Three Things That Kill CRM (…and how to counter them)

Thanks for coming back! Please use the comment function below to let me know what issues are on your mind and what you're thinking about. RSS Feed

According to the best research I can find, roughly 2/3 of CRM implementations fail. How can this be? After so many years why haven’t sales leaders and CRM vendors figured this out?

On days when my patience is running short, my list of three CRM-Killers consists of resistance to change, intellectual laziness and fear of being exposed as not quite the sales super star everybody thinks I am. On one level this is right on target, and as a member of a sales team you’ll be well served to keep this “2X4 upside the head” style list in mind.

At a more pragmatic level, though, it’s more helpful to think in terms of addressing the three key objections I hear most often.

“Process and metrics don’t apply to me because…”

Sales Reps think they’re different; that what they do is un-measurable and dependent mostly on hard-won, real-world experience. They (mistakenly) believe that continuous improvement techniques that apply everywhere else in the known universe don’t apply to sales.

Here are a few “un-measurable professions” that have been hugely and dramatically changed for the better within the last decade: Medical Care, Mortgage Lending, Wine Investing, PGA Golf and Major League Baseball Scouting. There isn’t enough space to discuss the details here. Suffice it to say that the conclusion of the story for each of the above is 1) Hard-won experience is great, but not enough anymore. 2) Statistical geeks beat the daylights out of the old pros every time. 3) The really big winners were those highly experienced folks that added a process and metrics mindset to their professional repertoire. In other words, process and metrics DO apply to you.

“You want me to spend time typing instead of making sales calls.”

Yes. I want you to spend time typing stuff into the CRM system. Get over it. Study after study shows that while you will spend more time typing information, you’ll save even more time in retrieving and communicating information.

You already take lots of notes, right? On note pads, day-timers, post-its, napkins, etc. Don’t try to tell me that a google-like inquiry into your CRM isn’t vastly faster and more complete than rooting through hand-written notes “neatly” organized and filed who-knows-where. Oh, and who else in your sales support organization has access to the incredibly valuable customer intelligence you work so diligently and hard to collect? If it’s on paper the answer is nobody. You need to spend still more time composing e-mails and/or verbally explaining things.

“You want to micro-manage me.”

Eeeesssssh!!! Are you really serious? It’s exactly the opposite! Sales Managers are pulled in a gazillion different directions at once. The most fabulous thing about CRMs is that they can slice, dice, analyze and spit out reports automatically. CRMs enable sales reps to manage themselves. CRMs can pin-point what your specific problem areas are so that you can take the appropriate actions without getting management involved unless you want them to get involved.

Management wants CRM so they don’t have to hold your hand!!! One caveat though… If you’re coasting, or screwing up or just a lousy rep, a CRM means there’s nowhere to run, nowhere to hide.

Professionals in every field need to continuously upgrade and update the tools they use. Coal mining with pick and shovel anyone? Prescribing drugs without electronic data bases that analyze efficacy, side effects and potentially dangerous interactions with other medications? Sales without CRM?

Think about it…

  • Share/Bookmark
Print

Dunbar 150 – Dreamland 45,000

Two colleagues and I have decided to profoundly change the way B2B sales is executed.  (Really… We did…)

It all started last November at a barbecue joint in Birmingham, AL.  (Read about our Dreamland experience.)  At the time, none of us knew the other two also had the Don Quixote gene, ever-ready to embark on a grand quest.  It’s been a fascinating ride so far, and the windmills keep getting interestinger and interestinger.

E-Rep – the electronic alter-ego of the “H” or Human Rep – is at the core of our vision.  We convinced a real, live client to buy in.  They’re paying us real, live money to build one.  More accurately, to build them a set of E-Reps; one for each of their H-Reps.  This train has left the station…

There are lots of reasons we think we can pull this off, one of the main ones being Dunbar’s Number.  Based on lots of anthropological data, Dunbar says a single person can maintain a stable relationship with at most 150 others.  We can’t prove it (yet), but we think a rudimentary E-Rep can maintain stable relationships with 45,000.

For just a moment, assume we’re not insane.  Assume it’s actually possible.  You could enter the business battleground backed by an army of 45,000.  Your competitor enters with 150.  The poor slob brought a knife to gunfight.

Might be worth your while to keep an eye on Dreamland Interactive.

  • Share/Bookmark
Print

“Plans are nothing. Planning is everything.”

