Symptoms and Causes – CRM Issues
CRM Issues
- Inappropriate CRM processes?
- Poorly designed CRM?
- CRM does not encompass your Sales Methodology?
- CRM does not follow your Opportunity Management disciplines?
- Using CRM as a policing tool?
- CRM on the cusp of falling into disuse?
- Other contributing issues:
- The inability to convey the essence of the Sales Process to the CRM implementers.
- Inability of the technical CRM implementers to apply the finer points of your sales processes.
- Not involving the actual sales process participants in the design of the CRM.
- Resulting in a misalignment between the actual process and that dictated by a technical implementation.
- Not distinguishing between a Contact Management System, a Customer Management System and a Client Management System.
Some Context
CRM Systems have been around for about 35+ years and have evolved to high levels of maturity. The technology is 21st century stuff and reveal a lot of promise. They are replete with features and functions, as well as parameterised options. But, they have been subject to a lot of criticism, mostly unfairly. Our experience and observations are that they were born out of the need to address mass marketing and the B2C market. In many respects they still serve this market better than that of the B2B world, for a variety of reasons.
We recall being involved in the implementation of four CRM projects. Only one of these had a favourable outcome in a B2B situation, because its purpose was that of a mass marketing tool – not that of a B2B aid. For context, this was before the advent of email marketing. Actual envelopes and stamps were used resulting in a 0.02% conversion rate. But that conversion rate produced a 23% increase in revenues and 7 year Client annuity relationships.
The other three fell into disuse for the reasons discussed below.
The ‘Relationship’ moniker in ‘CRM’ is in most cases a total misstatement. Sending automated birthday wishes, knowing a contact’s hobbies, kid’s names or the last time they attended an event, bought something or are existing on a mailing list; is not the stuff that is required in the focussed B2B relationship paradigm. Nor is it the material that the professional Closer would consider using or being of any value.
CRM Issues
CRM Issues – Pro’s
The strength of CRM implementations is when they are used as Contact Management or Customer Management Systems, meaning the volumetric market. The implementation of a CRM system as a Client Management System requires a very different level of application and aforethought. Again we stress that issue is not so much with the technology, but rather the approach of a) the implementation organisation and b) that of the management of the user organisation.
CRM implementations are excellent at faithfully recording and supporting sales and marketing processes. Matters of rote, even including decision trees, are efficiently processed, recorded and reported. The marketing and sales funnel linear logic is dutifully followed and tweaked over time. Target BTL marketing and profiling, product promotions and other mass broadcast retailing initiatives are the bread and butter of the underlying logic in CRM systems.
Objective: Create awareness, create the need, provide information and trigger sales volumes. Customer needs are irrelevant – demand and trends determine focus and direction. Even 15-20% traction and conversion is a success! Volume, reach, product variety, national and international exposure is the winner.
Result: Increased marketing exposure, wider reach, more sales and the garnering of valuable consumer information to refine and repeat the cycle. This typifies the ‘Push’ approach and the B2C world – product, price, terms and service are dictated in one direction: organisation to consumer. There is no negotiation – take it or leave it!
Judgement: The prime decisions, at management level, are to improve the processes and the results by tweaking the parameters of the CRM across a mass of potential consumers.
CRM Issues Con’s
Most CRM apps are unable to provide the same results in the B2B world. In fact, most of the benefits offered by CRM’s are completely irrelevant in the B2B context, except in the case of commodity transactions. Yes, focused marketing is still required and a repository of relevant Client information is fundamental, but CRM’s do not support the nuances of complex B2B engagements.
Invariably, the Client initiates a B2B relationship based on their terms and the constraints of their Buying Cycle. The B2B organisation’s approach to its target market is entirely different to that defined in the standardised CRM implementations, unless the chosen CRM is able to:
- Incorporate the vagaries of the Clients’ Buying Cycles
- Manage the process along the Client’s Buying Cycle
- Incorporate the multiple possible outcomes of negotiations
- Accommodate the ideal transition of control of the Engagement from the Buyer to the Seller
- Record and understand the Client’s challenge and need
- Identify and focus on the Client’s ideal outcome.
- Manage the process along the Sales Cycle and align this with the Buying Cycle
- Provide suggested suggested steps to progress an Engagement
- Process the Client’s Buying Criteria
- Incorporate the Client’s Buying Processes
- Suggest access in the Client’s chain of command
The Achilles Heel
The above aspects illustrate only some of the reasons for the typical failures of CRM systems in non-commodity B2B organisations. In addition, many organisations embark on a CRM implementation journey without:
- Fully understanding the impact of CRM on the organisation
- Having a clear and executable Sales Methodology to configure the CRM appropriately
- Selecting a CRM implementation outfit with a thorough understanding and experience in the complexities of B2B Engagement practices
- Involving the prime users of a CRM, being the Sales Team, in the design and development of the implementation
Over and above such issues, there is a most fundamental and single reason that all (and we take that under advisement) CRM’s are ineffective in non-commodity B2B organisations. The basic deficiency is that they do not understand nor incorporate the basics of Opportunity Management practices.
Opportunity Management System
A quick Google search on the title of this section results in a handful of sites. None of these appear to address the requirements of an OMS. As best we can tell they seem to merely shuffle standard CRM terms around into new categories, by distinguishing between Lead Management and Opportunity Management. The content from these searches skim the surface of a robust Opportunity Management System and may be more appropriate in a commodity product sales environment. Some examples are A, B, C. The aQuity definition of an OMS is covered in some detail in the next article – The aQuity Methodology.
Non-commodity B2B Engagements tend to be complex and often result in a lengthy process. Competitors tend to focus their attention with great skill. The potential revenue value of these Engagements tends to large, if not vast. Hence, the risks and rewards require a very different level of understanding, treatment and management. The adept professional must possess attributes like earnest assessment, detailed analysis, mature leadership and judgment.
It requires managing every Opportunity uniquely and with great care. Besides the essential Engagement Plan, the professional Closer will follow a structured process. This process is a road map that serves many purposes, but in the context of the topic of CRM, it provides:
- The vital Qualification criteria
- A clear understanding of the Status of an Opportunity
- Validation of the Stage achieved in the Sales Cycle
- Professional Engagement practices
As such, a clearly defined Opportunity Management practice is essential in the Sales Methodology, defined in the Sales Strategy. The development of Opportunity Management System requires many years of failures and successes in the B2B Sales trenches. The aQuity Opportunity Management app and its supporting ‘B2B or Not to B…‘ eBook provide a ready-made alternative to the poor alternatives.