It has become appallingly obvious that our technology has exceeded our humanity.
While there have been some successes, customer relationship management (CRM), as it has been executed, has become one of the biggest misnomers in the business world.
It hasn’t been about customers, it hasn’t been about relationships, and it hasn’t been about management. In fact, when done poorly, CRM can serve as a barrier between you and your best clients. In reality, CRM has been about cost reduction, and the net effect has been to commoditize relationships by allowing customers to have a “personal” relationship with a computer.
In my personal life, I have fired four vendors who implemented CRM systems badly: my landscape chemical company, a florist, my home alarm company, and several banks. (In fact, I was bank-free for over 15 years. I moved everything to an online brokerage account.)
My landscape chemical company was the first to go. I have been blessed to own 12 acres, just north of Atlanta. Although I have a large yard, I represented only one account to this particular company. Different zones in my yard require different care, and because the company didn’t have mapping capabilities, its system had only one description for my yard. On top of that, every time they changed drivers, we had to start all over because their system did not provide continuity of information, which is one of the primary purposes of a CRM system.
The next to go was my florist. Several years ago we had a personal tragedy in our family and I needed five flower arrangements on a Friday, the beginning of a holiday weekend, for a funeral on Saturday. I called my usual florist and explained the situation. I told the salesperson that I would be right over (the store was only a few blocks away). When I got there, the store was closed. I got on my cell phone again and called the salesperson back.
“I am standing outside your door, and it doesn’t look like anyone is inside,” I said.
There was a long pause.
“Can I please speak to a manager?” I asked.
Another long pause.
“Where are you?” I demanded.
“In Denver,” she said.
When I asked her why she didn’t tell me this when I first called, she explained that the shop had recently been acquired by a larger company, and all the records had been moved over to a new system.
I canceled my order and called a local florist, Nature’s Rainbow, who already had my preferences and credit card on file. The salesperson told me that he would have five flower arrangements ready the next day, and that he would work as long as it took to get them done. Guess who had my business from then on?
My home alarm company was next. A few years ago, my house was struck by lightning, and it knocked out my alarm system. I called the 800 number to ask the company for help. The person on the other end was polite enough, but I soon realized that she was in Salt Lake City. My records, she told me, were in Kansas City — again because of a merger, which happens often in this industry.
I was incredulous. This was the number my wife was supposed to call if there was a burglary attempt while I was out of town! Now I deal with a local company, and my representative is good ole’ Alan. The last time I called him with a problem, he said, “Oh, yeah—that’s the switch over by the window. It’s always been a problem. I’ll stop by on my way home tonight.”
Give me high touch over high tech.
Bankers. Where do I start? I have a credit card from a bank that is now one of the largest in the United States. They were nice enough to give it to me when I graduated from college and had no money (this is either a great investment in me or terrible credit checking, but I’m glad to have the card). I’ve kept it for 32 years. Today, when I put that card into an ATM machine, the very first question the machine asks me is what language I speak. Thirty-two years and they don’t even know which language I speak? How is that for customer intimacy?
When I go in and speak to a teller face-to-face, the first thing he asks me is if I have photo identification. For 20 years in Atlanta I couldn’t get a banker to learn my name. I was running a large region for a major software company where we had a new hire almost every other week. I could have brought in a lot of nice accounts. But not once did I ever have a branch banker come out of his cave in the back to learn my name.
Much less, not one of those bankers — until this year — learned my business and provided advice on how to run it. Finally, I found a banker I like: Jim Pope of Ironstone Bank. He knows me, has invited me to play golf, and checks on me to ask about my business and my needs. I actually walked into the bank building a few weeks ago and was greeted across the lobby by Caren Lightfoot from behind the teller window. I asked to see one of the executives, but when she learned what my issue was (a deposit and a check written at the same time), she handled it herself. She said, “I know your relationship with the bank and what other funds you have. We’ll be fine.” I never thought it would happen in my lifetime. Access to information made it possible, but a caring person made it happen.
When I need something or know that someone is looking for a good banker, I have somebody to call. This is why small banks are booming. When it comes to relationships, they are actually doing what the big banks say they do in their ads. My insurance agent is next. He thinks a relationship is sending calendars and refrigerator magnets once a year.
“Please wait while our agents are servicing other customers” often means “We haven’t hired enough people to take care of our clients, so you have to wait.”
The reason many CRM systems have been implemented poorly is that their objective has been a lie. It was never about customers or relationships in the first place.
The true objective when it comes to many of these systems is lowering costs. The idea is that if you can move a customer to a call center from a sales call, your cost drops from $200 to around $25. Even better, if you can move the customer out of the call center and onto the Web, it drops to about 17 cents. Lowering costs in this age of the “China effect”—the epidemic of cost containment — means that in some cases companies have become more efficient at providing Internet or call-center service for very low margin accounts.
