Transitioning From SFA to CRM
In a recent study of sales executives, we were astonished to learn that sales organizations have gotten all they will get from sales technology! Some sales executives told us that the salesforce automation (SFA) revolution was over. Since this study was not a survey but a series of in-depth interviews, we dug a little deeper and discovered they were right – they had gotten all they could get from SFA.
The issue is neither the software nor getting salespeople to adopt the technology; it is that management doesn’t really know what to do with the technology.
And it is no wonder. According to Jim Dickie’s (CSO Insights) research, more than half of sales organizations do not have a formal selling process, so how can they automate sales?
Like most parts of CRM, the technology takes the blame for problems that are far more basic. In making the transition from SFA to CRM, the challenge is not the technology but the people.
Perhaps the first challenge is simply to better
understand CRM. As illustrated in Figure 1, CRM
offers much more than SFA. Sales management
understands contact management and how technology
can support communication functions. Using
salesperson-collected data to create predictive
models or testing sales strategies via experimentation
are foreign concepts to sales managers. During
an internship, for example, one of my students
created a logit model that identified high likelihood
prospects for a new bond issue for O’Hare Airport.
The company, a financial services firm, usually took
three days to sell out a new bond issue. With this
model, the salesforce sold it out in three hours. Yet,
shortly after the internship, the company shut down
the CRM department. Their response was, “Well,
the salesforce would have sold it out anyway.” True,
but the salesforce could have sold at least six such
bond issues in the same amount of time. Even when
presented with the facts, sales management doesn’t
always understand the power of CRM.
That means that significant training and education is required. Salesforce leaders cannot leave CRM to the marketing department. If they do, the divide between marketing and sales is strengthened, not closed, and the system will fail. Sales leaders must understand and become a part of the CRM strategy process in an ongoing manner.
Another common challenge is deciding who owns the relationship. With SFA, the responsibility for the relationship lies squarely with the salesperson. Any change to that ownership threatens the livelihood and self-image of the salesperson. A salesperson for one of my clients has not allowed an executive to make a sales call on his customer for at least five years. CRM threatens that kind of power and control that a salesperson can hold over the relationship.
One remedy is to allow the salesperson to continue to own and manage the relationship (although no salesperson should hold the kind of power described in the example above). The best solution in some situations may be to train the sales rep on CRM and give the rep the responsibility of filtering everything from the company to the account. This strategy mirrors how Harrah’s handles the diverse nature of the company’s properties. The corporate CRM group creates campaigns which are adapted to fit local properties by the property management. Thus, the Tupelo, Miss., casino might send out a slightly different version of the same campaign sent to customers of the New Orleans Harrah’s.
These two challenges tie together. Common to both is that sales management should be a part of the ongoing CRM strategy and implementation process. For example, sales organizations typically have short-term promotions such as sales contests, SPIFFs (special promotion incentive fund, or short-term bonuses for specific sales goals) and so forth. These are typically run to manage inventory or achieve specific marketing goals such as market penetration for a new product. What has to change, though, is that these must be tied to the CRM strategy, and sales management has to be involved.
Making the Move
The process of moving from SFA to CRM begins with understanding, mapping and rationalizing the sales process. Answer questions such as, “What are the different forms of relationships that customers want to have with us?” and “What is the decision process for each?” In order to know how to sell, it helps to know how customers want to buy. Do they want an affiliative relationship (one based on friendship with people at the organization), or a strategic partnership (one based on mutual goals and investments) or something else entirely?
Once the buying and relating processes are understood, a sales process or set of processes can be developed. The implications of creating sales processes are not limited to developing a CRM strategy or increasing use of software; creating more effective metrics and compensation programs are another benefit, for example. Other benefits can include developing more effective multichannel strategies.
The San Antonio Spurs have engaged in traditional marketing research in order to understand different fan segments. While some of the data comes from Personicx (a lifestyle data set purchased from Acxiom), specific research by the Spurs adds greater understanding of the different fan segments, how they view the team and other important factors useful in creating relationship strategies. These strategies are then executed by a salesforce operating in a multichannel environment, in which salespeople have access to customer data regarding Web visits, merchandise purchases and other information that help them communicate more effectively with the customer.
