Customer Strategy

January 13, 2012

To Be or Not To Be (centralized)

We just finished a presidential primary race in our neck of the woods. It is interesting to watch, but the television advertising gets quite fatiguing. Another interesting element of the process is that it will eventually end with one winner – first for the party, then for the entire country. It is an evaluation process that has some pretty wild criteria along the way to the final selection.

On a regular basis I will go through this with a client. Not to select their president but to select their CRM platform. It doesn’t always happen for the entire company, like a presidential election works for the entire country. Most of the time it is more like selecting the governor of a state. We pick the best technology for a division, a country, or a function. But, every once in a while we go for the whole enchilada – one platform for an entire multi-division, multi-geography enterprise.

When is it a good idea for a large complex organization to rely on one technology to run all or most customer interaction management? From my experience, not all that often, but it is possible.

Size Matters

As your organization grows and becomes more complicated, it starts having more parts with needs that differ from other parts. Getting the organization to use one ERP is one thing. CRM is a different beast. Geographies have different business models; business lines sell to different segments. Acquisitions cause more differences, in some cases that should remain, in some cases that should not. If you are not too complicated, it might not matter. If you are big and complicated it probably does.


The first question to ask, if you are big and complicated, is why would you want to go to one system? There are common answers:
- Executives want one pipeline and forecast
- IT wants to manage one system instead of 20
- Many groups don’t like what they have, and just want to change
- Clients are irritated that they are treated differently by different groups that can’t communicate
These are fairly valid reasons, but might not necessitate one technology platform. The easiest way to kill an initiative looking into a single technology approach is to request a business case. Can you justify the expense of migrating everyone to a single platform in order to resolve one or more of the above issues? That kind of business case is usually a quixotic endeavor. The other challenge is whether you can satisfy everyone with one system. Looking back at recent elections, it is hard to get a country to accept one president.

The other question to ask is whether the conditions that drive you to investigate a single technology approach might be satisfied with another approach. There are a number of things that must be accomplished to satisfy most of the issues raised above. For example:
- You probably need to standardize your data. If you can agree on data standards, you will solve much of the need for bringing together technology.
- You probably need to standardize some processes, in order to have the chance of achieving data standards. Again, this will possibly take you much of the way there.
- The final component of getting this all to work is the connection of platforms, although this can be a challenge under the wrong circumstances. Integration can be more expensive than migrating to one platform, but in many cases it is a better solution, especially when one platform will not satisfy every group.

So, when does it make sense to go with one platform?

The biggest condition is when each customer-facing function across the whole organization is willing to perform most processes in a similar approach as each other. The sales team in one group is willing to perform similar process steps as a sales team in the next group. Timing is another condition, when the majority of the business is ready for a technology upgrade or change. The business case is much stronger when there is a need to change many groups at one time. A third major condition is when moving to a single cloud environment enables you to reduce technology management costs to offset the migration of business units that don’t need a change. If you can stagger your migration over time, the business case gets even better. Don’t make everybody change all at once, but get there eventually.

Still, all in all, I don’t see this all working very often in big and complicated companies. Business units get frustrated that they are performing processes in a way that satisfy another business unit’s needs (or at least that is their perception). Regions feel they are different and can’t conform to the region that the system was built to satisfy (in their perception). The technology gets thrown under the bus and the business unit or region goes rogue – they go out and get their own CRM and disconnect from the mother ship. I see it continuously. It is just like an election.

We have to go with the majority vote but there is always a new majority that wants to change, sometimes very four years.

November 11, 2011

You're Requirements Aren't Good Enough

Motivational speakers have a great job. They get paid wicked amounts of money and have no accountability. Plus, people listen to them, actually listen and heed their advice. I had the wrong major in school, so did not get the training for the motivational speaker career track. But, I have learned some things about the typical content of a motivational speaker’s pitch, and one element at the core of that content is the concept of stretch. Not Spandex, but the ability to push one’s self toward an objective that is a stretch of the capabilities. There are gazillions of examples of what is a stretch, depending on the motivational speaker circuit and audience, but stretch is key.

There is a strong relevance regarding the concept of stretch to your CRM program, and even though I am not a motivational speaker, I am going to tell you about it.

Every CRM program needs a strategy – it provides the guidance and direction for the program to deliver results. There is pretty strong evidence that links the presence of a CRM strategy (and strong buy-in of the strategy) to eventual program success. One characteristic of a good strategy is that it pushes the boundaries. If you want to have your CRM program really deliver, don’t make the status quo your focus. Build your program around the future, and a future that is a stretch for your organization. Stretch leads to success.

However, it is not sufficient to set stretch goals. What is really necessary is to set stretch capabilities.

Every business analyst knows that you need to define business requirements in order to build a CRM technology platform. The identification of requirements is a critical path step along the way to delivering CRM automation to the organization. However, building business requirements based on the current state is not what we do in the critical path toward a great CRM program. Rather, identifying the capabilities needed to achieve stretch goals is. If you want to be successful, define what should be in place, don’t replicate what already is in place. Stretch capabilities takes you to a successful end state, requirements keep you locked into the status quo.

How do you define stretch capabilities? Great question, glad you asked.

I think there are two great stretching sources. First, building out business requirements based on best practices is an excellent start. This helps define future capabilities needed, based on historical precedent. Best practices guide you to create something that others have proven successful already. But, sometimes you also have to a take further step. A second source of stretch capabilities comes from differentiation. How do set yourself apart from your competition? Sources of competitive differentiation are always changing, by definition – everyone is always keeping up with the Joneses, so the bar keeps getting higher.

For example, a source of differentiation right now is to build out your social business capabilities. However, a year from now this will be simply table stakes. Two years from now we won’t even talk about social – it will just be endemic to how we work with customers. But, there will be something new that helps you differentiate. Stretching constantly stretches into new territory.

No, your requirements are not good enough – not if they are based on the way things are today. If you are going to go through all the trouble of investing in a new or upgraded CRM program, you deserve better. Get more for your investment.


Ram Rally

July 29, 2011

Crossing The Line

Last week while at a concert in our little town we ran into an old acquaintance, who I did not recognize at first. This was because she had lost a little over half of her body weight since the last time we saw her. It was an amazing transformation – one that she was both proud of, but yet modest regarding the success of the feat.

If you want to lose weight, one of the best techniques, which you might not hear about from the folks who want you to buy low calorie / high margin meals, is to set a weight-loss goal that includes both the number of pounds or kilograms to lose and by what date. It also helps to have a personal motive that corresponds with that goal, such as fitting into a bathing suit prior to a long awaited cruise.

What I have learned over the years about effective strategic planning it that it works the same way. You set up a target to be achieved by a certain date and have it tied very strongly to an important business gain. This is pretty straight forward stuff. Yet, an important lesson I gained early on in my career was from a colleague who observed that a good strategy means you have to choose an end state that is different from your current state. This may seem obvious, but it is a really key concept. It means that a good strategy requires that you declare that where you are today is not good enough – you have to change.

Effective strategic planning demands that you have to work toward a place you are not currently – you have to be dissatisfied with where you are. But, it also requires that you then have to take action to get to the new end point. This of course is where so many people fail at weight loss – I don’t believe I can get there so I won’t take the steps to get there, and then I’ll eventually stop setting the goals and just pretend I am happy with where I am. This again parallels the strategic planning process – you have to choose a strategic end state that requires you make effort to achieve – you have to work to achieve a change.

So, my question is, if you have to change in order to have a good strategic plan, when does the execution of that plan cross over from simple implementation of the plan and into the notion of business transformation. The old acquaintance of ours had truly gone through a transformation – she appeared to us as a different person. Does this mean that business transformation demands that you must become a different company at the end of the process? I am going to cut to the chase on this – I don’t have the answer. I don’t know when you cross the line from simple execution and into business transformation.

Your question at this point, and I acknowledge that it is a legitimate question; what possible difference does it make? My suspicion is that there are two camps of thinking with regard to the answer. One camp is that simple execution requires a different level of effort than business transformation. The latter requires more focus on the change. This follows the line of thinking that losing 10 pounds requires a different approach than losing 110.

A second school of thought is that everything is business transformation when it comes to effective strategic planning. The logic would be similar to the idea that if you want to lose 10 pounds you have to make some changes, otherwise you are going to gain the 10 pounds back in a few weeks. Likewise, if you are truly building an effective strategic plan, you need to set a target that requires you to change, to achieve something that you are not going to achieve anyway (this is the crux of the folly for many strategic plans).

Bringing this back to CRM, specifically, if you want your CRM program to make a difference, you will need to make some changes. You need to introduce best practices, you need to ask for new behavior, you must expect that technology will be used in new ways (for example, see my recent posting on Social CRM).

Well, I guess then that begs the question, does every good CRM strategy require that you take a business transformation approach and not just a simple execution of planned tactics? I am going to go out on a limb and get radical with a, yes, as the answer. Successful CRM initiatives require real change, not just what will happen if you go with inertia to carry you forward. Do you need to lose half your body weight to be considered successful? Absolutely not. Would a 50% drop in the amount of time that deals hover at stage 3 be considered a big success? Absolutely!

I don’t know about you, but all this talk about dieting is making me hungry.

Tapas Banquet

July 15, 2011

Time to Stop Being Anti Social

She had been on my case for nearly two years. For some reason she decided to take up salsa dance classes and the expectation was that I should be participate. On Sunday I finally relented and joined my wife for a night of bachata, merengue and cha cha cha steps. I don’t understand why it has become so prevalent in these parts where I live, but pretty much everyone in our circle of friends was involved and I was the hold out. The classes are one part dance lesson, one part aerobics, and three parts social time. It was finally time for me to stop dragging my feet (pun intended) and also stop being anti-social. This rare Sunday evening event did not conflict with my travel schedule, so I relented.

