Customer On The Edge

Are you a first born? A middle child, or perhaps you were born last in your family? Do you subscribe to the whole birth order thing? I remember, from a very, very long time ago making the observation that one of my brothers, a middle child, did not get as many Christmas presents as others in the family. At the age of about 4 or 5 it started becoming obvious to me, well before I had ever heard the term referenced.

Anecdotally there seems to be a lot of evidence, but of course the research also supports the notion that who you are as an individual is highly influenced by when you popped out in relation to your siblings.

So, I would like to offer that this birth order thing has just as much impact within the working environment as it does around the kitchen table. However, I would like to take the conversation up a level. I also believe there is a birth order dynamic when it comes to the generations within the workforce.

Certainly we have all heard about the Baby Boomers followed by the Gen Xers and now we have Generation Y starting to make a strong contribution to the organization. Attributes regarding each generation have been postulated, some more similar to astrology-like characteristics than what might be found through conventional science. My preference is not to get caught up in the content of the differences, but to acknowledge that they exist.

More importantly, if there are real differences between those who are 55, 40 and 25 other than just the experience of age, then it might be worth thinking through how that plays out with business effectiveness. For example, if your SVP of sales is a Boomer and has worked hard to figure out how to manage and reward a team of X’ers over the years, what happens when all the new recruits are Gen Y? Have we built a set of policies to manage and motivate one group that might not work with another group? I think there is a good chance that this can become an issue.

What happens if you have a Boomer SVP of marketing, but your customer base is heavily weighted with the younger generations – can there be a mismatch of preference? One might have learned the value of direct mail marketing, while the other wants to see a podcast on the 4 inch screen of an i-Phone. The call center team today is made up of a different group of folks than who was jockeying the phones in the 90’s. Do they have different aspirations and expectations? That is what I have been led to believe. Are you managing the call center with what you learned about the function a decade ago and with a whole different generation of workers?

My apologies if you were hoping for some recommendations. I don’t necessarily know what to do about the differences between the three generations who make up our customer facing workforce and management team, but I do know that the differences between them will impact how the whole thing works.
Back when I was in graduate school we got trained how to write research papers. One of the things I remember most was making sure that every paper ended with a recommendation that would positively influence the possibility of getting more grant money for more research. I will conclude the same with this entry.

This topic merits further investigation.

Posted by Matt Johnson at 11:54 AM | Permalink | Comments (0)

So, us Yanks are just celebrating the anniversary of our independence from the tyranny of colonialism. Sorry to my friends in the UK – I truly don’t raise this to rub salt in the wounds. Just pretend I am talking about bonfire night. We have different ways of observing the celebration around the country. Mine typically involve being on a boat and concluding the day with a pyrotechnical display over the harbor. I try to be an observer of the fireworks while in the boat, rather than a target, but sometimes we get a little too close due to our enthusiasm.

While we take this opportunity once a year to mark our independence, I can’t help but to also focus on the things to which we remain dependent. My car comes to mind with gas going out of control. I still have not achieved independence from the airlines, which deserves its own revolution. My PDA has become a source of dependence that is a new development.

And then there is CRM. What is your dependence there? Could you do without your forecast? How about that new lead management process? How are things when the system crashes – feeling dependent? While I really would like independence from OPEC, some dependencies might be a sign of success.

If your CRM program is running well and you now recognize that you could not live without it; that is probably a good thing. If you feel that you are a hostage to the tyranny of a bad system; that is a bad thing. So, I guess the question is, would you celebrate with fireworks if you could free yourself from your CRM system or would you celebrate because of the success of your dependence?

Thank you to all, past and present, who have contributed to achieving the freedoms we enjoy.

Posted by Matt Johnson at 01:14 PM | Permalink | Comments (0)

Last week was another first for me. Yes, I had my inaugural taste of fried pickles. Perhaps some of you out there have no experience with this culinary oddity, while some of you might wonder how it is possible that a person with nearly half a century on this planet could have gone so long without such a staple in their diet.

The concept of a fried pickle had never occurred to me. What is most strange is that it is a food item that has been doubly processed. First, the cucumber goes through the pickling, which is typically the end of the road. But, the fried pickle then goes through the whole batter and fry process, an extra set of steps for something that is already supposed to be ready for consumption.

