Technology Strategies for Successful Sales

According to most accounts, CRM implementations more often fail than succeed. In fact, it is estimated that anywhere between 65 percent to 75 percent of all implementations fail to meet initial expectations. We are reminded of this almost daily by the experts, as noted by the following:

• Gschwandter (2001) showed that two-thirds of CRM installations failed to meet all goals, almost half were late, and more than a third over budget.

• According to Costello (2000), out of 50 large CRM users, 90 percent admitted to not being able to measure a tangible return from CRM implementation.

• Another study (Zoltners, 2001) reported that 70 percent of firms had little or no improvement as a result of CRM implementation.

Not only do CRM and SFA failures—or those implementations merely not meeting expectations—cost the company money, the opportunity costs of forgoing the benefits of a fully functional system can be staggering. A consulting study reported by Thompson (2003) concluded that a typical company with $1 billion in revenue could increase profits up to $130 million by improving their CRM system, and that CRM explained as much as two-thirds of the difference in return on sales between average and high performing organizations.

Despite the benefits, except for the largest organizations, most organizations do not have a fully functional CRM system in place, and many are not even planning one. A recent online poll by CRMCommunity.com (2003) showed that 47 percent of organizations had no plan to implement CRM in the coming year, 42 percent planned to in the near future, and only 9 percent had already fully implemented a CRM system. Most of the organizations in our study had implemented or were in the process of implementing a CRM system.

Participating organizations shared with us both the challenges and the keys to success that they experienced throughout their sales technology implementation. The next section discusses some of the challenges we heard about in our interviews and, more importantly, the strategies for successfully preparing the organization for change, designing the right system, and executing the rollout. While this chapter considers CRM and its subset SFA systems as important sales strategies, the following sections discuss the challenges and critical success factors with implementing broader CRM systems. However, the lessons apply to more sales department–specific SFA applications because they are often embedded in more organization-wide CRM systems.

Preparing the Organization for Success

Organizational factors, such as current sales skills, sales force segmentation, customer relationship processes, past experiences with sales force technologies, and other cultural variables, all have a bearing on the degree to which organizations can leverage their CRM systems.

Many of the organizations participating in the study had implemented or attempted to implement sales force technologies in the past, and many efforts were met with mixed results. The historical experience with sales force technologies has a significant impact on subsequent implementations. We found that bad experiences make it extremely difficult to create support and confidence among salespeople for a new system. A reputation of failed experiments fosters the “here we go again” attitude. One salesperson remarked, “I approach this stuff with a ‘this too shall pass’ attitude. . . . I’ll wait it out and they’ll roll something else out a year from now.” To overcome this, leaders must be able to demonstrate causes for past failures, show how and why things will be different the next time around, and allow required business outcomes to drive system development rather than the other way around.

The most effective way to overcome negative experiences is creating a sales culture that will embrace change, understand clearly the advantages and limitations of technology, and involve the trust of leaders. This cultural preparedness also involves leaders building a case for implementing a new system, communicating a need for new processes and procedures, and clearly demonstrating the gains in the effectiveness and efficiency of sales activities and advantages for the customer. The most effective way to build and sell a case is to avoid “top-down” commands of how things will be and instead create trust by gaining input from users and stakeholders, and offering ownership in the decision-making process.

Overcoming the Past at Diebold

Diebold, the manufacturer of bank security systems, automated teller machines (ATMs), and election systems, is currently undergoing its largest ever software automation and integration initiative. Based on an Oracle 11i CRM platform, the company will integrate processes and information to allow “salespeople to achieve balance, become more productive, and make their lives easier, as well as to better serve customers.” The goal is to let sales-people organize customer information and ultimately have more time in front of the customer.

In the past, Diebold had mixed results implementing sales technologies, and as a result, some in the sales organization were initially skeptical of the most recent initiative. The general feeling was that often technology “hurts us because it requires effort and time and we don’t always have an opportunity to understand the value of how it helps our job.” In addition, past efforts ignored problems with sales processes. One respondent said, “Every time we roll something out it ends up being more of a burden than a help, probably because we automated the current process as opposed to fixing the process and then automating it. For example, in the past, we took order-taking responsibilities off of less expensive resources and put them on the expensive sales resource.”

