Customer On The Edge

Confession – I learned this week that I am a bad fan, a scoundrel of the worst kind. After two very embarrassing losses I had written off last year’s almost perfect team. I was ready to switch my focus to basketball for the rest of the fall and impending winter. Then, something happened.

During that primetime-first-night-of-the-work-week game between the almost perfect team and the stallions who normally play at 5000 feet above sea level a miracle happened. The team who normally plays at sea level performed incredibly well, even with their leader out on the west coast enduring an unsuccessful knee surgery. And I was really pumped

So, I feel pretty shallow. My loyalty is based on winning. What a scoundrel.

My question to you is how many of your customers are shallow like me. Are they good customers if you give them a discount (the business equivalent of a win)? Do they root for a different team when the discounts disappear?

When I was a kid I grew up a Cubs fan. Winning was an unexpected treat. However, I was extremely loyal and remain a dedicated fan today, 800 miles away. Why so much loyalty in the face of such adversity?

There is quite a bit of research that shows that brand loyalty is highly influenced by whether the individual can identify with the brand – how well the product fits with how the individual views him or herself. I identified with the Cubs. WGN was my everyday channel before it became a superstation. The Cubs were the guys I watched on TV or if I got on the YMCA bus with a tuna fish sandwich and watched the game at Wrigley. Ernie Banks was a good guy, as I aspired to be. When I got older the idea of quaffing an Old Style while watching the Northsiders was as cool as it could get.

Well, I guess the more important question is whether your customers identify with your brand, if they do business with you because you fit with their self image? Don’t laugh – statistics don’t lie.

But I did not set out to write this entry to discuss loyalty and personal identification. I want to raise the newly discovered connection between loyalty and social media. While the stuff out on this connection is fairly recent, it appears that this has legs. I think it is the equivalent of being a more loyal fan because you often watch the game at the local watering hole where everybody has a C on their cap. You are a part of something bigger.

Everybody seems to be jumping on the social media band wagon. It is certainly a topic that is getting a lot of press. I would like to get more direct experience with it to be in a position to provide more point-of-view. But, I do think this is worthy of getting a lot of attention.
Just to get back to the whole identification thing – I suspect part of the power of social networking relative to a product is connected to identifying with that brand. More connections cause more identification. It is just a hunch. Stay tuned.

Next year Cubs fans.

Posted by Matt Johnson at 01:57 AM | Permalink | Comments (0)

A recent prognostication from a reputable source put the CRM new software acquisition market at 50% on premise and 50% hosted parity as early as next year. I think it is safe to say that SaaS is here to stay.

One of the changes that this transition to rented software brings is a shortened time frame and corresponding reduced cost for getting the technology up and running. Certainly this has much to do with the rapid expansion of market share. Let’s face it, the SaaS value proposition can be attractive.

The allure of hosted software with the ease of entry into world class CRM is also shrouded in a significant myth that can lure programs like a siren on the rocks into a treacherous situation. This myth involves the assumption that, because the software is cheaper and takes less time to implement, then it is OK for other corners to be cut as well. These corners, mostly organizational in nature, can make or break a program – leading a good business case into a disastrous loss.

There are a set of Critical Success Factors for CRM programs that apply to both large on-premise deployments as well as the small hosted variety. Ignoring them due to the belief that they only apply to big-time CRM is the current SaaS fallacy that is tripping up many would be new-comers to the CRM party.

If you are entertaining the idea of taking on SF.com, Siebel OnDemand, NetSuite or Microsoft Dynamics take a serious look at the list of CSFs below. Ignoring them may turn a sweet deal into sour even faster than the promised benefits.

• Clearly Defined CRM Direction
End state with associated business benefits
A logical path toward the end state
• Strong Management Sponsorship
Alignment between CRM and management objectives
Accountability for CRM success
• Real attention to managing change
Focus on user adoption
Adequate resources to build user capability
• Program Management and Governance
Use of project management best practices and oversight
Program design utilizing contained, realistic project phases
• Measurement of Program Effectiveness
KPIs that monitor attainment of capabilities
Metrics that quantify attainment of targeted outcomes
• Optimization of the Program Post-implementation
Follow through of action based on measurements
Enhance the processes and technology to improve effectiveness

Attending to these six CRM Critical Success Factors will take extra effort within your CRM program. But they serve as the difference makers between which programs are successful and which programs become statistics for the analyst firms.

Stay clear of those rocks, baby!

Posted by Matt Johnson at 03:55 AM | Permalink | Comments (0)

Who saw this coming? Actually, I know the answer, but I still feel compelled to ask the question. Nobody could talk about the impending financial crisis until it finally became a reality otherwise the forecast of it happening would have sped up its arrival. It still feels strange that this came about at the speed it hit us.

So, now what do we do? We suspect there is a storm ahead so we pull back and spend as cautiously as we can. The collective pulling back seals the deal and we have a self-fulfilling prophesy in the making.

Out at sea when the storm rolls in, the tendency is to tie everything down, close everything up, and ride out the weather. But, the batten-the-hatches approach to your CRM program can be exactly the wrong thing to do. Back during the Great Depression, a notable office machines company took a different approach than everyone else. Rather than laying off the salesforce since nobody was going to buy a typewriter during such a bad financial situation, they actually expanded their salesforce in order to increase the chances of finding buyers.

This company did not just ride out the storm, it surfed the waves that the storm whipped up. When you tie everything down and shut every opening on the boat, you can no longer fish. CRM is about fishing on steroids. Don’t cut the budget for your CRM program. Don’t scale back the training for SFA. Don’t kill the funding for that campaign automation. These are the exact things you need right now.

It is easy to watch cable news because I spend so much time in hotel rooms – the TV is the portal outside my little home away from home. Right now I keep hearing and seeing the word fear to describe what is going on with the markets and the traders. The thinking is that fear as an emotion is going to drive what happens next.

What I know about fear comes from years spent as an alpine skiing instructor. When a skier, at the top of a bumpy slope lined with aspens, looks down the hill and experiences fear, the next thing that happens is going to be a yard sale. Goggles, mittens, skis, hats, poles, and granola bars are going to be spread all over the moguls in the wake of a skier on the way toward an appointment with a tree.

Don’t let fear drive your CRM program governance. Keep on the course toward your targeted outcomes. Pulling back now will ensure that you hit the tree. Don’t tie everything down just to get through the rough seas – you have to keep fishing. If your competition keeps fishing while you are battened down, they are going to end up with your catch.

Posted by Matt Johnson at 12:58 PM | Permalink | Comments (0)

This year has turned out to be one where I have been able to really enjoy the beautiful game. Catching the Premier League in the UK, watching Euro Cup matches, holding tickets for the MLS Revolution, and now getting two weeks of Olympic action - at one time, not that long ago, my best bet was limited to U12 girls and U10 boys matches on Saturdays.

Within the business world we can learn a lot from soccer / football / futbol – especially when it comes to watching the delicate balance of offense and defense. On the soccer pitch we have players who are designated as offense and defense, but each plays a critical role in both parts of the game – even the keeper. I think it would be useful to bring this key synchrony between both halves of the team to the same alignment needed by the sales and marketing functions.

