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 "Everything
I need to know to make this quarter's number
is in this black book."
- A modern-day Willy Loman
Every
salesperson will tell you that sales is the most measured part of any
business. Nobody is more accountable for success or failure. And it's true in the sense that Sales is managed
by results more than any other part of a company: they have the biggest direct incentives
(cash now)
and the deepest penalties (only a few months to live).
Even
though sales is very focused on performance, very few salesmen want to have any "help" in the form of
productivity-increasing tools
from headquarters. Nobody wants
to be micro-managed, and the corporate SFA / CRM system is often viewed as an
unwelcome intrusion. Despite having been on the market for 10 years, most modern
SFA systems are utilized mainly as contact managers. Consequently, few companies have
real visibility into their pipeline, and sales forecasts are often produced via séances
involving magical incantations to the god of spreadsheets. Let's look at
how to do better.
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Take-Aways
An
SFA is a tool for improving the most critical business process:
revenue generation. Your sales and marketing organizational goals need
to be aligned around that business process for an SFA to make any real
difference.
An
SFA system is only as good as the data in it, but nobody will invest in data
quality unless there's a payoff for them, personally.
SFAs
are often rushed into production, leading to issues that dramatically reduce
their effectiveness. SFA systems' "bad rep" comes from lack
of organizational consistency, coherent process, and follow- through. Get
these right when
an SFA isn't working for you.
My
SFA Maturity Model™ lets you score the level of your company's SFA
usage. Don't be surprised if you only score 60% or so -- almost nobody
gets above 90%, even though they've been using their system for years.
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Best Practices
Pretty
much the whole article is devoted to SFA best practices, so I won't repeat
them all here.
Nobody
wants to be automated, and SFA systems suffer from a name that's poisonous
to its main users. Call the system by its brand name to lessen this
effect..
The
VP of Sales and the CEO must be vocal champions of the SFA, letting everyone
know how much they are depending on the system. It will take months
for this message to really get through.
The
SFA system must be clearly owned by an organization, preferably somewhere in
the Sales chain of command. The higher the level of the ownership, the
better.
SFA
systems are almost too easy to start using and extending. An SFA is
still an IT systems: you must think about little things like data
models and security from the outset.
Start
the first real usage of the SFA system at headquarters, with the
marketing and telesales teams as the first adopters. From there, add
the executive team. Then, add the SEs and consultants -- field people,
but not the field sales reps. Only after the system
becomes a really valuable resource for account and deal management --
typically a couple of quarters -- should you push the reps to adopt the
system.
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Sales Force Automation,
the Forecast,
and other Fantasies
Let's
start at the beginning: revenue management is the cornerstone of a healthy business.
It's a continuous business process that starts with marketing campaigns and ends
with collections. But because careers
and stock valuations depend on revenue management, it can be highly
political. From the weekly forecast through to account reviews, there's a
lot of emotionally charged data.
Sales execs can be quite adept at managing the flow of
information, so that nobody - not even the CEO - knows the whole story
of the pipeline. This can be dangerous.
SFA
/ CRM systems are an important step forward, because they can give a
comprehensive view of the pipeline as well as detailed drill-downs on the state
of play for any specific deal. Ideally, the Marketing VP, the legal team, and the CFO use
the SFA system and have integrated their processes with it. In a
perfect world, the SFA system provides a 360° view of the customer.
But none of this can happen
unless the
system is properly
used. Unfortunately, few SFA customers can really depend on (or even use) the forecast
that comes directly from the system. Most of the time, execs must second-guess the data --
applying judgment calls that aren't consistent and are rarely recorded
anywhere. Worse, everyone still has to call the rep to find out
what's really going on at any account. This SFA hell is automation in name only.
Unfortunately,
nobody will put the time into good SFA data unless there's a
personal payoff for them. So, the key to getting a real SFA payoff is making
the system a key tool for the success of how sales
actually does things. Artificial incentives won't help here -- you
need to tweak the "rules of the road" and the supporting sales, marketing, and
financial processes so that using the SFA system is naturally and continuously
reinforced.
To
make an SFA really work, you must first have the goal of integrating marketing, telemarketing,
inside sales, and field sales into a
unified
revenue machine. This doesn't mean
they report to the same person, but it does mean that they behave as a single
business process: one set of objectives and metrics shared by
different organizations. I can't tell you how often companies get
this wrong.
The
second secret to SFA success is rolling it out in phases (yes, even
Salesforce.com must be implemented this way).
Your First Users
The
first natural SFA adopters are the marketing and telesales (aka ISRs, inside
sales, telemarketing) people who focus on the early formation stages of the
pipeline. In a few weeks, they can get the lead generation, prospecting, and
qualification processes fully integrated in the system. You need to resist the temptation to try and
measure or optimize anything at this point: any metrics you might set up
will be misleading because you can only "see" a fragment of the
relevant business process. As I've written before, the long-run goal is
to shorten the sales cycle and
lower
the cost of customer acquisition, but you have to get more parts of the
sales cycle in the
system before you can make any progress on that.
In
these early stages, take the time to avoid common mistakes (it'll be much harder
to fix them later):
-
Resist
the temptation of setting up a bunch of extra fields or reports in the
system. This isn't just a matter of clutter -- it undermines the usability and
credibility of the system. As I wrote before, it's easy to
ask
for too much data you won't ever use.
-
Set
up a security model from the outset. The SFA system will contain some
of your company's most confidential data, so you want to make sure that
people have access only to certain data and reports. You need to make
it hard for an employee or partner to download all your leads before
they leave the company.
