• August 20, 2008
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

The Woes of Enterprise Miscommunication

NEW YORK -- The sales track expert sessions continued here today at destinationCRM 2008, where the discussion turned to such topics as enterprise 2.0 and consultative selling. Despite the availability of technology and expertise, users still need considerable help in getting their organizations up to speed on the latest advances in CRM.

Following the morning keynote and subsequent joint sales/marketing session on mobile technology by Tim Bajarin, president of Creative Strategies, sales track attendees took up the question of how to add Web 2.0 to an already functioning business. In "Web 2.0 Takes on the Enterprise," Patrick Bultema, CEO of CodeBaby, showed the massive power of Web 2.0 economics, the power of which is underestimated even today. He noted that Web 1.0 didn't really provide viable economic models -- most companies merely took what they already had and tried to sell it on the Web, with mixed results.

Web 2.0 is shaping up to have the money side included, though much of it comes from advertising. This is why Google is such a powerful entity. "Google's market cap is almost twice that of Ford, GM, and Chrysler combined," Bultema said. "Internet advertising in the U.S. is projected to reach $105 billion this year, while all other advertising combined will hit $250 billion -- but it's been shrinking at 30 percent a year. "Very soon we'll reach the inflection point where Web advertising will overshadow all other forms."

The way to harness the evolving power of Web 2.0 is to understand the culture that has attached to it. "Web culture is highly collaborative, but often impersonal," Bultema said, noting that while communities are commonplace in successful Web ventures, the people who comprise them only really know each other's Web personae. This free sharing of information and ideas leads to potential information overload - in what is perhaps the best quote of the conference, Bultema described Web 2.0 culture as "like ADD on crack," and emphasized the importance of filtering to manage the massive throughput.

Another issue with harnessing Web 2.0 to enterprise CRM needs is the nature of the customers themselves. "The Web customer often doesn't have a clear-cut ‘one who buys the product you're selling' kind of definition. It's more ‘an individual who invests personal resource with the company in exchange for value.' " Thus, it's often challenging to figure out how to monetize that value exchange. "How do you define a customer for YouTube, Facebook, or Wikipedia?" Bultema asked.

From enterprise strategy, the discussion turned to sales tactics in "Enabling the Solution Sale with Web 2.0 Technologies," led by James Burns, president of Avitage and cofounder of the Value Mapping Consortium. For years, solution selling has had its supporters, but has not truly taken off. Burns quoted some sobering figures from the American Marketing Association and SPI International in support of that:

  • 73 percent of CMOs say solution value messages are not reaching customers;
  • 90 percent of salespeople don't position solution value effectively;
  • 70 percent of the leads generated by marketing are never followed up;
  • 80 percent to 90 percent of marketing collateral is considered useless by sales;
  • 25 percent of all marketing and sales resources are routinely wasted; and
  • 70 percent of new product launches fail to meet initial expectations.

The selling techniques are there, but marketing materials that prepare the messaging, content, and discussion hooks to allow solution selling to take off aren't. "Solution centric marketing has been an afterthought," Burns said. "Materials must support the conversations salespeople are having, not high-level generic product information."

This is especially noticeable in larger, more established brands. "These challenges aren't size-independent," Burns said. "Smaller [companies] don't have the power of a brand to leverage, so they must focus on solution selling by nature."

Product differentiation is nearly impossible when a vendor leads with that product's capabilities and some buzzwords. This is what leads to the belief that all salespeople sound the same. "The sales conversation is the basis for product differentiation," Burns said. "Customers want to know how a product will solve existing issues specific to them. Supporting that with materials that address relevant needs rather than what's under the hood is a must.

The potential business impact of aligning solution selling with solution marketing is tremendous. Anecdotal results from CSO Insights include:

  • 25 percent higher quota attainment;
  • 20 percent higher win rates;
  • higher forecast accuracy; and
  • just one-fifth of the discounting that was previously required.

The results are anecdotal, however, because most companies aren't doing any of this yet. The next steps, evaluating a business' need for a solution-based approach and making sure it's done right, have yet to be taken in many cases.

When it happens, marketing has to own the process. "Quality and consistency of materials is paramount, and that's a strength of the marketing role," Burns said. And the change must reach to the core of the business. "Make sure you're not just putting a solution selling cab on a product-selling chassis."

Click here for more of our destinationCRM 2008 coverage.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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