CRM's Role in Managing Business Goals

It's good to have goals. They provide a way to measure our own personal success, a way to measure our success relative to expectations, and a reason to feel good when we exceed those expectations. And whether we are making a New Year's promise or participating in a 360-degree review at work, most of us also review our goals from time to time to determine how well we are doing or whether they still meet our needs.

Goals are measured in different ways. Personal goals may be measured in terms of miles run, clothing sizes lost, books read, or friends made. Business goals are usually measured in terms of revenue earned, product sold, margin retained, or targets met. Depending on the type of goal, it may be called a revenue target, committed forecast, budget, key performance indicator, quality score, or any one of hundreds of industry- and use-specific names.

Whatever you call them, goals help businesses drive employee behavior and measure that behavior against a standard.

A typical CRM system, such as Salesforce, can be configured to track revenue forecasts down to the dollar on a monthly, quarterly, or annual basis. Typically it tracks both expected and actual revenue from an opportunity. Each opportunity can also be given a "stage," indicating where it is in the sales process, the probability of winning, and a forecast "category," indicating whether the probability represents a "best case," "pipeline," or "committed" revenue forecast.

A good CRM system allows managers to view historical trends for individuals and teams, ensuring that goals are set with the best data available. The ability to override individual sales reps' forecasts allows managers to ensure that salespeople are appropriately challenged and to correct for differences in reps' forecast estimates.

We are frequently asked to implement alternative goal management processes, usually in order to support additional or different information. These requests cover:

Take or pay. Many companies, particularly media sales companies, enter into mutual contracts with clients that require them to deliver, and the client to pay, for a fixed amount of product over a long period of time. Since the amount of product requested or delivered each day or week may vary significantly, the daily forecast of products delivered and revenue earned must be adjusted regularly to provide accurate forecasts.

Commissions. Many organizations need to track both revenue contribution and commission earned for each employee. When commission is paid differently depending on the product or the salesperson's role on a team, there may be a significant disparity between the two numbers.

Multiple teams. Some organizations, again media in particular, assign accounts to sales teams rather than to individual salespeople. Commission (and revenue contribution) is based on the product being sold and the salesperson's role on the team. For example, a digital salesperson gets more commission for the sale of a digital product than for a print product.

Changing account base. When salespeople and accounts are assigned separately to teams, it often makes sense to judge salespeople relative to both their individual past performance and the past performance of the accounts they have been assigned.

Progress toward goals. For companies with a short sales cycle, it often makes sense to track progress toward goals on a daily basis without actually developing a daily forecast and targets. These customers typically use some kind of pro-rata calculation to determine, for example, whether 30 percent of the way into the month the salesperson has met 30 percent of his quota. These companies often track three or more goals per salesperson: daily, weekly, and monthly. Some companies also reallocate targets dynamically so that remaining weekly or monthly goals are distributed pro-rata to the remaining days—underachievement one day results in a higher goal the next day.

CRM platforms can almost always be modified to store the data you need and can produce the reports necessary to manage goals. After you've created a unified vision and set your goals, the final steps in properly managing these goals are defining metrics and implementing processes to support your strategy. And, of course, all of these must be backed by training and adoption support to prepare the organization and reinforce good behavior. Gamification is one way that companies approach the task of turning raw numbers into strategic growth.

By nature, most sales representatives are driven by challenge and are highly competitive. Many salespeople played competitive sports in high school and college, and several have achieved professional status in individual or team sports. The concept of gamification helps bring that competitive element back to your business while using CRM. Sales representatives always want to be number one—whether it's number one on the leadership dashboard or the number one prize winner—and creating a competitive, gamelike environment fuels this desire. Gamification is a way to reward sales representatives for good behavior and sales success, both of which drive adoption. In the end, we all win when we have easy access to the data we need to analyze and exceed our revenue goals, especially when the delivery mechanism is designed to suit a specific audience.

It's easier to meet a goal if it is tracked or managed in some way, and most of us feel more motivated if we know our goal and can see our progress toward achieving the goal. Some goals are easy to track because they can be directly measured, while others are more complicated. However your company tracks goals, a properly configured CRM system can help your employees achieve their aims faster by setting reasonable goals and tracking, managing, and rewarding their progress.

Ernest Lessenger is a technical architect at Cloud Sherpas, where he manages complex CRM deployments as part of the technical architect forum. He is a Salesforce.com Certified Technical Architect with more than 13 years of CRM experience.

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