-
Develop
and ruthlessly enforce the use of common terminology: what's a
lead? what's a qualified lead? what's a contact? what
criteria are used to convert a lead? what are the naming conventions
for opportunities? what are the criteria for deal stages?
The
next natural users are the executive team, who always want to be able to see
what's going on. Somebody (probably inside sales) is going to have to do
some data entry here: remember, the field reps will only view SFA
activities as a "tax" at this point. The focus here must be on the accuracy
and usability of data, not the amount of it or the number of reports.
One of the easier "wins" is to show the execs information about this
quarter's deals, so you'll need to do some things right:
-
Identify
what the key deals are, and reconcile / remove any redundant names, leads,
contacts, accounts, opportunities, and quotes from the system.
-
Make sure that marketing and inside sales is keeping the "contact history"
and calls / activity summaries up to date. You want the
SFA data to be the best known "state of play" for all of this quarter's
deals.
-
To
the degree possible, capture all the email traffic about these deals in the
SFA. This may mean cut-and-paste, but you want the SFA system to be the
authoritative information resource for these deals.
-
Whenever
you talk to the Sales Rep about one of these deals, make him log in to the
system and read through the relevant "deal page" to make sure the
information is up to date. If not, do the updates for him (don't
worry, this is only temporary). The goal here is to train the reps that "this is what
the deal looks like as far as headquarters is concerned." After a
few times at this, they'll get the message.
As
you get more advanced, you'll want to put the sales forecast information --
quotas, opportunities, bids, wins -- in the system as well. But know that
any forecast is only as good as the opportunity and account data in the system,
so get all that data right first.
The Last Wave of Users
 Getting
the field to actually use the system involves some interesting
tricks. Start with consultants and Sales Engineers: get them to
stuff the system full of relevant mails and documents that make their job
easier. For instance, if there's a proof of concept going on, have the
consultants and SEs use the SFA system as their project repository.
Hopefully, they'll start updating the system every time they talk to a
customer.
Eventually,
you'll have the reps surrounded with people who put all the information they
know about the account into the system. They reps will capitulate only when the value
of the information in the SFA is better than any other source. In other
words, they'll become solid users when:
- their
"little black book of deal info" becomes more of a pain than it's worth, and
-
you've made it easy for them to get value from the SFA system.
SFA Maturity Model™
Looking
across dozens of SFA implementations (almost all of them SalesForce.com), I've
developed a maturity model that characterizes the stages of development in
companies system usage. The key metric isn't the extent
or depth of usage: it's the directness of the linkage between the SFA
system and how the channel actually generates revenue.
In
looking through the milestones below, know that they do not always happen in
numerical order. Most companies answer "sort of" to a lot of the
items, and a typical score is about 60%. So far, I know of only one
company that scores above 95%.
-
All
leads and contact information are in the SFA system. Nobody is making significant use of private contact
lists. All new
leads are entered into the SFA system within 48 hours of collection.
-
Inside
Sales / Telesales / Telemarketing use the SFA system for "every"
call. These folks are on the phone all day long, and they
should always have the SFA call-activity screen up. If you want to
get fancy, modules are available to link your SFA system with your
PBX or VOIP switch for automatic dialing.
-
All
users are competent in basic SFA use. Everyone should know which
screens to use in updating the information on a contact, an account, and a
deal, and they know where to look for any specific item of data. This
does not mean that they actually use the system -- no point in being
perfectionist -- it just means they know how to.
-
 Lead
qualification and routing are baked directly into the SFA process. This
means "everybody" uses the same qualification criteria and
territory definitions, and the system enforces them in the workflows surrounding leads and opportunities.
-
Web
registration is directly linked to the SFA lead-entry system.
Since the web is your #1 source of new lead capture (right? right?),
it is important to have all new leads automatically put into the SFA
system. Smart companies will use a de-duping product as part of this
process.
-
"All"
email blasts and marketing campaigns are coordinated through the SFA system.
Even though the actual work of lead generation is done outside the system, all targets and results are recorded in the SFA. When using an
outside vendor for Email blasts, make sure that the "bounce" and
"unsubscribe" processing is handled in an automated way, so you can avoid
mind-numbing cleanup tasks.
-
Sales
forecasts are based only on the SFA data. This means that the
company only has one forecast, and it's generated at the push of a button with no human
intervention. Of course, you'll have external spreadsheets but
it's critical that no additional data entry or deal massaging be done there.
This is the only way to stay sane
as you grow... and if you ever plan to be public you're going to need SOX
compliance.
-
There
are less than 10% duplicate accounts or contacts in the
SFA system. One thing that drives sales reps crazy -- and
kills SFA usage -- is when they can't find their deal data in the system. If there are multiple copies of an account or contact in the
system, it makes for a blurred view of the deal status. Invest just a
little to get rid of dupes -- it will make an important difference.
-
Sales
Reps, Sales Engineers, and Consultants see the SFA as their
key information resource. By the time you've reached this stage,
even the field now views the SFA system as their friend because it saves their
butts by avoiding chaos and confusion. Yes, this level can happen, but it takes some
very clever tactics to make this happen in a matter of months, not quarters.
-
Commissions,
accelerators, and SPIFs are paid only on deals in the system. This
is where you put teeth into the SFA, but DO NOT TRY TO DO THIS ONE TOO
EARLY. You must have made significant progress on numbers 1-9 before the system
has enough credibility and reliability. Rush this one, and it will
backfire.
Digg
This!
Telesales:
the Linchpin -- coming in August
 Contents copyright 2005 by DOTnet Consulting, Inc,
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