But the disease has spread over to large-margin relationships where companies are treating their best business customers like commodities, making them wait in long hold lines. “Please wait while our agents are servicing other customers” often means “We haven’t hired enough people to take care of our clients, so you have to wait.”
The next objective of the CRM system has been to get the “little black book” out of the heads of salespeople and into the computer so that, if and when the salespeople leave, they don’t take their names and contacts with them. In reality, if they have built relationships with these contacts, they still take the relationships with them.
Whenever you have turnover in your sales force — on your side or on the client’s side — emotional bank accounts, as referred to by Stephen Covey in his book, The Seven Habits of Highly Effective People, go back to zero.
The real issue is turnover. If companies spent a fraction of the money solving their sales turnover problem that they do trying to automate their sales force to solve customer problems, they might start to build some real relationships.
But getting all the information and contacts into the computer is designed so that no one person has to have a relationship with the client. We can swap people out as the call centers change shifts. In direct field sales and marketing, though, capturing the little black book and ignoring the turnover problem simply won’t work.
While it is true that information is important to relationships, it is only a tool. There are missing links between our objective in the account — account dominance or preferred vendor status — and an information tool (see Figure 7–1).
Let’s work backwards: If you want to dominate an account, what the client wants is trust. Trust is built over time. Relationships are built over time. In complex sales, people buy from people—not computers. You can sell online, but not if you want trust. Not if you want account dominance.
If you want to sell commodities, sell them over the Web and service them with a call center — the same for noncompetitive reorders. But strategic business-to-business (B2B) services and products include greater career risk to the buyer and therefore require trust. In order to maintain trust, you need continuity of the relationship, yet sales turnover in the high-tech industry averages around 30 percent per year.
A CRM system is a repository for information — not a process. Information about problem resolution and purchasing history is very important, but only to the degree that it builds trust and continuity so that clients don’t have to constantly train new salespeople on how to sell to them. In addition to this continuity, the company has to have delivered value because performance on the last sale is the gateway to repeat business. When your product or solution is performing and producing results and value — and you have documented those results — then risk begins to lower.
A CRM system is a repository for information, not a process.
As risk lowers, trust goes up. This is why IBM was able to sell its products for such a premium in the 1980s. The company lowered risk for IT directors. In order to do this, you have to have a sales process that rewards not just customer satisfaction but also customer loyalty. And there is a big gap between the two.
In some studies, there is as much as a 40 percent gap between customer satisfaction and customer loyalty. Satisfied customers will still buy from somebody else. As Herb Cohen, the great negotiating trainer, said in one of his speeches, “They care, but not that much.”
Several years ago, Blake Batley met with a vice president of sales of a large CRM software provider and asked him, “What makes your CRM application so much better than all the other CRM applications in the market that seem to be positioned the same way?”
The vice president said, “Well, our application is great because it gives our clients insight into all the history and interactions they have had with their own customers.”
“But how does your CRM application help your salespeople defeat your competition?” Blake asked. “How does it help them win deals and make their numbers?”
The vice president didn’t have an answer.
Having access to contacts and a customer history alone doesn’t help you win deals.
Technology can’t make up for what hit-and-run selling does to destroy trust. And if you want to be trusted, you have to have trustworthy people — people who can sell consultatively, who know their clients’ business as well as they do their own, and who are willing to work collaboratively to solve business problems.
David Stargel, our principal in charge of the Deloitte account, relates this story. A partner at Deloitte called on an executive client, and although the executive didn’t have any work for the consultant, he agreed to meet with him anyway.
A few months later, the partner called on the executive again. He still didn’t have any work for him, but again, they met anyway.
The executive continued to meet with the consultant every time he called on him, never having any work for his firm, for 15 months. Finally, at the end of those 15 months, the executive called the consultant with a project.
The consultant excitedly offered to get his team together and present a proposal.
“That won’t be necessary,” the executive told him. “The last 15 months have been a test. If you will stay with me when I am not buying anything, I am confident you will stay with me when I am.”
Information is vital to the degree that it supports all these missing links and strategies. As Klaus Besier, who grew SAP America in its early days, says, “Knowledge of birthdays alone is not going to give you competitive advantage.”
If your objective is to reduce cost and you end up nickel-and-diming your clients by not giving them adequate service, then a bad CRM implementation can ultimately cost you.
Many CRM initiatives are ill fated when they get to the field sales force because they are implemented by IT and implemented backwards. Considering the system first — and then addressing the needs of marketing, legal, and customer service — before finally talking to your sales force about their sales process and what they need to improve, is the wrong approach.
The result is asking your primary revenue generators to do data entry for the rest of the firm. Think about the basic economics of this: If a salesperson has a yearly quota of $2 million and works 2,000 hours in a year, he or she must sell $1,000/hour to make quota. Yet the CRM implementation wants you to make that salesperson into a $1,000/hour data-entry clerk—for the benefit of everyone else (see Figure 7–2).