Have you been dragging your feet too? Acting anti-social? It was not very long ago that I made a presentation on CRM trends to a client where our stated position was that Social CRM was a trend worth keeping an eye on, but maybe not something to take action on quite yet. I have officially changed that presentation – it is time to take action and get social.

The statistics are hard to argue with. Half of those business professionals that utilize social media sites are there seeking to access thought leadership. More than a quarter of business users are researching business decisions. B2B commerce is being performed within the cloud and your company is involved, whether you are there or not. Your customers are talking about you; your prospects are asking about you; there is priceless feedback being offered up for your R&D; and very possibly, there is a firestorm eroding your brand value. There is no industry or type of company that is left out of the dance – anything from a lemonade stand to NASA is in play.

Yes, it is true that from a CRM perspective we are breaking new ground, but that does not mean that we have not learned what is working. Here are some things that we know: first, social media is not a new function – it is just another channel through which all functions can reach and engage your customers. You have to weave it into how you attract, acquire, and retain customers, like any other channel. The difference is that this is a channel that they control. And that is the second major learning – social media is extremely democratic. If you don’t provide value with it, your attempts at engaging won’t work. This leads to the third major learning – in order to understand how to provide value, you will need to listen well. The conventional wisdom, if we can use that term with such a new business phenomenon, is that the most effective way to get started is by monitoring your customers’ activity. Learn from it and then act upon it.

Social media is technology that lives in the cloud. It is very accessible, which is why it has become so prevalent. But, that is also the risk, because it also very easy to just start doing stuff. And the technology is advanced to the point where it truly delivers. The most consistent piece of advice I have seen from all the research I have conducted on this topic, and my own experience supports it, is that the very, very first thing a company should do when deciding to attend the social CRM dance is to build a strategy first and only then jump into the technology. You must decide what business outcomes you are chasing before charging down a path that may be fruitless at best or become a branding disaster at worst.

So, if you listen to the advice on how to get started from the early adopters it goes something like this:
1) Define your targeted business outcomes
2) Identify how social media will be utilized within your existing customer-facing functions
3) Establish the capability to listen and analyze
4) Engage customers or prospective customers in a limited capacity
5) Repeat

Everybody seems to think that this is crawl, walk, run territory. And that means if you have not embarked on the social CRM path it is time to at least crawl out to the dance floor. I learned that it is hard to dance the merengue the first time out, but getting started is everything. And, iIt does not hurt to have the right shoes.

Gypsy Tools

July 01, 2011

Starting A New Cycle

We are on the eve of a big holiday weekend and all the good folks in my corner of New England are all about the final preparations for being out on their boats to enjoy the beginning of summer. The weather has not been all that cooperative for the last month and that has raised the stakes even higher. This is a must do situation and everything has to be in a high state of readiness. Anticipation of this weekend actually starts earlier in the spring when many of us were going through our annual ritual of nautical preparation.

There are many things required for the boat to be fully functioning so that when summer finally arrives in full glory you can turn the key and be off in the sun and spray. Back in April, weather permitting; an endless list of chores unfolds, all with the hope of being out on the water serving as the motivation. With any luck the investment will pay off and when that magical long weekend arrives with a blue sky forecast, the boat will serve without disappointment.

Those that take short cuts or procrastinate on their preparatory chores will invariably pay the price. I am not sure what is worse: never leaving the dock with a boatload of happy people and an overstuffed cooler due an engine that won’t turn over; or being towed back to shore with a boatload of irritable crew and a long-emptied cooler due to an engine that died in the middle of a far-away bay. Those visions also serve as my motivation during spring prep.

This is a seasonal activity for boaters, especially us New England types. Some cycles are annual and some cycles are longer. I have learned that CRM programs also go through cycles. They are not annual – more like every two or three years, but there is a cycle. There is a start to the cycle, comprised of planning and preparation; there is a period of deployment and enhancement; and then, unfortunately, there eventually is a period of decline. User adoption drops off, data quality decreases, managers relax their vigilance. It is a lot like a kind of CRM winter.

Snow Boat 1

Then there is talk of something new. Sometimes there is a desire for a new CRM platform. There might be a change of senior management and a direction for the business. Sometimes there is talk about raising the bar – wanting to take CRM to the next level. This, ladies and gentlemen is the CRM spring, when it is time to get the boat ready for a new cycle. While it is not always the same organizational dynamic that causes the cycle to start again, but there will always be something to drive it. You can sense the signals, just like seeing buds on trees and robins in the lawn. It is time for getting your CRM program ready for a new cycle.

The start of a new CRM cycle means that you do the same things that were required when you started for the first time. You plan for what you are going to accomplish – where are going to take the business with this revolution, what do we need to build, what actions do we need to take to get the folks ready to perform? You may already own the boat, but you need to change the oil, do some polishing, update some electronics, and maybe even upgrade the engine. Your CRM program needs the same type of attention.

So, if you are starting to witness the signs of CRM spring, think of what you want to experience when summer comes around – do the preparation to gain the benefits. And remember, don’t take any short cuts. The last thing you want is to have your CRM platform towed back to shore because it died while you were out having fun in the middle of that long holiday weekend (which would equate to the middle of your peak sales season).

Enjoy your summer!

January 07, 2011

I Resolve

It is that time of year again. Did you make one? Have you had much success with these in the past?

Yes, we are talking about New Year’s Resolutions. Whatever it is that you might resolve to do in the new year, it usually involves a personal change, and one that most likely is remarkably hard to accomplish (which is why it has required a resolution to make it happen). This is a matter of resolve, and it demands large doses.

Driving Wrong

At the core of a resolution is a personal change of some kind. To lose weight is the most popular resolution to make this time of year, and the purchase of soon-to-be-neglected exercise equipment spikes substantially during the month of January. Many personal changes are hard. Dropping a cigarette habit, resolution # 2, is now a multi-billion dollar industry, but that change is made even more difficult due to the physical addiction to nicotine. These two most common resolutions require changes of behavior, changes of habit, changes of attitude, and physiological changes. The combination is formidable.

Interestingly, we don’t have an analogous yearly collective pledge at work that focuses on what we are going to do differently for the business. Although, some companies go through an annual planning process that can be as ineffective as the making of individual New Year’s Resolutions. However, the difficulty at the core of keeping resolutions does play a strong role in the business world as well. Accomplishing change is hard to do.

The planning and execution of organizational initiatives involves exactly the same set of changes that are involved with the personal change at the center of every resolution. Organizational changes will demand changes in behavior, changes in habit (business process), changes in attitude, and even physiological changes (work-related skills). Similarly, some organizational initiatives are harder to accomplish than others, like losing weight or dropping butts. CRM tends to fit in this category of being on the harder end of the change continuum.

Individuals who are most successful achieving their resolutions made in the heat of the moment on December 31st tend to have something in common – resources. You will do better at losing weight if you have access to weight loss techniques and knowledge, a plan for changing diet and exercise, a support community to coach and encourage, and (in some cases) the finances to correctly fund a proper diet and exercise routine. Likewise, your CRM program requires the same resources.

The larger the CRM initiative, and the more complex the changes involved, the greater the amount of resources needed to drive successful change. In the case of CRM initiatives specifically, required resources include:
- a solid change management plan,
- the competency to drive management sponsorship,
- the expertise to overcome resistance to change through appropriate user involvement,
- the capacity to redefine business processes,
- the capacity to manage the communication of changes, and
- the ability to deliver commensurate training.

Insufficient resources for your CRM program will land you in the same place as most New Year’s Resolutions – incomplete goal attainment. So, I suggest a 2011 resolution for your CRM initiative – make sure you secure enough resources to accomplish the changes.

I hope you have a prosperous 2011.

December 31, 2010

Top 10 Minus One

Two Thousand and Ten has been a year of recovery, although not for everyone I recognize. To those in the world of CRM who are still searching for employment I hope that 2011 is a better year for you.

Within the CRM industry we saw modest growth with CRM programs picking up in the second half of the year. From a consulting perspective it has been an extremely busy year, which I view as a bellwether for the continued resurgence of the economy. Below are a few trends that serve as a bit of a summary for the year just completed and perhaps an indication of what we have to look forward to in the coming year.


Cloud Computing – the most significant trend in CRM is the move from software that is purchased to that which is rented (Software as a Service or SaaS). Roughly three quarters of new CRM installations are cloud based, a trend which has leveled off, while the decline of on-premise installations has also reversed slightly. This is due to the growing trend of hybrid platforms utilizing both approaches to drive flexibility in multi-unit organizations. I suspect this will be a trend that will increase.

Vendors – three companies dominate the software landscape – (fast-growing top player), Oracle (shrinking previous leader), Microsoft (some growth since market entry and a very distant third). Each vendor offers platforms with advantages and disadvantages – depending on the customer’s needs. wins most vendor selections lately, but the best fit will depend on your organization’s specific needs. Likewise, there are other vendors in addition to these top three that might be a better fit for your specific situation.

Cost – cloud-based solutions are clearly more cost-effective in the short term and are the most affordable option for small and medium-sized businesses. Few companies can leverage the “out-of-the-box” appeal of the SaaS marketing hype and complex business requirements may be best managed with the more adaptable on premise options. As things get more complicated overall cost of ownership seems to converge.

