Customer On The Edge

Where did the summer go?

How can this possibly be the last weekend? It did not help that I spent the last couple of weeks of my summer on the road. That caused me to miss out on a portion of my favorite season one of my favorite pastimes – sitting out on my deck overlooking nature at the end of the day and watching the swallows swoop across for their evening barnstorming. I live in a valley full of bugs, lots of different kinds, and that truly attracts the swallows. They put on an amazing show darting across the sky randomly in a display of absolute wanton abandon. Together with the backdrop of a teal and coral dusk horizon, it is an absolute spectacle.

But I had work to do and customers to visit and so I was away. Then, in the middle of my trip, there was this one evening halfway across the world. I was having dinner, sitting on a large deck and overlooking a harbor full of boats. It was a similar environment as my home, which is why I sought it out. And I happened to look up and there were swallows. I could not have been more delighted. It transported me home.

These swallows, I was later to learn their name in the local language, were following the precise same process as those that perform this ritual over my house at exactly the same time of the evening. It was the standard approach swallows follow for collecting bugs, their evening meal. They got the same training as their cousins who I am familiar with and they carry out the process in exactly the fashion. I was mesmerized at the prospect of this standardization with a squadron of dive bombers so far removed from my own.

But yet, we also attempt to do this with CRM. We define best practices for managing customers and launch them with one flock of customer-facing professionals and we expect another flock on the other side of the planet to follow the same process and utilize the same tools. If it is working with the same bug, should the birds not use the same process if it works? That is our rationale when we manage global CRM programs. And, if my experience with the swallows plays out, this may actually be a reasonable pursuit. If one group is having success, why not expect that process to transpose to other locations as well? It was working very well for the swallows.

But what happens if there is a country where the swallows cannot fly as high as the bugs or cannot fly as fast as the bugs? Are there countries where our flocks are not as capable as other flocks? Ultimately, that has been my experience when it comes to managing customer interactions. Customer facing teams are not always of the same maturity or development. Should we expect them all to perform equally with the same processes and tools? One answer is that we could attempt to drive them all to the same level, taking learnings from one geography and exporting them to others. But then again, some countries may just not be ready.

Or we might accept the possibility that not all geographies can perform at the same level and perhaps we should still set out standards but build them with multiple levels of capacity in mind. Some flocks of swallows may be best suited to capture bugs at high altitude, but other flocks may be better capable to fly just inches over a swamp due to different reasons impacting their development. As you build out your CRM best practices intended for world-wide deployment, you may want to consider setting a number of standards, designed for varying levels of readiness or capability for assimilating your deployment. I recently worked with a client that built three levels of expectations – both for process standardization and also for the accompanying CRM tools that supported the three levels of capability. It was a great approach. And, it increased the chances for all countries to be successful from the start.

This does not mean that we never expect countries or geographies to improve or evolve. But we design our CRM program to accommodate their level of growth and evolution. For whatever reason, Albanian swallows may just have different preparedness as compared to the Danish.

So, I propose that we manage our global CRM programs with this possibility in mind. We may have constructed a great set of best practices and a really robust platform to support them, but we may also crush some of our internal customers with all the weight of those expectations. What you might consider as you build your program plan is to examine the gaps between your future state program capabilities and what the range of deviation is from that ideal end point. If you find that there are wide variations – some countries or units are closer to the end state than others, you might look to stage the closure of the gap. In other words, don’t force everyone to close their gap at the same time if some have farther to go than others. But this requires you to then build staged degrees of achieving the end state. Plus you may have some countries that due to size or economic conditions are never going to be capable of getting to the end state targeted for others. Either way, think it through carefully .

So, enjoy these last days of summer (or the approaching spring for all you down under) and take a glance up at sunset if you are outside and check out how the birds are acting.

Posted by Matt Johnson at 09:25 PM | Permalink | Comments (0)

This is a time of year for watching sunsets. We are more likely outside hiking, boating, grilling, or camping and that tends to put us in a perfect position to gaze west at the right time and take in the show. If you have not been there, you might be interested to hear that in Key West there is a gathering spot on the tip of the island where the crowd builds up just before the magic moment. And, upon its completion, the sunset always gets a rousing applause from the appreciative, if not inebriated, onlookers.