A better approach, seconded by Joe Galvin of Gartner, Inc., is to start with a sales process. First, identify your best practices sales process, all the way from demand creation through competition to contract and then to account control.
“Gartner Dataquest has recognized that enterprises have spent more than $3.6 billion on sales software alone, with growth projected through 2007,” says Galvin. “However, many of these investments have failed to deliver measurable results, characterized by extremely low adoption rates or total abandonment.”
Galvin further states that, “sales culture dictates, to a large degree, technology adoption,” and “technology alone will not change behavior.”[4]
Defining your best practice sales cycle with your management team is the starting point for almost all things in sales effectiveness. Out of this exercise, you can identify — in each phase — what questions should be asked, what actions should be taken, and who is responsible.
Take that sales process and combine it with a methodology that incorporates tactics, the impact of time, the hierarchy of pain, political navigation, and consultative selling, and out of this comes a strategy that will drive your sales activity. This becomes the “playbook” for your team.
Most information systems are used simply to provide access to your process, to document your chosen strategy to the rest of the sales team, and to give managers a tool from which to coach.
This is not about filling out forms or screens. It’s about how you think and how you lead.
There are two purposes to creating a sales plan. The first is to stimulate thinking and make sure that you haven’t forgotten things. Pilots, whether they have been flying for 3 months or 30 years, still use a checklist.
The second purpose of a sales plan is to communicate your strategy to your manager, who may be able to help you with your strategy, and to your teammates, who need to know who is responsible for which actions, which messages, which stakeholders, and when each activity is due.
This is a major area in which salespeople must move from loners to leaders. Lots of salespeople like to keep this in their head, and as a result, the forecast suffers, the presentations suffer because teammates don’t know what is expected of them, and prospects suffer because they have to sit through endless presentations that don’t address their pains.
“Meeting demands for increased visibility does not help salespeople or organizations sell more,” Galvin says. “The reporting of pipeline and forecast values to meet requirements of CEOs and CFOs has little impact on individual or organizational productivity. To increase productivity, sales executives should focus the execution of the sales methodology and processes that accelerate selling, not the reporting requirement of finance.”
It’s about communication, your plan, and leading your team. Your process needs to drive your technology, not vice versa.
It is helpful to examine technology in light of how it empowers the four levels of sales strategy. At the bottom are tools that empower selling to individuals, or face-to-face selling. Obviously, these are the contact and activity managers, and there are many vendors in this area. This has been one of the most productive areas for information technology in assisting salespeople.
Not only has new technology given salespeople a tool for searching and finding contacts earlier and then generating e-mails and correspondence more quickly, but it also gets the information, which is a company asset, out of the salesperson’s head and into the corporate system.
A well-known fact among salespeople, however, is that almost every salesperson has two databases: one that is shared with the company and one that they keep in Outlook or ACT or some other database of contacts that doesn’t really belong to the company. This is only natural, but it still means that every time a salesperson has to enter a contact, it may have to be entered in two places.
Network Management Tools
Some of the more innovative technology tools in the area of contact management for selling at the individual level (as of the date of this book) are those offered by such companies as Spoke, LinkedIn, and Plaxo that allow you to electronically validate your contact information, keep up with changes, and find out where people in your network have moved.
Spoke and LinkedIn have an interesting approach in that they acknowledge that the key to political navigation is sponsorship. They allow you to link people into your network — and vice versa — so that you can find out who actually knows whom. In this way, if you can’t get access to someone, you can get sponsorship from someone else who has access to that person. This kind of political navigation is one of the most effective ways of gaining access to executives. You can borrow influence from someone you know to get to someone you don’t.
These companies have moved beyond contact management to linking networks and saving salespeople dozens and dozens of phone calls to find out who in their firm or industry knows someone who can help them get that precious first 30 minutes of access.
A contact manager is not adequate for opportunity management, and neither is the simple forecast that comes with most CRM systems. Among the best practices we see in opportunity management tools are:
• A lead prequalification checklist
• A prospect qualification checklist
• A competitive assessment
• A value linkage chart
• A stakeholder analysis
• An action plan
• Coaching questions
Lead Prequalification Checklist
Marketing tends to measure its success by the quantity of leads generated by any given campaign. But the sales department is frustrated when it receives a blizzard of unqualified “leads” from marketing, most of which will not turn into prospects even after hours of phone calls.
Research shows that a very large number of these leads are never followed up on at all, probably because of the lowquality experience of previous leads.
Jim Ninivaggi, director of the sales performance practice at SiriusDecisions, a sales effectiveness analyst firm, says:
In some organizations, up to 90 percent of leads don’t get followed up on at all. If I get 100 leads and only two pan out, the next time I get 100 leads, I’ll ignore them because they aren’t worth my time.
