Empirical Rationalism and Other Oxymora
Customer Management
Speaker Lineup for CMO Summit – SFO – Sept 9-10
Jul 31st
We have an incredible line-up of speakers for our second annual Chief Marketing Officer’s summit being held in San Francisco on September 9-10: More >
Small Business CRM: Freemium’s Just Another Word for Nothin’ Left to Choose
May 28th
Interesting article on CRM Buyer by Alex Jefferies based on some recent research we worked on together.
CRM and contact management tools centralize all the information a company has on a client and make it easy for coworkers to share knowledge. When a small company decides it’s time to move to a more robust tool, it may be attracted to so-called freemium offerings. The “try-before-you-buy” model can minimize risk, but several key points should be considered when evaluating solutions.
The Difference Between Contact Management and CRM
Jan 29th
From CRM Buyer (With Alex Jefferies)
01/29/09 4:00 AM PT
Organizations considering contact management or customer relationship management solutions must evaluate the sales model of their organization and implement the solution that aligns best with their business needs. It all depends on who talks to whom, write Aberdeen’s Andrew Boyd and Alex Jefferies.
The budget cuts and spending freezes resulting from the current economic downturn have reduced the number of legitimate opportunities for sales representatives; therefore, organizations are placing a renewed emphasis on cutting costs and customer retention to combat certain economic realities.
In an ongoing attempt to meet the expectations of prospects and improve the lifetime value of current customers, businesses are examining ways of unifying fragmented customer data and making this customer and account information available to the organization at large. Contact management (CM) solutions and customer relationship management (CRM) solutions are two primary technology enablers allowing organizations to gain better control of their information assets and processes.
CM solutions are productivity and sales automation tools designed to allow individuals or teams to manage contacts, opportunities, or account information more efficiently. CRM solutions, on the other hand, are process-centric, multi-module solutions that serve as a system of record for all customer interactions. Varying definitions and the lack of a standard definition between CM and CRM solutions have some organizations pondering which is a better fit for their business and why.
What You Need to Know
Over the past year, Aberdeen has surveyed thousands of end-users to better understand how sales interaction models influence technology purchasing decisions. The research reveals the choice between a CM and a CRM solution often boils down to the sales interaction model of the organization, as well as the business challenges the company faces.
For instance, an organization with a one-to-many interaction model, in which one sales representative targets multiple job roles within a company, may consider a CM solution in order to better organize account information and conversation details. On the other hand, a company with many sales representatives or marketing professionals targeting a single job role would prefer a CRM solution to log call activity and leave detailed relationship notes for one another.
Sales Models Influence Technology Adoption
Aberdeen has identified four common sales interaction models that require certain functionality from technology solutions.
- One-to-One Model: In a one-to-one model, there is typically a single representative that is tasked with selling into a single job role. Insurance agents and stock brokers, for example, typically practice one-to-one selling.
Take, for example, the following scenario: Bob, a sales manager at a small marketing services firm, believes that Jane, the founder of her own business, could benefit from his offerings. Understanding that Jane is the owner of the company and therefore the head of a small employee staff, Bob targets Jane as the job role with decision-making authority. A CM solution becomes Bob’s preferred solution because it allows him to keep accurate contact and company information on Jane’s business, as well as detailed notes surrounding their conversations.
- One-to-Many Model: In a one-to-many model, one individual targets multiple job roles within a company.
For example, say that a number of years have passed in our scenario, and Jane’s business has grown into a large national brand. No longer is Jane the one and only contact with purchasing power at the company; she now has a staff of decision-makers with buying power. Bob, firmly believing that his services can continue to help Jane’s business increase its exposure, targets the new CMO, COO, and EVP as he articulates his value proposition.
With so many conversations taking place with different people within Jane’s company, Bob relies on his CM solution to keep accurate records of job roles, phone numbers, e-mails, and notes. An added bonus of Bob’s CM solution is that it allows him to discern the relationship between contacts based on his notes or, in the case of more advanced CM solution, through contact grouping or networking.
- Many-to-One Model: In a many-to-one model, there are multiple individuals, such as sales, marketing and service professionals, interacting with a single job role at a company.
For example, the growth of Bob’s business has resulted in the development of new products and services. In this example, Jane has placed a call into a service representative with a related question to a previous project. The service representative sees alignment between Jane’s question and the latest product release; therefore, Jane is invited to a webinar that showcases the new product.