Challenges – the original lure of cloud solutions as “plug & play” have led to many CRM program disasters, harkening back to the early days of CRM when failure rates hovered around 80%. This is due to the misconception that simple software initiatives can be matched with a simplistic focus on organizational requirements. Results are now driving failure rates north of two-thirds due to poor attention to basics such as change management. Don’t be fooled into believing that you can just install the software and everything is going to work magically. There are still people involved in the process, even if the software is rented.

Integration – the future of CRM technology is clearly to be dominated by cloud solutions, not as single platforms, but rather the integration of multiple SaaS offerings from different vendors and in different locations tied together with on premise systems across the organization. Some prognosticators see everything going to the cloud, but I suspect for the foreseeable future we will continue with hybrids.

Mobility – the hot activity over the past two years has been the empowerment of the field-based professional via mobile technology. The marriage of improved hand-held devices and powerful CRM emulation applications has driven CRM productivity in the field through the roof. The double-edged sword aspect of this trend leads to significant dissatisfaction with groups (especially sales) who do not have this access to CRM on the go. If you don’t have mobile CRM you probably have a growing rancor in your field.

Social CRM – yes, this is the sexy lingerie of CRM today, but like the analogy, not yet practical or with significant every-day utility. Social CRM applications get a lot of press, but time will tell if the integration of social media as a customer interaction point with CRM will be a significant breakthrough. At a minimum it should reside on every CRM program roadmap for future consideration.

Marketing – of the big three functions within the CRM arena (Marketing, Sales, Service) without question marketing remains the third in the race, especially in key industries such as life sciences. The best practices have been well identified and the software is fully mature, but many organizations continue to under-spend on CRM investments for marketing. There is a strong business case to reverse this trend. It would be great to see more focus on marketing in 2011.

CRM For The Masses – The explosive growth in cloud computing, especially for vendors such as, has been borne largely on the success of selling into the small and medium business market. While the growth of SaaS CRM in larger and more complex organizations is on the rise, we will continue to see an increase in activity within the SMB sector. Increasingly smaller businesses will be using a broad swath of software providers in a subscription-based approach, and largely done out-of-the box. This is fantastic that the advantages of CRM automation can be achieved by a larger set of organizations, but this comes with a bad side effect (see “Challenges” above). Because many of these installations will be done on the cheap, many of them will also be abandoned because of the lack of focus on the organizational aspects of CRM implementation leading to poor adoption. Training, process adjustment, management sponsorship and other elements of change management are required for these smaller programs – just the same as the big ones.

Happy 2011 and good luck with your CRM program!

December 10, 2010

To Be or Not to Be (in the system)

I have too much media spread out over too many locations. I can’t fit my 2000+ CDs on my iPod or my laptop. In fact, I can’t even fit them in my CD storage racks any longer. So, my music is spread over three floors of my house, two hard drives, multiple formats, and in some cases, relegated to dusty boxes deep in my basement. I have the same problem with my photos. Thousands are in 35 mm slide trays waiting to be scanned. More recent digital or digitized images are tucked away on CDs or DVDs or on hard drives in slide shows or as unsorted collections. And now I have run out of space on my Flicker account and have had to move over to Shutterfly to continue with image sharing. Finding music and photos has become somewhat of a time consuming endeavor. You would think I would have done better with this given my occupation.

This is self inflicted time wasting, mostly due to the inability to spend the time or money in the needed media organizational tools. But I do at least try to keep this from happening with my clients when it comes to managing their customer data assets.


For example, There are times when I am working with organizations in the life sciences industries who ponder the idea of excluding KOL management within the CRM system, moving these customers elsewhere. And, there are also times when a similar question arises as to whether the Medical Science Liaisons (and other similarly named roles) should be using the CRM system along with their sales counterparts. It is baffling to me that these questions even arise, but they do. I blame this, at least partially, on the software industry, because KOL management tools and other CRM revisions designed for MSLs are pushed onto unsuspecting medical industry buyers as indispensible solutions.

Here is the problem. Most companies today who adopt CRM also cherish the idea of the 360 degree view of the customer – the holy grail of having all customer interactions captured in one location for the greatest potential to achieve customer intelligence. However, when we push KOLs into another data location or push MSLs into a specialized system, we limit or complicate the whole 360 degree thing. We turn a blind eye to a portion of our customers (really important ones, by the way) or a portion of our customer interactions.

This is a mistake. Sales professionals and MSLs can work side-by-side within the same CRM system productively and in compliance with regulatory requirements. KOL interactions can be managed just as effectively within most CRM systems as they can with the KOL tools being promoted today. Why would you want to intentionally make it hard to foster collaboration and drive analysis? Some think it is required for data security and compliance, but this is a fallacy. Partitioning data, setting appropriate policy on the location of data capture, and using role-based access rights all combine to keep the right data in the right hands.

If you are considering the idea of a special tool for your medical liaisons or for their management of KOL data, I really encourage you to talk to others who have kept this all within the same system, but use appropriate techniques for operating in compliance. They will convince you to keep everything and everyone together.

Take a lesson from the early CRM adopters. Many of these organizations allowed CRM to evolve across the enterprise without a guiding, integrated CRM strategy. Service functions ended up on Siebel or RightNow. Marketing functions ended up on Unica or Eloqua. Sales functions ended up on or Oracle On Demand. Many of my clients who are in this situation are now spending big bucks to bring all these functions together either through expensive integration programs or the consolidation of all users onto a single platform, which is also mighty expensive. You will join them if you banish your MSLs to a separate tool – eventually wishing you had all users and customer data in one place.

So, follow my advice, but not my behavior, and keep your customer-facing functions and customer data together. Now, does anybody know where my Johnny Mathis Christmas CD is possibly hiding?

July 30, 2010

Words That Start With Trans

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

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

Eagle Sunset 2

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

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

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

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

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

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

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

Don’t forget to applaud.

Eagle Sunset 1

March 19, 2010


How do you define the concept of Customer Relationship Management? I have discovered in my travels that CRM is defined in many ways, and I have concluded that there are some variations that I particularly dislike. Those that know me might conclude that my least favorite is a definition that equates CRM to technology. While I do find that definition particularly bothersome because it gets companies into loads of trouble, this is not my least favorite because it is one that can be confronted and overcome fairly easily. Organizations that take a techno-centric approach to CRM eventually come around to recognize that technology is only a small piece of the overall CRM formula.

What I find as a greater challenge to effectiveness is a CRM definition popular with a number of prolific and well respected business authors. You may think I am crazy, but the customer-centric definitions are the ones that I think cause the most problems. These definitions espouse the need to advance the organization, through the use of CRM, to the ultimate end state of placing the customer in the middle of everything that is done. At this point you may believe I have flipped my wig. Of course CRM should drive toward customer centrism. Not.

Most of the companies I have worked with harbor some form of centrism. It is a part of the business culture. I have seen marketing centrism, sales centrism, patient centrism, engineering centrism and even creativity centrism. I have always considered these centrisms as just a given – something that may require some compensation to achieve balance, but not necessarily something to battle. Yours may be a customer-centric culture by its design. However, declaring that all CRM programs should place the customer at the center of the picture is limiting. It is a flawed academic concept. It is a pendulum swinging counter attack to the product-centric approach (which is also limiting). But, it swings the pendulum too far and causes just as much imbalance. Customer centrism is not practical and it will sub-optimize your business strategy. Here’s why.

Center Ring

Building a strong CRM program relies on building a strong CRM strategy - the foundation of which should be laid upon the business outcomes targeted for success. Each organization needs to define their targeted outcomes to fit their business strategy at the time. Depending on market factors and the developmental stage of the organization, the outcomes should be some combination of growth, efficiency and customer experience. There may be periods where growth has to be the focus and there may be periods where efficiency takes over. There may be periods where the focus must drive toward better customer experience. Seldom should all three be equally focused and seldom can you aford a total neglect of two in favor of one.

The problem with customer-centrism at the center of CRM is that it expects that customer experience is the dominant outcome and this is its downfall. There may be times when growth is king and there may be times when efficiency is king. Our CRM programs must enable the organization to achieve the defined strategy for the business, which may change every few years as things in the market change. Customer-centrism limits that flexibility.

I will disclose that I have not necessarily been a fan of the whole centrism thing. It smacks of political or religious ideology. Let’s just accept that ideology thwarts flexibility and not get into a big discussion about the merits of having strong ideological convictions. However, I will also disclose that I have recently considered a moderation of my own view of the benefit of centrism. There is a centrism, when it comes to CRM, which I now believe does have some merit. This would be an engagement-centric CRM approach.

Let’s start with a definition of the term engagement. I offer that an engagement is any interaction that your customer has with your organization. These touch points serve as the core reason for your organizational being and they include:
- Reading an e-mail that has been sent from anywhere in your organization
- Searching for a white paper on your web site
- Yelling at a customer service representative
- Participating in a focus group
- Filling out a feedback card
- Watching their mobile phone being repaired at one of your franchise outlets
- Paying a bill
- Standing in line

Customer engagements are not limited to a sales visit or a call into a customer service 800 line. Additionally, the engagement involves more than just the customer. Also involved in an engagement are potentially:
- Someone from your company
- A representative from one of your partners
- The product or service
- The task needing to be performed
- The medium utilized for conducting or enabling the engagement
- The outcome of the engagement, which ultimately leads to:
* Buying more or less from you
* Costing your more or less
* The customer becoming happier or unhappier with your organization

Engagement-centric CRM cares about all of the above, not just the customer. Focusing most on the customer – customer-centric CRM – is too narrow of a focus. It leaves out too many critical elements of the complete engagement. To be successful with CRM requires that you attend to all the engagement elements. Engagement-centric CRM will drive a focus on each element, and therefore, increase the likelihood of positive outcomes. If you leave an element out of your focus, such as the engagement medium, you may not be uncovering that one medium is costing precious resources while not delivering the same results for a type of engagement versus another less-costly medium. Success demands that you keep a watch on the whole package.