People don’t applaud the sun at 2:19 in the afternoon down in Key West, but they will at 8:19 in the evening. What has the sun accomplished at one moment that was not accomplished at the other? That moment at 8:19 PM is a transformational event. We transform from bright to dim, from blue to multi-color, from sun to moon, from work to party. At 2:19 it is just another transaction – the sun moves another degree in the sky – no transformation.

These two words that start with trans have been around the world of CRM with much hype for over a decade. But, I must say, I believe it is no longer just hype. I have seen the Promised Land and I know every CRM program can get there. More and more companies are truly building CRM programs that produce the value of transformation. You can move from transactional to transformational CRM, and I encourage you to do it.

So, what is this transformational thing all about? The way it was first explained to me is what has always worked best in my thinking. The watch is worth more than the sum of its parts. When assembled, the watch is transformed into a device that indicates time. The parts unassembled on the workbench can’t do all that much. With a good design and the correct assembly, the watch becomes a time piece. The better the assembly, the better the result. CRM is the same.

If we monitor prospective customer activities, which are indicators of buying interest, we can combine them together to predict when the prospective buyer is ready. Similarly, we can monitor customer behavior, especially patterns of reduced buying, which can predict turnover and trigger actions to improve retention. When we compare sales activity with buying patterns, especially within long-term sales cycles, we can identify which activities create the best conversion and improve close rates. If we measure buying volumes of distinct customer segments, we can match them to the appropriate channel to reduce the cost of sale or service.

Each of these examples represents a transformational situation. More value is gained through the correct combination of activity and data. There are many more examples to provide and if we were to look at the similarities in the examples we would identify the following characteristics of transformational CRM. Typically we are measuring multiple touch points with a prospect or customer that occur over multiple channels of customer reach. Multiple data elements are brought together representing multiple dimensions of measurement (i.e., sales activity, customer activity, time, buying outcome). Transformational CRM is all about synergy – combining data, collaboration of customer facing groups, bringing together different things to create more knowledge and, therefore, smarter action.

All of this combination of stuff requires some coordination. The watch maker has a design, knows the parts, is skilled in the assembly, and has access to all the required tools. Likewise, transformational CRM requires policies that encourage collaboration, processes that foster collaboration, tools that assist with the capture and aggregation of data, plus all the requisite skills to make it work.

Even the sunset requires collaboration. The switch from transactional to transformational astronomical activity begins when this all goes from one a one planet operation to a two planet operation. Once the sun and earth cooperate, we start the transformation. Even the moon can get into the act, rising at the right time to kick in some extra ambiance.

So, enjoy a sunset tonight and perhaps that will trigger a thought for enhancing your transformational CRM capabilities.

Don’t forget to applaud.

Posted by Matt Johnson at 04:37 PM | Permalink | Comments (0)

The current issue (July ’10) of CRM Magazine is taking a stand on some fuzzy history and devoting the entire editorial to a celebration of 15 years of CRM. The research that I personally have conducted on the origin of the industry represented by this acronym puts us nearing a 20th anniversary (after all, the most implemented CRM application was first released in 1994). But who am I to argue with this fine publication? If they want to declare a 15 year milestone post, I’ll go along with the party. If nothing else it is a good excuse for a look back.

So, with that look back, I considered some options for a review – we could do a little bit of chronology, but that seems too much like watching a documentary. We could do an expose on the CRM software industry, but I would prefer to leave that to the tabloids. Ups and downs could make a good topic – there were certainly plenty of downs to write about. However, I have chosen to look at the 15 most significant things that I believe we have learned over the last 15 years of CRM.

So, here goes my list of fifteen:

1 – We got a new version of the 80/20 rule. In this case we learned that CRM is 80% people and organizational challenges, and 20% technical challenges. Those that had to learn about this the hard way found themselves as a statistic in Gartner research reports. At first the industry came up with the idea of People, Process & Technology as a mantra to get folks to understand the correct balance of focus. But even that term is not really correct (my math says 67/33). The people and process portion of the PPT thing is complicated and requires much more elaboration,n including things like culture and sponsorship and buy-in.