Given the perceived lack of benefits to sales professionals, the lack of sales force input into SFA decisions, the mixed results of previous implementations, and the large concentration of tenured employees, some suspicion and initial push back was not surprising. As one respondent noted, “The record to date has been mediocre at best for getting systems out on time and with the desired functionality. We’ve been tinkering with the SFA system for six years.” Agrees another, “Salespeople do not use existing systems as often as they should.”

Diebold is very cognizant of these past missteps and is planning the current CRM implementation much more meticulously. As a result, the Oracle rollout is being viewed as a more thought-out process, and perceived as working more smoothly than past implementations. These efforts are paying off. The sales organization is fully supporting the initiative and upper-level management is ensuring ongoing communication of the message that this will be a positive step for the company. Respondents mentioned that, in general, “this rollout has more upfront sales feedback preventing larger problems later.”

Maintaining realistic expectations, Diebold believes that it may “go back a little before it goes forward” with the Oracle implementation because it touches every part of the company and it will take time to ramp up. How ever, the expectation is that they will be able to utilize pilot tests to identify all of the “gotchas and glitches” in a safe environment, instead of out in the field, thus allowing a more effective launch. As one respondent said, “The challenge is to convince salespeople that these are productivity enhancers to their lives and livelihood.” From all accounts, the salespeople seem convinced and are on track for a successful implementation.

A handful of salespeople we interviewed felt that the sales technology was merely a tool for management to spy on what salespeople were doing. This “big brother” mentality is not a function of CRM technology but rather stems from a cultural predisposition for mistrust. Others looked at CRM as making salespeople redundant. One salesperson remarked, “I know why the organization does this stuff. They want to make sure that when the account rep leaves, all of their information is left behind. It’s to make us expendable.” For the organization to be ready to change, however, there must be a culture of trust between management and salespeople.

Before organizations embark on a CRM project, it is imperative that they have well-defined and clearly understood business and sales processes in place. Automating poorly performing activities and processes rarely improves the quality of the outcome. Leaders should have a good idea of how salespeople sell, how their customers buy, and how they need to service clients to create long-term loyalty. Many organizations participating in our study segment their sales force based on customer buying behavior, ranging from high-touch, key customers to those who are strictly transactional. The important human dimension here is that the skills required of salespeople in each segment must be defined and in place. Those salespeople dedicated to strategic selling to enterprise accounts must possess advanced sales skills including negotiation, resource management, internal networking, financial acumen, and the like, that salespeople selling to transactional customers do not need. Even beyond just the sales force, the skill requirements and processes at all customer touch points must be developed and clearly articulated before designing a CRM system.

While preparing the organization, companies must first be able to answer the following questions:

• What are the outcomes needed to move forward with a customer?

• What skills do people need, in all areas of the organization, that touch the customer?

• What information is needed from the customer?

• What information needs to get to the customer?

• What tools are needed to perform these tasks?

CRM systems then should be designed to improve the efficiency and effectiveness of the touch points and processes. Just overlaying a CRM technology where skills are not aligned and the right processes are not implemented will merely result in automation of bad processes.

Designing a Successful System

Organizations designing sales force technologies generally rely on a combination of outsourcing and homegrown or customized solutions. The Selling Power/AchieveGlobal study found that 30 percent of the organizations responding to the survey outsourced their entire sales technology system, 25 percent developed it completely in-house, and 46 percent both outsourced and built part of the system themselves. The organizations interviewed for this study generally mirrored these findings, with most purchasing software from a major supplier and customizing parts to meet their needs.