If your culture is one that is customer-centric, that is great – you should not go out and change it because customer-centrism is bad. Rather, you should as a rule not conclude that driving your business to become customer-centric is the best way to be successful. But, if you want to center on something, if you have a need to hone into the bulls-eye, focus on the engagement.

Gee, maybe we should call it Customer Engagement Management.

March 12, 2010


Do you remember the Phi Slama Jama?

Yes, it is March Madness time – when college hoops go crazy starting with the frenzy of conference tournaments to get into the dance up to the pinnacle of NCAA sports, the Final Four. Back in the 1980’s there was a particularly popular team (U. of Houston) with a set of impossibly tall forwards who were peculiarly fond of dunking the ball as a means of racking up two pointers. Their specialized fraternity of verticality contributed maximally to the madness of the tournament. Those were good times.

There is something about slamming the ball through the hoop that gets folks fired up. A team can be in a listless impenetrable lull, but one steal and fast break that leads to an artful but violent slam dunk will fire up both the team and crowd, potentially changing the momentum of the game into a checkmark in the W column. My personal preference is the alley-oop – where an assist and a score happen in one arc of the ball. That is just pure unadulterated enjoyment.

So, when it comes to B Ball, I am truly good with a slam-in. But, when it comes to CRM, the slam-in is an egregious affront to everything I have learned that produces positive outcomes. Let me explain.

As everyone knows, the hot topic today in CRM is all about the cloud and at the center of that storm is CRM platform-as-a-service – the use of a CRM application that you rent, as opposed to buy. This new approach to the software ownership has changed some of the economics, both in reality and perception. The reality is that it is possible to have world-class CRM technology on the cheap. If you use the technology straight out of the box you can rent some pretty good software for not a lot of investment, particularly up-front investment. This reality has significantly changed some of the dynamics of the sales process – much of the messaging is around getting a lot for a little. This in turn has attracted a lot of folks who are interested in the little part.

This is where the slam-in comes in. Those who are selling cloud oriented CRM technology are focused heavily on the affordability angle and they are promising a lot for a little. Now, this is where the perception part enters. If you believe that you can get your company up and running on rented CRM software without any other investment, such as preparing the organization for the changes involved in automating processes , then your perception of the economics are skewed. SaaS sales reps are out there right now promising companies all the benefits of CRM automation with literally the flick of a switch. They are selling slam-ins. You too can enjoy all the benefits, and all you need to do is install it.

Unfortunately it does not work that way.

Virtually all of our experience with this approach – a rapid implementation of the technology with no focus on preparing the organization for its utilization – results in the same outcome: the adoption of the technology is marginal at best and totally abandoned at worst. I guess you do get what you pay for.

Now, I recognize there can be logical reasons for justifying the slam-in. I have heard some reasons that were hard to argue with. The results are still the same. The software does not provide the necessary business benefit. Which leads us to the proverbial fork in the conversation – we can talk about what you should do if you are contemplating a slam-in. Or, we can talk about what you can do if you were lured into the snare of the slam-in and now are unhappy with the results.

The first discussion is short. Don’t do it.

Bone Dangle

The second discussion is a bit longer. When I encounter a slam-in I attempt to do a number of things. First, I try not to be judgmental. Second, I like to understand what is working in the eyes of the user and what is not. Then, I like to find ways to preserve what is working while I look to find ways to improve what is not. Some of the typical improvement areas include:
- provide more training
- make process adjustments
- fix the reports
- clean up the data
- build a plan to add enhancements and potentially some data integration

These are pretty standard activities that would have likely been identified if the company had spent a bit more time with CRM preparedness. The difference is that the slam-in costs less initially, costs more in the long run, and does a marvelous job at convincing everyone that CRM software is bad because of the poor results.

So, don’t be lured by the faux allure of the low-cost SaaS implementation. It is merely an illusion of economic misperception. The person selling you on the idea will be gone when you learn the truth, by the way. It is easy for them to make the case when they have no accountability for the result. They are not rewarded on whether it works for you, just a commission on the contract value of your rental agreement. Less is more – they are making their money on volume, so they are happy to sell you a lowest cost approach.

Getting positive results from any CRM technology, whether you rent or buy, requires some effort and investment. The quick, low-cost slam-in will not deliver positive results (well, the odds are dramatically against you). Get your slamming fix at the NCAA or NIT tournaments, not within your CRM program.

January 29, 2010

Expecting Satisfaction

I learned something pretty useful as the result of a recent air travel issue with my daughter flying home at break from The U. She was unhappy with me at the length of time her connection was going to take in Atlanta. Then a flight change notice can to my inbox making the connection even worse, so I called to see what might be possible to improve things. Well, it turns out that airline policy allows for a certain degree of changes to occur (even to unchangeable tickets) if they cause issues due to a flight change. In this case, I was able to switch the segments to a much more favorable connection through Baltimore at no charge even though this was a more expensive option at the time of the booking.

It would have been awfully useful to know this sooner. I have encountered hundreds of itinerary changes over the years that I have never taken advantage of previously. Since that episode with my daughter’s flight I have been able to make a few ugly flight connections quite more tolerable (including the arrangement of a few non-stops here and there). How come nobody told me this before? I would feel much less animosity toward the airline industry if I had been able to pull these strings starting long before.

So, let’s use this situation to dig into the customer service function a bit. Much of the focus within the customer service center has traditionally been on the tasks performed by the CSR managing cases as they come in – how to effectively capture, assign, track and close them with resolution as fast as possible. More recently a greater focus has been given to the capabilities around managing entitlement. Many organizations had been casual or even lax in their enforcement of the provision of the correct level of service with the correct customer. Process improvements along with more sophisticated CRM software have enabled CSR’s to reduce the amount of free service given away. This may seem unpleasant as a customer, but it is much better for the bottom line.

If these two customer service capabilities are being managed well, the next area of focus should probably be given to Expectation Management, especially when the objectives include improving the customer experience.

Expectation Management is all about pretty much exactly what the name implies – setting and guiding the expectations of the customer throughout the customer lifecycle. This is also one of the more complex practices within customer service as it tends to involve, in some capacity, not only all capabilities within customer service, but also touches sales and marketing as well.

Expectation Management finds its origins within the commercial business strategy and the customer segmentation model that drives the service tier structure. Depending on their segment a customer should expect a certain level of service commensurate with their tier. You get better service in first class than in the cattle cabin and your expectations should be aligned with that. This location in the hierarchy impacts the degree to which the CSR can fulfill a service request. A quick check at your status and the gate agent knows how to work within the rules set for your class. But, Expectation Management goes beyond just the delivery of entitled service, it helps the customer be prepared and aligned with that level – the customer can be conditioned what to expect.

First Flight

The best customer Expectation Management begins at the point of product or service awareness, either through branding and or campaign messaging. Expectations about service literally begin before the purchase, but they can be further influenced at the time of signing on the dotted line. I remember buying a sofa sectional specifically because of the store providing a lifetime stain removal. When I actually pulled out the credit card to consummate the deal, I was given a bunch of additional information and advice regarding how to and how not to get the stain removed. This proved useful later when the inevitable red wine decorated the furniture following a party. I am glad I knew what to really expect.

When it comes time for the actual service event, it is pretty late in the cycle for addressing an incorrectly reached expectation. This is a situation that will typically erode satisfaction and commensurate loyalty. If someone purchases software with the assumption that a live human being will help them on the other end of a phone line should the application fail to perform, they are likely to be dissatisfied should they be driven only to FAQ’s on the website for assistance. This is the reason why so much software packaging now includes explicit messaging regarding support right on the front of the box.

Incorrectly set expectations can also hurt customer satisfaction whey they are set too low. Just as the airline example at the beginning of this post, if an individual has a service need that they don’t understand can be addressed by a CSR, they may harbor ill feelings toward the product vendor or even though it could have been corrected.

Yes, the CSR does have some room to make incidents reached through incorrect expectations better. They can offer a one-time exception or they can offer some modest compensatory token to help recover some good will. More and more, CSR’s are given the ability to up-sell the customer to a higher tier of service, thereby immediately raising entitlement and satisfaction. This works especially well if the individual does not recognize they have purchased their way into the cellar. It works especially poorly when it appears like a bait and switch. Freeware falls into this latter category quite frequently. Training around proper messaging and timing is key for this to work successfully.

One final element of proper Expectation Management, which extends beyond the service incident, is the use of feedback mechanisms that monitor the customer experience through follow up assessment. Typically this is conducted with a brief request to the customer to rate their experience via an unobtrusive e-mail or a drop-in-the-mail-card. This can serve two key objectives. First, if the incident was positive it helps reinforce the expectation of future positive experience, which then drives up satisfaction and loyalty. Second, if the expectation was not met due to an incorrectly set expectation, it can provide a channel for remediation that may be otherwise lost, perpetuating dissatisfaction and eroding loyalty.

Without question, Expectation Management has a lot of moving parts and is interwoven into all aspects of the customer service function as well as throughout the customer lifecycle. It is hard to get it right, but there are means for optimizing satisfaction through correct processes and attention to the intelligence provided through well managed customer data. My only wish is that the airlines would get better at this aspect of customer service.

