Organizational Process, Behavior, and Technology are Equally Critical for CRM Success

Adopting a customer-centered marketing strategy sounds simple. Focusing on the customers’ needs, values and expectations, and subsequently providing value for the customers is a goal to which many companies aspire. But too few deliver. The key to the successful implementation of a customer-centered strategy comes with the realization that technology alone cannot solve any problem without the people and processes in place to make it actionable. The reality is that most companies don’t have an integrated infrastructure – technology, people and processes – in place to support such an initiative.

Nearly every company focuses on the technology component of the infrastructure and assigns the people and process portions to a lesser level of importance. Technology rarely prevents a customer-centered initiative from being successful. More often than not, human behavior and organizational processes are the inhibitors to success.

So how can you ensure success with such an initiative?

Start by asking yourself the following questions:

  • Have your employees proven themselves willing to change the way they work, if necessary, to provide better service to your customers?
  • Is your entire company well trained in the art of customer service and is everyone customer-focused – regardless of how frequently they come in contact with customers?
  • Are your business processes designed with your customers in mind?
  • Do you have all the data about your customers that you need?
  • Are your systems capable of supporting your goals and objectives relative to your customers’ expectations?

If you have found that you can’t answer “yes” to each of these questions, you are not alone. Nevertheless, you’ve taken the first step in recognizing and accepting your company’s shortfall relative to customer relationship management (CRM) capabilities. To get back on track, keep in mind the three dimensions of CRM: technology, human behavior, and organizational processes.

Technology

If you are going to be effective in implementing a CRM strategy, you will need many different data sets – not just about your customers and their purchase patterns, but also about your products and services, your prospective customers, your competitors, the market, the economy and perhaps the regulatory environment. Next, quality technical capabilities are a must. To be most effective, you will need to be able to gather, move and mine the data for relevant information. You must integrate your systems to the degree that data sharing is dynamic according to your business needs.

Many companies have transactional systems, such as point-of-sale, telemarketing/telesales or customer service, but few have built in the degree of integration of the data necessary to truly assist the organization in meeting the customers’ needs.

Ask yourself, how does the information collected at these points of customer contact make its way throughout your company? Can product and marketing managers, market research, database marketing, and senior executives access this information at the appropriate summary or detail level to allow them to make sound business decisions?

Finally, most data has some value in and of itself, but it is the combination of the data, the system capability and the know-how that provides the actionable information needed to create a competitive advantage in the marketplace.

For example, let’s assume you know which customers buy which products or services you offer. Useful information to have, but ask yourself a few more questions:

  • Do you know why your customers buy from you? Can you find prospective customers just like your current customers?
  • Can you match your essential products and services against those of your competitors? What are the strengths and weaknesses? Are you selling against them?
  • Who are future purchasers of your products and services? What do they look like?
  • Do you know why your customers are not buying from your competitors?
  • Will changes in the economy influence your customers’ ability to purchase your products and services? How?
  • Will changing demographics have an impact on your business? How?
  • If your product or service is regulated, will pending changes in legislation affect your profitability? How?

If pressed, many companies can answer these questions on some level. However, the complete information is often spread throughout the organization on computer disks, in file drawers and in employees’ heads, which can take weeks or months to assemble. With such disparate and decentralized information in an organization, decisions are made without a complete understanding of the big picture.

Of course, reliable, consistent data and systems must be in place to maintain the integrity and credibility of the information. Without that, the ability to make sound decisions based on the information becomes suspect, and therefore should not be used.

Technology is the easy part of this equation. Systems and technology can provide virtually any capability that is needed to manage the data and information.

The tricky part comes with understanding the information and applying it to everyday situations. Most often, the creation of actionable information is not “rule-based” (generated solely by a computer) but rather, “expert-based” (requiring human intervention for interpretation).

Human Behavior

Human behavior is critical to the successful implementation of a CRM strategy. The biggest challenge companies usually face is putting an enterprise-wide focus on the customer. Outside of the sales or customer service areas, most employees are not directly exposed to customers. These individuals make vital decisions affecting customers. Everyone in the organization – from the CEO down to the line-worker – must be focused on the fact that the customers sign the paychecks.

This type of focus is difficult to achieve since individuals within an organization are usually focused on completing the task at hand and often have difficulty in seeing how their duties link to the big picture: satisfied customers. The good news is that overcoming human behavior challenges starts with a simple act – communication.

Communicating the change to all employees is an important – but often overlooked – part of any corporate initiative. Here are a few ways to keep your employees interested, involved and more adaptable to the many changes required to implement a total CRM strategy successfully:

  • Get the individuals who will be affected by the change engaged from the very beginning of the project. Tell them about the initiative, what the organization is expecting to accomplish from the change, how the customers will be affected and – most importantly – how the change will affect their work. Ask for their input into the project, not only at the beginning but also throughout the project.
  • Communicate regularly with appropriate messages and provide an easy way for employees to offer comments. You will have multiple audiences – from senior executives to telemarketers – within your organization. Each target audience will likely need a different slant and frequency of information.
  • Prepare for and provide sufficient training, giving your employees the skill sets necessary for the new systems and processes you will be implementing. Use this as an opportunity to re-assess communications skills and provide additional training in this area, if needed.