Of these leads that aren’t getting followed up on, most of those prospects will buy something in the next 12 to 18 months. They may not buy it from you, but the interest level was usually high enough that they will probably buy something.
It is more economic to have a marketing person nurture these leads than to have a field person follow them up. This is where marketing can play a very effective role.
Prospect Qualification Checklist
An agreed-on set of qualification criteria not only prompts the salesperson to identify the risks of proceeding but also removes the emotional issue of qualifying out versus quitting. In this way, you have the proper expectations for the forecast because everyone is using the same standards.
What are our agreed-on criteria for pursuing this opportunity? Will they buy from anybody? Will they buy from us? How does this prospect compare with our other opportunities? Do we have the resources?
Competitive Assessment
The key to competitive tactics is timing and anticipation. A technology that prompts our thinking promotes earlier action and competitive advantage.
How do we compare against our competitor in this account? Do we have a good chance to win? What are our relative strengths and weaknesses compared with their needs? Do we have any unique differentiators? What strategies can we anticipate from each competitor? How do we beat them out of the starting blocks?
Value Linkage Chart
A tool that helps us think through our value proposition allows us to present and focus benefits and messages to the right stakeholders without them having to figure it all out by themselves (and sometimes get it wrong). How do our solutions link into their issues and needs? Who cares? Does our value proposition link into strategic initiatives or issues? What cultural, financial, political, and strategic benefits can we offer?
Stakeholder Analysis
Who will be involved in the evaluation? Who matters? What part will they play? What is their current preference? How much power and influence do they have? How do we win their vote? How can we live without their vote?
Action Plan
This is the outcome of the analysis and strategy review. It is the purpose of a sales process. Without it, people wander in an account, waiting for things to happen. The most important impact of technology in this area is the ability to adjust the plan purposefully and dynamically through online strategy conferences with teammates who may be remote.
What actions are needed to win this opportunity? Who is the owner of each action item? When is it due? How will each competitor respond?
Coaching Questions
While there is no substitute for a manager’s coaching to challenge assumptions and blind spots, embedding the list of questions to ask the customer and yourself about your strategy is a useful tool to jog salespeople’s minds about all the issues they need to cover. This “coach in a box,” in an automated opportunity management system, not only reminds reps of the training concepts back in the binder in their office but also eliminates “ambush coaching” because all the questions have been previously defined. The result is competitive information earlier and fewer blind spots later.
A Picture Is Worth a Thousand Sales
One of the most useful technology tools we have seen is color-coded organizational charts of the stakeholder analysis. These charts are generated automatically from the opportunity management tool that we use with our clients, and they help sales managers to immediately visualize who in the organization prefers us and how much power they have.
Most veteran managers can take one look at this and drill down to about a dozen questions that not only will purify the forecast but also will help to bring a value-added coaching session to the salesperson to improve his or her strategy.
Too often, most sales coaching consists of little more than the basic questions of “how much and when” and brings no value to the salesperson whatsoever. In discovery for a recent speech in Europe, the sales executive of a Fortune 500 company admitted, “We are a very process-oriented company, but we are under such quarterly pressure that our account reviews focus too much on when we are going to get business and how much rather than what we’re going to do to win it.”
There are questions that the sales rep asks the client. There are questions that the reps should ask themselves. And then there are questions that a coach should ask the rep. There are over 100 in all that we have documented from some of the best salespeople in the world. This is how many it takes to win a complex sale.
Traditional questions asked of salespeople by sales managers typically include, for example: What are your differentiators that will cause them to buy from you? What is the source of urgency that will cause them to buy now? How will they make the decision? Whose votes really matter on the committee? Why would they buy from you? Do enough important decision makers prefer you to win? Who cares about your benefits, differentiators, and value?
This checklist can be automated as part of a drill-down forecast so that the vice president of sales can see the manager’s confidence level in the sales plan and the chances of winning.
This practice is spotty at best in most organizations and missing altogether in many others. Look for these organizations in the financial section of the newspaper when they miss next quarter’s earnings.
Coaching in Eight Simple Questions
Exactly what the 100 questions are needs to be validated by your sales managers for your industry and solution set. It is one of the first things we do with a client. But many managers have found it helpful to categorize them into eight universal questions that everyone can keep in their head or on a wallet card:
| 1. Why buy? | Pains, gains, needs, value, fit, budget |
| 2. Why us? | Differentiation, prior preference |
| 3. Why now? | Source of urgency |
| 4. How much? | Proposed solution, amount, approval process |
| 5. Why them? | Qualification |
| 6. Who matters? | Politics, roles, decision-making process |
| 7. Who cares? | Linkage, preference |
| 8. What next? | Strategy, action items, due date, owner |
| Copyright © 2005,The Complex Sale, Inc. | |
The top salespeople we know discover 80 percent or more of the information they need early in the sales cycle and either qualify out or pursue. Mediocre salespeople usually have less than 50 percent of the information late in the game. Coaches help the average salesperson to fill in blind spots and challenge assumptions earlier to gain advantage.