December 04, 2009

Time Out

It is basketball season again here in the states. Having come from Indiana, the home of Hoosier Hysteria – the epicenter of basketball madness come tournament time, the return of hoops always gets my attention. There is an amazing drama in a closely matched game. I have never seen so many people with their hearts in their throats when there is the potential for a buzzer beater to change the outcome. When I played bball as a kid in school I got butterflies before every game. It never happened to me on the football field nor did it happen on the baseball diamond. Something about basketball.

Today the sport is big business. University coaches make as much as top CEOs. High school stars hold press conferences to announce their choice of colleges. Each game is played starting long before the first jump ball. Coaches spend hours viewing scouting tapes. Offenses create new plays to surprise the opponents who have been watching those same tapes. And every game includes a defensive plan as well – how to handle the big guy, how to handle the hot shooter, who to double team. The game plan is comprehensive – both sides of the court are covered in order to maximize success.

The best teams make the best plans and execute best on those plans.

Hoop Dream

Time out - so, this is why I don’t get why so many of the organizations that I work with don’t want to include customer service in their game plan. Too often when I am asked to help build a CRM strategy or facilitate the development of a CRM program plan, the services end of the court gets left out of the picture. You can’t win a basketball game just on making baskets. Likewise you can’t get the most of your CRM approach focused only on business development. You must include the service element in the game plan to maximize the w’s in the win/loss column.

More often than not, the rationale I get is that the customer service folks have their own CRM system, so, they don’t need to participate in the commercial group’s program. This is like attempting basketball with three players on offense and two on defense, but not letting them help each other or have any interaction on or off the court. You can’t win that way – you will always be outnumbered. Everybody needs to be in the game on the same team and with the same plan.

There is nothing worse than a sales rep showing up at the client and finding out that there has just been a big service disaster, which they knew nothing about, and just when they were planning to have a conversation about a price increase. If there were a better mechanism in place for communication about account activities, these embarrassing client interactions would not happen with the frequency that they occur. And the communication flow needs to flow both ways. The services folks need to know the strategy for the account from the sales and marketing side of game plan. This helps them align services correctly and assure that top accounts get the right attention.

In the healthcare industries on which I focus a similar dynamic occurs with the field medical liaison team. They get left out of the CRM discussions all the time. Just because they don’t sell does not mean their customer contact is unimportant. CRM is meant to focus on all customer-facing activity and maximize the effectiveness of those activities to maximize the effectiveness of business outcomes.

So, the next time you get into a pick-up game, remember that you have to play both sides of the court. Then, let that be a reminder to you that you need your CRM plan to include both sides of the court as well.

Time in.

November 20, 2009

Ode To The Business Case

In the fall of 2001 things changed. We had been flying high – there was this thing called The New Economy and it was being driven by this new entity loosely referred to as dotcoms. Then a couple of jumbos were flown into skyscrapers in Manhattan and a whole bunch of things tumbled along with those buildings. Dotcoms resurged on the coattails of the Web 2.0 revolution and we seemed to be headed into another version of The New Economy, but we just didn’t call it that. We were flying high again, until that industry virtually located a block away from those two toppled skyscrapers took its own tumble.

When we were flying high we were able to get a lot of stuff accomplished. We identified business needs and we got the funding. If we could make a good argument for what we wanted to go off and build, we were given the investment capital. Following each of the two aforementioned tumbles, that investment funding got really scarce. If you wanted money you had to build an extremely solid business case.

As a consultant I see a clear correlation between the health of the general economy and the effort put into the development of the business case in order to justify investments. When money is tight, some programs still move forward, but they are the ones with the best chance of producing results. If we take this logic a bit further, we might deduce then that when things are good and money easier to come by, projects that are not as sound will also get funded. This bugs me.

So, I would like to offer up a couple of things. First, when times are good, and we could be heading in that direction again, I think we should push to have the business case become a standard. We don’t need to get lax on this just because funding is easier to come by. Let’s stop bad projects in good times – it hurts us in the long run. When we go for funding in bad times the people with the checkbooks will not be timid in reminding us about those bad investments.

Second, I have a suggestion for approaching the business case effectively, especially now while things are still a bit tight. There are multiple approaches to building a case for getting the funding. I am not talking about the different ways of calculating ROI such as the concept of net present value and other financial terms that I don’t really understand. I am referring to a more fundamental set of approaches. We can take a spreadsheet orientation, a very sterile, financially oriented, cell by cell calculation of where the value derives from regarding the money invested in programs. I don’t really like this approach because I am not an accountant. Also, I don’t like this approach because I think these types of financial modeling don’t appeal to people all that well because they are sterile and hard to fathom. We see a lot of numbers but we have to trust they are derived in a way that is real according to the way the business actually works. You can show me a rocket fuel formula, but it does not make me believe I can fly.

The second approach is the political orientation to business case development. It can take a little longer, involves more people, still relies on tables of calculations, but in the long run there is less math theory and more reality within the calculations.

In the world of CRM we typically make changes to the way work is performed. We deal in the world of emotion and perception. Acceptance of change is as critical as the logic of the change. Millions in investments can be lost because of irrational reaction to the approach taken. The business case needs to take this into account. Those who are going to take on the change, and sign up for the potential gains, need to define what they will be before they are held accountable for achieving them. So, I like to build my business case with the key stakeholders and thought leaders of the targeted business units and not the financial analysts assigned to support them.

First, have them identify very clearly the areas that a program will improve, such as pipeline management, for example. Second, explore what the improvement in the pipeline management process will produce – is it something like faster deal closure or higher probability of conversion? Next, ask your stakeholders to estimate what the improvements could realistically amount to. Is it an extra deal per rep every month; is it an extra deal per week?

Finally, once you have this list of quantified business benefits it is time to march into the finance department and request that they calculate the financial values according to whichever formulas they will accept. If you follow this path, you will satisfy the business and the bean counters and produce a business case the folks will believe and sign up for.

So, my proposal is that we build this into the standard program scoping process. Develop a business case even if you get the funding ahead of time. This will drive stronger sponsorship with your management team and that will always be good for adoption.

Business Roll

September 11, 2009

Taking Stock

After Labor Day Weekend it seems like things pick up. We all leave the beach and get back to work. I typically get pretty focused on the assortment of client projects that kick off just like the fall semester of school. Somehow things feel different for me this year. Things have picked up and the desire to be at the beach has diminished, mostly due to the change in temperature and the need to wipe frost from the boat windshield. But, there is a little distraction.

I suspect the difference this year has something to do with a few key happenings. First, I had a big milestone birthday, and right after that I shipped my first kid off to college. And now I have a second who is just starting the college shopping process – I see light up ahead shining on an empty nest. These things have really got my mind in motion. I am taking stock. Am I satisfied with what I am doing? Am I satisfied with where I live? Am I satisfied with what I have accomplished? Time is starting to become more of a factor. So, I guess it is time to consider these things.

Stepping back for a moment and taking stock of your CRM program is probably a good idea, but you don’t have to wait to hit a major milestone. It may be good to do this periodically. Are you accomplishing what you had intended? Have things changed and are there different requirements? Has the market changed and are there different priorities? Taking stock of your CRM program does not have to be a big deal or take a lot of time, but the small effort can have big payback.

I recommend starting with your program charter. You created a strategy at the outset of your CRM initiative and most likely it included some objectives and maybe some targeted business outcomes. The first question is to evaluate how you have done relative to those. If you have done well, make sure you communicate the successes. Then build out a new set of objectives and outcomes for your next stage of the program.

If you have not done as well against your original plan, it is worth asking why. What needs to be put in place to accomplish what is required? And, further, is your original direction still valid or do you need a course correction? With any luck, your steering committee is still intact and you can work through all of this with that guiding body. If not, assemble a new and improved steering committee, which alone can breathe some new life into a CRM program.

Taking stock gives us a chance to make the most of our investments and perhaps feel good about how well we have leveraged those investments so far. This does not have to be a somber navel gazing exercise. Keep it light and objective and don’t get too caught up in the blame game. A focus on how to be successful going forward will help you drive your program to the next level.

Good luck on the rest of the journey!

Jumbo Navel

July 10, 2009

Support Your Local Competitor

The celebration of our nation’s independence fell on a Saturday night this year. For most towns here on the Eastern Seaboard that rely on visitors to help pay the bills, that meant a three day weekend of ringing cash registers. My little village is overstuffed with boutiques, restaurants, and antique shops that cannot be supported by our small population alone. And it is for this reason that I am simply flabbergasted that our town chose to cancel its 4th of July fireworks due to the budget cuts caused by the recession.

So, that special night we drove the boat a couple of towns north and saw spectacular displays from other beach towns that were catering to the tourists. It was without question the best pyrotechnics I have ever seen from such small communities. One would never know we were experiencing a tough economic climate. Well, guess where the tourists were eating that night. Guess which town had their shops full of visitors. They were not in our little village and I am pretty sure there is a correlation here.

Meanwhile you have your own budget cuts to deal with. How many sales reps have you trimmed or not replaced? How much of the call center training budget has been cut? How many marketing programs were delayed? My final question is, did you cancel your fireworks as well?

I recognize that the recession has served as an opportunity to make some changes. Cutting out some deadwood in the field force is not a bad thing. But that has caused you to reach fewer customers. If you don’t supplement your reach with marketing or telesales, you are potentially pushing your customers to your competitors. If you have added a more sophisticated slice to your segmentation model, that is even better – now your sales folks are most likely talking to the right customers. But do you really want to ignore the lower segments? That is why you need to keep your campaign engine running at 100%. Maybe you really need it running at 150%!

Don’t send your customers to the fireworks in the town next door. That is where they are going to shop if you do. Keep your customer reach extended in the right directions so your customers are still with you when the fireworks are over.