While these three points will not solve all of your change challenges, they will help smooth the transition from merely having a CRM strategy to delivering on your customers’ needs and expectations.

Organizational Processes

Organizations are often their own worst enemies when it comes to implementing a CRM strategy.

In some organizations, the culture and processes are so ingrained that it is difficult to facilitate change – even if you have adequately addressed issues of technology and human behavior. Moreover, the mindset that permeates the organization’s processes is often based on technology limitations that were in effect at the time a specific process or procedure was developed.

What has been done in the past is often no longer the best guide for what to do in the future. Organizations must prove themselves adaptable with processes and procedures that are designed with the customers in mind.

Managing the total customer relationship is dependent upon how well these three dimensions – technology, human behavior, and organizational process – are developed, managed and integrated. To be successful, equal attention must be given to all three.

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A version of this article originally written for Direct magazine and appeared March 1, 2000, in print. (Direct Magazine is now Chief Marketer)

Featured Image: Photo by Christiann Koepke on Unsplash

Introducing the Working Life Project Podcast

Since December, I've been putting a lot more time on my latest project, the Working Life Project podcast. As you might imagine, there's a lot that goes into launching a new podcast and that, in part, explains the lack of content on my blog lately.

It's also no surprise, then, that it took me a little while to put the finishing touches on the new website and work through some production issues. 

My goal with the Working Life Project is to capture the stories of America's entrepreneurs and small business owners. It's a conversational/interview podcast where I hope to find those things that make them tick and share, in their own words and sometimes with pictures.

On April 2, I launched the first full-length episode with Ahna Hendrix of Anahata Swimwear. I interviewed David Harris of David Harris Magic for episode two, and later this week I'll launch release the third interview. New episodes will be released every other week throughout the first 10-episode season.

If you're a regular reader of my blog, you may recall I interviewed several entrepreneurs for my graduate work in entrepreneurship. This was a catalyst for bringing my 2010 idea for this project into the 21st century with a podcast. So, a couple of those interviews will make it into this first season in some way.

I hope you'll listen and share the podcast with friends. You can learn more and listen to the podcast online at workinglifeproject.com. You can also subscribe at iTunes, Google Play, Spotify, Stitcher, SoundCloud, or wherever you get your podcasts.

How to Develop a Sales Plan for Your Entrepreneurial Venture

Sales planning is a combination of both strategies and tactics necessary to achieve sales revenue growth within the company. The purpose of sales planning is to determine the expected volume of future sales to support business operations. A sales plan should be based in part on historical performance, but also factor a stretch or performance goal that considers new products, new territories, and changes in the marketplace.

A sales plan is direct and straightforward and focuses on how to identify and develop new customer sales opportunities as well as how do grow revenue opportunities from existing customers. Typically, the following four steps are used to frame the sales planning process:

  1. Establish a realistic revenue goal (What do you desire to achieve?)
  2. Identify sales opportunities (To whom are you selling?)
  3. Determine outreach approach (How will you engage and what will you say?)
  4. Set clear and measurable metrics (What will you measure and how frequently?)
Establish a realistic revenue goal

Sales planning must begin with a revenue goal. The annual revenue goal is this segmented and assigned to broad customer segments, such as new acquisition vs. existing or returning). Among the factors considered when determining how to apportion the revenue goals are historical sales performance for new customers vs. existing customers as well as customer satisfaction and customer churn rate (Gallo, 2014). Factors such as new product launches, the lifetime of a product, product or service pricing, and other similar things will often influence which segment gets the most substantial proportion of the revenue goal.

Identify sales opportunities

Once the revenue goal is established and the segmented by new vs. existing customers, the next step would determine how to identify sales opportunities within those segments. For both segments, an analysis of the customer’s needs, values, and expectations (NVEs) are essential, as is a review of the competitive landscape. The outcome of the analysis will shape the products and services offered, as well as the price position of those offerings.

With existing customers, the goal is to create deeper customer loyalty and increase retention. To do this, start with how to strengthen the relationship by meeting or exceeding the customer’s NVEs. Often this involves creating new insights for customers that support long-term goals and objectives. Usually, this means brainstorming new ideas and identifying new solutions and projects before the customer realizes or understands the need (Selling Power Editors, 2014). Determine if there are cross-sell (offering similar products) or upsell (offering an add-on or next-level product or service) opportunities with existing products or services, or if something different needs to be provided to strengthen the relationship. Then, create a sales goal for each customer based on those identified opportunities. These customer sales goals should roll up into the existing customer sales revenue segment.

For new customers, first, determine what an ideal customer might look like using the parameters of the current best and most profitable customers. Sometimes it’s helpful to create “buyer profiles” or “personas” to help identify what that best customer will look like in the marketplace. Then, identify prospective customers that align best with the products and services offered. Next, consider what would cause those potential customers to switch and whether the products and services provided will create enough value. Finally, establish realistic sales goals for new customers considering the market conditions and competitive landscape. These sales goals should roll up into the new customer sales revenue segment.