I have been helping a new client with identifying the business requirements for a potential new SFA system. Interestingly, none of the members of the sales management team felt there was much need for any marketing involvement, input or collaboration in the requirements gathering. After all, sales does sales stuff and marketing does marketing stuff and best to keep them separate.

When I asked specifically about pipeline management I got puzzled looks. Sales and marketing have very clear and separate roles. Marketing has no reason to be connected to SFA. Sales folks manage the opportunities and marketing folks do marketing things, what ever that may be.

This does not happen when Chelsea and Man U get together. When the team in blue is on the move to score, all eleven players are on offense, starting with the goal kick. All eleven players in black are prepared to defend. The defensive backs don’t take a break as the sweeper takes the ball forward. They are ready for a one touch pass to a charging striker. Sales and marketing need to play together precisely as they do in futbol.

There has been a lot written about the need for aligning the sales and marketing functions more effectively. But, it seems we have a long way yet to go. There are also a lot of places where we could focus the efforts of alignment, but I think the opportunity pipeline is ground zero. Or, sticking with the football metaphor, it is the goal box and net – the place to score.

There is some mythology in the way of successful alignment between sales and marketing and the big three myths causing the most trouble are:
- Marketing does not participate in the management of opportunities
- Sales does not participate in the management of leads
- Marketing needs a separate prospect data base from the sales customer data base.

Leads and opportunities are simply the two ends of a single pipeline and both functions need to contribute at each end to make the whole thing work well – just like offense and defense. Marketing must be connected to the opporunities, especially to get feedback as leads progress from stage to stage. This feedback is essential to improving future leads sent to the field in order to generate better opportunities. Marketing can also play a pivotal role in supporting the sales function by providing content at critical opportunity stages to keep the deal moving.

Likewise, sales must participate correctly within the lead management portion of the pipeline. Providing prospect contact details or profile details and updating the criteria for defining a successful lead are essential. Every business that I work with where the sales function complains about lead quality performs these activities poorly or not at all.

Attempting to align these two business development functions when they are using separate and dissimilar data bases makes the whole thing a whole lot worse. Success usually requires that everybody come together with a single source of prospect and customer data, or at the least an integrated set of sources.

If we can bust these myths and bring together sales and marketing, at least along the pipeline, we are going to produce more W’s.

Comparing business activities to sporting activities is nothing new. And I hope that you non-sports fans out there are not offended by the analogy. I truly believe that using analogies and metaphors are a great way of illustrating the path to success. If soccer does not work for you stay tune next week when we examine the similarities between brain surgery and customer service.

Posted by Matt Johnson at 04:29 AM | Permalink | Comments (0)

That is the question. No, not for the King of Denmark. Not for the Jenny Craig spokesperson, either. We are asking about the size of CRM programs.

A circumstance that I have been encountering with more frequency lately is one where things are summed up roughly as, one big program or a bunch of little ones? The typical situation goes something like this. A client organization is comprised of a number of business units and functions, each of which is looking into some form of customer management tool – SFA, campaign automation, managing contacts, managing service requests. Some groups share customers with others, some groups don’t, and some groups work with all the customers.

Likewise, some of the business units share information about customer activity with other business units. Some don’t, but they should. Customers don’t always call into the correct place and sometimes they get lost and sometimes that get taken care of.

This probably sounds like the poster child for a company that can benefit from an enterprise-wide CRM platform and should become a case study for the infamous 360 degree customer view.

Not so fast. This same company has a history of failed company wide initiatives. Different executives are in different places on the need to make a big investment in a large software program. And, one or two of the business units are on the verge of pulling the trigger, including approved budgets and selected software. Meanwhile some of the other groups are months or even quarters away from making any decisions. Going down the path of a single enterprise program would delay the groups with the biggest pain from getting needs met for longer than will be tolerable.

Sound familiar? What is the answer? Too big, or not too big?

Ten years ago the answer would have been automatic. The IT department would select a CRM platform and begin implementing for the groups that ask first, and maybe even for the groups that did not ask. However, by the third or fourth implementation it would be discovered that the data model for the first group does not fit the next group. Of course, today we avoid this by building a single data model first and then force all the groups onto it whether there is a fit or not. This has caused a backlash and in some cases mutinies where business units abandon the company platform and build their own CRM. And we are back where we started.

Can’t we all just get along?

For organizations with multiple business units and multiple customer types, it should not be a given that a single CRM platform and a single source of customer information is the correct answer. If there is a need and a benefit for an integrated approach, it should be considered. But that needs to be addressed first. Just because it is convenient for IT to support a single CRM software package does not mean it makes sense for the business.

For most of the organizations I work with there are three categories of requirements in these situations. First, there are the common requirements such as the need for a single forecasting model or the need to share a single customer identification number. Second there are best practices that are useful to share, but not mandatory, such as following a similar set of sales stages or using the same codes for service issues. Finally, there are requirements that are unique to business units, such as the need for distributor information in a single geography or compliance differences driven by legislation.

To answer whether a company should have a single or multiple CRM programs will be contingent on the ratio of common versus unique needs. I am not sure there is a single threshold that once crossed drives the decision one way or the other, but it is this ratio that needs to be examined and then the decision made whether there is strong enough need to drive conformance to a single platform or whether the agony of that conformance will outweigh the benefits.

Ultimately, the decision needs to be made by the stakeholders who will benefit from the common approach, but also pay the price of the conformance (and the length of time it takes to get everybody up and running with one approach). Enterprise wide CRM is a challenge, and not enough organizations have proved it to be successful. That does not mean it is not right for your organization, but you do need to go into this with eyes open and make the decision with all the stakeholders at the table.

Posted by Matt Johnson at 05:04 PM | Permalink | Comments (1)

So, why do I keep running into client organizations that, for some reason, believe that e-business is something separate from their other customer interaction requirements represented within their CRM programs?

Working with customers on the web is just one form of CRM, albeit a relatively new one. You should use the web to attract customers and generate leads. If appropriate, you should look at selling products or services over the web. And, whereever possible, you should be using the web to manage service interactions. These are all normal CRM related activities, but performed with the internet as the channel rather than human contact.

However, many of the organizations that I meet with feel they need to have a separate strategy for managing these interactions – a strategy built and managed outside of the CRM program.

The problem with keeping it separated is that it can be sub-optimized if left un-integrated. The web is often the first point of contact from a search. It typically serves as a key point for self service. A landing page typically serves as a platform for e-mail marketing. Monitoring web activity is a fundamental mechanism for lead nurturing. E-commerce sites can serve as a primary order entry source. And, increasingly, the web is becoming the preferred partner communication medium. How could these be separate from your other CRM activities and function optimally?

CRM strategy should encompass every channel of customer contact, whether for acquisition or retention, including partner relations. The web is simply one of the channels that should be within that strategic framework. The web channel can serve as an ability to both extend reach out to the long tail, but also to be the virtual receptionist for your best customer. The million miler wants to have self service access when working late at night from a hotel and wanting to print a boarding pass. Likewise, the once a year flyer should be encouraged to your airline through easy reservation booking on your site.

If you don’t have a web strategy, you need one.