2 – Strategy and planning became popular. We learned that the biggest cause of problems with a CRM program was the lack of a plan based on a solid CRM strategy. It took some time, but the word got out and CRM program success rates have seen improvements over the 15 year trend lines.

3 – Direction is OK, but alignment with that direction is essential. Too many CRM false starts are tied to key executive stakeholders not being on board. You cannot build your CRM direction behind closed doors – every senior manager impacted has to be at the table. It is easy to let them off the hook – we learned that they need to be on board from the beginning, not at the end.

4 – CRM has to be a business initiative. This learning was painful. CRM began with the good people in IT who were the first to envision the power of the technology. However, tied with number 3 above, because CRM was originally considered a technology thing, too many business stakeholders did not understand the ramifications. Large programs were rolled out to provide big improvements, but the intended audiences were somewhat reluctant – it was not something they had asked for. Eventually we got clued in that CRM is something that solves business problems, so it has to be driven by the business and with a clear business case for program funding.

5 – Users of CRM technology must perceive a benefit. Those scoundrels! Why can’t they recognize when something is good for them? Well, it turns out that CRM does not work well when it is deployed to satisfy just the business. It also has to satisfy the individual within the business who does all the work. If not, it does not tend to work very well.

6 – Size matters after all. What a relief – bigger is not better. In fact, bigger puts you at risk. The numbers don’t lie and the stats tell us that chunking your project phases into small manageable bites gives you a fighting chance at success. Of course the challenge is delivering the message to the group who gets to go last or having to explain why the much anticipated functionality cannot be released until phase 3. See again, item number 3 above.

7 – Think process first, technology second. I remember back in the 90’s when I was told by the CIO of a client, “We want to get the technology in first, and then deal with the process changes – and I think they will just work themselves out organically.” He had his way and, oh boy, what a mess he made of the call center for his company. Fortunately we have learned that you do things in the reverse order now. It is important to get the process right first. That does not mean you cannot take advantage of some of the inherent processes that many of the platforms are built upon, but you need to build those into your design and not assume they will just take hold organically.

8 – Yes, the data is a really big deal. This was a learning early on, then it got lost and was found again. The big on premise programs discovered the need for a clear data strategy. Otherwise things did not work. Then the cloud arrived and we thought we could bang-in solutions really fast. The data did not go along with the quick and dirty thinking. Rather, it caused a lot of CRM sales reps to lose face. Even small SaaS projects need to have a clear data structure, cleansing, migration, and stewardship plan. We know that all over again now.

9 – CRM is not SFA. It has been a hard learning to achieve, but we have reached an understanding that CRM is something far beyond the singular focus on one function. Rather, CRM gets its real power by integrating all customer functions together. If you really want CRM to produce, you need to go beyond the parochial approach. This is your big opportunity to finally achieve that integration between marketing and sales. Carpe Diem.

10 – Don’t forget about the roll out. We need people in our CRM programs who understand how to deliver training. We need people who know how to communicate. We need people who understand how to deal with organizational change management. And we learned that you cannot deal with all this as an afterthought. These elements of the CRM program are just as critical as the configuration of the software and we learned that having experienced professionals run the non-technical elements of the program leads to success.

11 – And then there is the concept of owning versus renting. This is something we weren’t expecting to learn. You can be successful with your CRM program no matter whether you buy and manage your own CRM software or whether you use a service provider who does the work for you for a monthly fee. Yes, each alternative has benefits and disadvantages, but both are viable options, and some companies do best by employing both in a hybrid approach.

12 – Customer 2.0 is not a fad. What we figured out is that CRM is not static. Just when many businesses finally got it right, the second web revolution finally took hold. Customers added a preference for engagement with your company and it had www as a prefix. The learning here was that our CRM programs need to keep up. And that includes effectively utilizing CRM capabilities for all channels such as those who prefer to surf to you rather than walk up.