A good coaching session not only can improve the chance of winning, but also improve the forecast as well. The coaching process lies above the sales process and is an “analysis of the analysis” from a more experienced eye.
Our principal, Phil Johnson, has worked with several of our clients to include the front-line sales managers’ analysis and confidence rating in the salesperson’s plan as part of the official forecasting system.
A major flaw in current forecasting philosophy is to multiply the percentage of your chances to win by the value of the deal to get an expected value for the opportunity. This is usually reduced by the manager based on his or her confidence in the rep rather than the analysis. All of the opportunities on the forecast are then combined in the hope that the law of large numbers will get us to a total figure that is somewhere close. In reality, deals are binary. You either lose them or win them.
Phil’s approach of including a confidence rating feedback system from strategy reviews ensures not only that the analysis is being conducted on a periodic basis but also that the forecast reflects the realities of winning rather than a probable expected value for each deal. This is a new way of thinking about a forecast.
There is a symbiotic relationship between good coaching questions and the activities in a best practice sales cycle. The coaching questions are what the salesperson needs to know in order to win the deal. The activities are the things the salesperson needs to do to find out what he or she needs to know.
Answering the questions isn’t about filling out a form — it’s getting the information it takes to win. If your sales management team doesn’t have the discipline to require salespeople to get this information and get it early, then your organization doesn’t have the discipline to win, no matter what technology you use.
Too often coaching is really a “review” of where you are and have been in an account or opportunity. True coaching is discussing blind spots, strategy, and actions to support both accounts and opportunities. A good coach can help a salesperson challenge what he or she doesn’t know or is assuming and then build actions to fill the gaps. A key value that coaches bring to sales reps is to anticipate competitive responses and prepare counterstrategies. Better information leads to a better strategy.
Unfortunately, a large number of deals that are on the forecast have already spun out of control owing to one event or another. Consequently, every pipeline also should include “suspects” so that sales managers can start asking pointed questions and coaching salespeople how to get in control of these deals early in the cycle. This is the difference between a forecast and a pipeline. And this is also where a good CRM system allows sales managers to track lead quality and responsiveness.
Forecast or “Pastcast”—Driving in the Rearview Mirror
Many sales managers don’t review or coach forecast and pipeline opportunities early enough to make a difference because of the current quarterly focus. Public companies’ deals generally don’t get reviewed until the quarter in which they are forecasted to close. If the average sales cycle at a company is six months, the deal is not being focused on until it is in its last 90 days.
Think about how big of an issue this is if the sales cycle is 12 months. This would mean that the deal was ignored by management for nine months! This is aggravated by salespeople who don’t want the manager’s scrutiny on the deal until it is either virtually closed or in trouble.
Every manager should schedule coaching sessions for all pipeline deals, no matter how far out they are. These sessions should occur once during the early part of a quarter, when you can focus more on the long term, and then again when the deal is moving to the next phase of the sales cycle. Or the sessions should happen before each major phase of the sales cycle that requires additional resources (see Figure 7–3).
In addition to a sales planning and communication tool, several other technologies enable effective opportunity management. In the area of competitive intelligence, as part of your knowledge management strategy, it is important to have a repository and a dedicated resource committed to gathering information about specific competitors to equip the field sales force with tactics to respond to competitive traps, objections, messages, and strategies.
One of the first things we do with our clients is work on their competitive sales messaging in four areas: what we say about the competition, what we say about us, what they say about us, and what they say about them. Of course, this is done in a professional manner, but if you know your competitors, you can defeat them at three levels: at the company-to-company level, at the product or solution level, and at the person-to-person level (see Figure 7–4).
Competitive interactions occur every day, but are you learning from them? Some historians say that the Allies in World War II were able to win because, even though they were unprepared, they were able to learn faster from their defeats and failures and more quickly develop new tactics and weapons.
What strategies are the competition using? How have they beaten you recently? When and how did you beat them? What differentiators and tactics are they using?
Gathering this information should not be a haphazard effort. Depending on the size of your company, you may choose to have this done in marketing, or you can outsource it.
Many companies outsource this to firms such as Primary Intelligence, a company with which we partner. Primary Intelligence and firms like it research competitors for their clients, uncovering their strengths and weaknesses and anticipating how they are going to compete against them.
There are also new technologies from companies such as Involve Technology that allow you to glean information from your own people and distribute it in a more efficient manner than many-to-many e-mails.
Involve Technology has a new enabling tool (at the point of this writing) that allows each salesperson in the field to input competitive tactics, messages, traps, objections, and so on on a daily basis, where they are then “scrubbed” by somebody in product marketing for duplication and legal issues and made available instantly to the rest of the company. The key is that this system is driven by a content-sensitive search engine that allows salespeople to find the information they need quickly and efficiently.