If your web strategy is separate from your CRM strategy, they need to be combined

Most importantly they need to be integrated – not just identifying the preferred channel for each customer segment, but specifying the best combination of channels for all acquisition through retention initiatives. In the old days at Sears & Roebuck the stores were for the city folk while the catalog was for the rest of us. Today, the line is blurred and we must assume that any buyer can demand access to multiple channels for even a single transaction, including your web.

Don’t let that e get separated from the C, R and M.

Posted by Matt Johnson at 10:20 PM | Permalink | Comments (0)

I recently stumbled across an article by the CEO of a performance management firm that made a declaration, which caught my attention. Making a point centered on the basic premise of their business approach, the article proposed that you can achieve improved performance through one of only two approaches:
- increase output while keeping cost steady
- drop cost while keeping output steady
The CEO also conceded that there was a third approach formed essentially as a hybrid of the two above. This executive then went one step further to hint that the hybrid approach was preferred.

Perhaps it is a character flaw, but when I read an article that makes a strong statement about a certain way of doing things being the best, I tend to reflexively examine whether this is true and then look for reasons to support or refute the claim. I just can’t help myself. In this particular instance I came to the conclusion that the assertion made by this corporate leader was incorrect on at least two points.

First, I think there is a fourth option – increase output significantly by making changes that increase costs less significantly. And, I also reasoned that the better answer to which option is best is, like most things in business, it depends.

As a consultant it has been ingrained into my head through expansive training to answer, “It depends” to a myriad of business questions. Further, that training has often included as a chief illustrator of this answer the infamous S curve.

Picture if you will the ubiquitous business chart with investment on the horizontal axis and return on the vertical axis. Under many circumstances when we examine the relationship between investment and return a curve forms that takes the shape of the letter S. At first when you increase investment the return slowly rises. Eventually as you pour more investment you reach a critical threshold where the return rises more sharply. Then after yet more investment the rate of return drops and further additions cause diminishing returns. A classic S curve chart.

Chances are there are reasons why you will be able to improve throughput with some additional investment – but it completely depends on where you are on the S curve. When you are on the bottom half then this is the option for you. If you are on the top half, going after more output with extra investment may not give a favorable payback. Taking cost out seems like a more reasonable approach.

However, this increase-the-investment solution option is best when you have the ability to go after more market share. On the other hand, if there is no more market to go after, pulling cost out may be your best bet while maintaining output and share. This is a popular approach in a declining market (although it perpetuates the declining market when everyone does the same thing all at once.)

Now, if you find yourself on the bottom of the S curve but you can’t get any working capital from lenders, then that hybrid approach mentioned above starts to look attractive. Take some cost out, and then go after a little improvement in output by reinvesting the savings. Repeat as needed.

So, the bottom line in this case is that there are a number of options for improving performance should that be something you would like to have happen with your marketing, sales or service teams. How you go about achieving that performance should be contingent upon a number of factors best considered prior to embarking on that performance improvement initiative. Good luck and stay tuned for a lively discussion on another favorite, the O curve.

Posted by Matt Johnson at 01:10 AM | Permalink | Comments (0)

Rather than use the euphemistic “economic downturn” is it possible that by actually typing “recession” into this blog entry there may be some search engine making tabulations of its repetition across the world wide web that then reaches a threshold causing a report to land on a famous economists desk who then declares “we are now officially in a recession because the last of the indicators has confirmed it from all sides!”

Talking about it can make it so. But if it is going to be, I would rather talk about it and get prepared. So, let’s talk.

I have been in quite a few conversations lately about recession proof this and recession proof that. Stocks, housing, customer segments, products, there seems to be no end to the list of topics that people think they have found that could be recession proof. Maybe it is something to consider, but most of us are going to be working with the situation that we have, so we might want to think about how to make it successfully through this bumpy ride. (For those of you who have specialized in serving customers who are mostly in the sub-prime mortgage industry, you probably want to seek out a different vertical).

So, I guess the question I should be asking given the nature of this site is what about your CRM program? What are you doing relative to CRM to ensure that you are going to ride this out well?

I have consulted to companies through a number of these cycles. The last time, brought on by airplanes flying into skyscrapers, caused many of my clients to want to find ways to cut costs. This is tempting. Figure out a way to keep your business going but in case the revenues drop, make sure your costs drop and keep the margin positive. I don’t know about this. Just this week I watched a segment on the evening news pitching this idea to consumers – offering all kinds of advice to cut spending. Hello! Fan those flames. Too many of those segments on the local news across the nation will cause the recession to go deeper. If we all cut costs we are going to dig a very deep abyss.

My recommendation is to take a tack that probably seems a bit counter intuitive. Build your CRM strategy to drive business development, not cost efficiencies. IBM hired extra sales people during the great depression rather than laying them off. We all need to sell ourselves out of this thing not hunker down and hope it blows over. A lot of hunkering is going to lead to a lot of recession. There, I typed it again

Go after the market with guarded confidence (as opposed to economic denial like our nation’s president). Improve your marketing reach if you don’t want to expand your salesforce. Invest in better sales effectiveness if you can’t invest in more actual headcount. Develop a new channel to expand your reach, maybe it is time to involve partners. Perhaps you need to analyze your customers to assure you are targeting the segments correctly. Going after the wrong segment with the wrong resources will become more exposed during an economic downturn. The investment in analytics will help to position your channels toward the correct segments and drive better results.

Either way, CRM can be a key to success, even if you do want to find a few places to make some efficiencies. Just don’t spend too little.

Posted by Matt Johnson at 05:36 AM | Permalink | Comments (0)

At about the same time that Tata announced that one subsidiary would be acquiring Jaguar and Land Rover from Ford another Tata subsidiary was announcing the results of a study measuring CRM program effectiveness. To be frank, I hope they do better with the luxury cars because the study results feel a little embarrassing to me. What is most disappointing is that the evaluation focused on metrics such as finishing projects and on time and on budget as a measure of success. Even back in the 80’s we were looking for more than that from project evaluations.

So, what should we be measuring? I think there are four levels of metrics, which include project level measurements such as completing on time, but go beyond into three more advanced categories. By the way, it is not bad to measure projects at the project level – it is useful to monitor how well projects are being managed. It is just not sufficient.

A second level of measurement for technology-based CRM projects is to measure whether the technology is functioning correctly. When it is not working as expected, it needs to be adjusted. If it is working as expected, but there are still issues with performance, then you need to look at the next level of measurement.

I think a focus on capabilities, the third level of measurement, is probably the most critical for CRM projects. CRM is all about building more effective customer-facing capabilities, such as campaign management, lead management, account management, and service delivery. If your CRM program is not actually achieving more effective customer facing results, such as campaign lift, close rate, penetration, and service quality, then it is truly not making the mark. It does not matter too much if the campaign automation implementation was completed on time if ultimately it does not improve lift.

Then of course there is always the fourth level of success, actual business outcomes that justify the investment. We do want to improve revenue, efficiency or customer satisfaction and it is important to monitor this level as well. However, it is not always easy to make a solid connection between CRM program investments and business outcomes, primarily because of all the variables that are hard to rule out. Not impossible, but it is hard. This is why I place my emphasis on the third level.

