Sales & Marketing Effectiveness for Sustained Growth

Lead Scoring and Data Quality: How Much is Dirty Data Costing You?

Qualifying, coding and ranking your leads so the hottest opportunities are the first to get distributed to your sales teams is vital to your company’s sales and marketing success. That’s a given.

Yet, what many companies fail to understand is that data quality is core to an effective lead scoring system.  

A SiriusDecisions study, “The Impact of Bad Data on Demand Creation”, shows that following best practices in data quality generates a 66 percent increase in revenue. 

The study summary cited in a CRM Magazine article, “Looking to Score”,  offers some key insights for B2B organizations, such as:

• 10 to 25 percent of customer and prospect records contain critical data errors.
• The amount of data doubles every 12 to 18 months.
• It takes $1 to verify a record as it is entered, $10 to cleanse and de-dupe it, and $100 if nothing is done, as the ramifications of the mistakes are felt over and over again.
• From inquiry to marketing-qualified lead: A data strategy that solves conflicts at the source can lead to a 25 percent increase in converting inquiries to marketing-qualified leads.
• From marketing-qualified lead to sales-accepted lead: Unifying the data, whether into one database or by using technology for virtual integration, can lead to a 12.5 percent uplift in conversion rates to the next stage.
• From sales-accepted lead to sales-qualified lead: Clean data can reduce by 5 percent the time spent conducting the kind of additional research that precedes initial contact with a prospect.
• From sales-qualified lead to close: Given that the average field-marketing function spends no more than 10 percent of its budget in support of this final conversion, accurate data is a must for applying the right tools and resources to the right audience at the right stage of the buying cycle.

Jonathan Block, author of the report and senior director of research at SiriusDecisions, writes, “A best-in-class data strategy is shared by marketing and sales, and is focused on quality from [inquiry] to close. Although it is a job that consumes both money and time, paying more attention to data quality is not only worth it, it is something that your organization simply can’t afford not to do.

I couldn’t agree more.  Have you reviewed the quality of your data lately? 

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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Why Do CRM Projects Fail?

Shamus McGillicuddy, News Writer for SearchCIO.com reports in CRM PROJECTS FAIL BECAUSE USERS SAY 'NO THANKS' that “Nearly one-third of customer relationship management (CRM) software deployments end in failure, according to new research from AMR Research Inc.”

The Boston-based research firm recently surveyed 190 IT and line-of-business executives and found that 29% of CRM projects fail. That's slightly better than the 31% failure rate AMR Research uncovered in 2006.

The article provides some good learning tips form executives who have failed and some from those who have turned around projects. It is always nice to see that what we have been saying for 18 still holds true for successful user adoption:

     1. There must be value for the end users – CRM cannot have a “big brother” is watching goal. How does it help the sales reps do their job better, and do they recognize the value?

     2. CRM cannot be a technology project – Yes, you need IT involvement, but the ownership and direction of the project must be driven by sales or marketing.  I have stopped counting the number of moans I have heard from sales mangers saying “We were forced by IT to put in XYZ and everyone is ignoring it. Maybe someday we will be asked what we need”.

    3. Software selection, surprising, has little to do with project success – Documenting your marketing, lead and sales process must be your number one concern.  If you cannot show how your processes work on paper, don’t expect that a computer system will magically figure it out or sales reps to help.  Users will sit on their hands until you get it right.

    4. Phased plan with measurements at each step – Know all that you wish to accomplish but set priorities and rollout a system in phases.  What must users know how to do in the first 30 days?  How do you they were successful? How do you let them know that they were successful or support them in becoming successful?  Build on success for the next phase.  A full day training program covering every aspect of the system is a receipt for failure. Rather plan three-hour sessions, every quarter for the next year and consider a weekly, one-hour, webinar - user group session. 

Finally, with sales managers, necessarily, focused on hitting their numbers each month, do they have time to drive a CRM project?  I suggest that they do not.  If the goal of CRM is to breakdown the silos between marketing, sales and customer service, maybe marketing is better position to bring up the system.  Often a deterrent to a successful rollout is data conversion from other systems, everyone’s Outlook and purchased lists. When the CRM data is incomplete, users have another excuse for not using the new system. Marketing has a stake in getting customer and lead information complete.  Let them drive the project and phase in sales and customer service.  This approach also provides you with a base of user to call upon for one-to support.

To be successful, it must be remembered that a CRM implementation is not a one-time event. It is an on-going process. You will never do business the same. You will change the culture within the organization with every sales and marketing meeting looking to the CRM system for knowledge and ways of using your customer informational asset better to sell more.

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