Pyro Painting 2

June 19, 2009

Mix It Up

Lately, I have been involved in a number of conversations regarding segmentation and targeting. I state it this way, segmentation and targeting, as if it were one topic with two words in the name because that is how many folks I have been interacting with refer to it. Combining the two terms, as if one, is a bit like giving this the status of something like gin and tonic. Gin and tonic water are two uniquely different things, but when mixed together they become a single, recognized entity. Segmentation and targeting are two uniquely different things and when combined together don’t become an entity, they remain two different things.

Now, the first thing you might ask yourself is, what possible difference does it make if people refer to these two things as if they are one thing? My answer is simple. They serve two different purposes, and if they are mixed up, there is a good chance you are getting the benefit of one and ignoring the utility and benefit of the other. I think it is important to get the benefits of both. If you mix gin with tonic (and add a wedge of lime) you get the benefits of both. But if you mix up segmentation and targeting, you are probably assuming they are the same thing and you are accomplishing only a portion of the value of what each can bring to your CRM program.

My here plan is to offer up my definition of each topic plus make some effort to show how they might be connected (but not synonymous). However, without doubt, I will define them incorrectly according to one of your favorite marketing reference books. Likewise, I will define them in reverse according to some of you – this I know because I have already engaged in that debate. No matter, I stick with these definitions, and I think you can find them useful. Here goes.

Segmentation – this is the process of differentiating your customer and prospect base into discernable categories, which aid in positioning the correct resource with the correct segment. Mostly this helps determine who talks to whom and who gets the priority attention. My customers use segmentation most often for territory management and channel assignment. For example, A customers get top coverage by the field sales force, B customers get secondary coverage by the field and primary coverage with tele-sales, and C customers get covered through the web and by tele-sales if they come through a campaign. You can use a number of different criteria for segmentation. Consumer banks use socio-economic status. Many B-to-B companies use factors that indicate buying potential. Some companies just follow a simple formula based on size (revenue, employees, customers, etc.).

Peculiar Customers

Targeting – this is the process of selecting customer or prospect segments or sub-segments for the purpose of a specific activity, such as a campaign, messaging, or promotional program. Targeting is all about rifle shooting versus the shotgun approach – getting the right message or offer to the right customer at the right time. Typically, targeting takes the basic categories of the segmentation structure and then divides up the population by another characteristic such as buying behavior, purchase lifecycle stage, customer base, or other trait. While there are a handful of common segmentation criteria, there are literally hundreds of thousands of criteria for targeting, all industry specific.

So, what is all the fuss about getting these confused? They serve a different purpose. Segmentation is really critical for building account strategies. Targeting is really critical for building marketing plans. Yes, they have a key overlap. Targeting typically takes into account the segmentation structure as one dimension, but it is usually more refined – there are more target groups than segments. Account planning can also include targeting strategies, and are best if done in collaboration. But, if you mix them together and think they are the same thing, chances are you are leaving out something.

Relying only on the process of segmentation probably means your messaging is only as refined as your segments. Relying only on targeting probably means you are focusing on the messaging process, but not on differentiating your focus on territory management and the prioritization of your reach. One crude distinction that I tend to make is that segmentation is a sales process and targeting is a marketing process. But, that is a dangerous simplification as they really need to be well integrated. Unfortunately I have seen too many companies where sales uses one segmentation structure for managing accounts and marketing uses a completely different targeting structure for programs. This is a disconnect that promotes the typical issues we see between these two functions. Targeting and segmentation have to include some element that links the targets to the segments. A lot of budget can be wasted on campaigns otherwise.

Mix up those gin and tonics, but keep your segmentation and targeting integrated not mixed up.

June 05, 2009

Caps and Gowns

This is the time of year for graduations. And, it is the time of year for graduation speeches. One of my favorite stories about graduation speeches was something that ran a circuit through the web a few years back. Apparently, the highlight of a graduation address made by Kurt Vonnegut Junior at some nameless school was the recommendation to wear sun block. Ultimately it turned out to be a misrepresentation, and Mr. Vonnegut, one of my favorite authors, never actually delivered the much acclaimed speech. I wish I did not know the truth – because I thought it was a really great recommendation.

This year I have heard my share of speeches. One of them was along the lines of what is probably the ultimate graduation speech cliché – this is not the end of something, but, rather, it is the beginning. That was all fine and well and I could have done a cliché blog entry as a follow up, but it was the last of the addresses that I sat through that I enjoyed the most. When a student is selected to address their own graduating class, there is a very good chance that this person earned that honor based on their academic record, and the correlation with being a bit of a nerd is, therefore, pretty high. Because of that, it was all the more poignant that this speech came from the very mouth of someone who fits in that demographic classification.

After being in a school gymnasium for already much, much too long, this was not a monologue I was looking forward to. And, it started out predictable. Then, all of a sudden, this individual with a GPA higher than statistically possible makes a personal disclosure. If you are nice to other people, she learned in the last weeks before graduation, they will be nice to you in return. Then, amazing revelation that it was, she declared it is actually possible to have fun and be a brainiac at the same time. Outstanding.

I am not altogether sure if everybody in the school gymnasium was hearing the same thing I was hearing, but this 18 year old was confessing in front of 2000 members of her community that she just figured out how to be a happy functioning member of that same community. Wow. It turns out that is not all about performance. Her summary advice to her peers – make sure you balance enjoying life with working hard. The message wasn’t the revelation. The fact that this was such a recent revelation to her was the revelation.

Conveniently for coming up with blog material, two of my clients at the same time were reaching a similar conclusion. Being nice to customers causes good things to happen – you can have fun and perform effectively.

Much of the focus of my work with clients is centered around strategic planning. You have read previous entries on this site referencing my recommendation that CRM programs should target growth, efficiency or customer experience as a primary direction. Without question, the extreme majority of programs focus on growth or efficiency and seldom do the programs I encounter target the improvement of customer experience. Fun does not pay the bills.

A number of years back I did some research on the origins of CRM. There is a bit of variation in the general history, but there are roots in the three primary functions, sales, marketing and service. Each root of this family tree seems to take credit for the genesis of CRM. From a customer service perspective, some of the original focus on improving customer interactions was given life from the quality movement of the latter part of the previous century. The whole value proposition in that argument was that an improvement of customer service quality would lead to increased customer satisfaction. Interestingly, at that time, an improvement in customer satisfaction was viewed as something to pursue.

For the last decade, the concentration has been on the other two potential business outcomes. CRM investments must to lead to improved revenue growth or decreased cost of commercial activity or it would not get funded. What happened to the good old days of the quality movement? Is customer satisfaction no longer a viable business benefit?

Then out of the blue, two clients want to use CRM to improve the quality of the customer experience, with the belief that doing right by the customer will do right for the company. Next, I hear a speech declaring the importance of balancing high performance with fun. All the while we have things in the news about the need for bringing back business ethics to combat our economic problems – the era of “greed is good” is finally over.

Are these things related? I’ll let you decide. My advice?

Wear sun block.

Flying Mortar

May 15, 2009

The Genius or the Fool?

Reportedly, of all the many quotes from his father, the favorite of T. Boone Pickens is: “A fool with a plan can outsmart a genius with no plan.”

Now, a guy like me has to like a quote like that – it is helps give my job some credibility (my official title with my employer is Chief Strategy Officer after all, and that does involve a bit of planning here and there). There are actually a number of “fool” quotes that I have collected over the years, but this is probably my favorite.

Mr. Pickens is a pretty successful dude, but he is very much not satisfied with that success. Making billions from oil has not satiated his desire for achievement. But it is what he has set his sights on next that has really caught my attention. His desire is to help our country become independent from foreign oil (which means becoming independent from petroleum products in general). Most importantly he has a plan. His vision is huge and the challenge is daunting, and he is somewhat going it alone. Yet, he is doing it nevertheless.

When he demonstrates some success others will jump on his bandwagon and the greater initiative will prevail. We will have wind farms and hydrogen cell technology, and we will burn a lot less fossil fuels. At the moment his plan is a bit out there and there is the question of fool or genius?

I quite like it and I encourage you to consider this as a model for your CRM program planning. There are a number of elements to T’s situation that I think are worth emulating. First, he is not resting on his laurels. Many of you have run successful CRM programs and could stop now and declare victory. Don’t. No matter how successful you have been with your program, there is more to get back and you should go after it.

Second, he is taking on a big challenge. So what? Automating a salesforce is a big challenge as well. You don’t have to do it all at once, but you have to do it. We need to wean ourselves from hydrocarbons, but we will have to do it with a bunch of smaller connected initiatives, not just one big one.

Third, and most importantly, and this may be where the fool part may seem to appear – he is offering up his plan and going after it, even though he does not have a backing from the government or the oil industry or any other significant body. He is doing it anyway, but I believe others will join him eventually. Over the last quarter of a century I have worked with many divisions and business units of larger organizations who were paralyzed with the absence of a higher level corporate strategy. The more successful organizations finally break free of those perceptual chains and plow forward with their plan. This has been done not in defiance of corporate direction, but rather, in order to support it the best it can in the absence of a clear direction.

It is a common occurrence to be in a situation to build a plan when the direction is otherwise unclear. I suggest going forward, but I also encourage that you involve folks to provide input on that direction. Having consensus on what you are attempting to achieve is the number one predictor of program success – even if that consensus does not involve the highest levels of the corporation. Work toward a clear vision, demonstrate success, and you will achieve what I have seen happen many times. The folks from the corporate office will want to learn what you have that is working so they can import it back to the home office.