If you do improve the performance of your customer facing functions, you are more than likely going to see bottom line results. If you don’t see the improvement, any bottom line change is pretty much going to be due to some other reason, not your CRM program. Therefore I place the biggest emphasis here.

By the way, just because your CRM project takes longer than expected, it may not be that you have a problem with anything other than your time estimation skills. It is far more important to build capabilities than be finished on time. If you have to take one over the other, go for the capabilities (although I have had clients that believed being on time was more important than actually building the needed CRM requirements.). Sometimes a focus on good project management takes a priority over good business results. Better not to get caught in this trap.

Posted by Matt Johnson at 09:41 PM | Permalink | Comments (0)

Back in college I had a novel assigned in a literature class that turned out to be a discourse on the strong forces of entropy that constantly surround us. I don’t recall the name of the book or author any longer, but I do recall that the conclusion was depressing – everything is bound to fall apart.

Now, just as a reminder, entropy is a physics concept best explained by the notion that once you take simple things and make them more complex (such as assembling raw materials in the construction of a house) these complex entities are destined to eventually be reduced to their original elements (rent a copy of The Money Pit for an illustration).

The only way you can beat entropy is to keep putting energy into the process – repaint, reshingle, rewire. But, once you ease up on the effort of adding energy, entropy takes over and everything crumbles, dust to dust.

Pretty much everything in the universe is subject to the laws of entropy. It appears, however, that contemporary organizations are, somehow, exempt – maybe it is Frederick Winslow Taylor’s fault. At some point, probably after the industrial revolution, organizations began to defy the laws of physics.

Having thought about this for a bit, it seems to me that once a company reaches a certain size and complexity, the dynamics of the organizational system take over. You don’t need to keep adding energy to maintain the complexity, it gets more complex through its own inertia. This is a lot like Arthur C. Clarke’s HAL, the system develops a will of its own.

A case in point, Phillips, the Dutch electronics conglomerate, recently came to the realization that it was suffering from this affliction. It had grown too big and complex and it was getting too hard to manage effectively. Ironically, it had to put significant energy into the process of simplifying the business. Entropy is supposed to take care of this for us, but Phillips grew into a state where entropy no longer applied. (It conjures up the Talking Heads song with the line, “Somewhere in South Carolina / Where gravity don’t mean a thing”). Phillips even went so far as to declare a simplification day when all 125,000 employees spent the day applying mental energy into the process of brainstorming means for simplifying their organizational existence.

Don’t worry - it gets worse - organizational sub-structures seem to have also evolved into this physics-defying ability as well. For example, we have all witnessed those committees that formed seemingly eons in the past, but still meet weekly. They may not actually have a purpose, but getting them to disband actually takes more effort than simply allowing them to continue, so they do.

CRM programs too can achieve anti-entropy status. They get so big and convoluted that they can’t be stopped. Crappy utilization and suspect data even fails to get in the way. Some CRM systems are like HAL on steroids mixed with HGH (although they have gone on record at congressional hearings vehemently denying their use).

I have multiple clients, who like Phillips, are putting significant energy into CRM simplification in an effort to make things more manageable. And many more have taken smaller steps, such as taking advantage of software upgrades as an opportunity to drive complexity out of their CRM programs. This need for simplification is a huge driver in the trend toward SaaS – hosted solutions are easier to unplug. But, who knows, maybe even these programs will evolve and start to take over as well.

So, a couple of conclusions:
First, if you feel that things are too complex, you are probably right. It may be time to cause some self-inflicted entropy. Look for ways to devolve. On the other hand, if you are just getting started, the best advice is to not do anything that will even remotely enable the creation of the next HAL (place a premium on simplicity).

Posted by Matt Johnson at 07:45 AM | Permalink | Comments (0)

I guess the lesson from Super Sunday is that perfection is an illusive target. There are obstructions that are certain to get in the way, not the least of which is yourself. When you fall short of such an ambitious endeavor it is pretty hard to feel satisfied with coming close.

Many of my clients began CRM journeys with expectations just as outrageous. Coming up short was a bitter pill to swallow for most of them. In sports you get to take off six months and start over the next season, probably with some changes to the team. Business folks go back to work on Monday morning.

Setting goals and working toward them each month and each quarter is our business. When we don’t achieve the targets we adjust, work harder, sometimes set different goals, sometimes identify different actions. Setting reasonable expectations is part of the key to success. To not lose is probably not a great expectation.

If you don’t achieve what you are looking for within your CRM program, keep going. Look back at times, if it provides some insight. But, most of all, keep moving toward the goal. The journey is worth it.

Posted by Matt Johnson at 10:34 PM | Permalink | Comments (0)

So you found yourself at a cocktail party over the holidays and you ran into somebody who spoke about how great their new analytics system is working. You got jealous. Maybe it was campaign sophistication, or maybe even bragging about how great their call center is.

I have a lot of clients who wish they had more customer facing capabilities than they do. Every once in a while they get the budget to do something about it. The first thing that happens is they send somebody off to go research the software – what is the latest and greatest set of bells and whistles that will help keep pace with those proverbial Joneses next door in the corporate business complex.

So, the way the process goes is that there is a belief that implementing some great software and developing a few key processes will lead to some improved customer outcomes. In theory this seems reasonable. These good folks are not looking for a silver bullet. They want to improve some business capabilities, expect to do some hard work with the implementation of the software, and recognize that they will need to change or update some business processes.

Where the process goes wrong is with regard to expectations about how much or how fast they can change When a business gets a bit behind with its capabilities, such as sales effectiveness or marketing, and then gets the budget to improve things, it has a tendency to leapfrog forward as many steps as possible. This often leads to poor results. We tend to see this in the analytics realm often. A company wants to go from no capability to cutting edge overnight. This is where that walk before running axiom is applicable.

So, it is fair to ask why the leapfrogging thing is such a bad idea. After all, who knows when the budget will be available again? I tend to see two things that can go awry. The obvious problem is the attempt to accomplish more change than the organization can handle at once. I have seen quite a few organizations take too large of bites and then choke. This is primarily a function of having too many moving parts and not enough ability to pay attention to the changes.

However, there is also a less obvious reason why moving too fast can be difficult. Take, for example, someone who buys an old Mustang and wants to convert it into a souped-up sportster. In order to accomplish this you need to convert a number of things. First is the engine and horsepower. Second would be the transmission and then would come the suspension and tires. Finally you might also give it a sexy paint job with maybe some flames or racing stripes. Each of these modifications represents a dimension of the conversion from regular car to sports car.

Similarly, companies wanting to improve their business performance can make improvements along a number of CRM dimensions. These might include sales effectiveness, marketing sophistication, call center capability, and business intelligence. But, when you convert a car, you don’t just buy some expensive wheels and big tires and expect it to go faster. Without a similar improvement in horsepower not much is going to change. Adding racing strips will not make you handle the curves better. The overall performance of the car improves at the rate of the least improved item. Horsepower may improve speed, but without improved handling from the new suspension and the tires, the car remains restricted.