I have run into other food items like this. The chocolate frosted glazed donut comes to mind. Again, this is an ingestible product that has gone through a preparation twice. I always wonder about these – are the glazed donuts stale, so they add the extra chocolate topping to make them appealing again?

Did these fried pickles follow a similar path? Did the vinegar and garlic wear out causing them to require a cooking process as a form of second sterilization? Is this a lipstick on a pig situation – covering up something that is not quite right with something that is a superficial betterment?

Of course you figured out where this is all leading. How many CRM systems have been deep fried in an attempt to make them more appealing? We get asked all the time to get involved with this. The CRM system does not satisfy anybody, but if we just layered an extra topping of analytics it would be just fine. Or is this is a situation where we are deep frying the CRM system with even more capability such as adding lead scoring to an already good lead management.

So, you might ask, was the deep fried pickle good? Actually, it was really good. Just like enhancing lead management with lead scoring is good. But, that situation starts out with an already good lead management capability. Too many times I see the stale glazed donut with a request for adding chocolate in an attempt to improve it.

Admittedly the metaphor gets a bit weak here, so give me some journalistic license. If your CRM system is like a stale glazed donut, please don’t expect that a chocolate topping of analytics or any other pleasant distraction will make it less stale. You have to fix the donut, not disguise it. In the case of the stale donut you simply start over with a fresh donut and cut your losses. This may not be the case with your CRM system. You might not have to put it in the trash compacter – it is likely improvable. But, the point is, don’t try to cover up the problem with a superficial improvement. Fix the problem, and then add more capability.

Enjoy those pickles.

Posted by Matt Johnson at 10:54 AM | Permalink | Comments (1)

The sales guys certainly can make it appealing, but how do you know if renting a CRM package rather than buying it makes sense for you? Software as a Service (Saas) is gaining momentum within CRM and more and more companies I visit are asking if it makes sense for them. It might have been easier to answer this question in the past – smaller companies who did not want to make the investment in a sophisticated package could ease into CRM with a hosted solution without a lot of fuss. But the separation of whether or not it makes sense is getting narrower.

There are some factors to consider if you are looking into this form of CRM for your business:

I believe one of the strongest arguments for going hosted is if you plain and simply don’t have the bandwidth to manage the complexity of a CRM platform internally. Here it is obvious that smaller organizations are likely going to fit here. You may not want to invest in the CRM competency because you want to keep your investments more focused on the core of your business. That is logical.

However, small divisions and functions within large organizations can fit this mold as well. This is most true with those groups who have a different business model and customers than the rest of the enterprise. These folks have been dragged along by corporate IT to conform to the chosen standards, but CRM for everybody else does not fit for them. This is the perfect situation for a hosted solution, which the industry has now labeled hybrid CRM – some folks get on premise and some get a hosted package. This leads to a lot of happy customers for big IT functions.

Another fairly obvious consideration is the length of time a company expects to utilize a hosted CRM system. There has been some conventional wisdom accepted in the past that SaaS is particularly useful for an organization that wants to have a CRM system for the short term, prior to moving to a different system in the long term. There can be many reasons for this need, such as an impending business change or a preference for minimal expenditure. Under these circumstances, a large outlay of investment for a CRM system that will be changed does not make sense. The thinking has been that if you plan to keep the system for less than three years, hosted is the way to go. On the other hand, the cost of renting the software starts to add up after a while and it eventually will make sense to own rather than lease if you want a lower cost of usership. Again, this seems to be around the 3 year mark.

I find this 3-year price break perfectly logical. However, I have seen too many companies that first try out CRM and then change it radically, that they would have been better off renting for a while prior to jumping in the CRM deep end. If you really are uncertain what you want, but you know you want to have CRM quickly, I believe it is much more affordable to rent for a bit and then buy when you really know what you want.

A third factor that is gaining some ground is the notion of integration. Are you attempting to plug your CRM system into many data sources to have the best picture of your customer? If so, you may want to invest the needed integration effort in an on premise solution as the limitations of what you can do with a hosted package may impede your integration requirements. The vendor sales folks will surely argue the point, but we wary on this factor.

There is a fourth factor that seems to have resurfaced as a critical consideration and that is the notion of data security. I have had many clients who plain and simply were unwilling to store there confidential client data in a data condo complex side by side with others. This factor has some interesting dynamics going on in the market place at the moment. On the one hand the one leading vendor maintains their multi-tenant approach is completely secure. On the other hand, the other leading vendor has offered a single-tenant service to quell the concerns and now offer a more secure solution. Is this service being offered just to satisfy the perception of a potential security breach or is there a potential for a security breach? It is not entirely clear to me, but I raise it for your consideration.