One of the critical success factors at the design phase is to ensure that the applications and functionality of the proposed system align with real everyday sales activities. Too often software applications are adopted merely because they are available, yet they have no relevancy for day-to-day sales activities. Sales technologies must improve job performance, but applications that are not directly aligned with improving the effectiveness or efficiency of sales activities end up as useless icons cluttering the desktop. One company we interviewed was working to pare down the number of software applications available to salespeople, eliminating those that were not needed. According to one of its managers, “Moving from more than two dozen icons on our sales force laptops to just the ten that we use saves us time and money, and just makes sense.” According to the study by Selling Power/AchieveGlobal, 20 percent of salespeople said that they do not use their CRM system because the technology is not applicable to their sales activities.

Another question to consider is whether a full-blown CRM system is even required, given the organization’s sales model, the nature of the business, or the size of the market. Infineum, a leading multinational manufacturer of fuel and lubricant additives, is experiencing consolidation among customers and has determined that a highly automated system is not required. With only a handful of customers and “six business processes,” including such things as pricing, tender management, proposal generation, and the like, Infineum does not need a complex software system. This case reinforces the importance of designing a system that fits the needs of the sales organization rather than designing the organization to fit the needs of a system.

As the organization aligns the requirements and capabilities of CRM projects with business processes, it is critical that they remain realistic about what the system should and will do. Many companies make the mistake of over designing their system and developing well-intended yet unrealistic applications— those that are too time-consuming to use or create additional work. A salesperson from a participating company in the study noted, “I found it troublesome to input my data just to get the manager’s feedback to my report. When the content is urgent, I communicate directly with my manager, but for less important cases, it is difficult for a manager to find time to give feedback. If a manager has 8 salespeople under him and each of them makes 10 entries a day, the manager must give feedback to 80 histories every day. If they don’t give any feedback, team members will not be motivated and won’t care to input the calls, which may cause a vicious circle.”

Over engineered processes—those trying to do more than what is required by the business—are generally not user-friendly for salespeople and others in the organization who will be responsible for interacting with customers or customer data. For there to be full adoption and compliance, the design phase must ensure an easy to use, intuitive system. The Selling Power/ AchieveGlobal study found that only 30 percent were satisfied or very satisfied that their company’s sales technologies were convenient and easy to use, and 55 percent said that technologies that are too time-consuming or inconvenient to use is the number one barrier to adoption of technology within their organization.

A large office products retailer developed a comprehensive sales force application that contains key customer and prospect data, such as contact information, contact notes, order history, including products purchased and charges incurred, contract terms, delivery point information, invoicing, and purchase forecasting. However, the system was not being used by all of the salespeople because, as one respondent said, “It was heavy on the ‘admin’ side.” Another application designed by the company allowing salespeople to track customer orders and related bonus/commission earnings was criticized by some as being cumbersome and inconvenient to use. Overdesigning the system and creating burdensome processes will lead to what one company in our study characterized as “too many inputs for the outputs you get.”

Several of the organizations interviewed recently experienced a merger or acquisition. Attempting to integrate disparate sales technologies and back-office databases and systems adds an additional level of complexity to the design phase. Yellow Book USA, Stora Enso, Infineum, and Hewlett Packard all acquired or merged with other organizations in the recent past, though each company maintained realistic expectations of the time and effort required to fully integrate all legacy systems on one CRM platform.

As system requirements are being defined in the design phase, organizations must keep in mind that the most valuable design information will come from stakeholders and users. The sales organization should be the driver of the design phase and not merely along for the ride. This should begin with early solicitation of input from users and stakeholders, especially sales managers. Systems that are designed from the top down and forced on the salespeople without addressing their pain points or fitting easily into their daily work flow will result in poor adoption rates.

Successful organizations begin the design phase with answers to the following questions in mind:

• What features of the system will increase adoption?

• When do sales representatives prefer to do various sales activities, such as their call reporting?

• What information do salespeople really value in the field?

