate lead generation forced a re-evaluation of its internal sales process, the company turned to Web marketing firm Marketo, which synchronizes with lead information embedded in Salesforce.com. “As soon as [leads] drop off the first three to four days, Marketo takes over,” Politis explains. “It’s a seamless process. Some of the leads we get aren’t buying right now. Instead of leaving [those as-yet-unconverted leads] in the sales pipeline and clogging it up, we let Marketo take over and nurture the lead until it becomes a hot lead again.”

Phil Fernandez, chief executive officer of Marketo, says that he believes that sales and marketing departments must be on the same page for a company to be truly successful. “If you ask any CEO how they think of finances, they say sales puts numbers on the board,” he says. “We think that’s all broken -- more broken than ever in a world in which marketing holds the keys to the kingdom.” Fernandez recommends having marketing representatives involved in sales meetings and making prospecting truly collaborative. The marketing team likely knows where the leads come from and can offer better insight. “You talk to so many [chief marketing officers] and they say, ‘I don’t get any respect. People don’t give us any credit,’ ” Fernandez says. “They’re concerned that their hard work isn’t recognized. On the sales side, they say, ‘We’d give leads to marketing, but they aren’t any good.’ There’s friction in the system.”

“The big challenge...is that you have a lot of pushing back and forth between [the two departments],” Politis says. “When you have them working together seamlessly, you have better feedback. If marketing respects that, they can improve in the quality of feedback. You’ll be saving money and making better use of the budget.”

4. Develop Internal Visibility
The use of analytics is not new. In fact, companies have been involving analytics to boost and better understand sales for years. However, according to Karen Steele, vice president of marketing for Xactly, a provider of on-demand performance management solutions, analytics is only as good as the data you’re building it on top of. (Xactly involves post-sales data, which Steele suggests is the richest source of information to which analytics can be applied.)

But well-developed analytics can bring visibility to an enterprise -- and analytics vendors are increasingly providing the functionality in an on-demand delivery model. Cloud9 Analytics, for example, offers a software-as-a-service integration of its analytics product. CEO Swayne Hill says, “As we move quickly to on-demand, what happens now is that users have much more control without going through a lengthy IT process.”

Xactly also offers a compensation-and-rewards application that allows salespeople to see real-time estimates of commissions as well as potential revenue from possible sales deals. Steele says that with visibility comes unanticipated motivation. “I can also do a real-time estimate of ‘If I close this deal or this opportunity, what material value will that have on my commission check?’ These can be integrated seamlessly -- that’s critical.” So many sales reps are doing the math on their own, she says, that there’s tension when it comes to what they’re owed. They don’t trust that they’re getting credit for sales. Steele says that when sales reps have on-the-fly information about what commission they will make off sales deals and what revenue they will bring to the company, that brings about positive motivation. [See “Pay Day,” October 2007, for more about the benefits of a successful compensation system.]

Dublin, Ohio-based Signature Worldwide, a company that provides employee-training programs, uses Cloud9’s analytics software to bring context to its sales information in Salesforce.com. Ray Taylor, Signature’s senior vice president of sales, says that one of the main benefits for him is being able to see his employees’ sales leads and statuses in real time. “It allows the sales manager to be more focused on the processes than [on] the result,” he says. “An old sales manager might have said, ‘Have you closed today?’ Now we have the tools needed to give and see that information. With 24/7 Web-based access, we don’t have to wait to sync. I can get the information and satisfy my curiosity.”

5. Update, Upgrade, Innovate
If the technology is there, embrace it. Sheila McGee-Smith, analyst and founder of McGee-Smith Analytics, says that a company might be hesitant to adopt new capabilities after hearing several years before that the product was not ready. Research has to be redone more recently, she says: Chances are, a lot of innovation has occurred in the time in between. “One of the big mistakes,” she says, by way of example, “is not embracing speech recognition: Companies may be gun-shy because they looked at it 10 years ago and say, ‘That [wasn’t] good enough.’ ” But today’s voice recognition, she says, can be very seamless and may provide better customer service than that delivered by a poorly built push-button prompt.

