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July 30, 2010

Words That Start With Trans

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.

Eagle Sunset 2

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.

Eagle Sunset 1

July 16, 2010


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:

Another Happy Birthday

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.

July 02, 2010

Old Dogs Big Dogs

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.

Poop Permit

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.