The one risk in all this is that you may have to spend a period of time appearing as the fool.

A Fish and a Prayer

May 08, 2009

Too Much Of A Good Thing

Recently, during a family holiday trip, I had the pleasure of visiting a corner of the world that is all about lemons. There is lemon in much of the cuisine. The local digestif is made from fermented lemon and is available on every corner. Chocolate often comes lemon flavored, which does not always work. Lemon trees grow like weeds, depositing their fruit casually here and there. Some of the orange trees grow lemons (really!) Lemons are even used as projectiles on occasion. But, I have to confess, after a while you start getting to a point where there is too much of it.

This can happen to anything, even some items that we might assume you can never get enough of. In the business world one interesting topic that is now popping up as being overdone is 6 Sigma, the management philosophy of continuous improvement. I was surprised when I first ran across this, but if you dig into it a bit there is something to it.

Apparently some very visible 6 Sigma programs have yielded some very non-positive results – continuous un-improvement. As a result, some case studies have emerged in an attempt to explain what not to do with this type of program. The pattern in the case studies looks something like this:
- The initial deployment of 6 Sigma yields the resolution of some low-hanging-fruit-type problems.
- The initial success reinforces the belief that the methodology / paradigm makes strong business sense leading to an expansion of the program to a broader focus within the company.
- The large scale effort leads to short-term improvement in operating margin.
- This real bottom line impact causes more reinforcement of belief that the paradigm works, so the company then goes through a culture change to embrace yet more continuous improvement.
- Then, an interesting thing happens – a focus on cost-cutting as a chief strategic focus takes over and begins to negatively impact morale and customer satisfaction (which reinforce each other).
- Revenue and stock price begin to drop (even though margin remains decent).
- The CEO gets fired and the 6 Sigma thing starts a slow death.
This quick synopsis is a bit over-simplified, but the pattern has emerged with a number of prominent companies. So, my conclusion is, too much of a good thing reduces the value of the good thing, until it loses its value altogether.

I have worked in client organizations where 6 Sigma has been deeply rooted in the culture. And like the root word in that term, it is somewhat cult like. I have always been a bit skeptical of such a strong force. I guess a second conclusion is that we need to approach everything in moderation.

Balance is a key aspect of getting the CRM strategy to work best. Too much of a focus on one type of outcome versus another can be very problematic. We have the ability to derive three types of business results from our CRM program investments: growth, efficiency, and customer value. Programs that go over the top seeking one outcome in a cult like fashion cause an imbalance. Too much focus on efficiency causes growth and customer value to be squashed (poor revenue earnings and customer satisfaction).

The 6 Sigma example is very relevant to how you might pursue the business results from your CRM program. I have seen some companies blindly pursue improved customer experience as a driver for their CRM, but often to the detriment of efficiency. Likewise, I have seen the same abandon thrown into the pursuit of revenue, often at the expense of customer satisfaction. It is a balance thing. I am not proposing that your CRM program should focus equally on growth, efficiency and customer experience. Attempting to go after everything usually results in gaining nothing. However, like the whole death-by-lemon thing, too much focus on one item at the expense of the others is also the wrong pursuit.

Good luck with your balancing act. Care for some lemonade?

Senor Limon

April 17, 2009

Organizational Food Groups

An apple a day keeps the doctor away. Poor Richard’s recommendation from the pseudonymous almanac seems like relatively sound advice. Apples were a great tool for helping keep teeth somewhat clean plus the nutrients and fiber were a great supplement for the sketchy diet of the 18th century common man. Today, on the other hand, is another story. I couldn’t keep the doctor away if I ate a bushel of apples a day. High cholesterol, acid reflux, allergies, and creaky joints require all kinds of supplements that apples alone can’t deliver.

Fruit aside for the moment, when I first got into the field of IT consulting I was very pleased that the People / Process / Technology axiom was so well understood and accepted. My training as an organizational psychologist focused much on the multiple factors required to get changes to work. Companies have a bunch of moving parts and expecting that you can just switch out new technology and assume that everything will be fine is a well established myth. In the early days of IT consulting it was fine to use the People / Process / Technology concept as a mechanism for getting clients to pay attention to more than just the technology portion of the equation.

But, when this consulting apple-a-day type aphorism was first introduced, IT consulting was at a stage more equivalent to Ben Franklin’s understanding of medicine. We have progressed substantially in the last couple of decades, and I think we need to advance past the People / Process / Technology thing – just like we can’t rely on simply apples to stay healthy – insufficiently simplistic.

Yes, it is great that we go beyond just a focus on the gadget when it comes to introducing improved technology into the organization. The people factor is one to reckon with. Folks need the skills to utilize the technology correctly, plus there is the whole attitude thing. Users can be resistant to change and we have to do all kinds of things to get their acceptance and adoption. So, great, the people thing is cool. Then there is the whole issue of business processes. Most of the time the technology will have a mind numbing impact on the way things are done. We usually have to rethink the work tasks a bit and get them sorted out to be in synch with the technology. Great again, that makes a bunch of sense.

What about strategy – are we working the right objectives and is everyone at the top of the org chart on board? What about measurement – do we have the ability to actually monitor if we are making improvements with all the investments? What about the company’s ability to manage all these variables – do we have the right project management capability and the expertise to provide the training needed for these new skills that the people require?

I think the whole P/P/T thing served a great purpose back in its day. Now we need a more complete model to make sure we have all the variables attended to. My suggestion is to look at the five areas below to make sure you have everything needed to make your CRM program successful:
- Alignment – clear direction with harmonious objectives and management support
- Capability – the needed business processes and skill that support the direction
- Intelligence – mechanisms for measuring the correct metrics that monitor achievement
- Technology – the tools that appropriately enable the processes necessary for success
- Transformation – the ability to manage these changes from both a technology and organizational perspective
Certainly five variables is a bit more complicated to oversee than just three, but the broader focus increases your likelihood of success. You are doing more than just consuming the apple, you got the whole range of food groups covered.

Bon appétit!

Spoetzle Bernese

December 12, 2008

Bail Me Out

I am not going to take one side or the other on the topic of bailing out Detroit. There are strong arguments on both sides. On the other hand, we don’t see the NFL stepping in and handing the Lions free checkmarks to place in their win column.

What I find more fascinating is all the writing out there now about the failures of the collective management within the big three of the American auto industry. The list of things that they seem to be doing wrong appears to be endless. It appears that the problem might be boiled down to an unwillingness to make fundamental changes. They needed to transform their organizations to be competitive, but they were not up to the task.

Based on what I have read it may be that there was significant effort put into blocking change. At the heart of the problem is a legacy that may have been handed down to the industry by that Detroit paternal figure, Henry Ford. We have been told that the whole assembly line thing included a catch - Henry is accused of delcaring that the customer can have any color car they want as long as it is black.

Detroit was tooled up to crank out cars and that is what they did, whether the customer wanted them or not. In the beginning it was black. In the 70’s it was junk. Most recently it has been large and thirsty. Somehow other countries seem to be better at targeting what the American consumer demands and the current results provide the moral to the story.

Lost Cause

Our automobile manufactures are not the first to find themselves in this predicament. My second job as a professional was at a place called Digital Equipment Corporation. At the time it was the world’s #2 computer company. Ironically my first job was with the world’s #1 computer company, but, it is the story of #2 that is more interesting. In the 1980’s we were riding an amazing wave of success. Ken Olson, the founder and Chairman, was named by Forbes as the most successful entrepreneur ever. Then something happened and the industry took a right angle turn.

What changed was the introduction of the personal computer and an operating system called Windows. However, Ken Olson believed it all to be a fad – he would wait out the temporary changes and the computing world would eventually return to its senses. Seemingly overnight my stock options went from $199 to $1.99. It was a devastating crash. And, with the exception of a few skeletons inside of HP and Oracle, the company today is gone (with no Washington bail out either).

Ken Olson refused to change. He would not accept that his customers wanted personal computers. He knew what they needed and his better judgment would prevail. In the end 130,000 employees had to find jobs.

If nothing else, paying attention to your customers and building your organization to satisfy their requirements, should be at the core of your CRM strategy. This is your best approach to avoid a trip to Washington and asking for your bail out.

October 24, 2008


Patriot Act

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.

October 10, 2008


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, 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.

Rock Baby

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!

October 03, 2008

Batten The Hatches

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.

Tree Wrecked

August 08, 2008

The Beautiful Alignment


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.


June 27, 2008

Too big, or not too big?

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.

Gnarley Horn

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.

June 13, 2008

Connecting the e with CRM

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.

Golden Eye

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.

May 09, 2008

The S Curve

Rocks NB2

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.

April 04, 2008

The R Word

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).

Evil Coaster

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.

March 28, 2008

Don't Get Trapped

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.


March 07, 2008

Corporate Entropy

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.

Diablo Decay

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).

February 03, 2008

Keep Going

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.

Sheepscot Rainbow II

January 18, 2008

Are You Going Too Fast?

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.

Leatherback Smile

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.

January 04, 2008

CRM 10 Commandments

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.

Sangre de Cristo

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.

December 21, 2007

Are You an Ostrich?

Aussie Emu

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.

November 30, 2007

A Bottle of Relevance, A Bottle of Meaning

Piano Man Dance

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.

November 23, 2007

CRM Cornucopia

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.

Rock Baby

November 09, 2007

Goal or Target?

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.

Twellman on Goal

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.

October 12, 2007

Strategy? We don't need no stinking strategy!

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.

Hungry Advice

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).

July 06, 2007

Got Pie?

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.

Flower Labia

June 15, 2007

What Channel Are You Watching

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.