13 – One size fits all, not. Perhaps one of the most important things we learned about CRM programs in the last 15 years is that not every group and every function in the company will benefit from the same solution. One single approach to solving the business problems of many different groups is not feasible, even if it is ultra efficient for the group responsible for providing the technology. The lesson here is that the economy-of-scale benefit of managing technology centrally does not always outweigh the benefit of having a correct solution for each unique contributing business unit.

14 – It’s good to be cultured. You don’t have go to the opera or marvel at Ming Dynasty pottery but you can’t ignore the culture. When the changes planned in your CRM program have the potential to rub up against your company culture, the culture will always win out. It is an easy conflict to want to ignore, but we have learned that is not a good idea. You need to attend to the compatibility of your program with the personality of your company. If you are introducing a bunch of discipline wrapped around some new technology to a traditionally undisciplined field force, it will take extra effort. You can’t assume that the changes are just going to be accepted without some substantial compensatory activity that helps reduce the natural resistance from the culture.

15 – And finally, CRM is the correct term. Over the course of the last 15 (or 20) years there have been attempts at changing the moniker. When things were going rough for the CRM software industry it was a feeble attempt at rebranding. Even the analyst firms and watchdog groups got in on the game. However, none of the changes ever took hold. CRM is still customer relationship management. Perhaps the reason is that what we are actually talking about is managing relationships with customers. It seems like a label that has at least another 15 more years of life.

Posted by Matt Johnson at 08:01 PM | Permalink | Comments (0)

One of the things that amazes me these days is that there continue to be so many things that amaze me within the world of CRM. Most of the things on this list are those topics that never seem to go away, and the majority of these perpetual topics seem to cycle around the CRM sub universe I prefer to label sales force excellence. My engagements over the last few weeks have gone far to reinforce this for me.

At the center of this is the whole issue of being able to teach old dogs new tricks. More specifically is the problem of big dogs who are unwilling to even consider the possibility of new tricks. You know what I am alluding to – those tenured and successful sales reps who stand unwaveringly at the epicenter of your change management problems.

Within the CRM specialty of sales force automation an emerging trend is the increasing need to bring best practices and the corresponding enabling technology to support the growing focus on strategic account management. More and more senior-level sales reps are being assigned to complex umbrella accounts that span geographies, markets, or industries, and require coordination of a broad team of sales professionals who drive business within the local account affiliates. This role is not new, but it is growing and demanding increasing attention from the CRM program. SFA is not just for the traditional account rep any longer.

For those of us who are tasked to satisfy this new demand, the challenge lies in the elite nature of the sales personnel assigned to these uber-critical accounts. This is the crème-de-la-crème of the sales gene pool – these people are true rock stars. And, they need to lean on SFA just like their mere-mortal sales cousins, but they don’t all necessarily see it that way.

Here is an example of the challenge. Very recently while wrapping up a two-day session that had gathered together the A List strategic account reps for a client, I encountered a demonstration of this resistance head on. Our task during the session was to identify what was working with regard to their management of these complex accounts to better enable us to export those best practices to an expanded elite flying squadron in more geographies. The final topic of the meeting was a focus on the use of tools, primarily SFA, to support the pursuit of strategic opportunities. We defined the tool requirements without a hitch and the group appeared pumped that we would be rolling out the tool shortly in the next phase of the program.

But, when going around the room to gather feedback on perceptions of the meeting effectiveness, the alpha dog in the pack stated casually, “Just so you know, I would never use this tool – I absolutely don’t need it to manage my accounts!” The room went silent.

After scraping my jaw off the table, and doing my best to maintain composure, I asked the rest of the group for their reaction. The ensuing conversation proceeded along the lines of who actually would adopt the proposed tool and who might choose to pull rank and drive tool free. Old big dogs don’t like to be asked to perform new tricks. So there is the challenge. We don’t want to roll over either, pun intended. SAMs that don’t play nice in the sandbox hurt their teams. They reduce the value of the data captured within the tool, which requires more 90’s era e-mail communication, and results in less understanding of the customer. Marketing has less intelligence regarding what messaging helps to drive big deals. Forecasting suffers. Ultimately we sub-optimize the investment.

We need the big dogs on board.

