Technology and the Successful Sales Organization

If you ask ten people to define CRM, or for that matter, SFA, you will likely get ten different definitions. Although no two definitions are alike, there emerges some common language demonstrating that the concept, from both a technology and a process standpoint, is becoming more focused.

Pulling together common themes across dozens of definitions, broadly speaking, CRM can be defined as any information technology (IT) that helps an organization overall and the sales division in particular execute processes for developing and sustaining long-term, profitable customer relationships. More specifically, CRM is a corporate strategy and a corresponding system of tools and procedures a firm uses to identify, locate, acquire, and retain customers, as well as manage interactions with customers at several touch points.

SFA, as a subset of CRM, refers to a system of hardware and software applications that automate a wide range of sales activities, but differs from CRM in that it may not involve other nonsales activities and databases within the organization. As the technology and process, and hence a definition of the concepts of CRM and SFA, have developed, there is a consensus that CRM should add value to the customer, increase the value of the customer to the seller, and create efficiencies and improve effectiveness of serving customers for the salesperson and the organization as a whole.

When most people think of CRM, they are generally referring to the various software and hardware incorporated in an enterprisewide system. However, a CRM system also involves the processes by which organizations interact with and collect data on their customers and prospects. These include sales processes, ordering, customer service, and marketing processes among others. Many argue that a CRM system is indeed more than just software and hardware, but rather it encompasses extensive changes within a company in terms of skills, processes, and structures. CRM tools merely enable and enhance these attributes.

This chapter explores what we found to be the prerequisites of a successful CRM strategy—having effective and efficient business and sales processes in place, understanding beforehand the required business outcomes of the system, ensuring that the right skills are in the right place, and leveraging the right hardware and software tools to execute these processes.

Sales Technology: Hardware, Software, and Process

CRM went through several stages from the mid-1980s through the 1990s, from systems designed to automate a few sales activities, to sophisticated databases and data collection processes encompassing all types of customer and product data. The evolution to full-blown CRM systems by the late 1990s reflected the realization that there are many touch points with the customer and that more fully understanding customer behavior allowed better forecasting and the ability to establish strategies that mutually serve the needs and expectations of the buyer and seller. Organizations assumed even more of an external or customer- centric perspective focusing on such things as what the customer buys and when, why, and for how much; what creates value for customers; and what drives their buying decisions. CRM systems also ensured that organizations had stable relationships with customers across sales channels and that customers had similar experiences across sales channels.

The idea was to enhance the quality of every customer interaction by ensuring that everyone in the organization who comes in contact with customers can access accurate information at the right time. CRM became the most important data management tool available to organizations as they faced an incredible growth in the complexity and sheer volume of customer data.

Sales technologies that compose CRM and SFA systems include both hardware and software that allows salespeople to input, record, track, and recall customer- and product-related information. Hardware typically includes laptops, cell phones, personal digital assistants (PDAs), and presentation equipment. Software includes PC-based applications automating a host of sales and business activities, complex database software, and wireless business intelligence that includes access to data via wireless communications. Figure 4.1 shows the percentage of salespeople reporting that their organization offers various sales technology–related applications.

Figure 4.1: Technologies Offered by Companies to Support the Sales Organization

Web-based applications, or eCRM technology, include electronic commerce ordering, product configuration, pricing, and tracking and billing. In addition, eCRM also promotes marketing and sales efforts, such as electronic customized newsletters, e-mail communications, co-browsing, and product or service offerings provided electronically that are based on predictive behavioral models. As more organizations establish a presence on the Web, competition requires dependable and robust interactive e-commerce capabilities. Through an eCRM system, this “channel” of data flowing to and from customers is integrated with other databases and customer touch points within the organization, such as customer service, telesales/marketing, and direct sales.