Air Force Colonel John Boyd discovered that the speed of information drives the speed of strategy, which then drives competitive advantage. His theories of maneuver warfare, based on competitive intelligence, revolutionized our military between Vietnam and the Gulf War.
Boyd led the design of the F-15, F-16, and A-10 fighter planes. He was the first graduate of the Air Force fighter weapons school to become an instructor immediately upon graduation. He was called “40-Second Boyd” because he would bet anyone that they could start on his tail and he could shoot them down within 40 seconds. He never had to pay.
He proved that the F-86 had a 10:1 kill ratio in Korea against the MIG (which was an equal airplane) simply because it had a bubble canopy. Our pilots were able to see the enemy first and anticipate their tactics. About 80 percent of the time, the pilot who sees first wins.
The principles contained in Boyd’s books, and in those about him, have much to say about business and sales strategy as well as resistance to changing cultures.
In competitive positioning, the advantage lies in saying it first.
Salespeople should have access to what the competition is planning to do because, in competitive positioning, the advantage lies in saying it first. If you know that a competitor is going to raise an issue, it’s better that you raise it first. If possible, neutralize it and position it as an advantage for you.
If your competitor is allowed to come in and say things unchallenged or unanticipated, he or she gains an incredible amount of power. It takes up to 10 times more resources and effort to change someone’s mind than it does to help make it up in the first place. You can see why timely knowledge management can have a significant impact on competitive advantage.
If you plan to compete in a professional manner, you must anticipate issues and shape them — often without mentioning your competitor by name. Instead, you can say, “Other firms approach this area in this way. Here is our approach, and this is why we think it is superior.” The chances of having this perceived positively are much greater if you can anticipate the competition’s move.
In the area of account management, the technology bar is raised once again. Not only do we need to manage an opportunity and the politics and pains therein, but if we’re trying to dominate a global account or we have a major strategic account, we also need to know the current status of every opportunity. If we don’t, the results can be disastrous.
This is where a CRM system can be of great value in identifying and cataloging opportunities worldwide.
Jon Hauck was delivering a Total Enterprise Account Management (T.E.A.M.) workshop to the Daimler Chrysler account team of one of our clients with attendees from the United States, Germany, and several other countries. The goal of the workshop was to build a global account plan.
As they went through the process, they discovered that the prospect actually had four strategic business units involved in the decision-making process, not three as they had originally thought!
This led to a call to the CIO, which resulted in identifying a key pain around a quality initiative, all unknown to the account team. Based on this knowledge, they were able to develop a plan to compete for, and ultimately win, the business.
Had they not invested in the account planning process and gotten everyone to collaborate on a plan, they would have missed a huge opportunity from a division that they didn’t even know existed.
With greater visibility into all opportunities throughout the world, by having all opportunities on the same system, you can achieve greater access, avoid conflicting pricing, and structure joint proposals that the competition can’t match. At the account management level, you also need to be able to drill down into individual opportunities to find out if they can be combined with other opportunities to outflank the competition. In many cases you have a better chance of winning a bigger deal than winning a smaller one.
One of the first things we need to do is research the account and be very knowledgeable about the strategic issues and initiatives so that we can talk intelligently with executives, link our solutions to their high-level initiatives, and earn greater than commodity pricing. Technology and the Internet have been invaluable in enabling companies such as Hoovers and OneSource to gather information from a wide variety of sources and put it all in one place so that salespeople can quickly get the names of the executives, the issues, and the background information they need before calling on an account.
But outside electronic research is not enough. What you need to identify is pain, initiatives, and issues. The best source of this can be reporters and financial analysts. These people are paid to dig in and find the big, snarling, nasty problems that executives are embarrassed to admit.
Another good research organization for finding pains and issues for demand-creation selling is a company called Stratascope, Inc. Stratascope gathers industry statistics and available data on companies based on their financial reports. The company then works with salespeople to help them identify areas where an organization has a gap between its statistics or financial ratios and the industry standard. Using information from Stratascope, if an organization has a solution to the problem, they can actually create a value proposition based on closing that gap.
For example, a prospect averages 83 days sales outstanding in accounts receivable. The industry standard is 67, and the best in industry is 59. Based on the prospect’s financials, if you (the salesperson) can close that gap to meet the industry standard, you can show the prospect the savings and return on investment (ROI) he or she would experience as a result of implementing your solution. Maybe the result is an increase in earnings, more freed-up cash, or even an increase in shareholder value by a penny a share. This is a powerful approach in demandcreation selling that the consultants have been using for years.
There are some major organizational and cultural barriers to effective account management that are above and beyond what technology can solve. One is split policy and revenue recognition. Another is turf guarding, and a third, obviously, is communication.