Dan Vetras, CEO of Talisma, which was recently acquired by customer interaction management provider nGenera, says that it’s a shame that companies aren’t embracing new ways to reach customers and new forms of communication. “It’s a win-win solution both for customers [and] companies,” he argues, referring to multichannel communication and reaching customers via live chat, email, and text messages. “It goes across verticals. It will become even more important as people in their 20s become [a larger share of] the workforce and the mass consumers. It spans generations -- and it’s here. And I couldn’t have said that five years ago when I started Talisma.”

6. Make Adoption Easy
Time really is money -- and choosing CRM software that is difficult to adopt is practically money down the drain. Check your implementation timelines before seriously pursuing any vendor. Anything longer than a year is generally too long, analysts say. Anything too complex and foreign opens the door for employee frustration and dissatisfaction. CRM provider Avidian perceives the ease of user adoption as its main benefit. Built on top of Microsoft Outlook, Avidian’s CRM product, Prophet 5, gives clients an already recognized platform that takes little time to adjust to.

For Sean Combs and Steelhead Productions, this was crucial. “When we went to buy a CRM product, my big criteria [was] that it [could be] implemented really easily,” Combs says. Avidian, he says, “just plugs into Outlook – there’s virtually no learning curve for our users.” He goes on, “We created an internal point person -- not a tech person, just one business-development person -- [to] collect any comments, concerns, [or] questions, and [that person] works with Avidian’s tech support.” Steelhead, he adds, didn’t even have to buy Avidian’s training program: The ease of implementation made it unnecessary.

7. Stay the Course
As the economy sputters and businesses begin to re-examine spending, there’s a general fear of budget cuts. Bois points out that, during the last recession, technology budgets were cut, on average, by about 1 percent. Companies were spending less money on software -- and customer satisfaction, in a direct correlation, took a hit. “We saw a general decline in customer satisfaction that took years to win back,” Bois says. He notes that decision-makers are setting themselves up for disaster if they stop investing in the customer experience. You can’t let a temporary trend or issue affect how you treat your customers over the long term.

8. Be Proactive and Reactive
"Reactive support means, 'I'm a technology vendor, I create a product, and I sell it.' One day the product will break down and the customer will discover that and will call the support department while the product is down," says Nimmy Reichenberg, vice president of marketing for NextNine, a company that provides proactive support automation technology. Reichenberg points out, however, that in most cases support is more complicated.

In fact, he says, NextNine's client Allscripts, a Chicago-based provider of clinical software and information solutions in the healthcare industry, is a perfect example. Allscripts runs its software on PCs, often in hospitals or pharmacies. The company prides itself on excellent support and maintenance -- but customer service had become a challenge. Allscripts would often receive support calls sprouting from a customer's problem with its PC or desktop programs. For instance, a computer's memory would fill up, causing Allscripts to crash -- and the customer would call, thinking that Allscripts was the problem. John Nebergall, vice president of support for Allscripts, says the company struggled with the burden. "Where's the line with things that we can support and what we're capable of supporting? How far does it go? Do I fix their computer and network?" he asks, rhetorically. The company soon began to realize that it needed to intervene before the problem occurred, providing not just reactive support, but proactive support as well.

Soon after turning to NextNine for increased support, the company saw a reduction in customer confusion and complaints. "It gave us the opportunity to have intelligent software built into our offering that could continue to monitor the critical performance of clients' systems, as well as our application," Nebergall says. "It monitors our application specifically and looks for conditions that could be a tip-off that the application needed to be adjusted to make sure end-user experience stayed as we wanted [it] to."

The NextNine support program sends customers alerts of something that might go wrong and that might affect the Allscripts application, such as a system overload. Alerting customers of potential problems before they create actual problems for end users is powerful customer service and promotes a dialogue between vendor and client. “Our customers are very happy to not have seen an issue that impacts end users,” Nebergall says. "What we are really trying to do in partnerships is not just fix things that are broken, but be proactive and avoid problems before they happen, to stay ahead of the curve and not fall behind it. The best problem is one you avoided and [didn't have] to react to."

SIDEBAR: Enterprise Strategies That Stink

Instead: Act now, no excuses.

Keeping data and communication channels siloed
Instead: Unify your data -- all of it.

Throwing away customer feedback
Instead: Treat what your customers tell you as unmined gold.

Being rigid and controlling
Instead: Be nimble and agile.

Keeping secrets from customers -- and employees
Instead: Breed trust -- and build business -- through transparency.

Editorial Assistant Lauren McKay can be reached at lmckay@destinationCRM.com.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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