I think the answer is about adaptation. On the surface, strategic account management looks similar to traditional account management. Most likely you go through similar if not the same sales stages. But the complexity is the difference. Account management is like a game of chess. Strategic account management is like playing 19 games of chess simultaneously. You need to adapt your SFA to account for the complexity. The SAM needs to get something back from using the tool, just like any other sales rep. You need to find what that is for your strategic account managers – it may not be always obvious or the same from company to company.

I think you can win over the big dogs. You need to let them maintain their alpha status in the pack, but you also need to show them how you will help them excel in that alpha role. That may take a bit of research on your part – but the big dogs will play.

Posted by Matt Johnson at 10:32 AM | Permalink | Comments (0)

Photography is a hobby of mine, something I have been doing for some time. Early in my career I was friends with a group up young twenty-somethings who had too much disposable income and as a result tended to travel more than the average person. These unmarried and upwardly mobile professionals would return from their exploits and proceed to throw a party. However, at the center of these parties was a slide production of their trip. Now, these were not your Uncle Fred’s slide show of his station wagon venture through the Smokey Mountains. These were the chronicles of action-packed adventures such as climbing K2, bobsledding at Lake Placid, running level 4 water on the Colorado, or back packing across Vietnam. Each show told a story and was highly entertaining, mixing in the local culture and offering a glimpse inside the travelers’ experiences. Plus, the photographic quality was high. Those parties changed the way I use a camera today.

Many folks take snap shots – kids, birthdays, vacation scenes, pets, the occasional sunset. You point, click, and the light sneaking through the lens is transformed into an image on film or onto a memory chip. The output is pretty easy to get these days. But most pictures get shot, looked at once, then packed away in a box or a CD and their value diminishes as they get further buried in the closet.

This phototechnic capture of our experiences seems a lot like how we also capture customer data. CRM technology has made the point and click pretty easy to make happen. We store a bit of information of our visit with the customer, look at it once, then store it away just like the overexposed snapshots from last year’s Halloween party. There is an obligation to shoot our guests as they arrive in costume, but we never really do anything with it. We shoot quickly and then get back to the party, putting in the minimum effort. Maybe you look over the snapshots when you download your camera, but you have to move on to the next event and the obligatory shots of your niece’s graduation.

Many of my clients have similar tendencies, asking for a little bit of sales activity to be captured, maybe a tad of information of who the customer is, but really, we don’t want our sales people to be admin folks – let’s have them sell, not enter data on their computer all day. After all, we won’t do anything with the data anyway, other than to monitor that a certain level of sales call activity is happening. Why would we want to put any more effort into it?

I see this as a classic input / output situation. The value of the output is totally contingent on the value of the input and the ability to perform a transformation of the input to increase the output value. I can take 100 images with my camera of a visit to Bermuda, random shots of beaches, candids of my traveling companions, and the random historic building. But, if that is all I do, a view ingof those 100 images is going to be really boring. However, with a bit more input, I can make the output exponentially more appealing. If I decide I want to tell a story about the visit, I will look at things differently, I will see them differently. A sign that I would not have noticed helps deliver some of the message. A close up detail of an object when viewed after seeing a panorama of that object provides more insight. Capturing the activity of my traveling companion then adds yet even more insight. But the capture of the image is not the end. There also needs to be a transformation step before the output really has value. You need to sequence the images, edit them to remove distracting or poor images, and then make sure there is a start and a finish to the story. (Adding a soundtrack also creates an even more enjoyable output, should you be so inclined.)

We can do the same with our customer data. We can build our customer interaction processes to capture key customer information rather than ignore it – because we know what the output possibilities are and we expect more value from the input. We can also combine different data elements to become more valuable in their combination. A customer profile trait combined with a correlated activity helps to perform better targeting just like a sequence of images tells more of the story than a single shot. Having a sufficient amount of data input helps us to perform more transformation, but it is not just the analysis that is valuable. It is also the storage of the data in a central and accessible location that adds to the value. When a service issue is captured and a sales rep can view this prior to making a sales visit, this extra insight can be invaluable. This is similar to the value of shared photo sites. Grandma can access pictures of her grandkids with greater regularity because of the many sites for posting snapshots. The extra effort of loading the pics onto the shared site is far outweighed by the value Grandma experiences from viewing them.