Again, improving salesforce effectiveness greatly, without a commensurate improvement in marketing will typcially lead to a limited overall improvement. However, many times when I work with an organization that wants to do some leapfrogging, they want to spend a whole bunch of money on really great wheels, but not raise the horsepower to keep pace. Once again, this is happening often with regard to analytics. It is easy to fall into the trap of wanting to make a lot of improvement in BI since it is the hot item in the CRM market. But, if you don’t improve a number of other elements of your CRM system to be at the same level, the BI investment will be limited.

I like to refer to this concept as CRM Maturity. Developing maturity in one dimension without keeping the other dimensions at a similar level limits overall CRM effectiveness. Likewise, having one dimension lag behind the others that are at par with each other can hold back the entire organization. CRM can be viewed as having 5 dimensions that each can mature at a different pace. These include 1) CRM business strategy, 2) customer interaction capabilities (like campaign management or account management), 3) enabling technology, 4) measurement systems (including analytics), and 5) business transformation competency (such as the ability to manage large programs and organizational change).

To become a world class organization you need to move along this maturity curve for each of the 5 dimensions, keeping pace evenly across each. Moving each at one step at a time is probably the best path to that world class status.

Posted by Matt Johnson at 07:06 AM | Permalink | Comments (0)

As we counted down to 2008 at a neighbor’s house in candlelight and to home made acoustical melodies (the power went out due to a wayward reveler encountering a utility pole just before midnight), we weren’t totally certain whether we had the exact moment captured. But, we were probably within a minute of crossing into the New Year along with everyone else in our time zone. This entry into 2008, if imprecise, marked a big milestone for me, which I have been spending some time pondering as I change the calendar from December to January.

In 1998 I began my focus on CRM, although at the time it was more through the momentum of customer demand more than a conscious and intentional decision. It became more intentional two years later when I joined my current company, Innoveer Solutions, which specializes exclusively in CRM and is also celebrating its 10th anniversary.

In that 10 year span I think I have learned more than in any other 10 year span in my three decades as a professional. The industry has also gone through an amazing learning process as well. What we have learned includes the fact that it is possible that CRM can drive your business to be more successful. Plus, I have seen research that declares, and I firmly believe, that CRM is one of the three most effective means for improving business success. Either way, I have come to the conclusion that this is not just a passing management fad like so many I have encountered in the past 30 years as a student of the organization.

Most important, I have learned some seriously important things about CRM that I think it would be useful to share. Yes, I am audaciously calling these the 10 CRM Commandments, but, no, I did not just watch a Cecil B. DeMille epic. And while I don’t expect these to be picked up by Letterman for a Top 10 spot, I think it would be great for them to be passed around, so please feel free. Here goes.

10) CRM is not technology
This confusion has gotten more folks into trouble than any other issue related to the whole CRM movement. Often at the heart of a CRM program is both the need to solve complex and dicey organizational problems and achieve big time results. Technology virtually never has the ability to do this independently. It requires strategic planning, process change, people change, sometimes culture change, and a lot of hard work in making the technology support all the changes.

Too many have attempted to solve the problems and get the big results with attention paid just to the technology implementations. All of those infamous programs are what contributed to the 80% CRM failure rate that we so proudly acknowledge about our past in this industry.

9) You have to define success
Some CRM pundits like to declare that CRM is all about customer centrism. I suggest that there are three categories of possible success – growth, efficiency, and customer value. If you want to pursue customer value as your primary outcome, then you need for your CRM program to be all about customer centrism. However, if you are looking for growth or efficiency, you may need to consider other philosophies. Sometimes those philosophies conflict with customer centrism, but they can still be very effective.

No matter which you choose, you do have to choose. You absolutely must have a target for what your CRM program is attempting to achieve. Otherwise your program is going to meander all over the place and waste a lot of time and money before somebody pulls the plug on you.

8) How you build it is just as critical as what you build
This commandment is all about change management, which deserves much more than the few lines entered here. Change management, my first area of expertise, is an entire management discipline unto itself. CRM programs almost always introduce massive amounts of organizational change, and to the degree that is also almost always under estimated. The way that the change is handled is just as much of a factor in success as the change itself.

Poor communication, insufficient involvement, lack of sponsorship, and under-funded training lead to disasters (that 80% statistic comes back into play here). I have heard some experts state that success in this space is 10% what and 90% how. I don’t know what the correct ratio is, but I do know that the how is largely misjudged within too many CRM programs.

By the way, don’t believe what they tell you. Size matters. This is so important that it almost warrants an 11th Commandment. If you try to build your CRM capability in a way that takes on too much, too fast, you also run a lot of risk. The old aphorism that proposes that the best way to eat an elephant is one bite at a time is more valid within CRM than perhaps anywhere. Small steps tend to reduce the potential for problems, help the organization assimilate changes, and improve chances for success. Keeping projects small and contained works, and starting a CRM program with short projects that deliver quick wins works even better.

7) CRM must be driven by the business, not IT
I don’t win popularity contests with my technology colleagues because of this commandment, but it is the truth. CRM is a business strategy (see #10) and business strategies are better managed by the core business functions rather than staff functions. Certainly the technology function must have a place at the table, and it must also manage key aspects of CRM programs. However, the business has to own and drive the program, largely because of the significance of the decision making involved and the degree of organizational change required for success.

6) Management buy-in is step one
The research shows that management support of a solid CRM strategy is the number one predictor of CRM program success. I suppose this is confusing since I have positioned it as number 6 on the list. I don’t have any strong rationale for this, just think it fits squarely in the middle of this list – permit me some literary license on this one. But don’t misinterpret my action here because this is big stuff. You have to have the management team on board or you are sitting on a doomed exercise. And, I am not talking about tacit agreement here, we mean visible and active sponsorship.

I cannot tell you how many CRM programs I have encountered that have run aground on this issue. What I have learned is that people do what the boss wants done. And if a critical mass of the bosses do not truly want to do CRM, it is not going to happen.

5) The user has to be served, not just management
So, the corollary to Commandment #6 is that it is not sufficient to have your management team on board, you also have to get your users on board. Where this typically goes wrong is in design. Yes, Commandment #8 does state that we have to do things to help users get past the normal resistance to change. However, many CRM programs are designed in a way that the best change management capability on the planet could not save it from the CRM dumpster.

When you build your CRM program to only satisfy management objectives, you virtually ensure that users will be against the program. What typically happens is that CRM becomes a mechanism for policing and monitoring the business and does not focus on supporting individual performance. Information is gathered and analyzed on the backs of the user, but they get nothing in return. After about 8 months of struggle nobody gets anything in return because the poor adoption leads to lack of confidence in the numbers. Reports have to be produced redundantly and all of sudden the CRM system is obsolete.

4) Adoption comes through relevance and meaning
One more corollary commandment is focused on what it takes to get adoption. If you buy into #5, this is the one that looks at how to pull it off. CRM only works for the user if what they get out of the system is information that is relevant to their job, and has meaning for what they need to be successful. If you have trouble locating your customer information or if you have trouble determining what action you should take based on what you do find, then CRM is not serving you well. When this happens repeatedly, you will find other ways to get what you need. This is relevance and meaning. Without it, the CRM fruit will whither on the vine.

3) Customization is evil
Going back to the technology part of the CRM equation, one of the loudest sirens on the rocks is the call to modify the software to better fit what you believe are your unique requirements. Do you truly believe your business is unique? There are times when my clients get offended when I ask this question. Over the last 30 years I have worked with an amazing array of varying companies and a huge number of different industries.