Intier Automotive’s Strategies for Improving Usage of CRM

Intier Automotive Inc., the Canadian supplier of interior and closure systems for vehicles, has made considerable investments in sales technology. Most notable is the company’s CRM software application known as Auto-CRM. AutoCRM is a comprehensive application that contains key customer and prospect data, such as contact information, meeting notes, order history, pricing data, and data for forecasting purposes.

“Our new AutoCRM will help with sharing pricing information, contact information, and the like; will help us with the forecasting of new programs and auto models; and will allow us to choose and identify those programs that are important to us, such as the Dodge Ram pickup truck, for example.” Another application involves virtual information sharing. As one respondent describes the application, “We had several teams from DaimlerChrysler, Ford, BMW, and others across Europe and North America on a conference call. In the past, they would have to run reports in advance of the meeting. Now they can log in to AutoCRM with their laptops or desktops and with a simple projector show the reports on a screen for all to see simultaneously.”

Although respondents noted that AutoCRM will be very beneficial to the organization once it is fully implemented, there was initial resistance on the part of some salespeople to fully utilize the system. The company acknowledged this and immediately took steps to increase usage. The company is studying an innovative approach to reducing an account manager’s administrative AutoCRM responsibilities. To ease the laborious task of entering meeting notes, for example, the company is beta testing a program that provides account managers with a pocket PC to orally record customer meeting notes. In addition, the company has identified the top ten customer issues and has asked its account managers to keep all customer notes within the range of those issues. The recorded information is later typed by other parties, sent back to the account manager via e-mail for confirmation, and then finally entered into AutoCRM.

While manufacturing and cost pressures are front and center issues for Intier, AutoCRM is an important tool for improving the customer relationship process. In the end, for it to be a success, the system must be seen as “valuable to salespeople’s everyday activities and valuable to the customer as well.” With encouragement from senior leaders, Intier is on its way to achieving this objective.

Designers must meet with salespeople to identify common frustrations and explore how best to fix them, and to determine what barriers are coming between the salesperson and the customer. For example, if the salesperson has not been able to access the most up-to-date marketing, product, and pricing information in the field, it is likely that he or she might have difficulty answering customers’ questions.

Implementing a Successful System

Long after the concept and design have been developed, after vendors are selected and requirements identified, organizations are faced with creating a rollout plan, piloting a roll-out, and, finally, implementing the CRM system throughout the organization. The implementation phase is generally the most painstaking and time-consuming. Observers agree that the process takes anywhere from a year to 18 months, and many of the organizations we studied expected their CRM to be fully online from 1 to 2 years after the design phase was completed. In a recent study of small and medium-sized businesses, Schaaf (2004) found that 30 percent of the organizations had completed their CRM deployment, 12 percent were in the process of rolling it out, 25 percent planned their implementation for the coming year, and more than a quarter (28 percent) had no plans to implement a CRM system.

This phase is difficult because training and support plans are being developed and executed, salespeople are trying to figure out what it all means to them, and various parts of the organization unaccustomed to working together must coordinate efforts in new ways. According to one company we interviewed, “When the rubber hits the road, there’s some confusion. Everyone knows it’s coming, but once it does it takes a while for everyone to figure out what to do and for things to start operating normally.” How do organizations overcome these challenges in the implementation phase?

First and foremost, it is critical that organizations set realistic time lines and articulate clear goals and expectations for what they are trying to achieve throughout the rollout phase. Unrealistic time lines create frustration and ultimately damage the credibility of the project and confidence on the part of sales-people. Goal expectations should include specifics on who will be required to do what and when once the system is up and running. Salespeople will need to have a clear understanding of when they will be trained, when they will be required to use the system, and the implications of not using the system, and an understanding of how technologies will impact their roles and responsibilities. Salespeople must understand what it means for their workload, compensation, and responsibilities.

During the pilot and any phased rollout stages, salespeople are exposed live to the system for the first time. The level of comfort and competency that salespeople have with using the system is a critical factor for ensuring compliance. Many organizations have problems with getting their salespeople comfortable and competent during the rollout phase. According to the study by Schaaf, of the more than 500 IT professionals surveyed, more than half (59 percent) said that their company is somewhat comfortable or very comfortable using their CRM system, and only 55 percent said their company is somewhat competent or very competent in using the system. With only around half of all salespeople feeling comfortable with and skilled in using their CRM system, it is little wonder why adoption rates are so low.