Determine Outreach Approach

Also known as the strategies and tactics of the sales plan, the outreach approach defines when, how, and the message used to reach each of the target customers and prospective customers. Given social media and online engagement have changed prospecting, some argue an excellent way to connect with potential customers be present in their communities (Haden, 2017). Identify the company first, if the prospective customer is a company, and then identify prospective buyers within the company. According to Inc.com contributing editor Jeff Haden, questions to consider when determining outreach approach include:

  • Are they on social media?
  • What’s their network of choice?
  • Are they involved in social media groups (e.g., LinkedIn or Facebook)?
  • Do they ask questions on Quora or Reddit?
  • Do they listen to podcasts? Which ones?
  • What blogs are they reading?

Gaining a better understanding of the prospective customers and their media consumption habits will help to define the strategies and tactics used to engage those prospects.

For example, considering the lists above, a strategy might be to provide value to prospective customers by becoming a trusted resource. Then, the tactics might be to engage in non-selling activities (i.e., conversation and Q &A) in social media groups, and answer questions on Quora and Reddit. Other tactics might be to develop a sponsorship program for the target prospects that includes the blogs they are reading (if possible) or the podcasts to which they listen. And, of course, some prospective customers do not engage with online media or do so sparingly.

Another strategy might be to incent the sales staff or offer customer incentives to increase sales. If a strategy is to increase sales by 20% during a calendar quarter using incentives, for example, tactics might include referral programs, price discounts or promotions, sales team bonus, or increased commissions for the period (Frost, 2018).

While the outreach tactics will depend upon the nature of the offering and the engagement preferences of the customers and prospective customers, ideally the engagement should include multiple channels. Creating a continuity of contact campaign or program that defines the frequency of contact, the channel of engagement (online, email, phone call, personal visit, trade show, podcasts, blogs, etc.), and the message strategy can be very useful in moving a customer through the sales cycle to purchase. Technology, such as sales force automation systems or CRM tools can be beneficial for tracking and keeping up with engagement campaigns and programs.

Set clear and measurable metrics

The sales plan must establish metrics and milestones against which to measure performance progress. Moreover, that progress needs to be measured frequently to ensure the plan is on target, and if it is not on target, what needs to be done to ensure any shortfalls are made up before year-end. While many things can be measured, the most important thing to measure in a sales plan is total sales because it provides the top-line cash flow for the business.

For example, let’s consider, and sales goal is 1 million dollars. Based on the historical sales seasonality of the business, $200 thousand is expected during the first quarter, $400 thousand is expected second quarter, $300 thousand third quarter, and $100 thousand in the fourth quarter. Because of the seasonality of sales, the majority of the sales come during the first three quarters of the year. If sales are off during any of those quarter, it becomes harder to make up sales to meet the goal. Therefore, monthly milestones should be established to monitor performance and enact new programs as may be necessary if sales fall short.

Sales planning is as much an art as it is a science. While revenue targets can be established that are built on a solid foundation of research, customer and market needs, product and service offerings, and historical performance, there remain many variables that can affect the ability to achieve those targets. Market conditions, new competitors, pricing and delivery factors, and sales team staffing are just a few of the factors that are difficult to predict and may influence sales performance. Regular performance monitoring will allow for quick plan corrections and revisions and minimize variances from the plan.

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Supplemental Articles Resources

In addition to the references and links within, here are a few more supplemental resources that might be of use to you as you consider how to develop your sales plan:

The Value of Keeping the Right Customers by Amy Gallo

What is Sales Strategy  by Hubspot Staff

The Hubspot.com Staff provides a good overview of sales strategy and planning and offers case studies of sales strategies for Hubspot, Salesforce.com, and Shopify.

How to Create a Sales Plan in 7 Steps by Allison Potts

Allison Potts offers a step-by-step approach to developing a sales strategy and plan, covering everything from the benefits of developing a sales plan, to examples and ideas for execution. The article also provides guides and templates to use in developing your own plan.

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References

Frost, A. (2018, January 9). How to Create a Sales Plan: The Ultimate Guide. Retrieved October 25, 2018, from hubspot.com: https://blog.hubspot.com/sales/ultimate-guide-creating-sales-plan

Gallo, A. (2014, October 29). The Value of Keeping the Right Customers. Retrieved October 25, 2018, from hbr.org: https://hbr.org/2014/10/the-value-of-keeping-the-right-customers

Haden, J. (2017, July 12). How to Create a Profitable Sales Plan for Your Business: 10 Steps. Retrieved October 25, 2018, from inc.com: https://www.inc.com/jeff-haden/how-to-create-a-profitable-sales-plan-for-your-bus.html

Selling Power Editors. (2014, August 21). The True Purpose of Account Planning. Retrieved October 26, 2018, from sellingpower.com: https://blog.sellingpower.com/gg/2014/08/the-true-purpose-of-account-planning.html

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Photo by Daria Nepriakhina on Unsplash