While I acknowledge there are critical differences with business models across these different industries, you must understand that the number of similarities is astounding. Most software companies have been experimenting and writing code for years to solve the exact problems you are trying to overcome. They have invested millions on their packages and collectively billions in the CRM industry. Most have encountered every best practice on their way to their most recent release. Do you really believe you need to modify what they have done? There is a higher probability that modifying your process to fit what they have built will lead to success faster than customizing the code to fit the way you do things today.

But, why is customization evil? You are changing the software in a way that will make you pay. You pay to customize it (more than you estimate), then you pay to keep it working, then you pay more to upgrade it, then you are held for ransom when the software changes so much that your version becomes obsolete and you have to start over again or live with what you have unsupported. I have seen companies paralyzed with this situation for years before they cut their losses. My recommendation is that if you believe you need to customize build a very solid business case before proceeding. Then, try to find someone to talk you out of it.

2) If data is not actionable, do not capture it
For most companies, CRM must satisfy a complex set of business requirements that span multiple business functions. These circumstances typically lead to a myriad of stakeholders all asking for specific customer data elements to be captured. The tendency is to attempt to satisfy everyone. This is normal, but it leads to an undesirable end state – more data is collected in the CRM system than is utilized. This leads to a spiraling set of problems: users can’t find anything, performance is slow, navigation is cumbersome and the whole thing becomes unpleasant.

The Second Commandment is all about not capturing information because somebody’s cousin thinks it might be useful to have at some point. If you don’t plan to act on it shortly after it is entered, leave it out. When I examine those customers who are unhappy with their CRM results, I see a majority of them who have tried to satisfy too many requests for nice to have information. If you fit in that group, go on a data diet.

1) Expect the rules to change
At some point in the fall of 2001 the dotcom bust started in earnest. Seven years later, business on the internet is being conducted on a magnitude that few at the turn of the millennium could have ever imagined. More importantly the rules for how business was conducted in 2000 are very different from how they appear today. I believe that the other 9 Commandments are pretty steadfast. But the First Commandment is all about not expecting things to stay the same for very long.

Just when you think you have the management of customer interactions figured out, a wrinkle will appear. For example, too many of my clients don’t have a web strategy – they have not accepted that this is a channel that they must use to reach customers. Their focus is on field sales, the call center and maybe marketing. These are the certain customer interaction points that have to be managed.

I believe to be successful with CRM you have to pay close attention to the topics raised in the other 9 items on this list. Then you need to keep a lookout for what is changing. There is a pretty good chance that something that you think is certain, no longer is.

Posted by Matt Johnson at 09:42 PM | Permalink | Comments (1)

I remember the first time I ever heard of the internet. It was back in the 90’s and I was serving as the President of the New Hampshire Chapter of the Society for Training and Development. One of the board members told me that we needed to start looking at how training would become impacted by the internet. I think I said something really profound like, “what are you talking about?” At the time, ironically, I was working for Digital Equipment Corporation, who was responsible for building a good portion of the infrastructure for the world wide web. However, I was not quite ready to embrace the possibilities of what that www acronym would come to be - my how things have changed.

While I don’t really like to think of myself as a technophobe, I don’t think that the people who know me would describe me as a technophile either. And while I had trouble understanding the ramifications of the information super highway 13 years ago, I do understand a few things about it now. It has changed the way people buy. But, I am not talking about ordering used books on Amazon, I am talking about everything.

Yes, it took me a long time to get it. However, it is taking others longer, and that is what demands some attention. No matter what the it is that you sell, there is information about it on the web, there are people researching how to buy it on the web, and your competitors are attempting to attract those prospects to themselves before they find you. And what is even more profound about all of this is that even if you are not attempting one ounce of effort to do business on the web, your customers are talking about you. Your products and services are rated, your prices are quoted, and happy and unhappy customers are sharing their feelings about you.

Welcome to Web 2.0.

What I find astounding is that I have customers who still believe they don’t need to pay attention to this. They still think that their prospective customers will find them at a convention or will be waiting idly until a sales person shows up at their doorstep. I have clients who have customers who know more about their products than their sales and services people do because of the research they have done on the web and the people that they have interacted with who are also customers. Something has to be done about this ostrich behavior.

For those of you out there who don’t think this whole internet thing applies to you I say – get ready. You need to be prepared, because even if there is only a little bit of business done via the internet regarding your products or services, it is going to increase faster and further than you ever expect.

If you do recognize this as a requirement for conducting business today, the better question is what can be done to be more ready for internet driven business development. It is easy to recommend that you develop an internet strategy. Below are a few other readiness factors to consider.

Optimize your findability – We all know about search optimization, but are you doing it? There are a number of new rules for improving your visibility on searches, which I won’t get into here. It is important to follow those as it will drive business to you. But don’t be confused about this – just because somebody comes to your site it does not mean they are ready to buy. It is critical to do everything you can to drive activity to your site, but you also have to create reasons for people to stick around.

Nurture your prospects – Don’t expect that you can capture a prospect visit to your site and convert it to a lead that is ready to hand off to sales. You will more than likely drive that prospect away. It is better to offer them more information electronically, such as an opportunity to download a whitepaper. Once they have been window shopping adequately, you can hand them to a sales person for more active pursuit.

Go both ways – One of the new rules of Web 2.0 is that you don’t just push information one way. Interaction is key and can happen in many ways other than e-mail, such as chat, and blogs. This may require some experimentation before you make it work effectively, but it is key.

Age matters – My septuagenarian in-laws run a business using e-bay, which is proof that the internet is not just the realm of Generation Y. However, I do see that my under-30 business colleagues have a different way of thinking about the web – it is more innate to their way of acting. If you don’t have professionals under 30 who are helping to guide your internet strategy, you are leaving out a very critical point of view.

Immerse yourself – If you are not regularly working on the web to learn about other businesses, you are not getting a full appreciation for how prospects are learning about you. It is OK to assign the under thirties to the tasks above, but you too need to really understand what this is all about. Read more blogs and do more searches and get active with it. Research your customers; watch what your competitors are doing; do the social networking thing. Get that head out of the sand.

Posted by Matt Johnson at 06:09 PM | Permalink | Comments (0)

That previous entry with the picture from high above the City by the Bay ended with a strong message. If you are going to keep your CRM program from imploding under the weight of all your customer data, you must get serious about Relevance and Meaning.

I think this is a really big deal. In fact, these two every day words loaded with big significance should be two of the foundational elements of virtually every single CRM program. So, why all the ruckus? Let me attempt to explain.

Let’s start with a brief review of the problem already raised in a prior entry – there is too much data for the average CRM user to assimilate. And, what is worse, the CRM industry is building super weapons of data proliferation, setting the stage for an impending information overload of epic proportions. And the key to survival, I postulate, is these two simple words, Relevance and Meaning.

What’s so special about Relevance? It is all about filtering the noise. Most customer-facing employees only deal with a subset of your company’s customers. The last thing you want to do is bombard them with information about all your customers. Sophisticated CRM systems can easily accomplish that feat. Relevance is the means of holding back information that does not pertain.