One of the important lessons learned from organizations participating in our study is that management and senior leaders in the organization must be brand champions of the implementation, and they must encourage the organization to embrace the new system. According to Schaaf, 70 percent of all respondents agreed or strongly agreed that their senior leadership demonstrated commitment to their organization’s CRM implementation. Leaders must create excitement and build momentum with continuous updates of the rollout. Management at Diebold, the manufacturer of ATM machines and bank security equipment, embodied the meaning of brand champions. They were able to describe the vision of the implementation and passionately communicate its benefits to the organization and their customers.

With leadership’s commitment to a successful implementation comes systematic, clear, and ongoing communications throughout the organization. Company CRM newsletters, regular meetings, e-mails, and periodic updates of the rollout’s progress are means by which successful organizations keep the rollout in the limelight, keep everyone informed, and maintain the momentum of excitement.

Early in the implementation phase, successful organizations design a training program plan that includes a curriculum, a selection of trainers and trainees, and a training schedule. While the software vendor often provides education, for most organizations there is a component that must be customized and, over time, the company assumes full responsibility for ongoing training. Training should include both technical and process competencies as well as how salespeople can get the most out of the system for themselves and their customers. Although most organizations provide training—more than two-thirds of organizations surveyed by Schaaf provided ongoing training to their employees—some organizations only provide basic training.

In addition to education, organizations that successfully implement CRM systems also focus efforts on developing a plan to provide ongoing technical support that is accessible, visible, and responsive. User support is critical for keeping salespeople on track and instilling confidence in them that there is a “go-to” team in the organization that knows the system and can answer any questions. Many organizations, however, have not perfected their support mechanisms. According Schaaf, just over a third (35 percent) of respondents agreed or strongly agreed that their organization provided good help desk support.

The rollout plan and implementation of sales technologies are only successful if salespeople use the system. While it is critical at this stage that salespeople commit to full adoption, it is at this phase where behavioral change is the most difficult. More CRM systems fail at the execution phase because of poor compliance. There is a resistance by salespeople to report information they learn about the customer because they have always gained prestige by being the sole source of information about the directions their customers might take. In addition, new requirements may be seen by salespeople as an administrative burden. At one company, the most frequently cited reasons for not using the tool included a lack of resources for data entry, “too many inputs required for the outputs we get,” a lack of a champion to lead the implementation and manage utilization, a lack of full management support, a fear that “big brother” is watching, and a lack of education or training on how to use the system.

The hesitation of both sharing customer information and taking on additional administrative tasks is a key barrier to sales technology adoption. Organizations successfully implementing sales technologies have taken different approaches, including easing the burden, offering incentives, and implementing mandatory use policies that are tied to performance reviews and compensation. According to one company, “Salespeople are not typically administrators and don’t like to be. As a result we use both a carrot approach, by reducing administrative tasks, and a stick, by mandating accurate and timely usage to drive adoption.” Organizations that do not incorporate incentives and strict adoption policies typically have greater challenges with usage. For one company in the study, early on, salespeople did not use the system to its potential. According to the company, their CRM system was a “paperweight,” as their greatest challenge was “getting salespeople to sync up.”

Finally, as mentioned earlier, several organizations in our study either implemented or are in the process of implementing sales technologies on an international basis. Many of the unique challenges with rolling out CRM systems include differences in platform standards, technological sophistication, cultural differences, and infrastructure. Marriott’s global CRM system will be designed as a global consolidated inventory system that will allow worldwide tracking of sleeping and meeting rooms. Diebold is implementing a CRM system across all of its foreign operations. While their implementation has been successful, it was not without some challenges, such as technological competency, incompatible technical standards, and cultural issues regarding usage.