Sales & Marketing Effectiveness

Is a Truism Holding True?

The software industry often expounds that you are 1st,  2nd or 3rd  in your category or simply out of business. The question I pose is whether the announcement that Entellium, makers of Rave CRM, has falled on hard times is an early warning of more fallout to come in the CRM space.

If you believe the numbers, that less than 20% of small and mid-size businesses are using CRM, you can understand the opportunity.  Yet, potential users need to show caution in their selection of a CRM product and vendor.  Another truism might be that the marketplace does not care about the “best technology”. 

A CRM project must be approached as a blending of strategy, process and technology for sales, marketing and customer service.  While selecting the right software that facilitates this blending is important, it is not the most important activity. 

Some pointers on the right way to approach CRM

A CRM implementation will have more chances of success if:

•  It is not considered a technology project

• There are clear and documented step-by-step processes for how you go to market, how you sell and how you achieve customer loyalty

• There is an implementation plan with clear, measurable, and phased objectives for each user group

• Management takes the time to determine the real ROI for a CRM implementation and evaluates each phase against the established ROI for corrective actions

• You don’t get overwhelmed by the features of sophisticated systems. Evaluate systems based on the features that will help you reach your current goals, plus potential for additional capabilities

• You consider hiring an expert for selecting and installing your solution and/or training if your company doesn’t have the necessary skills or resources

I cover all this, and much more, in an earlier posting “Building Customer Relationship – A Blueprint for Success” 

If you have not read that post, I encourage you to do so before venturing too far down the CRM selection path. 

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Why Some Companies Mismanage Their Sales Leads

In follow-up to my last post, “The Sorry State of Lead Management”, a big question remains.

Why, after spending huge sums on generating sales leads, do some companies mismanage those leads? Or, even worse, have no lead management system at all? 

My experience shows that, in many cases, faulty lead management stems from company confusion over the basic difference between sales and marketing functions. This uncertainty often results in sales and marketing being grouped together, with sales usually coming out on top and being put in charge of marketing.

When a company becomes sales-focused only, marketing is usually reduced to the role of marketing support. Actually, this equates to sales support, but most marketers won’t admit that.  Marketing then does little more than hand out literature, create ads, produce sales brochures and make list purchases.

Big mistake!  While sales and marketing need to operate both independently and in concert, for the good of the company as a whole, there is a critical difference between the two functions.  When that difference is not recognized, lead management suffers dearly or simply becomes nonexistent. 

At the most basic, sales and marketing functions differ in the following ways:

* Sales takes a short-term view: this month
Sales is focused on the present – today – what sells now.  Their jobs depend on reaching quotas for the month or quarter.  They need to be closing new deals, maintaining key customer accounts, and working on current customer cross and up-selling opportunities.  Anything and everything that helps them generate commissions and immediate company revenue.  Sales doesn’t have the time, resources or experience to create and oversee marketing campaigns, generate and qualify leads, or chase after tire kickers.  They need to sell now!

* Marketing takes a long-term view: this year
Marketing, on the other hand, is more centered on the longer view.  While marketing understands the importance of what sells now, they realize it is far more important to build on who buys now and later.  Their jobs depend on providing sales with the right opportunities and tools to sell now and in the future.  Real marketing - not sales support - position their companies to identify both current and future opportunities, and enable sales to convert those opportunities into profitable revenue in order to grow the company. 

Failing to make a distinction between the roles of sales and marketing, makes successful lead management next to impossible. 

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A Simple Measurement for Determining if You Need CRM

Our phone starts ringing the Monday after Thanksgiving.  The message – can you help us pull together our data for getting out the holiday cards?  Over the years I have come to believe that this question is the single best indicator of how much an organization needs CRM. 

As companies pass around Excel files trying to organize the holiday card mailing or VIP list for the gift basket, one gets a pretty good idea of how information about customers is managed – it is not!   

Rather than this task being as simple as filtering for those customers with the holiday card box checked, it becomes a Chinese fire drill, consuming considerable amounts of support time and sales reps’ time. I have even seen some companies give up and tell the sales reps to come in to address their own cards to mail.

If this simple task is not being completed in minutes, how well are you maintaining relationships with your best customers?  Are you satisfied with leaving that responsibility totally up to the sales reps?