The final factor that I raise for consideration is whether you are looking for a full suite of features to satisfy a broad range of requirements across the enterprise or whether you need a simple solution for a few set of common requirements. Certainly the hosted solutions started out simple, but they have evolved and are becoming quite sophisticated. The differences are narrowing in this case and you might not want to rule out SaaS just because you feel that you have a sophisticated set of demands. However, the one area that remains unsatisfied is a broad set of industry tailored solutions across the different vendors. Many of my clients have ultimately ruled out hosted CRM because they would spend more money than they preferred customizing packages to fit the look and feel of their business processes. The on premise options do hold an edge in this regard.

So, do your homework and don’t get overly influenced by a flashy demo touting the bells and whistles that you may or may not require. Determine the criteria that you need to satisfy and carefully compare the options before you buy (or rent).

Posted by Matt Johnson at 07:24 PM | Permalink | Comments (0)

Within the same week I was told by two different clients, quite emphatically, that CRM can only produce increases in revenue but not reduce costs, and that CRM can only reduce costs but not increase revenue. So, the big question is which point of view is correct? I say, “let them eat cake!”

When I look at my own experiences I can recall clients who have wanted to make more money, but ended up only able to reduce costs. I have some clients who have wanted to reduce cots but have only been successful with improving revenue. And then of course, there are those clients who were not able to achieve either.

So, what to make about all of this? Taking a look at a recent editorial in the April issue of CRM Magazine some trends are reported that offer up a little insight. In this case, those organizations that are looking to increase revenue from CRM are focusing on the sales force. This certainly makes a lot of sense because if you use CRM and SFA tools to improve efficiency it will either lead to better use of time driving better sales or it will lead to sales people being able to spend less time at home or in hotel rooms doing admin tasks. But, it won’t reduce any cost (although the sales force is happy about having more time with their families).

Back in the 90’s a lot of my CRM experience was focused on call centers, much of which were dedicated to customer service. Unless you use CRM to migrate service personnel into blended sales and service roles, your only hope for bottom line results is through driving out costs. And, I believe there were plenty of examples of success where CRM improvements within the call centers led to cost reduction – mostly in the form of being able to scale the call center to handle growth without adding comparable headcount.

Taking this all into account, it may be that the answer to the question of whether CRM is good for making money or saving money is that it can do either one, but it might depend on which function you are supporting with the program. But, to complicate things, let’s throw the marketing function into the mix.

CRM software and process improvements can help drive lead management efficiencies, plus automation can dramatically drop the cost of managing campaigns. At the same time, analytics that drive better targeting and evaluation can improve lift. Marketing can realistically achieve both benefits of making more money while saving money.

Getting back to those strongly convicted clients of mine - you can have your cake and eat it too.

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

We spent the Presidents’ Day holiday week nestled at the base of the Presidential Range, while the presidential race was raging in the sound bites at 11. It all seemed pretty appropriate.

On more than one occasion over the course of the week we went to top of those mountains named after our founding father figures. Most of the time we paid for the privilege to ride to the top in high-speed comfort, but we did scale one of those peaks using shoes made for snow travel.

The journey was good, and we were ready. We had the tools, we had the experience, we had a path, and we had the motivation to get to the top. At times we considered turning around and going back.

But we kept going. The driver was the reward at the end of the journey (we actually had a few reward expectations – a really nice view, a sense of accomplishment, and a strong desire to see where the path actually went). Some times I had to convince my climbing partner to keep going, using colorful reminders of the expected rewards.

The journey required effort, which we were not in complete understanding of at the beginning. Once again, we did not truly know where the path went, but we bet on the fact that it would lead to the desired rewards.

You might see where this is all going by now – CRM sure is like scaling a mountain – the ends justify the means. The preparation for the journey was significant, with a number of factors driving the success:

- get clear on the end-state and keep it clearly in mind;
- set expectations with all involved using a path or plan;
- get agreement to make the effort, even with some unknowns; and
- be ready for the journey with the right resources.

It was a very rewarding journey.

