Lessons Learned from the Trenches: The 4 biggest challenges to a successful Customer Relationship Management (CRM) software Implementation.: The SLMA

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Lessons Learned from the Trenches: The 4 biggest challenges to a successful Customer Relationship Management (CRM) software Implementation.

Mark Friedman | Articles > From the section: Sales Channel

November, 2014 |

The Velos Group

Over the past two years, The Velos Group has been involved in over 20 Customer Relationship Management (CRM) implementations, almost all of them using Salesforce.com software. We have worked with companies with annual revenue in excess of $100 Million and as a little as under $1 Million; companies just getting started. This has translated into as many as 50+ Sales people to as few as 2.

We have found and successfully addressed four consistent obstacles to a successful CRM implementation:

Getting the Management team to enthusiastically sponsor and stay involved in the implementation.
The company's Sales Lead Management and other processes are neither efficient nor documented and in many cases, exist only in someone's head.
There are many, mostly subjective, ways within a company to describe the status of a lead in the Sales process.
Dirty Data. In one company, we identified a total of 18 different spreadsheets and databases where prospect and customer interactions and data were recorded and tracked. After the first phases of the CRM implementation, we were able to eliminate all but 5. Future phases have been identified to eliminate them

Getting the Management team to enthusiastically sponsor and stay involved in the implementation.
Why is this so important for a CRM implementation when just about all project implementation mention this a Key Success Factor?

What we have seen in too many companies is that Management looks upon the implementation of a new CRM system as a technology decision and not a strategic decision. Their opinion seems to be that"If we buy it, they will come." Nothing could be further from the truth. In fact, the selection and purchase of the CRM software should be the last decision made before the actual implementation. New software should only be purchased once the organization's CRM requirements have been documented and
prioritized. These requirements should include operational needs of the various user groups, including Sales, Marketing, Customer Service and Management.

What we have found is that too many applications, especially those built as Add-ons to an Accounting or Production software system, are not designed with Sales in mind. At the crux of the matter is that Sales people are different than other employees in a company. They are used to operating autonomously and independently, they are trained to listen to "No" and then figure out ways around it. They are measured each month, quarter and annually based on their ability to convince people to take an action that will involve money and usually subject to intense competition from other vendors as well as internal budget allocation procedures. What we have seen is that Sales people, to a far greater extent than other groups within the company, will organize their activities and create their own processes to ensure that they will be able to consistently hit quota.

Compare and contrast this to a typical Customer Service Rep or an Accounting or a manufacturing employee. Usually, these groups are rewarded primarily on"following the rules." Of course this is a bit simplistic and we know that these groups are also rewarded for recommending changes that will make the company more productive or profitable, but arguably, the preponderance of their evaluation is based on how well they follow the rules.

So, it is critical that the Senior Management team be involved in the CRM implementation project from the very beginning of the planning process. An executive-level Manager should be appointed as the Executive Sponsor of the project. The responsibilities of this individual include:

Communicate the strategic importance of the project; this is a new way of doing business and we expect the project to provide a strategic advantage to the operation of the company.
Ensure the implementation is successful

Management personnel from each group plus a representative from Executive Management should participate in as many kick-off and final decision-making meetings for each group. The Executive sponsor should help tear down walls and overcome institutional inertia that keeps the project from moving forward quickly and on budget. This involvement reinforces the strategic nature of the project and lets everyone know that the executive level management considers the project not only important, but mandatory throughout the groups engaged in the project.

Once the CRM implementation has been rolled out, it is imperative that the executives use the information from the program to monitor the performance of the organization, from program adoption to the actual operational reports that are generated. If the organization experiences questions, guidance and interest in what is happening in the company based on information derived from the CRM application, then the organization will see that Executive Management is sincerely interested in the program's success.

As Jay Curry, a CRM expert and author of a couple of books on the subject, put it,"If the owner/CEO is in charge of, or monitors closely, CRM implementation and processes, then the good news is that he can get done what he wants to get done. But if he loses interest, it's all over."