By using a multi-module CRM solution, Bob’s service professional can log the activity around Jane’s account and leave detailed notes so other employees, such as marketing professionals or accountants, know how and when to follow-up with Jane.
- Many-to-Many Model: In a many-to-many model, there are multiple individuals interacting with multiple job roles at a company.
For example, marketing individuals or service individuals at an organization target their counterparts at other companies to sell into. Bob, whose work with Jane’s boutique has catapulted his business into the spotlight, has filled out his own marketing staff and professional services offerings. These individuals on the marketing side target similar job roles at Jane’s company. This coordinated effort requires a heightened sense of internal visibility; therefore, Bob has replaced his CM solution with an integrated CRM tool. Bob is now able to access customer service information, accounting and billing details, and marketing data through his CRM system.
Recommended Actions
Organizations considering CM or CRM solutions must evaluate the sales model of their organization and implement the solution that aligns best with their business needs. If a company is primarily focused on taming information overload at the lowest cost and providing the greatest selling autonomy for their sales team, then a CM solution may be an ideal fit. On the other hand, if a company’s only hope at providing a 360-degree view of the customer to all parties within the organization is to integrate the data that exists in disparate silos, such as a contact center, marketing databases, or accounting profile, a CRM solution may fit their business needs. As is the case with any technology implementation, the organizational processes and performance metrics in place often provide a foundation for success.
Read the rest of the recommendations.
Five Steps to Best-in-Class Sales Performance
Sep 18th
By Andrew Boyd and Alex Jefferies
CRM Buyer
09/18/08 4:00 AM PT
New technologies are enabling customers to find out more about your company — and your competitors. This presents a new challenge for sales forces, which now have to interact with better-informed buyers. New Aberdeen research indicates 5 factors companies should focus on to improve their sales strategies.
As the advent of new customer-facing technologies (such as social media platforms) changes the way consumers gather information about a particular company’s products or services, sales representatives are challenged to sell to a customer base that better understands the competitive landscape. As a result, companies realize that they must enable their sales force to work smarter, not harder, to acquire and retain customers.
In August 2008, Aberdeen surveyed 218 companies to understand how top-performing companies are positively affecting top-line revenue growth through improved sales performance World Class Managed Hosting from PEER 1, Just $299. Click here. strategies, capabilities and technological enablers. The report, publishing on Oct. 1, examines how top performers (the Best-in-Class companies) put their sales representatives in a position to succeed through a focus on overall sales structure, lead management and cross-functional integration.
You Call That a Lead?
To properly assess the best practices resulting in improved sales effectiveness, the issue of sales and marketing Learn how you can enhance your email marketing program today. Free Trial – Click Here. alignment must first be addressed. According to the March 2007 Aberdeen Benchmark Report, “Automating Leads to Sales,” 56 percent of Best-in-Class companies and 62 percent of Laggards indicated that sales and marketing alignment was a target for improvement. Furthermore, sales and marketing alignment is also a significant influence on technology implementation.
According to the July 2007 Aberdeen Benchmark Report, “Success Strategies in Marketing Automation,” nearly two-thirds of respondents (63 percent) ranked sales and marketing alignment as a top-two challenge to deploying marketing automation Latest News about marketing automation solutions.
While the ongoing struggle between sales and marketing departments concerning the quality and quantity of leads is not a battle that will easily be decided, prior Aberdeen research reveals that 80 percent of the Best-in-Class realize the importance of integrating lead qualification and measurement efforts between the two departments for the overall growth of the business.
Build the House on a Strong Foundation
For this upcoming report, Aberdeen used four key performance criteria to distinguish Best-in-Class sales organizations: 1) year-over-year performance in quota achievement, 2) year-over-year performance in sales cycle time, 3) year-over-year performance in bid-to-win ratio and 4) year-over-year performance in the percentage of time sales representatives spend on administrative tasks.
As the challenges associated with lengthening sales cycles and low sales productivity HP LaserJet M3035 MFP series – Starting at $1,599. Save up to $500. Click Here. continue to mount, the savvy sales manager Improve customer service and productivity with Avaya Unified Communications. continues in the search for the perfect mix of organizational processes and sales automation solutions. Survey results show that the firms enjoying Best-in-Class performance shared several common foundational characteristics, including:
* Formal and documented sales processes (85 percent)
* Defined performance metrics to measure sales effectiveness (76 percent)
* Executive-level support for sales productivity tools (63 percent)
* Formalized sales training program (53 percent)
With these foundational elements in place, the organization can begin to focus on building a sustainable competitive advantage through differentiated process, organizational, measurement and technological capabilities.