Posted by Matt Johnson at 02:21 PM | Permalink | Comments (0)

It was one of those trips. 12 days, 6 hotels, 5 Countries. They happen on a regular basis. Cross the big pond and visit as many clients as the sales reps can squeeze in. This was a particularly rough version of the usual excursion with irritable customs agents, 5:00 AM taxis, and food poisoning. But I catch myself whining, which is not my intention here.

The interesting part was the client visits. As it turns out, if you go to London, where a dinner costs as much as my parents’ mortgage payment, you will hear about the same thing you hear in Pittsburgh, something about needing to generate leads. Rotterdam conversations sound just like those in Boston, better ways to get management alignment. What I have heard in Chicago previously, discussions around leveraging the web for CRM, has resemblances to conversations while just in Dublin. We got the same stuff going on at each side of the Atlantic.

Customers demand the same things. We all have customers and we all have to do similar things to be successful with them. It was a hard set of travel days, especially the food poisoning (and from a client’s cafeteria, too!), but it was an affirming set of client visits. It feels like we are making progress out there

By following the best practices that have been established over the last decade and standing by the principles that have been built repeatedly from effective CRM programs, I believe we can replicate success across borders and time zones. Although, a translator can be helpful at times - some Dutch terms just don’t convert to English easily.

Posted by Matt Johnson at 05:01 PM | Permalink | Comments (0)

I spent Christmas Eve Day on the Island of St. John in the U.S. Virgin Islands snorkeling with my family. We rented a Jeep and drove to a remote part of the island to commune with nesting leatherbacks and search out the illusive featherduster coral. While on the idyllic crescent shaped beach in between dives we encountered an interesting pack of wild sea donkeys. As it was our first trip there, we were not familiar with this institution, and while they were not troublesome, they were persistent. They wanted the food in our back packs. They would not go away, which meant that we had to stay on guard lest a mobile phone be mistaken for a sandwich.

Returning to civilization after the holidays, one of the first calls I received was from a colleague asking me to prepare him for a visit with a prospective customer who was hoping for help with a CRM program gone astray. My advice to him was that there was a 95% chance, not knowing any details of the situation, that the problem could be traced to one of three factors, or a combination of the three. He needed to be prepared to talk about weak strategy, crappy usability and technology sub-optimization. Later, during a debriefing, I learned it was a combination. There was no solace in being right.

This all reminds me of those wild sea donkeys that just wouldn’t go away. The same problems keep coming back looking to steal our lunch. The CRM industry is about 15 years old, depending on how you define things. It is amazing to me that after that much time, the same things keep going wrong.

Companies still fund CRM programs thinking they can relegate the process to a bunch of good intentioned IT folks who never get the license to bring together the execs to set expectations about what the program should deliver. CRM software gets designed and implemented to satisfy a whole boatload of different stakeholders, except not the users who have difficulty making it work efficiently and get back no individual benefit. And, on top of that, CRM has become so much a central concept in contemporary organizational thinking that everybody has it including your dry cleaner – but the problem is that there is not enough talent to go around to get it all installed correctly now – so too many software systems are put together like a cheap condo complex.

So why raise this? Two reasons: first, if you are planning a CRM program, please make sure you have a solid strategy and buy-in across management; make sure you design the system to satisfy the performance needs of the user; and make sure you have competent folks helping you build and implement the technology. Second, if you find yourself dissatisfied with your CRM program, use this as a diagnostic tool – examine each of these three factors to find what you need to repair. It will get you most of the way back on track. Then go eat your picnic lunch before the wild sea donkeys come back.

Posted by Matt Johnson at 02:58 PM | Permalink | Comments (0)

One of my bigger challenges as a consultant is convincing my clients not to think too small. When I am approached by a business that is looking at the possibility of buying a new SFA tool there is often an expectation to keep things fairly narrow in scope. Typically the interest will focus on a primary capability such as better forecasting or more sophisticated contact management. But, while the desired scope of effort may be small, the expected outcomes are disproportionately big. This is where the problems arise. Spending a few hundred grand on better forecasting or contact management may not ever see a positive return.

If you were to pour through the different research reports on sales effectiveness, especially those utilizing CRM and SFA software, you will find trends that help to resolve this problem.

First, one of the big limitations of SFA as a stand alone solution is that it tends to be best at lowering cost of sale, but less effective as a sales growth solution. This can be a big disappointment for those sales VP’s who were making the investment in order to drive higher sales volume. However, further digging into the research indicates that this potential disappointment can be abated with the correct additional investment. The best chance of improving sales growth is to combine sales force automation with marketing automation, particularly lead management solutions.