Some salespeople would rather have 100 percent of zero than give up a percentage to someone else. This is the “me” mentality, and this mind-set has to be defeated internally in your culture if you are going to have a successful account management program.
Two of the bigger barriers to technology at the account management level are personal compensation issues and regional boundaries. When SAP was very small, it dominated several accounts because one salesperson could handle a major global account. When SAP became entrenched in other countries, there were internal fights in these accounts over whose share was whose.
The challenge is to keep these struggles internal and away from the client. Never let your service levels be affected by internal arguments.
The people who are probably the best, but not perfect, at this are actually the big consulting houses. For one, they have good revenue recognition—split policies that recognize who sold it and who has to support it. They also evaluate each other in regard to promotions and advancement in making partner. They know that they are going to need another partner some day down the road on their own deal, so, for the most part, collaboration is part of their culture.
They are usually able to put the good of the client above their internal priorities in order to make the pie bigger. Not that there are not fights, but they seem to have a collaborative approach — more so than many of the product companies we work with.
Building preference must be done before a formal buying event takes place because then the lights come on, the guards go out, and the walls come down.
In addition to listing research and opportunities, one of the key places where technology can be of help is to create a balance sheet of political assets— a metric of relationships— within a company. This is a way of measuring preference for you and your firm with powerful executives between the sales.
If you have a good account plan and the technology to make it available to everyone with a need to know, you can set clear goals and leverage your team. Everyone who touches the account in the organization knows what the objective is and can use the normal give and take of daily business to trade for access to the people you need to meet. Without a written companywide plan, and a system to make it accessible, this is simply not going to happen. There is also no way to present your documented value and negotiate it for preferred-vendor status.
Keeping track of multiple divisions and multiple sales efforts — while making sure that your pricing isn’t all over the board and providing a convincing joint proposal for the client that will help him or her understand your advantages—takes a great deal of coordination. Solving the political problems inside may be the biggest challenge. Without a piece of technology to keep track of who is doing what, however, this becomes an even more difficult task.
Another important area of automation — that of sales messaging — can greatly affect the interface between marketing and sales. This is an area where technology actually has exacerbated the problem.
Marketing serves many important functions. Among these is creating effective and timely sales messaging for salespeople. Often the sales department is unable to get the information it needs from marketing in a format its people can use.
With the advent of e-mail and the Web, marketing people now can barrage salespeople with tons and tons of information, which makes sorting through it all to find the right information even more difficult.
The key to this is to provide the information in a format that allows salespeople to find what they need quickly and easily. Another problem is that marketing typically doesn’t create different messages for prospects, customers, salespeople, and investors. And if a company has a large number of products, a large number of competitors, and is in a number of different industries, the result is a huge knowledge management problem — which drives a sales problem.
Marketing collateral and brochures obviously should be written from the point of view of the customer. But which customer? For sales-effectiveness messages, the starting point should be from the salesperson’s point of view, which is by stakeholder. What do the salespeople need to be competitive, to keep customers satisfied, to add value, and to win more business?
Once you have this information, it has to be organized and indexed. First, it has to be chunked into pieces. Some companies approach this by chunking it by product, but salespeople need it by customer pain — from the customer’s point of view. If customers have this pain, how does our solution solve it? What are the outcomes? And — oh, by the way — it is contained in what product?
After the information has been segmented, it then has to be indexed so that salespeople can search for it by customer pain; by product, solution, or service; by industry, executive, and technical buyer; by phase of the sales cycle; and by competitor. Once indexed, it must be linked to other relevant data so that salespeople can trace it back to other related information that they might need.
You are a salesperson in a hotel room, late at night. Tomorrow morning, you have a sales call to a CFO in health care, against competitor XYZ, for a certain solution set. What do you say? What are the industry issues for each person on the buying committee? What will your competitor have said? What traps can you look for? What issues can you create?
Tomorrow afternoon, you have to talk to procurement in Bank X. What are their issues? What will they be concerned about? What solutions do you have? How can you differentiate yourself?
As you can see, this can be a knowledge management challenge. Most file document vendors organize and index documents, but salespeople need their information in a more granular fashion.
Sales Knowledge Management
Salespeople tell us that they often have to make as many as 20 calls internally to find the information they need for prospects and clients. A tool that makes this easier is an enormous value that frees salespeople up to sell.
An example of a vendor working to provide that additional level of value to salespeople is Pragmatech. The company’s offerings allow salespeople to quickly personalize communication in the context of “buyer-ready information.” In other words, the communication is personalized and tailored to the buying criteria of each prospect or customer. All Pragmatech applications are driven by a common knowledge base. Content in the knowledge base is parsed into customizable pieces and indexed with appropriate search engines so that salespeople can easily personalize presentations, proposals, statements of work, RFP responses, business letters, and other communications throughout the sales process.