Building a Best-in-Class Sales Organization
Based on the findings in this upcoming report, Aberdeen suggests that companies must focus on the following to achieve Best-in-Class performance:
- Define performance metrics to measure sales effectiveness. As the old saying goes, “you can’t manage what you don’t measure.” Currently, only 45 percent of the Industry Average companies have defined performance metrics in place designed to measure the effectiveness of the sales department, compared to 76 percent of the Best-in-Class. In order to garner the support of senior management and receive the proper resources, companies must demonstrate the benefits, or lack thereof, that defined sales processes and technology implementation have on the company’s bottom line. Nearly a quarter (24 percent) of the Industry Average companies that do measure sales performance do so on a monthly basis only. Only 16 percent of the Industry Average measure sales performance in real-time or on a daily basis, compared to 30 percent of the Best-in-Class that track sales performance over the same time period. The pathway to sales productivity can only be successfully navigated once businesses understand where the roadblocks lie.
- Focus on team-based collaborative selling. It is essential for companies to address the structure of their sales departments before making any investment in technology. By organizing the sales hierarchy and creating teams, companies are able to positively affect sales performance through collaborative selling. Currently, 43 percent of the Industry Average, compared to 56 percent of the Best-in-Class, utilize team-based collaborative selling strategies. If it is true that “no man is an island,” then organizations must consider providing various degrees of support, such as subject matter inquiries or visibility into other reps’ prospects and contacts, in the form of a team-based collaborative environment. The additional 28 percent of Industry Average companies that plan to implement such an organizational capability must do so before the focus shifts heavily to technology implementation.
- Focus on lead management. As a way of ensuring that high quality leads enter the pipeline, Best-in-Class companies have instilled an organizational focus on lead management and lead management solutions. Currently, 42 percent of Best-in-Class companies, compared to 26 percent of Laggards, integrate a lead management solution with an existing CRM. Fifty-nine percent of Best-in-Class companies indicated that they decreased the amount of time between pipeline stages, compared to 9 percent of the Industry Average and 4 percent of Laggards. By reducing the amount of time it takes for a lead to receive the necessary sales attention, Best-in-Class companies are better able than their counterparts to quickly target and contact prospects.
- Focus on data quality. Before a company can start to integrate data from various customer-facing channels into a sales solution (such as CRM), care must be taken to ensure the quality of the data. Customer data should be “scrubbed” to identify incomplete contact information or multiple entries for the same contact, for example. Currently, just over a quarter of Best-in-Class companies (27 percent) leverage data quality solutions. An additional 40 percent of Best-in-Class companies plan to leverage such solutions in the future. An early focus on customer data quality translates into more usable information when an enterprise is ready to integrate disparate data silos.
- Integrate data from disparate silos. Once an organization takes the necessary steps to ensure the quality of its customer data, the next step should be to integrate the data from various data silos into a centralized repository that is accessible by all departments within the organization. Forty-two percent of Best-in-Class companies currently utilize data integration solutions, compared to 28 percent of Laggards. Despite the fact that nearly half of Best-in-Class companies currently use data integration solutions, 59 percent of Best-in-Class companies surveyed indicated that they plan to increase the focus on data integration in the next 12 to 24 months. Best-in-Class companies looking to provide sales representatives with a unified view of customers and prospects must take the steps to ensure the representatives have access to information that exists throughout the enterprise.
In order for a company to truly impact sales effectiveness, there must be an organizational focus on sales structure and compensation management, lead management, and the use of sales automation solutions. By achieving harmony between these three things, Best-in-Class companies are able to improve key sales metrics. For example, nearly two-thirds (65 percent) of Best-in-Class companies experience year-over-year improvement in sales contribution margin, compared to 11 percent of Laggards. As a new age of customers becomes increasingly adept at accessing company information and better understanding the competitive landscape, businesses are forced to equip their sales forces with the tools that enable them to work smarter, not harder. By integrating customer data from disparate data silos, as well as providing the necessary organizational support, Best-in-Class companies are nearing that elusive 360-degree view of the customer.