The number one advantage of a CRM system is getting sales, marketing and customer service on the same page with every customer. It is not just getting out the holiday cards.  CRM is all about customer touches.

Is marketing reinforcing the sales message?  Does sales know it? Is customer service easily sharing issues with the sales reps?  Is the president aware of the good and bad things regarding a key account before they call?  After the basic communications are taken care of,  then you are ready to analyze the data and know who to cross-sell or up-sell and who else should be your customers. Any value in that activity for your growth?

Just run the time numbers required for getting out the holiday card, times it by the other 12 months of little issues that come up and ask yourself how much is it costing me not to have a CRM system. Well, how much?

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When a Customer Becomes Your Major Competitor

How often have you spent tons of sales and marketing dollars working on closing a highly qualified deal, only to find that the customer or prospect decides to do nothing?  Probably, more often than you’d like to admit.  It happens to all of us, at one time or another, and more often than it should.

Yes, the customer has a severe pain, you can provide the solution to alleviate that pain  and help them effectively grow their business.  You’ve spent a fortune on providing them with sales, marketing and ROI analysis, doing on-site and on-line demos, attending numerous executive meetings, they say they’re ready to begin, but, at the end of the day…they decide to do nothing.  Nothing, except to stay with the same outdated ineffective processes and systems they’ve grown used to. 

So, what do you do when a customer or prospect’s inaction becomes your biggest competitor?  When they decide to stick with the old pen, pencil and index cards, or a prehistoric contact management system they define as CRM?  How do you show them the cost of doing nothing? 

I’d like to hear your opinions, but I would also like to direct you to a great article titled, Competing against Mr. Do Nothing, authored by Sridhar Ramanathan / President  of Pacifica Group.  The Pacifica Group Management Consultancy, Inc. specializes in driving revenue growth for technology firms.  (though, I think their guidance would fit any type of company)  The article provides invaluable advice on how to successfully deal with these types of situations. 

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The Good, The Bad, and The Ugly. What Describes Communications Between Your Sales and Marketing Teams?

We all keep hearing about the age-old, never-ending, finger-pointing disputes between sales and marketing departments over lead management. 
     - Sales – “You send us lousy leads.”
     - Marketing – “You can’t close any leads.”
Sounds like a bunch of bickering children.  Will the arguments ever end?

Current tech tools have greatly improved a company’s ability to effectively generate and qualify sales leads, distribute the hottest leads to the right reps, nurture the cooler leads, track follow-up efforts, plus grow and maintain great customer relationships. 

So, why in the world is this still a problem and generating so much discussion?  In my opinion, what we have here is “a failure to communicate.”

Sure, we have the best tools but the problem has never been about the tools, but rather processes. In this case, the communication process between sales and marketing.

Sales and marketing need to start communicating now!  Begin with the basics, covering such topics as:
     - What exactly is a lead
     - What are the steps in qualifying a lead
     - How should marketing track the leads they distribute
     - How should sales provide feed back on the leads received
     - How do they both best close the loop
     - How long should this process take

If your sales and marketing departments are like many others, you have room to grow in your communications.  A recent destinationCRM.com reader poll asking companies how they would describe communication between their sales and marketing departments showed these results:
     * 5% - Thorough and seamless
     * 15% - Sufficient  (I think this should go along with Needs Improvement)
     * 54% - Needs Improvement
     * 27% - Poor

Think about it.  How would you rate communications between your company’s sales and marketing teams on something as basic as lead management?

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What Do CEOs Consider the #1 Growth Strategy for the Next 3 Years?

Building customer relationships!!!!  Is that a surprise or what? 

A recent Gartner survey, http://www.gartner.com  of CEOs showed that building closer customer relationships is the top revenue growth strategy, not just for next year, not just for the following year, but for the next 3 years.  That should tell us all something. 

1to1 Media, a fantastic group with a constant eye on the important news and events in the world of sales & marketing for all industries http://www.1to1media.com, wrote an excellent post on this - http://www.1to1media.com/weblog/2007/09/are_you_ready_for_2008.html

There is absolutely no sense in trying to write it better.  Their post says it all and I urge CEOs, Sales & Marketing VPs, CIOs, CFOs - well, any people involved in customer relations, which should be everybody in all companies, to take the time to read it, (along with 1 to1 Media’s other materials, which are all great.)  It will be well worth your time. 

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