'Til Death Do Us Part

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.

March 02, 2007

The New Rules

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.

Saintly Respect

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.

February 02, 2007

What is Your Sales Effectiveness Strategy?

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?

Da Bearsox

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 giving so much budget to better sales management reporting.

The research that I have come across on this topic has produced virtually identical findings. SFA and CRM programs that focus on the effectiveness of the individual sales rep provide better results including adoption, improved business capabilities and bottom line ROI. Programs that focus primarily on sales reporting, forecasting, and sales management accoutrements tend to fair worse.

Sales managers, please don’t get upset with me. I don’t mean to make it difficult for you to get these things you want. But, I think the thing that is most important is better sales, and investing correctly in CRM will get that for you.

Go Bears!

December 29, 2006

Greed is Good

Remember the movie Wall Street? Gordon Gekko (Michael Douglas) makes that famous speech to the stockholders of the company he is raiding. One small trivia note regarding that speech is that he never says precisely the words, “Greed is Good!” But that is the quote we all came away with. He does, however, state specifically at one point, “Greed works.” When I look back on 2006 this is a sentiment that somehow comes out as a theme.

If Gordon Gekko had a point that could be hijacked in a more positive vein it might be that capitalism does require the pursuit of a profitable end game. Greed as a term is filled with baggage, starting with Dante and the seven deadly sins. But the driving force of achieving a gain is the element of greed that I think has valor.

The dot com burst proved that greed can be bad – especially when pursued with foolish abandon. My observation about business behavior in 2006 is that we are back on the path of profitable growth, which is good. Surviving the turn of the Millennium required hunkering down, battening the hatches, and cutting corners. This past year, at least according to the organizations with whom I have been working, was a full 12 months of action in pursuit of growth.

This energy, the pursuit of profit, is something that needs to be harnessed, like the tide. It is there, innate, ready to be leveraged. Your salesforce has it. Your customers have it. In 2006 we got better at managing it. CRM is a very smart way to achieve it. If the prognosticators are correct, we will see more successful pursuit in 2007 as well.

I hope you are enjoying a peaceful holiday.
Here is to a fantastic New Year!

Matthew E. Johnson
December 29, 2006

Bho Dog Gone Wild

December 15, 2006


We are approaching that time of year where all the trade rags and the popular magazines make their predictions and forecasts for the upcoming year. What I have read so far regarding CRM and Sales Effectiveness prognostication feels somewhat muted from past years. The most interesting article I ran across was suggesting that CIO’s make a few New Year’s resolutions given some technology trends for the upcoming 12 months.

My resolutions will be the following:
- Spend more time with my kids
- Do my back exercises more regularly
- Stop worrying about my poor diet

Not one of these is technology related, although I do need to get my 13 year old to stop spending so much time with his computer games.

There are some consistencies with regard to the IT predictions I have been reviewing. One is that there is going to be a cooling in the technology spending for 2007, which translates into potentially less budget for sales tools and the like. A second big trend in the press is the rise in collaboration, in this case referring to web-based collaboration of both work activity as well as societal interaction.

These two trends are going to have an interesting interaction, in my opinion. Most importantly, I believe that collaboration is something that does not have to require a lot of investment to make work. If CIO’s and other business managers were to make a resolution for 2007 that focused on these two trends it would be to resolve to leverage existing knowledge better with the tools and data already in place. It might be that a bit of work is required to clean up the data or organizing a better framework for capturing knowledge already gained. However, there is much to be achieved by taking stock of what is in place and how it can be better utilized while the business belts are tightened.

December 08, 2006

Vision with Rhythm

When I was about 10 my father brought me home my first drum one summer afternoon. It was a used snare drum but I was as excited as if it were Christmas morning – drums were my fantasy musical instrument. I took it up to my bedroom and set it up on its stand and played the first song that came to my head – Henry Mancini’s Theme From Peter Gunn. After playing two verses, flawlessly, I ran excitedly downstairs to the kitchen and asked my mother what she thought of my first drum solo and whether she could tell what the song was (of course she could tell that it was brilliantly interpreted Mancini).
Rocks NB
Well, she did not have a clue and she did all she could not to act like it was just a bunch of unbearable noise. Now, if you were to read a newly published book, Made to Stick, you would find out that this phenomenon I experienced painfully at the tender age of 10 is not so uncommon. Within one portion of the book is described a research experiment where an individual taps out a song, similar to my drum solo, to another individual who has to guess what the song is. The music tapper predicts that the other will be able to guess about half of the songs, but, in fact, the correct interpretation of the tapped out songs averages a bit over 2%.

Now what on God’s good earth does this all have to do with developing good strategy? Well, when I was playing Peter Gunn I could hear it perfectly in my head, which matched quite well the rap of the drum stick on the head of the drum. It was all in brilliant synchrony in my head, my perception. But, it was not beautiful to anyone else because they could not hear what was in my head. If you switch from auditory mode to visual mode then we encounter the same problem in the executive suite when it comes to business vision.

Executives often have great vision for what they want their organizations’ to achieve – it is intensely, ultra clear to them. But, when they beat out their vision on the proverbial drum it is not clear to others at all what the song is. So, people have to guess. And according to the statistics they get it right somewhere a little north of 2% of the time - so much for strategic planning.

The moral of the story? No matter how clear your vision is to you (because the song is playing in hi-def in your head - like wearing good Bose headphones) it probably sounds like the noise of my used snare drum to others. That means you have to do much more to communicate the vision than you think. Take the headphones off and turn up the stereo – loud so everyone can hear well. Moving off the mixed metaphors, it means that the vision has to be articulated in detail, with clearly defined tactics, put down in writing and maybe in picture, and repeatedly communicated and reinforced. Then everyone will be marching to the same tune.

October 13, 2006

Has the pursuit of ROI become out of fashion in CRM?

It seems that way. Back in 2002 when we were all up to our eyeballs in alligators due to the recession it appeared that every customer wanted to talk about conducting a return on investment analysis or build a business case to justify their CRM budget. Now the companies I talk with indicate that it is “just a given” that they have to make the investment. My how times have changed.

However, I am not fooled into thinking that we can afford to take our eye off of the proverbial ROI ball. The benefits of having a good business case for CRM program investment go beyond strictly convincing the board to approve program funding. Back in 2002 the programs with a strong business case also had some of the most clearly defined CRM strategies as well.

Why is having a CRM strategy so important? The simple answer is that the more clearly defined the strategy, the greater the likelihood of success. There is both evidence and logic to support this statement. Evidence can be found within the plethora of analyst reports coming from companies like Gartner that show strong correlations between program strategy and program success. A significant number of the reports I have seen put strategy at the top of the list for predicting success or failure. The logic behind this is pretty straight forward. If you put in time to define what you want to achieve with a CRM program, it increases the likelihood that you will actually identify the correct tactics to get there as well. And further, if it is clear where you want to be, you have a better chance of knowing when you are not getting there, and therefore you know that you have to take corrective measures to achieve your endpoint.

The great thing about developing a business case is that it forces you to think about the end state or Outcomes of your program. I believe that having a clear sense of the Outcomes is the key to successful planning. The more you understand your Outcomes, the better the chance of consensus on your end state, the greater the likelihood of setting correct expectations, the better the chances of setting and monitoring metrics, and the better the likelihood of knowing what capabilities and tactics are needed for the program to be successful.

Ultimately, if you do a good job of targeting your CRM Program Outcomes you will know what business benefits to expect from your investment. From there you can build a hard or a soft business case, depending on what you need for budget approval. Either way, Outcomes never go out of fashion.

September 30, 2006

Getting Started On The Edge

Every Organization Has Them

Customers, customers everywhere. They come in all shapes and sizes, but every single organization has them. They may be called something else – member, patient, constituent, fan, or guest, but they are still simply, customers. (I am just going to use the term customer for all of you that call these people something else – please forgive me.) More to the point, every organization needs them – there is absolutely no purpose without customers. You can’t run a business, for-profit or not-for-profit, without these pesky customers. This is a site about customers, my favorite group of people (outside of my family).

Customers on the Edge

Every organization has prospective customers waiting to become customers. The question is, how do you tip them over the edge from not being a customer to being a customer? More important, how do you tip over the good customers? This is a site focused on business development strategies and good practices (the term “best practices” is over used). Also, how do you keep good customers from leaving – going over the edge and becoming somebody else’s customers? This is also intended to be a site regarding account management strategies and good practices.

On the Edge of Normalcy

There is an amazing amount of verbiage out there regarding how to sell. It is important for me to state here and now that this is not a site about how to sell in three EZ steps. There are many places to look for ideas there. One that I personally like is SPiN. Go check it out, but please do come back. This site is intending to look at the whole process of acquiring and keeping customers, and maybe a few peripheral topics here and there – I need a bit of flexibility to stay motivated. But, I would like to think that I will offer some unconventional wisdom – and I hope you will be willing to share some too. There is plenty of convention elsewhere.

On the Cutting Edge?

Maybe, maybe not – I don’t tend to be an early adopter. No PDA for me yet, but I very much like my HDTV and use IM on a daily basis. I am hoping to share 25 years of experience working with a lot of different companies –of which every single one had customers on the edge. The longer I work in this space, the more I see things over again – new ideas tend to recycle – I’ll hope to share some that have been improved with age.

Razor’s Edge

Let’s keep this to the point – or at least a sharp edge, like a razor. No rambling monologues from me. OK? But a razor blade has two edges, so let’s make this a dialogue. There is a lot of insight to share, and we need to get multiple points of view out on the table. So, please share your comments, and also keep me from going over the edge.