The irony for me regarding this significant benefit of combining sales and marketing as an integrated solution is that I often have to push to get marketing invited to the table when it comes to planning for these CRM programs. The push back is often centered around wanting to contain scope in order to maximize results. Buddy, if you want results, don’t think so small.

A similar inappropriate scope limitation involves the idea of containing the reach of SFA. This next problem is often disguised as a desire not to burden the field with unnecessary admin. It goes something like this. There is a recognition that the customer data base is patchy. Too much contact information resides on PDA’s and rolodexes. So, the request is to implement SFA for the resolution of this problem but not to overtax the field with unnecessary tasks such as sales call reporting. However, when you look further at the results of the research we find that these programs have the least ROI. You want results, then you need to build a sales methodology into your SFA – these initiatives show the best returns.

The added discipline of the sales methodology drives better account targeting, facilitates coaching, enables collaboration, and reduces the risk of leads falling through the cracks. It does take more effort to get right, and it does increase the scope of the program, but it also delivers better results. Is that not the reason you were making that CRM investment in the first place?

Now, you may be thinking, “wait a minute, the research also indicates that keeping project scope small also improves the likelihood of success!” This is very true, but the studies specifically point out that chunking programs into bite size project pieces is the best way to implement. This is not intended to imply that keeping the span of the overall program small will lead to better results. To the contrary, the integration of multiple initiatives spanning functions like sales and marketing leads to the best results - according to the research.

Hedge your bets. You don’t have to do it all at once. Start with sales then add marketing, or the other way around. Just don’t think small.

Posted by Matt Johnson at 12:55 PM | Permalink | Comments (0)

Lately, I have been spending a lot of my time helping my clients correctly select CRM technology for their businesses. Yes, I know this is not all that interesting, so why am I consuming precious blog space on such a mundane topic? Well, I think it gets interesting when you add the fact that all of my clients have already gone through a selection of CRM, but come away very dissatisfied with their decisions. Can the process of choosing a software package to enable business capabilities be all that hard to get right? It does not have to be. However if you do not pay attention to some key factors, your selection can turn into a big crap shoot. Here is a process that I recommend.

Step 1 – Probably the biggest factor in a successful selection process is not starting with the technology, but rather, starting with the end state that technology will achieve. Get a very clear vision and consensus on what CRM will do for the business. Many get this wrong the first time, thinking it is simple, but leave out key functions of the business, fail to gain consensus and, like one company who spent $12M on CRM but with virtually no adoption, waste serious money. Once you know where you want to go, the rest of the selection process gets easier.

Step 2 – Next it is necessary to clearly uncover the business capabilities needed to achieve the vision, which is harder than it appears because many are not adept at facilitating future state requirements definition. I have a client that chose a CRM system a number of years ago, then later determined they needed to add order management as a business capability. This was not included in the initial selection process and it led to them choosing a package with too narrow a set of abilities. As a result, they have had to abandon the original selection, forcing unnecessary turmoil and expense on the business. Your selection needs to cover your future requirements, not just remove the pain the business is battling with today.

Step 3 – Once you have established a prioritized set of capabilities required by the business, you next want to compare these against inherent package abilities to determine best fit. The pitfall with this step is not knowing whether a package can really do what the sales and marketing people say. Due diligence is the key. Start with creating a shortlist - there are many packages to choose from – weed out the poor fits and focus on the obvious few. To do this well it can be very helpful to know the technology marketplace and where the hidden traps are.

Be careful not to weed out good packages because of inappropriate perceptions. I had a client who told me they would never choose a certain package, but anything else was fair game. As it turned out, the best fit was the one they declared they would not choose. With a bit more pushing, we found out that they had no sound reason for discounting the best fit; it was purely irrational conclusion-forming. They now happily use that software to this day.

Step 4 – With a clear comparison of business requirements against software abilities, it is possible to objectively determine the package that will fit best. However, there are potentially some non-objective criteria included in the decision process. Therefore it is best if you facilitate the decision process with the business choosing the best fit. I have learned that this cannot be an IT decision, and it cannot even appear that IT has a preference because of the risk that the business will resist what IT puts in front of them. We have replaced a huge number of CRM systems for this one reason alone

Step 5 – Finally, with a preferred vendor chosen, develop a realistic estimate of TCO and negotiate your best price with the vendor – software vendors are notoriously horrid at providing estimates, and they lowball shamefully. Plus some software vendors have a history of trying to sell unnecessary services and modules when they can get away with it. This is an area where knowing how to navigate the buying process becomes really key to ensuring a good deal and avoiding the potential of buying shelf-ware.