So, how does one go about achieving Relevance? Think “my CRM”. This is where you utilize the technology to only display information that pertains to the customer(s) at hand. Functionality such as role based views and task based views are designed for just this purpose. Software embedded scripting works well as does workflow used correctly.

Meaning is all about converting data into knowledge that can be acted on. This too can be successfully achieved with the more recent developments within the CRM software, specifically analytics. This is where the technology transforms multiple data points into more substantive information – either as trends, probabilities, or finding relationships that would otherwise be lost due to the data volume. The analytic tools provide reports or indicators that help CRM users take the most effective action with their clients.

One observation that you might make is that I am proposing that technology is a core component of foundational elements of every CRM program. Those of you who know me understand that I am often the one who cautions about putting too much importance on the technology variable in the CRM equation. This is an important example of where the technology truly is at the heart of the success.

Posted by Matt Johnson at 07:54 AM | Permalink | Comments (0)

One of my responsibilities each year at Thanksgiving is to make an apple pie using an old recipe handed down from a branch of the family from Iowa. They probably know something about apple pies out there. This pie is always a hit after all that turkey and potatoes.

Now, this particular recipe starts with a pie crust that is a bit unusual in that it is pressed into the pie plate rather than rolled and laid out. The tricky thing about the crust is that you have to keep a bit of the dough set aside to create a crumble top as the final step prior to going into the oven. It is important to keep this step in mind, or the pie is just not the same.

The great thing about following a recipe is that you have all the steps written down and you can read through the instructions in order to know what to anticipate. Without the directions, it would be an easy error to use up all the dough building the bottom crust and not have any for the crumble top.

No matter what you read, CRM does not come with a ready made recipe. However, there are some things you can do to increase your chances of baking a nice CRM pie. For those of you reading some of the previous entries on this site, it is no secret that I strongly value the benefits of planning. A good CRM strategy is the closest thing you can get to a recipe.

What I see as the greatest value of planning is that it increases the chances that you will get that crumble top on the pie at the right time. But there are other parallels with pie making as well. Many of the ingredients for pies are similar from recipe to recipe, but the fruit changes to suit taste and the season. Likewise, your business may focus on the sales force during one stage of your program, and then put emphasis on the call center at another stage. Cooking times and temperatures may differ between a berry pie and an apple pie just like the speed of implementation between a vanilla marketing deployment may differ from a more complex field service project involving competency-based dispatch.

If you are looking at building a new CRM program, don’t expect somebody to hand you a recipe. But there is a lot of knowledge out there to help assure your program comes out of the oven smelling, looking and tasting savory. Use the available research to supplement that planning process – this will help you identify the optional ingredients, cooking times, and preparation techniques.

Then again, you always have the option of just winging it. Stay clear of the rocks.

Posted by Matt Johnson at 12:36 PM | Permalink | Comments (0)

When I first started getting heavily involved within CRM as a consultant, back in the last millennium, I did a lot of surfing around the web to see what others had to say about it. Many posted definitions that were offered up for others to consider, even though this was before the era of the blog. The most prolific authors pushing commentary on the topic of CRM tended to include the concept of “customer centrism” within their definitions. I will disclose to you all here and now that at first I bought in to this idea.

When I think about the concept of centrism the image of concentric rings comes to mind - a bevy of PowerPoint slide variations dance in front of minds eye with the customer in the center and other business functions surrounding the customer in expanding interaction orbits. Essentially these images are portrayed as targets with the customer as the bull’s-eye.

But I don’t buy it any more - CRM is not just about becoming customer centric, unless of course that is the strategy that your business chooses. You don’t have to become a customer-centrist in order to build an effective CRM strategy and achieve beneficial CRM outcomes. Interestingly though, I am starting to see the centrism thing pop up again in the blogosphere.

The goal of CRM should be to maximize or optimize the results of your complete span of customer interactions. These results, which I prefer to call outcomes, really fall into three categories of business benefits. This is something I have outlined in previous postings on this site, but in summary, these outcomes can either result in some form of revenue growth, cost savings, or customer perceived value.

Becoming customer centric will most likely assist you with finding means for providing more customer value. But it may not help you reduce costs or improve revenue. Why would you want to choose a CRM strategy that limited you to only one of the three possible types of outcomes unless you already had those nailed?

My advice is to determine what centristic balance is required to achieve the needed outcomes for the business. Are you too product focused or are you too marketing focused? Maybe putting in a bit more focus on the voice of the customer would a good thing. Is it a good thing to swing the pendulum completely to the other side? Maybe, but it is not the answer for everybody. It is also possible to be too customer focused. Yes, I know this is likely considered CRM heresy by many of you out there.

Maximize your outcomes as your goal for CRM and place your strategy for managing customer interactions in the bull’s-eye.

Posted by Matt Johnson at 08:53 AM | Permalink | Comments (0)

Back around the turn of the millennium there was quite a bit of press lauding the merits of having a CRM strategy. It happens that there was a lot of evidence piling up in support of the idea that a CRM strategy, or a customer-facing strategy of some sort, was one of the best factors for improving your chances of having a CRM program end up making everybody successful rather than making everybody look for a new job. Yours may have been one of the companies that heeded this advice, actually took action, and went out audaciously building a CRM strategy.

Well, my question to all of you is, when was the last time you took a look at it? While it may be OK for things like disaster recovery planning, once-and-done is not a great approach for this kind of planning. A CRM Strategy does require a bit of looking after. Plus, those original reasons for building your Strategy in the first place are still completely valid.

Certainly the chances of stuff changing since the time of putting that strategy together is high. You might even be going after the wrong target now. If for no other reason, it would good just to see if you are shooting for the right moon. On the other hand, maybe you got there, but that is no reason for ignoring your strategy. This just means you now need to set the bar higher – shoot for a higher moon.

When I work with my clients setting strategic targets I often use the metaphor of going from Point A to Point B. The CRM Strategic planning effort is all about choosing a destination and then causing the motion to reach that destination. When you revisit your strategy you need to determine where you are. Did you get to A.5? If so, that means you might be stalled. Did you get to A.95? That means you made it and need to declare victory. Or, maybe you determine that Point B is no longer valid – you need a new letter. However, if you do make it to Point B, once you clean up after your party, look again. Point C is the new B. You need to mobilize again.

So, what do you do? First, dust off the strategy document, and maybe even be so bold as to review it with the others who put it together with you. Next, take account – how far did you get? Finally, take action, for which there are a few choices.

Revise - You may find that your original plan has not taken you completely to your destination. That’s OK, things change. Modify the plan and get things back on track Keep pushing.

Revitalize – Sometimes the original plan was just fine. However, you all got so busy fighting fires that you got lost a bit. In this case I recommend rekindling the fire – get the sizzle back in your CRM program. There is nothing like a re-launch with some balloons and confetti (or at least donuts) to get things mobilized again.

Repeat – Don’t stop now – you have momentum on your side. Success breeds success and there is no better way to create a CRM strategy than on the heels of one that just succeeded. Go through the strategic planning process again, but this time with a few things a bit different. First, you are experts now, so you can do it relatively faster. Also, you probably learned a few things the first time around, so take those into account (like invite marketing to the table from the beginning rather than asking them as an afterthought part of the way through the process).