Jennifer Webb of Pragmatech tells us that when the company surveys its clients, it finds that 90 percent of the sales messaging used by its salespeople comes from their own hard drives—not a central message center—and that much of the data is feature-driven rather than pain-driven. When Pragmatech talks to prospects, its people ask, “What if you could capture what your A players are saying and get that into the heads of your B and C players?”
Pragmatech’s success stories demonstrate the value of a centralized knowledge base made accessible to sales organizations. For one enterprise, a leading online global career network, the marketing team aligned closely with sales to capture and refine the best high-value buyerfocused messaging. With use of automated proposals and presentations and a searchable Website, the sales force throughout the enterprise had access to these wellarticulated and accurate messages and could apply them to communications that were personalized to the buyer’s objectives. The results included improvements in sales effectiveness, client interactions, competitive advantages, and productivity.
Salespeople still need the flexibility to tailor messages to individual buyers, but in this way they can at least start from a central repository. Then you can be sure that they are basing their messages on current information that is already arranged into pieces that they can organize and use.
The solution is not just a sales portal, a tool kit, a dashboard, or a marketing encyclopedia. There is no technology “silver bullet” when it comes to sales and CRM.
Messages Focused by Stakeholder
The best practice is to have relevant information, to keep it fresh, and to organize and index it based on what your sales force needs. This should be the point of departure, and it should be driven by the best practices sales cycle, working backwards through marketing to get the right information by industry, stakeholder, organizational chart, solution, product, competitor, customer, prospect, or investor.
The information needs to be segmented, indexed, and linked by a tool that can help salespeople find what they need, when they need it, to win more business. By the time a salesperson gleans all this from brochures or books of binders, well, you can get the idea.
Product Launch or Product Lurch?
And if you are involved in a new product launch, your window of competitive advantage is probably six months before your competitor can bring a new product online. If your salespeople spend half that time creating messages themselves, you’ve already lost half your opportunity.
A typical scenario for many companies is for marketing to give the salespeople information on a new product or solution in a format that is great for a marketing piece but not great for a competitive sales message to be used throughout the sales cycle.
Each salesperson then “translates” this marketing message into the message he or she needs to support the sales process.
Here is the problem: The “A” players may figure this out quickly and lose value for only one or two weeks. But it takes the “B” players a little longer, and they may lose one or two deals before they figure it out. And how long does it take the “C” players? Somewhere between a long time and never. There is a better way to do this.
The best practice that we have found is that when it comes to competitive information, buyers needs, value propositions, and your benefits and differentiators, these
need to be organized in a context-sensitive search engine rather than in a marketing encyclopedia full of brochures. The search engine is the key.
A few years ago, Jon Hauck and I met with the company with which we had just been merged.
The manager asked us, “So, what did you guys do about six months ago? All of a sudden, you started turning on a dime. We used to be able to try a new tactic on you half a dozen times before you would finally have a sales meeting and get wise to it. Suddenly you started having an answer ready the very next day. Not only could you handle the objection, but you had set a trap for us and spun it the other way!”
What we had done was use the then-new technology of voice mail to create a clearinghouse of information so that whenever a salesperson discovered something new, he or she passed it through the product and brand managers immediately, and it was back in the field the next day.
The simple use of this technology made millions of dollars for us, but speed was the real issue. Now, with the Internet, this competitive speed should be even easier and faster.
Speed of Feedback Is Advantage
The best practice is to refresh information every 48 hours and to have somebody in charge of each competitor and each industry to keep that information current. You also need a feedback loop where a salesperson in one part of the world who uncovers a competitive trap can spread the word and have the rest of your salespeople ready for it before your competition can use it on you a dozen times.
| Technology Scorecard | |||||
| Best Practices, Technology | Importance | Execution | |||
| Degree of Importance (1 = low, 10 = high) | Agree, but we never do this | We sometimes do this | We often do this | We do this consistently | |
| Individual | |||||
| We have a standard, widely adopted contact management system for our firm. | |||||
| Opportunity Level | |||||
| We have an effective, widely adopted opportunity management planning tool. | |||||
| Our metrics allow sales managers to track lead responsiveness. | |||||
| We regularly conduct win-loss reports through a third party. | |||||
| Our sales process and methodology are imbedded into our forecasting/pipeline system. | |||||
| Our forecast/pipeline system includes early suspects for management visibility. | |||||
| Account Management | |||||
| Our CRM system gives us visibility into opportunities for a given account worldwide. | |||||
| We have a C RM system that is widely adopted by the sales force. | |||||
| Industry/Market | |||||
| We have a tool for gathering and distributing feedback from our reps quickly. | |||||
| Marketing information is organized and indexed by industry, solution set, individual buyer, and competitor. | |||||
| Our sales force is equipped with tactics and messages, by industry, to respond to competitive traps and objections. | |||||
Joe Galvin, Technology-Powered Sales Productivity (Gartner, Inc. 2004), pp. 6–10.