The company's Sales Lead Management and other processes are neither efficient nor documented and in many cases, exist only in someone's head.

If a company's current system can be classified as"Catch as Catch Can," then it is highly recommend the company apply the same systems/process-driven approach that their manufacturing and quality departments have been using to this critical business process. The dividends gained will be more than the work that is put into it.

The Velos Group systems approach includes the following elements

Initial Processing
Inquiry Qualification
Lead Distribution
Work the Lead/Reporting

The Sales Lead Management process begins in the Marketing department then flows into the sales organization and the information gathered in the Sales Force Automation systems provide the input to several important departments within the company. It is crucial that each step of the process is mapped with an eye towards:

What is my over-riding business objective?
Is this the most efficient way to handle this process?
How does this process contribute to the achievement of business objectives?
Where are my inputs and who receives the output?
Who needs to be involved to ensure cross-system and inter-organizational coordination is considered?

This planning and business process review becomes more complicated and involved based the level of integration a company desires in all of it's major business systems; manufacturing, financial, inventory management, customer service, sales, etc. It is a big job and requires a great deal of thought, but it is absolutely critical in designing a best-in-class system that will become a strategic advantage and contributor for the company.

Once a company's business processes and procedures have been document, streamlined and optimized, then they can be used as the basis for the customization of the CRM system. It is critical that the software support the systems, processes and procedures documented from this process. The customization of the system to support these processes and requirements will make the system more user friendly and contribute to a more enthusiastic adoption by the user community.

Systems designed without this critical step tend to be heavily weighted towards data collection and not oriented towards how to make the end user more successful in their jobs, whether they are in the Sales, Marketing or Customer Service organization. When the users see that the system has been thoughtfully designed to help ensure they are successful, adoption is enthusiastic.

There are many, mostly subjective, ways within a company to describe the status of a lead in the Sales process.

The Velos Group has conducted a Sales Lead Management survey for 5 years, targeted primarily at small to medium-sized businesses. One of the questions asked is,"How does your company compile Sales forecast information?" In the 2009 survey, 44.7% of the companies responded that they have no formal process to capture this critical information. Based on interviews with numerous companies, the way to capture this information is verbal, Excel and Email, but what is noteworthy beyond this is that most companies use a very subjective percentage probability that the business will close in a defined period of time. And precisely because it is subjective, there is no standard way for management to derive value from the information.

We have heard on numerous occasions that a Sales Manager will take their monthly forecast and apply some"Kentucky Windage" percentage to it before they report it to Executive Management. The on-going impact of this approach is a very sub-optimal ability to order raw materials, plan for cash flow requirements and anticipate potential post-sales operational requirements.

Best Practice calls for a company to define a company-wide, consistent Sales process, identify the major milestones of this methodology and then use these milestones to define the Sales Stages in the company's CRM program. (See below for an example.) The Sales organization as well as the Operations group are all then trained on the definitions of each Sales Stage and can interpret the reports more efficiently. What we have seen over time is that companies can then forecast their sales more accurately, operations can plan their production schedules more efficiently and finance can plan their cash requirements more effectively.

Dirty Data can be the Death of a CRM implementation

Everyone is familiar (and probably sick of) the saying,"Garbage In, Garbage Out." This, however, is one of the biggest sticking point for any successful CRM implementation. And this problem is not reserved for just small companies with unsophisticated IT infrastructures. What we have seen is that the larger the company, the more reinforced the"Silos of Information" become. Each major functional group has created its own database of information that has typically been customized to meet their own requirements, but have not been reconciled with the requirements of the company as a whole. Smaller companies have smaller silos, but they exist nonetheless. Additionally, the smaller companies typically have maintained a large part of their Customer and Prospect databases in individual databases such as a singe user ACT or Microsoft Outlook.