The next step is to facilitate an educational process for sales management. The easy answer would be to train sales management on the software’s functions but the reality is that the choices are not that easy. One end goal of the process is to have the right salespeople engaged in the right sales process for the right customers. Understanding what is right can be a lengthy process, fraught with many missteps and false starts. In addition, engaging the power of a
CRM system requires analytical skills that sales management may not have and that may not be easily taught. Successfully teaching sales leaders logistic regression models and other data mining techniques is unlikely. But questions concerning who will do that analysis still need to be answered. Such questions can be resolved through facilitating a series of strategic planning sessions and educating sales leaders on CRM processes.
Prentice Hall, the textbook publisher, is engaged in that process. The company operates divisions based on academic specialties – one division sells to business schools, another to science departments and so forth. Beginning with sales leadership and marketing working together, a facilitated process of learning how CRM can address specific challenges now will likely lead to quick wins that can then engender greater support for CRM as the strategy is rolled out across other elements of the organization. At the same time, sales leadership is learning how CRM can support the sales process, which leads to expanded use of the CRM solution.
As the organization maps the buying and relating processes and then designs corresponding sales processes, the question of relationship ownership can be resolved. Rather than risking revolt, most organizations avoid the question. The question, though, is of strategic importance and should be resolved. With ownership comes responsibility and accountability; responsibility for managing the account across channels, and accountability for profit, revenue growth and other important objectives.
Relationship responsibility requires additional knowledge for most salespeople. Understanding their role in the multichannel environment in which most CRM strategies operate will require some training and development. For example, will they be responsible for generating or adapting email campaigns to their accounts? Should they receive reports regarding website visits? Who should qualify leads for new sales in their accounts? In short, both their role and their understanding of that role should be clarified.
One goal, then, is making CRM a competency of the organization, not just marketing. Starting with sales leadership and working through the entire sales organization, CRM should be the core of strategy – but not instead of sales.
Richard Langlotz of Konica Minolta Business Solutions (KMBS) understands that CRM should not occur at the expense of making sales. The company empowers salespeople with CRM technology and strategy, yet has avoided the “professional friend” trap that has snared too many sales organizations. In a study conducted by George Dudley of Behavioral Sciences Research Press, the adoption of relationshipselling strategies led to a significant decline in sales performance. Using CRM software, KMBS sales management can create locally effective sales strategies based on overall relationship strategies developed by corporate leadership. Management uses the system to carefully track salesperson performance by every step of the selling process, identifying training needs or opportunities to tweak strategy. The result is that sales objectives continue to be met.
A red herring in the use of SFA and transitioning to CRM is that salespeople won’t “use” it. Typically this means salespeople aren’t entering data into the system. When salespeople refuse to “use” the system, it is because they get nothing from it. In such situations, using the system really means powering someone else’s application. We know from research conducted by Mike Ahearne at the University of Houston that salespeople who use a CRM system for more than inputting data are more productive. In one study, he simply counted the total number of screens viewed by salespeople as a measure of use and compared it with sales. Those who used the system more sold more. Before we conclude that the use of the system drove sales, we could also conclude that sales drove the use of the system. The more they sold, the more they had to enter data. But that doesn’t appear to be the case. We can also look at the variety of screens used and determine that it was use of the system that was driving sales.
Some sales organizations do have significant technology reluctance. For example, fully one-third of 3M’s salesforce will retire sometime in the next five years. Persuading these salespeople – who are quite happy with their level of performance sans technology – to adopt technology has been a difficult and slow process. At the same time, however, all of that customer knowledge will walk out the door in the very near future unless something is done. To address the issue, the company has employed several tactics, including hiring temporary personnel to input data, requiring salespeople to enter data in order to be paid sales bonuses, and other actions. These tactics will capture data (sufficient as a first step but not the ultimate objective), but not encourage use. If you want salespeople to use the system, it must do something for them. And they must know how to make it work beyond simple contact management. Once they understand how CRM works, they can begin to engage in relationship planning, campaign management and other activities that are empowered by CRM technology.