Sometimes it can be helpful to use a resource that is familiar with the software industry to assist with the process of steering around the potholes. The cost of bringing in some help is a great way to parlay your bet. Good luck!

Posted by Matt Johnson at 07:04 AM | Permalink | Comments (0)

Did you read that the Australian National Rugby League recently implemented a CRM system? It is easy to ask the question, why does a Rugby League need this kind of technology, which then easily transitions to the question, “gee, does my company need CRM too?”

Actually, sports teams and leagues are jumping on the CRM bandwagon right and left, the Aussies just being the latest. CRM is really popular in AAA baseball where attracting fans is more about marketing than the appeal of the national pastime. But it does beg the question, what drives the rationale for the CRM investment?

I think there are three questions to ask to determine whether CRM makes sense for you business.

First, are you satisfied with your customer outcomes? The NRL was not. They wanted to have more attendance at games, possibly doing more to improve gate revenues and ancillary sales. What about your customer outcomes? Do you sell as much as you want to as many customers as possible, and at the price you prefer? Or do you feel cost of service is too high? These are all examples of outcomes that can be improved with CRM.

Second, what changes to your business capabilities are required to improve your outcomes? The NRL believed that they do not know well enough who their fans are and believe that some traditional marketing capabilities would help. How about you – could you benefit from better marketing, or better customer targeting, or improved tracking of buying behavior? Are you good at keeping on top of service issues? Again, these are examples of common customer-facing capabilities that many organizations want to improve. CRM is intended to address these, either through technology, or through process improvements included in a broader CRM program.

Finally, will technology do anything to further your capabilities, and will it be worth the price? This is a harder question to get right. Some companies feel that CRM technology is a necessary ticket to play in the big leagues and make the investment without worrying about a clear ROI. I even had one client executive tell me, when working to determine if a CRM purchase made sense for their business, “The fact that we don’t have a real CRM system at this company is immoral!” Those are strong words, but it does reflect a sentiment that CRM is simply part of the fabric of the modern enterprise. However, it is possible to improve capabilities through better process, policy, and human resource initiatives.

For most businesses the benefits are pretty strong. Automation of sales, marketing and service processes lead to both effectiveness and efficiency results improving both growth as well as profitability. A third outcome is also common, which is the improvement of customer satisfaction through CRM. Automated auto registration and license renewal is a great example there.

So what about the Aussies – will they benefit? Go see for yourself, starting here http://www.nrl.com.au/
but maybe take in a match and draw your own conclusions.

Posted by Matt Johnson at 06:19 AM | Permalink | Comments (0)

Getting through security at the airport these days has become seriously complex - too complex. Everything has to be uncovered. First it was the metal objects, then the laptop, then came the shoes, next came the coats, and now we have the liquids in the Ziplock. Getting this all onto the tables and into the bins while walking closer to the entrance of the x-ray machine has turned into quite a dance. I don’t have enough hands to manage it all, but as a regular traveler I feel pressure to keep the line moving. It makes me long for a simpler time.

I am also seeing a similar trend with a lot of my clients who are also becoming more complex. But for them, everything has to be covered. When a new sophisticated product gets launched, a special sales force gets introduced. When a complicated service is added, a new layer of service specialist is layered onto the team. When a new customer segment is identified it leads to the development of a new layer of account management. It seems like every time there is a new wrinkle there is a new group added to the org chart. When will this coverage complexity stop?

It may just likely continue. It appears to be a necessity.

However, I also see some risks. When the number of groups and the number of customer touchpoints reaches a certain complexity, the likelihood of problems grows exponentially. Opportunities get missed in handoffs, cannibalism between groups increases, the cost of sale inches up, and the chance of a customer becoming irritated from having to talk to too many people, or not knowing the right person to talk to skyrockets.

There are choices when the coverage model gets out of control. Certainly one option is to scale back, but this is not popular I have found. A second approach is to create a single point of contact. This alternative seems appealing, but I find it is intensely hard to operationalize. The third approach is collaboration – linking all the groups together in a way that attempts to present the right resource to the customer based on the need at the time.