It is typically an overwhelming project to reconcile, de-dupe and standardize the information from these disparate databases. The Accounting Database has set up Customer data one way, including company naming conventions yet typically only maintain financial contacts like the CFO and Accounts Payable Manager. Often times, Customer Service does not use the Accounting database to maintain the naming convention of the company when creating their Customer Service system. Their contacts are seldom the same as the Sales organization's contacts.

Additionally, Sales and Marketing people typically have not been requested to create company names in their databases based on the Accounting naming convention. Sales and Marketing is typically more interested in sales decision maker contacts such as the CEO and operational Department Managers. Most of the times, the names of these companies are provided by third-party lists, web form contacts, Magazine subscription lists and Trade Show contacts; all sources over which they do not exercise naming convention control.

In one company we worked with, we are able to document 18 separate databases and spreadsheets where customer data was "managed." And that doesn't count each employee's Outlook files.

According to Gordon Daly, director of marketing with DataMentors, a privately held Data Quality, Data Management and Business Intelligence Analytics software company, "The average American company retains somewhere between 25 and 40 percent bad data. Not only is this data worthless, it's a dangerous data liability as well."

Robert S. Orf, President DataMentors, Inc. continues in another study conducted by his company. Loss results vary but often these losses result from activities/programs such as low quality marketing or sales campaigns, direct mailings, associated staff overhead, etc. Loss is usually associated with targeted prospects who no longer reside at a particular address, or customer campaigns that end up sending the same customer 2-10 of the same promotional packages. Indeed, more injurious than the unnecessary printing, postage and staffing costs is the slow but steady erosion of the enterprise's creditability among customers and prospects. This is easy to understand.

All of this creates a situation where a great deal of time, effort and money need to be spent in order to clean up the data and start the CRM application with the best data possible. As a result, it is all too easy for a company to postpone the project due to the overwhelming nature of the problem.

What is the solution? Ultimately the goal is to maintain one central database for the company's requirements or build integrations between them. This can be anywhere from a relatively straight forward project involving several people within your organization all the way to a multi-million dollar project for larger companies with many databases.

Companies can start to tame their dirty data by first identifying and documenting all of the different databases (Sales, Customer Service, Accounting, ERP, etc.), spreadsheets and Outlook files where customer and prospect information are kept.

Once this is done, assemble a group of managers to examine the information kept in each location and then start to define a consistent way to record the data that is common between them paying particular attention to the naming convention for the companies in your data base. For instance, a naming convention might indicate that there will be no abbreviations used in the name of a company. Another key area to examine is how each department refers to part numbers. We have seen companies where different departments use a SKU number, others a Part Name and still others a Part Description.

Once a naming convention has been agreed upon, then the management must start cleaning up data in their departments to ensure compliance.

Depending on the extent of the data spread throughout the organization, then a data synchronization plan must be agreed upon AND funded with both resources and budget.

About the Author

Mark Friedman is an experienced, results-oriented executive with over 20 years of proven success in managing Sales, Sales Lead Management, Telemarketing, Marketing and Customer Service. Notably, world-renown consulting giant Accenture and the Distribution Research and Education Foundation have recognized one of his programs as a Wholesale Distribution Industry Sales "Best Practice"; the program overview was published in "Maximum Sales Velocity: How to Build a World-Class Sales Organization" by David P. Woodrow.

Watch Mark's Video - "Eliminate the Black Holes in your Sales and
Marketing Process and Increase Your Bottom Line Results"

His articles on Sales Lead Management have appeared in Network World, Sales and Marketing Excellence, Sales and Service Excellence magazines, the PMMI Newsletter and MHEDA Journal.

Mark is a Vistage Expert Speaker and has spoken at national events, such as the PMMI (Packaging Machinery Manufacturer’s Institute) Marketrends conference, the 50^th annual MHEDA (Material Handling Equipment and Distributor’s Association) conference and the CGNA (Controls Group North America) conference about Sales Lead Management. Read more.

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