Who am I to argue with General Dwight D. Eisenhower?   He made the comment in this post’s title regarding the Normandy invasion.  He was reflecting upon how little the actual battle resembled the D-Day plan; a plan that resulted from a truly stupendous effort on the part of the Allies.

  • Share/Bookmark
Print

How Self-Absorbed Are Your Value Propositions?

What’s in it for the customer? From day one of a sales career, the necessity of thinking in that context is crystal clear. Everybody knows it. Everybody believes it. It’s intuitively obvious!!! BUT …sometimes the obvious is not so easy to execute…

Ready for another humbling experience? Here’s your mission… Randomly choose five quotes and/or proposals that you and/or your team have submitted to key accounts over the last six months. Choose five more that were offered to prospective new accounts. Sort them into three piles.

Pile 1 is the “Mine” pile. It will contain those proposals that talk mainly about why and how your product or service is the best option for that particular customer. All of the classic quotes that do no more than state a price go here. Those that describe features and how they apply to this customer also go here. Those that go that (really tough) extra mile and describe your “value add” stay here too.

Pile 2 is the “Yours” pile. The minimum required to graduate to this level is a clear, quantified, un-self-absorbed statement of the customer’s Total Cost of Ownership or TCO. “My price is lower than their price,” doesn’t cut it. If value add is provided for free or bundled into the price of the product/service, return to pile 1.

The TCO analysis must include the “before” and “after” total cost of at least the major tasks performed by customer personnel related to this purchase. These could be things like design, acquisition, receiving, inspection, additional processing, testing, combination with other products and services, marketing, support, service and warranty claims. (You might notice that this will require an in-depth familiarity with the customer’s value chain and associated costs as well as a certain degree of comfort with financial statements and analysis.)

Pile 3 is the “Ours” pile. Many of you won’t have one. (Some might not even have a “Yours” pile.) The proposals here include an analysis of the total financial impact on both the customer and your own company. The perspective here is taking cost out of both value chains and/or adding value to both value chains. These proposals will provide incentives for you and your customer to customize and rationalize everything about the sum total of all of your interactions.

Before I ask you to think about it, recognize the magnitude of the change I’m suggesting here. How many of your reps are up to the task of thoroughly and deeply analyzing all of the myriad aspects of both internal and customer business processes as well as how they interact and affect each other? They’ll need to understand process and process engineering. They’ll need to understand financial analysis. They’ll need to get to know and establish credibility with people both up and across the customer’s organization. (including those “C-level” folks like CEO, CFO, etc.)

Bottom line, enabling the majority of your reps to build pile 2 and 3 value statements won’t be easy or quick. With the right leadership, though, it is doable. And the fact is, if you don’t, your competitors will. OK, now…

Think about it…

  • Share/Bookmark
Print

Quick Thought for Week of 7/11/10

Inspiration doesn’t just happen…

  • Share/Bookmark
Print

Ask Why 5 Times

I know, I know, you’ve all heard the “ask why five times” cliché over and over and over.  Why repeat it again?  I’ll tell you why.  It’s because of a story I heard just last week from an extremely successful rep with more than 30 years of experience.

The story starts with our crusty old veteran being asked for a bit of advice by a rookie rep.  Not having much time to spare, the vet spits out the tired old “5 whys” tip.  Then he hops into his car to make a call at one of his accounts.  It’s not one his key accounts, but one he’s covered for 14 years now.

The first person he runs into is the plant maintenance manager, a pretty good friend after all these years.  He asks the same first question he’s been asking since 1996, “What’s annoying you most this month, Frank?”  (Actually, the question was worded slightly differently, but hey, this is a family blog…)

“Hate to say it, but it’s you,” is the immediate reply.  “You have got to get me those spare parts for my HMIs NOW.  I’ve known you a long time and you’ve always done right by me, but get ‘em delivered on time every time or I’m gonna’ have to go with a different supplier.”

A few side notes…  HMI stands for Human/Machine Interface.  Don’t worry if you don’t know what that is, it’s not important to understand the point.  The spare parts involved here represent about $2K in annual sales for our intrepid rep who carries a $5 million annual quota.

Our hero remembers the sage advice he just dispensed back at the office, and realizes it’s been a while since he’s done the “why” thing.