Yet, there is a huge amount of resistance to putting effort into the input. Sales managers, for example, strive to minimize the effort their sales teams have to expend on this task. The problem with this is that they are actually acting rational in this case. If we don’t get much value from the output, why would we put much effort into the input? Let’s minimize that input to keep the balance correct.

That very logical sentiment is one of the primary drivers of CRM program sub-optimization. We need to focus on the output and the expectation of value. From there we need to further examine the transformation – are we building value with the data? If not, it may be that we need to examine the input – are we collecting and sharing the data sufficiently? All three elements of the input/transform/output equation must be in focus, but it really needs to start with the output. We need to make sure we know what value we are targeting, and we also need to know who is getting that value. Many times the data collector does not reap the benefits of the collection, which gets in the way of basic motivation to be a good collector.

So, the next time you have your camera out, think of the output as you are pointing and shooting.

Posted by Matt Johnson at 10:49 PM | Permalink | Comments (0)

If I were to start my career over tomorrow I would go back to my original plan as an 18 year old and follow through with my desire to be a marine biologist. And, should I actually graduate with that once intended degree, I would then go off and try to save the mangroves. Don’t read into this in any way that I am unhappy with my current career. It has been a really great ride and I have no regrets. But, for some reason I would change if given the chance to do it over. Maybe it has something to do with that visit last fall down to the University of Miami Marine Science campus on Key Biscayne over parents’ weekend.

I have helped plenty of companies in my quarter century of consulting, but I think the mangroves need the help even more. This ecosystem located along the tropical coasts of all of our continents serves an incredibly important role. It cleanses the water. Young fish are nurtured until ready for open water. The complexity of roots protects the coastline from erosion. And, when the meteorological feces hits the fan, the mangrove keeps the big storms from washing away the villages. It virtually serves as the lifeblood of the tropical coastline.

Until I get that opportunity to start over again, I guess I will have to settle with helping the organizational equivalent of the mangrove, which is the contact center. You might snicker at the analogy, but there are some significant parallels. The contact center is a critical organizational ecosystem and serves some very similar functions as its marine counterpart. First, their number one charter is all about cleansing customer issues. But, at the same time, they can nurture new customers until they are acclimated to their new product or service. They also protect the company from erosion – defending against customer turnover. And they likewise tend to be the first line of defense when the big storms come, such as recalls, bad publicity, or distribution problems.

Why do the mangroves need saving you ask? Well, there are a number of reasons but the biggest is that it takes up shore line that could otherwise be utilized for something else, such as shrimp farming or creating tourist friendly beach fronts. The problem is that the destruction of the mangrove is the same as the destruction of just about any critical ecosystem. There is a balance that each creates and their loss has impacts on the surrounding ecology. The service it performs is not performed by anything else when it is gone, and therefore problems develop, such as pollution, erosion, loss of fish stock, and less defense against catastrophic storms.

Biologists have been able to calculate the economic losses due to mangrove deforestation to far outweigh the benefits of replacing them with the short term economic gains of farming and tourism. It turns out to be all about the big picture versus the pursuit of quick returns.

This too is parallel with the situation in many contact centers. Pressure remains to squeeze their costs and use that funding for more attractive commercial pursuits. Yet, experts also continue to laud the merits of managing the customer experience as a means of protection from turnover. And the contact center can always be leveraged for other compatible pursuits such as upselling or lead qualification. Limiting the funding of the contact center is pretty much the equivalent to the destruction of the mangrove when it comes to economics. Yet it is hard to get the full picture to be sufficiently visible to everyone that matters.

One thing that has helped me personally to be more appreciative of this tropical ecosystem is to have spent some quality time within it. For example, I have had the opportunity to stay at resorts that harbor a mangrove barrier, which has enabled some up close exploration. Kayaking through a number of mangrove waterways has also been educating as well as totally enjoyable. This exposure has helped me understand it all better, and therefore pay more attention when the experts raise their warnings.