Posted by Matt Johnson at 08:46 AM | Permalink | Comments (0)

Please pardon the analogy if it seems a bit of a stretch, but I think building CRM strategy is a lot like picking berries. Go with me a moment with this. There are actually a couple of elements that I think are particularly relevant.

What are you going to do with your berries? Are they going into a fruit salad, or are they for an ice cream garnish. Perhaps they are going into a pie, or maybe you just pop them in your mouth as you pick them. The process of berry picking needs to match the final result. If you want to make a pie, you can’t pop very many in your mouth, otherwise you will never reach your goal. On the other hand, berries for a pie don’t need to be a perfect specimen like those that need to beautify the top of a sundae, so what gets picked and when very much matters matters.

This is how I view the development of initial CRM strategy. What you do with your software and customer-facing processes need to match the outcome you want from your effort. Are you trying to grow market share rapidly or are you trying to drive efficiencies throughout maturing operations? Everything needs to be tied to the outcomes, just like picking berries.

Another element of the analogy is a bit more salient to the effectiveness of the berry gathering process. Raspberry bushes, the object of my early summer attention, have long branches, big leaves, and when healthy, tend to be full and bushy. These circumstances make for excellent conditions for berries to hide from would be harvesters. Therefore, to be a successful collector of the little red fruit, one must look at the targeted bush from many directions. One must look from above, one must look from below. Then one must look from the left and again from the right. Not finished, you then have to look from the back and circle again to the front - each change of vantage point yielding another prize.

This is exactly the way it works with CRM. There are obvious benefits and sources of reward within a CRM program. Better forecasting, more efficient issue resolution or improved lead generation are typical examples. Those berries get picked first. But there are more benefits to be gained and it is important to look from directions that you might not have initially expected or assumed.

You might believe that the important reason for your CRM investment is to improve sales effectiveness. However, you might find that you will double your ROI if you include your field service organization because of the benefit of collecting key customer information available at that touchpoint. It is really critical for success to look beyond your initial scope – don’t limit yourself to only a portion of the berries.

And to answer that other lingering question – I am going for a raspberry pie.

Posted by Matt Johnson at 10:35 AM | Permalink | Comments (0)

There have been a number of studies recently passing through my inbox that laud the benefits of using channel partners to increase reach with best margins. I would say the evidence is pretty sound that utilizing channels is an effective way to maximize growth while keeping cost of sale in check. However, simply deciding to push more revenue through your partners does not a good strategy make.

How do you plan to manage channel conflict? How do you plan to keep your partners loyal? How will you know if you are using your channels for the right market or product? For many of my clients leveraging channels has been a key step toward more effective attainment of business goals, but the most successful of them has built a defensible plan are using their CRM technology to maximize results.

Planning is a good idea generally speaking, but the involvement of channel partners in representing your business to prospective customers probably requires some extra forethought. Recently a client of mine decided to exploit a channel that had, up until very recently, been reviled as the arch enemy. The 180 shift in policy was taken in order to take advantage of a window of opportunity to develop a new market. My client pounced on the chance, but did not think through all the variables, including two key issues in particular. One was not thinking through a means for efficient order capture. As a result the call center became swamped causing order errors, billing delays, and generally driving up the cost of order. The market got penetrated but at a lower than planned margin.

As second issue was the about face with the long-term competitor. Sales people were expected to collaborate with the enemy in a change that literally happened over night. The problem was in not communicating the change properly. As a result, the expected collaboration took much longer to develop than expected further delaying the originally proposed margin benefit of the new program.

Part of the planning process should include how to capitalize on CRM to achieve the best outcomes. Involving your channel partners in your CRM program will help to reduce the risk of channel conflict, help assist the promotion of partner loyalty, and provide the best chance of performing the analysis required to determine if your channel approach is achieving the best results.

It all sounds good in theory, right? It does have one significant challenge. For the most part your partners have to be willing to utilize your CRM system. If you think user adoption was hard with your SFA deployment, wait until you roll out your new PRM system. Ultimately you have much more leverage over your own employees than you do with your partners. But if you build it, it is possible they will come, with the right incentives. For example, send them leads on your partner portal, but require that they register their deals in order to get their leads. Let them pull down sales reports from that same portal, but remind them that those reports require entering sufficient opportunity information. I have clients who are doing both successfully.

Partners will work for you, but it does require executing on a good plan.

Posted by Matt Johnson at 09:59 AM | Permalink | Comments (0)

I recently had the pleasure of visiting with a client in Schenectady, NY. This very traditional American city was both the birthplace of my father and where my grandfather began his lifetime of employment at General Electric. It turns out that holding down a steady job as a mechanical engineer all through the great depression molded my grandfather into a very loyal employee.

Driving past the Schenectady plant and then seeing dozens of historical pictures displayed at numerous downtown merchants got me to thinking. It appears that the GE campus where he began has not changed much in the decades since. At least the old sepia tone pictures look an awful lot like the place appears today. However, I have to believe that there are a number of things that are different at least regarding how customer interactions are managed. They did not have self-service web portals, predictive analytics, or automated lead routing back then. And, I know for a fact that GE does today.

The drive back from Schenectady to Boston is fairly long, and that gave me ample time to think some more. What I ended up with was the conclusion that there are actually a whole bunch of things that are different today with regard to managing customer interactions than before, but you don’t need to go back a century to find the differences, things have changed intensely in just the last few years.

And to take this one step further, things aren’t just different – the rules have changed! Companies have to manage the process of attracting and retaining customers far differently for today’s college grads entering the job market as compared to the way they needed to be managed as those same grads were just getting out of high school. I hope the professors at the B schools have been keeping up because we are not driving our father’s Oldsmobiles any more.

Is anybody keeping track of the new rules for marketing and selling? Just four years ago not that many people were doing a Google search to buy CRM, but they are doing it today with wanton abandon. Somewhere in that example of buying behavior is a new rule. Bounce back rate wasn’t a household term back then either, but it is becoming normal talk at the dinner table these days. That means that marketing rules have changed in some way. Shortly resumes are going to be a mainstay on YouTube, and I’m not talking in .pdf format. Finding new sales reps for your team is going to require a movie critic rather than a recruiter.

The rules have changed, and some of them are changing at a rate that is hard to adapt to. Stay tuned – I am going off in search of the new rules and I’ll be sending postcards from the edge.

Posted by Matt Johnson at 01:16 AM | Permalink | Comments (0)

Maybe I’m just irritable because after Sunday there will be no more football for 6 months, but I was really disappointed by some research regarding CRM program activity and investment for 2006. According to a January 18 posting on the CRM Buyer site, much of the CRM activity for Sales Effectiveness (according to a survey of chief sales officers) was focused on sales management. Hasn’t anybody been paying attention? By definition, Sales Effectiveness initiatives are supposed to improve sales effectiveness! That means the effectiveness of the people who sell not the people who manage the people who sell. What’s up with this?

Yes, I admit that I am anxious about the Super Bowl and what Rex Grossman is going to do. But, gosh darn it, we have got to start focusing on sales people performance and stop