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September 21, 2007

Who is the Rogue?

You may recall a recent posting where I raised the issue of business functions breaking away from corporate IT in order to obtain their own business applications, most notably a CRM platform that fits their requirements over the standardized system designed to fit a broader range of needs.

Since putting up that posting I ran across a blog site that has also elaborated on the situation, showing both sides of this thorny predicament. However, the author of that site has taken one step in the direction of IT that I cannot support. Stated directly is the recommendation that, although the business needs to have its requirements met, IT must have the final say. On this point I cannot disagree more.

Giving IT the final say on what application a business will use is the equivalent of giving HR the final say on the next recruit to be hired into that same business function. That would be preposterous. Wouldn’t it? Yes, absolutely. IT and HR are in place to serve the needs of the business, not the other way around. Everybody repeat that out loud a few times until it sinks in.

However, this can result in a battle waged in the name of control that can waste a lot of time and other resources. Very recently I advised a client smack dab in the middle of this conundrum to work with IT in a way that enabled them to believe that they had the final say. Was this manipulative? I prefer to think it was collaborative. And I would advise the IT people the same. Work this out in such a way as to get the IT standards met, but do it also in a way that lets the business believe they have the final say.


When the business has to go around IT and get its own CRM system, I do not think we should view this as rogue behavior. I believe we should look closely at what is going on in the IT organization and encourage some soul searching.

September 14, 2007

Changing Rules

While searching through a folder of articles that I have saved on a diverse set of topics (poorly organized and therefore hard to find easily) I ran across a Peppers and Rogers Group article focusing on how the rules for Marketing have changed. The basic gist of the article was how changes in buying combined with the increased diversification of channels have forced marketing functions to manage campaigns differently than more traditional approaches.

This is all fairly common messaging in the marketing trade rags these days. The interesting thing is that the article I was reading was from 2004. The rules have not only changed, they have changed again.


What makes this all interesting to me, interesting in the Chinese curse kind of way (“may you live in interesting times”), is that too many of my clients are still using marketing strategies from 1984, let alone 2004. Plus the changes between today and 2004 are just as significant as the changes between 1984 and 2004.

To me, the challenge is on what set of rules to bring these marketing organizations up to speed. Do we jump from 1984 to 2008, or do we go incrementally? Each has their advantages. Wasting time with a marketing approach that is behind the times, even if advanced for the organization, is delaying the benefits that the Web 2.0 provides (especially since most of these organizations have customers that are buying in the current paradigm). On the other hand, making big leaps often causes problems and the approach of baby steps can be a strategy for success.

Chances are the answer to this question of small change or big change will depend on a number of factors. Perhaps the biggest factor is what the customers expect to receive. If they are not satisfied, they can easily defect to a competitor. A second factor, not to be overlooked, is what is required by the sales organization for lead management and sales support.

Either way, marketing according to the rules of 1984 can’t continue. At least getting into the current millennium would be a start.

September 07, 2007

The Big Match-up

Back in the 90’s a lot of my clients were into customer segmentation, particularly the consumer banking folks. Thanks to analytics software becoming more available to more business, segmentation is all the rage again.

Today, the big deal is focusing on an optimized match between customer segment and coverage channel. Do you want to send one of your sales reps on a 300 mile trip to get a customer order that comes up a few dollars short of covering the cost of the travel, or would that customer complete the same order with a less costly telesales rep? If that were a smaller account, would it be more efficiently served through a distributor? Once that customer becomes a regular buyer, can you keep them regular with e-mail offers directing them to an e-commerce site? Would an e-mail offer be the best way to soften up a new prospect prior to a visit from a field rep?

Breaking down your customer base into segments based on criteria for differentiation is the best way to answer the questions above. Building a channel strategy for best coverage of each segment is the new CRM Holy Grail, and for most companies the use of analytics is the path there.

Scary Monsters

However, there is a big caveat to all this. The use of analytics software to create segments and model the best channel for coverage requires a couple of key components of a CRM program to be in place. First, CRM needs to be integrated with order data, usually residing in the back-end. And, it also will likely require sales call activity history – across all channels.

When these two critical factors are not in place, most Business Intelligence programs never get off the ground. Integration with order data can usually be accomplished, although it may require some effort to get the data in order. Getting sales activity data in the mix can be a taller challenge. This requires the cooperation of the different sales teams, introducing those nasty variables of user adoption and data quality.

I am always amazed how these two factors never go away. So, the moral of the story is, yes, it is possible to get to the end state of having an effective channel / segment match. But the path goes through the mundane land of getting sales people to enter data correctly into your CRM system. The new match-up requires an old match-up. Good luck.