The next objective of the CRM system has been to get the “little black book” out of the heads of salespeople and into the computer so that, if and when the salespeople leave, they don’t take their names and contacts with them. In reality, if they have built relationships with these contacts, they still take the relationships with them.
Whenever you have turnover in your sales force — on your side or on the client’s side — emotional bank accounts, as referred to by Stephen Covey in his book, The Seven Habits of Highly Effective People, go back to zero.
The real issue is turnover. If companies spent a fraction of the money solving their sales turnover problem that they do trying to automate their sales force to solve customer problems, they might start to build some real relationships.
But getting all the information and contacts into the computer is designed so that no one person has to have a relationship with the client. We can swap people out as the call centers change shifts. In direct field sales and marketing, though, capturing the little black book and ignoring the turnover problem simply won’t work.
While it is true that information is important to relationships, it is only a tool. There are missing links between our objective in the account — account dominance or preferred vendor status — and an information tool (see Figure 7–1).
Let’s work backwards: If you want to dominate an account, what the client wants is trust. Trust is built over time. Relationships are built over time. In complex sales, people buy from people—not computers. You can sell online, but not if you want trust. Not if you want account dominance.
If you want to sell commodities, sell them over the Web and service them with a call center — the same for noncompetitive reorders. But strategic business-to-business (B2B) services and products include greater career risk to the buyer and therefore require trust. In order to maintain trust, you need continuity of the relationship, yet sales turnover in the high-tech industry averages around 30 percent per year.
A CRM system is a repository for information — not a process. Information about problem resolution and purchasing history is very important, but only to the degree that it builds trust and continuity so that clients don’t have to constantly train new salespeople on how to sell to them. In addition to this continuity, the company has to have delivered value because performance on the last sale is the gateway to repeat business. When your product or solution is performing and producing results and value — and you have documented those results — then risk begins to lower.
A CRM system is a repository for information, not a process.
As risk lowers, trust goes up. This is why IBM was able to sell its products for such a premium in the 1980s. The company lowered risk for IT directors. In order to do this, you have to have a sales process that rewards not just customer satisfaction but also customer loyalty. And there is a big gap between the two.
In some studies, there is as much as a 40 percent gap between customer satisfaction and customer loyalty. Satisfied customers will still buy from somebody else. As Herb Cohen, the great negotiating trainer, said in one of his speeches, “They care, but not that much.”
Several years ago, Blake Batley met with a vice president of sales of a large CRM software provider and asked him, “What makes your CRM application so much better than all the other CRM applications in the market that seem to be positioned the same way?”
The vice president said, “Well, our application is great because it gives our clients insight into all the history and interactions they have had with their own customers.”
“But how does your CRM application help your salespeople defeat your competition?” Blake asked. “How does it help them win deals and make their numbers?”
The vice president didn’t have an answer.
Having access to contacts and a customer history alone doesn’t help you win deals.
Technology can’t make up for what hit-and-run selling does to destroy trust. And if you want to be trusted, you have to have trustworthy people — people who can sell consultatively, who know their clients’ business as well as they do their own, and who are willing to work collaboratively to solve business problems.
David Stargel, our principal in charge of the Deloitte account, relates this story. A partner at Deloitte called on an executive client, and although the executive didn’t have any work for the consultant, he agreed to meet with him anyway.
A few months later, the partner called on the executive again. He still didn’t have any work for him, but again, they met anyway.
The executive continued to meet with the consultant every time he called on him, never having any work for his firm, for 15 months. Finally, at the end of those 15 months, the executive called the consultant with a project.
The consultant excitedly offered to get his team together and present a proposal.
“That won’t be necessary,” the executive told him. “The last 15 months have been a test. If you will stay with me when I am not buying anything, I am confident you will stay with me when I am.”
Information is vital to the degree that it supports all these missing links and strategies. As Klaus Besier, who grew SAP America in its early days, says, “Knowledge of birthdays alone is not going to give you competitive advantage.”
If your objective is to reduce cost and you end up nickel-and-diming your clients by not giving them adequate service, then a bad CRM implementation can ultimately cost you.
Many CRM initiatives are ill fated when they get to the field sales force because they are implemented by IT and implemented backwards. Considering the system first — and then addressing the needs of marketing, legal, and customer service — before finally talking to your sales force about their sales process and what they need to improve, is the wrong approach.
The result is asking your primary revenue generators to do data entry for the rest of the firm. Think about the basic economics of this: If a salesperson has a yearly quota of $2 million and works 2,000 hours in a year, he or she must sell $1,000/hour to make quota. Yet the CRM implementation wants you to make that salesperson into a $1,000/hour data-entry clerk—for the benefit of everyone else (see Figure 7–2).
A better approach, seconded by Joe Galvin of Gartner, Inc., is to start with a sales process. First, identify your best practices sales process, all the way from demand creation through competition to contract and then to account control.
“Gartner Dataquest has recognized that enterprises have spent more than $3.6 billion on sales software alone, with growth projected through 2007,” says Galvin. “However, many of these investments have failed to deliver measurable results, characterized by extremely low adoption rates or total abandonment.”
Galvin further states that, “sales culture dictates, to a large degree, technology adoption,” and “technology alone will not change behavior.”[4]
Defining your best practice sales cycle with your management team is the starting point for almost all things in sales effectiveness. Out of this exercise, you can identify — in each phase — what questions should be asked, what actions should be taken, and who is responsible.
Take that sales process and combine it with a methodology that incorporates tactics, the impact of time, the hierarchy of pain, political navigation, and consultative selling, and out of this comes a strategy that will drive your sales activity. This becomes the “playbook” for your team.
Most information systems are used simply to provide access to your process, to document your chosen strategy to the rest of the sales team, and to give managers a tool from which to coach.
This is not about filling out forms or screens. It’s about how you think and how you lead.
There are two purposes to creating a sales plan. The first is to stimulate thinking and make sure that you haven’t forgotten things. Pilots, whether they have been flying for 3 months or 30 years, still use a checklist.