  • “Why (#1) do you need those parts so desperately?”
    • “Because the HMIs are breaking down all the freakin’ time”
  • “Why? (#2)?”
    • “Because they’re old.  And as you apparently don’t realize, replacement parts are really hard to get.”
  • “With all the responsibilities you have around here, why (#3) is an extra supply of $5 spare parts even on your radar screen?”
    • “Because when an HMI goes down – which happens 2 or 3 times a week – the entire production line goes down.”
  • “Well shoot, lines go down all the time.  That’s just a fact of factory life.  I still don’t see why (#4) this is such a big deal.”
    • “How about because this production line produces $1 million per day in profit for the company.”
  • “Whoa!  Well why (#5) not just replace all the old HMIs with new ones?  That would cost about, oh… $150,000.   And $1M per day is what… $40,000/hour?  So preventing  4 hours of down time pays for everything.  How much down time are HMI outages causing?”
    • “About 8 hours a week.  Holy cow!  That means I could save the company $320,000 a week!  How long will it take to get those new HMIs installed?”

No BS, that’s how it played out.  What would have happened without the whys?  Not to insult your intelligence, but our rep would have spent 2 or 3 hours hassling with Customer Service expediting a $200 order.  It would have burned rep time, Customer Service time, Order Processing time…  It would have cost the rep’s company money.  WORSE YET, the rep would probably brag about what a customer-centric dude he is and boldly demonstrate the “best practice” of rapidly chasing your tail whenever a customer barks at you.

The two morals of the story are already clear aren’t they?  1) Ask, “why?” five times all the time.  2) Pick one of the old sales clichés every week and apply the daylights out of it.

  • Share/Bookmark
Print

Frustrating? Sad? (…or Great News!)

I don’t quite know how to react to the feedback I’m getting on my series of selling with finance blog posts.  It ranges from comments like, “Excellent, this is so critical,” & “I commend you,” to “I wouldn’t waste my time reading this irrelevant-to-sales stuff,” and “Sorry, I skipped that post because I don’t understand finance and don’t need to.”  There’s not actually too much in between.  Seems pretty polarized with vastly more of the latter.

Consider this.  I randomly picked 25 companies with headquarters in GA and looked up the titles of their corporate officers.

  • 8% have a Chief Sales Officer  (2 of the 25)
  • 64% have a Chief Marketing Officer (16 of the 25)
  • 100% have a Chief Financial Officer (That’s 25 of 25 for math challenged)

While I wouldn’t characterize my little study as statistically valid, experience tells me that the CSO % might creep up into the double digits with a more extensive survey.  The CMO number is probably about right.  I’d be absolutely stunned if the CFO data changed one iota.

Given those percentages, who has the most clout?  What discipline is absolutely essential to every company?  Can you effectively sell without fluently speaking the lingo of the corporate officer who is most essential and has the most clout?

  • Should I be frustrated that the majority of sales reps and managers are basically clueless financially?
  • Should I be sad at the sorry state of this essential skill set among my peers in sales; in my chosen and loved profession?
  • Or is it great news!!!???  Puts me at one heck of a competitive advantage!

What do you think?

FYI – Here’s the series:

  • Share/Bookmark
Print

ROI – For Pete’s Sake, Know What It Means!

This is the fourth post in a series about selling with Finance, the Universal Language of Business.

Critical question:  Would a CEO, CFO or C-Whatever-O rather talk to you about features, benefits, price and discounts or an ROI of 78% and $486 grand of positive net cash flow?

Hey!  Don’t wimp out on me!

Read this post and the rest of the financial series!  Learn the universal language!  It could easily become your single most powerful personal differentiator.  It will for sure open doors to you that will remain firmly and forever closed and locked to your financially illiterate competition.

ROI is one of the most mis-used and abused financial terms among sales reps.  Hearing something like “…an ROI of $500K,” or “…an ROI of 2 years,” is like hearing fingernails shrieking across a chalkboard.  Makes me wanna’ scream!  By saying, “ROI” when you actually mean, “Net Cash Flow,” “Cumulative Cash Flow,” “Payback Period” or “Break-Even Point,” you label yourself as one who doesn’t really know what he or she is talking about.  (Read and learn parts 2 & 3.)

Sorry if that felt like a slap upside the head…  But isn’t it better to get whacked while reading a blog post than to prove yourself less than savvy in a discussion with a customer CFO?

