DSC Tech Library
This section of our technical library presents information and documentation relating to CRM Solutions and Customer relationship management software and products. Providing customer service is vital to maintaining successful business relationships. Accurate and timely information provided in a professional manner is the key to any business and service operation.
Our CRM software application TELEMATION, was developed with this in mind. But the ability to change is just as important in this ever changing business environment.
Telemation call center software was designed from the very beginning for this environment.
Many call center managers, with unique and changing requirements, have chosen and continue to use our CRM software as their solution of choice.
Our contact center CRM solution is ideally suited for call center service bureaus.
By Tony Welch, Consulting Partner
Most organisations have invested heavily in Customer Relationship Management (CRM) initiatives at some point in time. Yet, despite the vast amounts invested in CRM, it has become a discredited term for many because few companies are achieving a return on the investment (ROI) made in CRM. The picture is even worse for direct sales teams, with higher failure rates from CRM initiatives than in any other part of an organisation. Despite all the experience that has been gained by organisations many analysts predict that this trend will continue. So, why do so many CRM implementations fail to deliver a return on investment? Why are sales force initiatives even more likely to fail than other front office initiatives?
There are of course many reasons why CRM initiatives fail to deliver benefits and ROI to the sales organisation. In this article I look at the most common barriers to CRM effectiveness in sales teams.
1. The Nature of Selling Technology
Most sales applications date back to a time when sales professionals were equipped with diaries and filofaxes. The early sales force automation software applications merely automated many of the functions contained within a filofax, such as a diary for appointments, contact information, activities (to do list), products, pricing and rudimentary pipeline information for leads and opportunities. Despite the advances made in other areas of CRM applications, the functionality for sales professionals has changed little over the years. These systems often add little value to what sales professionals do and the time spent updating information in them is often disproportionate to the benefit derived. It is common therefore for usage of these systems to trail off markedly not long after an implementation has gone live. Consequently many implementations of sales force technology are seen to fail.
Today's tougher business environment means increased global competition, eroded margins, heightened customer expectations and reducing customer satisfaction. Thus, a greater level of sales effort is required to continue to deliver shareholder value.
The challenges of managing sales are often complex and include specific processes, key milestones and a series of tasks requiring completion at each stage. However, sales professionals are not supported in terms of managing either complex sales or many sales simultaneously. These professionals need tools that define the selling process and help the sales person know, at any point, where they are within the sales process and what needs to be done next. The application needs the flexibility to define a sales process for different market segments, geographies, accounts, products and industry verticals if required. Once sales professionals are given a sales application that supports what they do they will see the benefits of fully embracing the technology and the organisation will derive benefit from the investment.
2. Evolving Sales Teams
Sales teams are dynamic and constantly evolving to reflect changes in markets, competition and customer needs.
Most organisations have evolved from a straight buyer/seller relationship through a co-operative account management focus to a collaborative, crossfunctional account team. In essence, sales professionals move from ‘rep’ to ‘consultant’.
The challenge is not only to manage an evolutionary approach to the sales organisation, but also to be able to support different stages and processes for various geographies, customer segments, product groups and accounts where required. To maximise selling effectiveness across these groupings requires an innovation in process design and a highly flexible technology approach that does not impose constraints on the organisation.
3. What Customers Want
Research carried out for the Centre of Information Based Competition in 2003 suggested the following:
Yet despite this:
- Up to 70% of a customer’s decision to buy is based on how they are treated
- Only 30% is based on product attributes (price, features etc)
One key to professional selling and building loyalty is brand strategy and the customer experience. The brand is the sum of a customer’s experience with a company and it encompasses the entire range of an organisation’s products, services, behaviours, distribution channels, technologies and processes. For example, a company that prides itself on its quality products and superior customer service, yet makes customers wade through complex options when ordering, is damaging its brand with a poorly designed customer experience. In truth, strategic goals rarely drive CRM initiatives, most are characterised by an ad hoc, tactical approach, lacking an overall strategy and few if any are tied to the company’s customer, channel and brand strategies.
- More than 80% of CRM investment focuses on matching products to customers – i.e. targeting, cross-selling, up-selling etc.
- Few if any focus on treating customers better – i.e. the customer experience Not surprisingly, the research concludes that customers don’t want relationships, they want to be treated like human beings – they want to be professionally sold to.
4. Back Office / Front Office
Many organisations and even some professional services providers fail to recognise the major differences between back office and front office when implementing change initiatives – where back office is defined as; accounting, procurement, production, distribution and the legacy environment and front office as; sales, call-centre, customer service and marketing (the CRM environment).
One of the reasons why so many CRM initiatives fail in the front office is that organisations adopt the same approach to process design, programme management, system selection and system implementation as they have adopted in delivering back office systems. This means that often IT departments lead projects of this nature or system integrators are used to assist with the process. The result is that back office approaches are used when delivering CRM change initiatives in the front office – when the requirements of the front office are fundamentally different.
The back office functions are procedurally driven and are characterised by the need for operational efficiency and a high degree of conformance. The environment is stable, with changes to procedures happening within lengthy timescales.
The front office by contrast is the direct interface with the customer, it is event driven and is characterised by a need for flexibility and innovation. The environment is dynamic and it is where an organisation can create differentiation and competitive advantage. The rate of change is high in responsive organisations with requirements changing in months rather than years, in order to respond to changes in markets, competitors, products and customers.
For these reasons, CRM initiatives need a rapid implementation approach with a highly flexible toolset that recognises the dynamic nature of the environment. Unfortunately, many of the well established front office software applications have been developed either from existing back office ERP systems or have grown from sales force automation tools into complex applications. The result is that these systems are characterised by lengthy implementation timescales and integration with the legacy environment adds greatly to cost and timescales. The end result is effectively a front office legacy system, that lacks the flexibility required for a dynamic environment, and because of the lengthy implementation timescales, no longer meets the needs of the business.
5. Changing CRM Technology
Consider for a moment that the front office is the key area for an organisation to create competitive advantage in order to increase shareholder value. Yet, many organisations have invested in mainstream CRM technology for the front office that restricts their ability to innovate and differentiate the customer experience.
Why? Complex CRM applications are inflexible and they impose constraints on the flexibility to innovate. Furthermore, by using similar CRM applications to major competitors, sharing similar screens and fields, the question has to be asked - “where is the competitive advantage to be gained from?”
Organisations need to constantly innovate in order to create competitive advantage. Nowhere is this needed more than in sales, where successful selling professionals can become an organisation most valuable asset. It is only by defining winning strategies that the real benefits of innovation will be realised.
CRM systems must not be allowed to impose artificial constraints on the creativity of the front office organisation. The choice facing businesses is between complex CRM applications that allude to cover all the front office functions, often favoured by those in IT, or between applications that provide flexibility and depth within key front office functions such as sales. There are a number of tools that cover individual front office functions, or that may in some cases sit over established front office applications to provide further functionality.
Conclusions - Using technology to produce better results
Organisations need to change the way they operate in order to increase their selling effectiveness. These changes can be made through the innovative use of the latest CRM technologies but only if the common pitfalls are avoided. If they are to achieve a successful return on their investment in CRM organisations must:
- Define successful sales strategies
- Give customers a great experience
- Develop innovative sales processes that close more business
- Use best practice selling methodologies to support the quality of the sales process
- Coach, mentor and motivate individuals to achieve peak performance
- Implement innovative software solutions for the sales force that support the selling process, methodology and that add value to sales people
Tony Welch, Consulting Partner
SalesCentric Technologies Limited is a UK based company which provides Customer Interaction Management software.