Maybe we could schedule some kayak trips for business execs to paddle through the contact center more than they do. Have them listen in on more calls. Encourage them to read some customer testimonial e-mails when a resolution to a difficult problem made a difference (and drives some loyalty). Exposure goes a long way. Hearing about the contact center in sterile business reviews conducted via spreadsheets and PowerPoint slides is no substitute for a kayak ride.

Go find some paddles and life jackets and take your senior team for a ride.

Posted by Matt Johnson at 04:25 PM | Permalink | Comments (0)

Do you remember being in the 7th grade, taking a math quiz, and being told by the teacher that you had to show your calculations, or other logic for deriving the answer, on the back of the quiz sheet in order to get full credit? What was up with that?

It wasn’t such a bad thing in the end. If you got the answer wrong, but your logic and calculations were sound, (perhaps a careless transposition error) you probably received most of the credit. On the other hand, if your logic was erroneous but you still got the answer right, you got little credit due to the fact that you did not really know what you were talking about. Ultimately it is not about the answer on the quiz, it is about the problem solving ability. If you didn’t understand how to solve the problem, uncovering this at the time of the quiz gave the teacher the opportunity to help set you straight before the final exam. Working the problem out on the back of the sheet was all for the purposes of coaching and guidance. It was truly in our best interest (even if we did not recognize it at the time).

Over the last few weeks I have been working with a couple of different clients on the standardization of the territory planning process. It has been interesting in that they are accepting this change to their sales force effectiveness methods very differently. One company really gets it and is embracing the need for a more disciplined approach to ensuring that every sales rep has a well thought out plan for making their number. The other company is resisting the idea and would rather skip the process and go straight into pushing the reps out onto the street to make their number.

In a meeting with the management team of the latter client, the whole thing about writing-down-the-problem-solving-on-the-back-of-the-quiz-sheet hit me. How do we know if the sales rep has a chance of getting the problem right on the final exam if we can’t tell if they really know how to solve it (by having visibility to the back of the quiz)?

In the former company of my example above, one district manager was so driven to improve territory planning that he believed it was a good idea to give full commission on achieving sales targets only if the sales rep can show in the plan how they will get there ahead of time. In other words, don’t rely on luck to make the quota, rely on the plan. I guess this is like playing billiards where you have to call the pocket in order to get credit for sinking the ball. Skill counts, luck does not. Perhaps this is acceptable when playing pool but maybe it is a bit extreme when compensating your sales team, but I really appreciate the sentiment greatly.

Let’s not rely on luck for achieving quota. Instead, how about if we show how we are going to work the math problem on the back of the quiz? A good territory plan examines each targeted account and carefully examines the potential revenue to be derived from that account to best project where revenue will be generated. The account projections are rolled up into a territory projection and the logic of solving the math problem is wondrously illustrated. Most important, if the logic does not add up – the fault of the problem solving is exposed. And, what is even more important than most important, this gives the sales manager and coach time to improve the situation before the final exam. We can examine the back of the quiz sheet to ensure that the problem solver is working with the right capabilities.

Why would you not want to have this seriously critical capability in place for your sales team? In my experience, opponents to a disciplined territory planning process are typically victims of their previous success. Companies that I support who have recently experienced escalating growth do not typically want to invest the time – the market vacuum they fill with their product does not need a plan. Rather, it needs a faster fulfillment process. But these conditions change as fast as the weather in New England. It may be that the discipline of territory planning is an unneeded drag on the progress of triple digit growth sales teams. However, as soon as your boon is over, you might want to consider the value of soundly illustrating where your success is based.

Yes, I think it is a good idea to show your calculation on the back of the quiz sheet. Is it because my mother was a math teacher? Maybe. But maybe it was also because sometimes I had a few flaws in my own logic and my instructors were enabled with the opportunity to coach me before it was too late. I believe firmly in the idea of sales manager as coach. If the problem solving is illustrated on the back of the quiz sheet (or perhaps in your CRM system) the coach will have a chance to guide before it is too late, that is, before the quarter closes.

For those of you with triple digit growth – you get a reprieve – don’t worry about territory planning. For the rest of us mere mortals, I recommend writing out the problem on the back of the sheet.

I hope you get an A+.

Posted by Matt Johnson at 05:48 PM | Permalink | Comments (1)