Simple ROI (Return-On-Investment) is the ratio of the money I gain vs. the amount I invest.  More strictly speaking, it’s the cumulative net cash flow divided by the cumulative investment over a given time period.  In the example below:

  • $233 +$268 +$229 = $730 is the amount of cash that will come in as a result of my proposal over the first three years
  • $339 + $301 + $229 = $755 is the amount of cash that will be invested over the first three years
  • $730 – $755 = ($25) is the net cash flow for the first three years (So far, I’m still in the hole)
  • ($25) / $755 = -3.3%

Ta-da!  The simple ROI over the first three years is -3.3%

As the example shows, the identical logic is used to calculate ROI over four and five years.

Let this sink in!  Consider again the question I posed earlier:  Would a CEO, CFO or C-Whatever-O rather talk to you about features, benefits, price and discounts or an ROI of 78% and $486 grand of positive net cash flow?

More questions:  Do you want to be a traditional, smile-slap-on-back sales rep fending off the rest of competitive hoards and working with customer middle management?  Or talking about making money in the cushy comfort of the C-Suite with the other grand muckety-mucks?

  • Share/Bookmark
Print

E-Rep: DO IT!!!

OK, fine.  I’ve become a (possibly annoying) evangelist for the notion that “Every H-Rep Needs an E-Rep.”  That is, every human rep needs an electronic alter-ego to supplement his or her never-ending, always-more-demanding responsibilities.  More food for thought below.  Am I right?

  • Share/Bookmark
Print

Sales Rep = Change Agent (Right?)

Hold up a mirror before you answer that question…

The knee-jerk response of any self-respecting sales rep or manager is an indignant, “Of course I’m a change agent!”  But, as anyone with a complex sell cycle knows, the biggest competitor is “do nothing,” and the underlying reason is the no-guts, change-resistant customer.  If a sales rep is a change agent and therefore an agent of change, how can this be so?

To make things even more uncomfortable, let’s be honest about how changeable we sales types are ourselves.  Consider these three examples:

Situation 1:  The top 2/3 of our funnel is empty.

This sales team had just implemented a CRM system.  There was a 90 day start-up window, then the monthly funnel review process started.  In the very first review, it was immediately clear to the entire team that the top 2/3 of the corporate funnel was literally empty.  Zero opportunities.  Even though several logical explanation as to why were tendered, all agreed this was an intolerable situation.  An action plan was put in place to fill up the early funnel stages.

In the 2nd monthly review, the top 2/3 of the corporate funnel was literally empty.  Zero opportunities.   The logical explanations were repeated.  All re-agreed this was an intolerable situation.  Everyone re-committed to the action plan to fill up the early funnel stages.

In the 3rd monthly review…  Yeah, you guessed it.  Imagine that, a sales process, executed by a bunch of change agents themselves resistant to change.

Situation 2:  The reps are too busy too thoroughly understand the big opportunities.

This Sales VP and her five Sales Managers concluded that detailed reviews of the top three opportunities in each manager’s unit would become part of their monthly status meeting.  After 4 months of shallow discussions on this topic, the VP had had it, and asked why so little detail about customers, their situations, their problems, etc. was forthcoming.

The reason?  All of the managers were covering for their reps who were unable to provide that detail.  No wonder their close rate was so low.  The reps were investing time in writing proposals at the expense of understanding what would be of value to the customer.  Talk about putting the cart before the horse!  Each manager knew this after month one, but did nothing to change the sales process for four months!

Situation 3:  I know the deadline was 1/31/10. I’ll start it this month .

In December, 2009,  I successfully enlisted seven sales managers and execs to become part of my E-Rep crusade.  (An E-Rep is a sales rep’s electronic alter-ego who’s on duty selling 24 X 7 X 365.  The blog, LinkedIn profile, etc.)  All seven enthusiastically agreed to start a blog in January, 2010.  I did not need to shove the value of a blog down any of their throats.  They all robustly agreed to getting it done because, to each of them, the value to the sales effort was blatantly obvious.  OK, it’s six months later and they’ve collectively done six posts.  All seven remain “as committed as ever.”  We’ll see…

So here’s the point…  Before you tell me what a great change agent you are, hold up that mirror!  Do a little self-assessment about your own adaptability and willingness/ability to change.  It might just provide some insights you can pass along to customers to help them change faster.

Think About It…

  • Share/Bookmark
Print