Why Manufacturers Avoid CRM Metrics
Years of lean manufacturing continued process improvement have resulted in behavior to maximize productivity and performance except in the most important business function....customer relationship management.
Most North American manufacturers have eliminated waste on the plant and production floor, warehouses and back office administration, yet rarely smaller manufacturers are either too small for CRM or simply do not understand the concept of CRM or the value that can realized. After interviewing more than a thousand manufacturers with a salesforce of ten or more people, the level of incompetence is blatantly apparent. More than 90 percent of the sales managers possessed no professional sales training, no focus with stated metrics, no sales structure beyond their compensation, little sales-cycle monitoring or process, no predictable sales forecast. The greatest irony during the comprehensive interview process these same sales managers expressed no worries and no interest in changing how they operate. (The average age of these sales managers was fifty six and three-fourths (74%) admitted they lacked technological expertise.)
Some technology solutions providers are attempting to change this discouraging trend. "The main point is that traditional one-stop-shopping CRM solutions are not designed to meet the needs of manufacturers," according to Larry Caretsky, chief executive officer of Commence Corporation, which specializes in CRM for manufacturers. "Distribution management who simply run out and buy a CRM solution without proper planning for change management almost always fail. These guys plan for a year to purchase and implement their ERP system, but CRM is treated as a commodity desktop application that you simply install and use. We believe CRM software coupled with years of experience in the sector is a critical differentiation. Even the ERP guys who claim to have CRM, often have no track record for successful implementation, use, and customer ROI."
In the new book, Practices that Pay
, Caretsky details many elements of Industrial CRM including:
- Focus on Defined Market Segments
- Communicate Value Consistently
- Organize Sales by Accounts
- Implement a Consistent Sales Process
- Hire Salespeople to Stay in the Office
- Assure Salespeople are Tightly Accountable
- Coordinate Planning Efforts with Channel Partners
Sales Optimization Through Technology
- Take Small Steps to Drive User Adoption
- CRM is a Tool, Not a Solution
- Coach Your Coaches on the System
Today's industrial sales environment is characterized by intense competition, strategic sourcing contracts, online auctions, customer pressure for self-service, and the ongoing debate over fee-based services. To thrive in this environment, industrial manufacturers need more than leading technology or efficient warehouses to achieve long-term growth.
Leading industrial organizations are looking outside their four walls to their customers for growth ideas. By leveraging the voice of the customer, these organizations achieve a competitive advantage in redefining sales and marketing, the all-important customer-facing portion of their operations.
In an effort to help industrial manufacturers sell more, more effectively, Caretsky details more than forty smart practices in industrial selling, culled from interviews with leading executives within high-growth companies, and building on a comprehensive review of published perspectives on smart industrial selling.
Information technology investments of sales departments are often wasted due to failed implementations. The keys to successful industrial selling can be enhanced with proper application of technology. "Based on extensive experience, the only path to success is to first develop consistent marketing and sales processes, then utilize these processes in a disciplined manner reinforced by dynamic training and carried forward through effective coaching," according to Caretsky.
Many industrial companies, particularly manufacturers, are contemplating adding centralized sales and marketing database system, whether called Customer Relationship Management (CRM), Sales Force Automation (SFA), Contact Management (CM), or a variety of other confusing names and acronyms. These initiatives, by whatever name, are critical to the promise of lean operations.
In the world of continued process improvement, lost sales opportunities, unhappy current customers, wasted marketing dollars due to poor CRM utilization, should capture the attention of senior management. Sadly when manufacturers focus merely on turnaround times, too many other elements of customer satisfaction and sales opportunities are quickly lost.
Enforcing technology consistency and continuity appears to create significant reluctance on the part of manufacturers and senior management. With a disparate staff around the country and globe, the attitude of "every person has a unique way of managing clients," neither serves the customer nor the company. Without consistent, measurable, and accountable CRM there is increased inefficiency and waste...the antithesis of lean. Six Sigma's motto of 'it must be measured to exist,' would suggest small manufacturers' sales departments do not exist because they are not being measured.
About the Author
Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based TR Cutler, Inc., the largest manufacturing marketing firm worldwide -- www.trcutlerinc.com. Cutler is the founder of the Manufacturing Media Consortium of three thousand journalists and editors writing about trends in manufacturing. Cutler is also the author of the Manufacturers' Public Relations and Media Guide. Cutler is a frequently published author within the manufacturing sector with more than 300 feature articles authored annually; he can be contacted at firstname.lastname@example.org.