Creating a Stronger Customer Link
Jul 13th
By Andrew Boyd and Sumair Dutta
Posted on CRM Buyer
07/13/08 4:00 AM PT
Successful warranty management executives are deploying analytics technology and maintaining warranty performance data in central knowledge warehouses. Such initiatives can help reduce warranty claim processing time and increase customer satisfaction.
Despite progress made against key warranty chain improvement initiatives, service and warranty management executives still wrestle with post-sale customer Double your sales close rates with SalesView. Click to learn how. satisfaction issues and escalating warranty costs.
These executives are revising business processes and adopting technology solutions to better manage warranty workflow, enhance claims administration, reduce costs and implement a closed-loop analytic-driven warranty chain, according to the results of a survey Aberdeen conducted in May with 170 service and warranty organizations.
Benchmarking the Best-in-Class
Aberdeen used three key performance criteria to distinguish Best-in-Class warranty companies: claims processing time, claims processing improvements, and the two-year reduction in revenue reserves to support warranty operations. Based on aggregate performance on these KPIs (key performance indicators), Best-in-Class firms reported:
- 2.7 days on average for warranty claim processing time;
- a two-year warranty claim processing time improvement (26 percent); and
- and a two-year reduction in annual revenue required to support warranty claims (13 percent).
Survey results also showed that the firms enjoying Best-in-Class performance shared several common characteristics. Best-in-Class companies are:
- nearly three times as likely as Laggard firms to have deployed warranty analytics technology;
- 66 percent more likely than Laggard firms to have an integrated warranty management and service organization in place; and
- 54 percent more likely than Laggard firms to have a central knowledge warehouse to maintain warranty performance data.
The research revealed that Best-in-Class companies hold a significant lead over other firms in terms of completed warranty process improvements. For example, 59 percent of the Best-in-Class (vs. 30 percent of all others) have overhauled their extended warranty sales processes; other areas of focus included improvements in internal repair workflow, claims workflow and spare parts logistics. This allows them to focus on broader initiatives like building out a closed-loop warranty management workflow and other higher-level initiatives.
Catching Defects
Another key component of the Best-in-Class strategy is to link the warranty process with product design rather than just manufacturing. By feeding warranty information into the design process rather than manufacturing, organizations can catch defects that can cause spikes in claims at the design stage, saving costs and reducing risk.
Also, with the number of manufacturing processes and sub-assembly processes being outsourced, it makes reliance on warranty to manufacturing links to spot the root cause of failure challenging. In addition to complete closed-loop warranty management processes, the Best-in-Class are also following the solid strategy of focusing on process first. While technology enablers play a strong role in strategic actions, business process improvements lead the strategic focus by the Best-in-Class.
Lastly, the research suggests that strong warranty processes can be a powerful tool in a tightening economy.
Visibility Into the Warranty Process
A review of the enabling technologies currently in place within warranty management organizations shows little significant difference between Best-in-Class and others in the basic areas of claim processing and reporting. However, Best-in-Class hold a significant lead over other firms in the deployment of warranty analytics and the use of product life cycle management. It’s this more advanced technology link that enables the adoption of early-stage design change and closed-loop warranty management that helps separate the Best-in-Class from less advanced organizations.
Warranty analytics, currently in place among nearly half of Best-in-Class organizations, also leads the list of technology enablers that organizations across all maturity levels are planning to use to streamline warranty operations.
Recommended Actions
Based on the findings in the report, Aberdeen suggests that companies must focus on the following to achieve Best-in-Class performance:
- Complete the closed loop. While the Best-in-Class have a substantial lead over other firms in connecting warranty operations to product design and manufacturing — including procurement in the process, which only 20 percent of Best-in-Class now do — they can add value by providing procurement staff with product quality performance as they negotiate contracts with new and existing component suppliers.
- Implement aggressive extended warranty sales campaigns. Nearly 40 percent of Best-in-Class firms generate 20 percent or more of their service revenue from extended warranty sales. While extended warranties can be a source of predictable and recurring revenue for service firms, increasing the number of customers under warranty or service contracts can offer more predictability within service operations, create a stronger link with customers, and open the door for more advanced service offerings.
- Offer incentives to warranty workers for better claim processing performance. While the Best-in-Class have made significant progress in installing the automation and support tools and associated measurement processes to track warranty chain performance, only 16 percent currently offer incentives to staff for better claim performance. Establishing goals and providing the proper incentives for meeting or exceeding those goals can have a significant impact on improving claim processing performance, a critical factor in improving customer satisfaction.