To accomplish a collaborative model for handling complex coverage, there a few variables that become essential. First, it is critical that each individual become crystal clear with their role. Overlap of tasks or responsibilities to permit flexibility is one thing. Ambiguity is another, and needs to be driven out.

Second, it is positively necessary that the CRM system be set up to enable push and pull communication that is both robust but not burdensome. The sharing of information both instantly and historically is a threshold requirement. Without it, the approach won’t work. This means that everybody has to hold up their end of the bargain, as well. Nobody is too important to share their interactions with others. That is why it is called collaboration.

Posted by Matt Johnson at 06:06 AM | Permalink | Comments (0)

The March issue of CRM Magazine has a number of interesting articles, each with a top ten list. Unlike what we have come to expect from Letterman, they are provided in ascending order, but the content is still good, ranging from SFA through CRM Program Management. On the latter list, the top item is, “Put the User First”. There was a time when I would have enthusiastically accepted this recommendation with great applause. After all I have spent a good portion of my career as a self-proclaimed expert on change management, constantly extolling the virtues of user buy-in as a key critical success factor.

Now, before I make anyone upset with me, please understand that I still very firmly believe that a focus on the user to ensure acceptance is really, really important. However, I am no longer certain that it is correct to claim that good CRM requires for us to put the user first. Seeing that in print makes me cringe at the thought of the incoming hate mail.

Well, what about management needs from CRM? What about timely and accurate forecasting? Isn’t that important? I’m not fooling around here. This is really important stuff. How could the average user be more important?

This is resolvable.

It’s all about balance. Ultimately, I believe it is important that the needs of the user are balanced with the needs of management. Getting out of balance usually causes problems. When forecasting is all that matters, sale reps have a means of finding ways to not do forecasting sufficiently. Having declared this so emphatically, I’ll also disclose that there are times when being out of balance briefly is needed as well. For example, when the first phase of an SFA project is all about getting the forecasting module up quickly due to problems with inventory shortages, it is totally fine to let the second phase be all about the folks out in the field. Ultimately it is essential to get to balance.

There are a number of key balance dimensions in addition to the management / user relationship. Getting things balanced between headquarters and the field is good. Having a reasonable balance between a focus on business processes and a focus on technology is also good. Striking a balance between a customer orientation and an internal orientation is really good, too.

More on those later - go get balanced.

Posted by Matt Johnson at 03:19 PM | Permalink | Comments (0)

CRM is not technology. This is a sentence I have spoken possibly more than any other one sentence in my career. Now, the truth of the matter is that it is a little more complicated than that, especially since there is technology that is categorized as CRM. I would like to take this opportunity to sound off on a topic that I find causes some confusion.

Customer Relationship Management, most commonly referred to as CRM, is an approach to optimizing the interactions your company has with its customers. CRM is really all about managing customer touchpoints for fun and profit. Now, why get all caught up in my shorts about this issue of CRM not being technology? The answer is connected to the naïve belief that implementing CRM technology alone will solve customer interaction problems. Most of the time when you throw technology at a problem as complicated as customer touchpoints you are destined to make matters worse. In fact, this has often been the case for many companies.

For the far majority of companies that want to improve the outcomes they achieve from managing their customer relationships, the effort required must involve a number of different organizational elements. Typically this means making adjustments to policy, processes, skills, attitudes, and also technology.

In fact I recently ran across an article in Industry Week that proposed that CRM has become one of the top five mechanisms for managing organizational change, up there with others such as TQM and process reengineering. This is a pretty significant amount of progress made since the mid 90’s when CRM first hit the market as the next killer app.

However, it is still quite common for companies to equate an investment in CRM to strictly the effort required to implement software. This narrow consideration for planning a CRM program has led many organizations into great peril. This is all made more difficult with the siren song of software sales and marketing professionals lauding their wares for achieving great business benefits. It is true that amazing things can be done with the current generation of products on the market. Never has the technology been so good.

Don’t get lured into the rocks on the shore by the CRM software siren. If you are thinking about taking this CRM voyage be prepared to address more factors than only the introduction of new technology. If you view CRM as a total business approach to better managing customer interactions, you will be more successful (and have more fun and profit).

Posted by Matt Johnson at 02:29 PM | Permalink | Comments (0)