What’s Missing from CRM’

The evolution of Customer Relationship Management (CRM) software during the past 10 years has truly revolutionized the way businesses conduct business. From the collection of key demographic data during the prospecting stage to the automated fulfillment of contracts and customer updates, the power and impact of communication has exponentially increased with CRM.

It’s easy to see why, as the benefits of such a system are endless. Specifically as it relates to the sales function, CRM can be a sales organization’s dream.

Its key points of value include:
Automating routine activities—Activities like information requests, proposals, thank you letters, surveys and routine ‘check ins’ can all be automated. It allows the system to tend to the minutia of details and allows the salesperson to do what they are most valuable at: selling.

‘Set it’ and ‘forget it’—It was written years ago that, “The faintest of ink is better than the strongest of memory.” CRM applications put the ‘ink on the paper’ by scheduling all tasks, appointments and activities, and then placing each on a calendar. Salespeople can literally set it and forget it. They simply schedule activities and then handle them when they appear on the CRM calendar.

Integrating key business functions—At any point in the sales process or customer relationship, management can have a snap shot of the playing field. By integrating areas like customer service and support, sales automation, marketing automation, reporting, tracking and analysis, businesses are operating at a very efficient level. Even better, when all departments work from the same database, communication and teamwork are outstanding as all employees are accessing the same information.

As great as CRM is, however, the more discussions I have with professionals from all industries, the more obvious it is becoming that something is missing. But what?

Generally, there is nothing tangible missing from most CRM applications like increased scalability, additional options or specific functions, provided a business purchased the proper CRM solution.

What is missing, however, is intangible, yet of prime importance: the understanding, at the core, of what CRM is, and what it is not. Let me explain.

There are many common pitfalls companies encounter when implementing a CRM solution, several of which are created by CRM developers and resellers themselves.

Research suggests that at least 50 percent of all CRM solutions do not fulfill a customer’s needs or expectations. Often companies are expecting a CRM solution to translate into an actual sales process, and many providers position the offering as such. This is absolutely wrong, and sets the relationship up to fail unless major backtracking and re-education occurs.

Why is it wrong? Often it’s a bait and switch scenario in which providers position their offering to an uneducated buyer as a total sales system. They make tons of promises but fail to mention that it is still incumbent upon salespeople to sell. Customers buy the application expecting a process, only to learn later that it’s an automation tool. No matter how functional the application, salespeople must still manage the application.

A colleague of mine runs a direct sales organization with more than 200 salespeople. He tells me that he receives calls weekly from CRM vendors telling him that if he uses their product, he can eliminate his more costly salespeople. This could not be less true because a CRM application does not become the sales process, which means it can’t replace salespeople.

Now, can it help to reduce overhead or cut expenses by automating certain functions? Absolutely. But this doesn’t mean companies should say, “Hey, we’re saving in these areas, so let’s cut salespeople.” If anything, they ought to reinvest the savings into professional sales training for their people and add additional salespeople, as selling is the only activity within a company that directly generates revenue.

Recently while visiting a prominent CRM provider’s Web site, I found that the company is dead-right when citing the key CRM benefit as: “Effective Sales Process Management – A Competitive Differentiator.”

Note it does not read, “Effective Sales Process.” It includes ‘management’ because CRM can help an organization and its salespeople manage the sales process. However, it cannot circumvent or replace it.

What is really lacking is the understanding that a CRM application is not the sales process, but rather a component of the sales process. With this understanding, it’s easy to realize that it’s still the selling skills of salespeople that ultimately determine a sales organization’s success.

Accordingly, all companies should use a CRM system with the understanding that it’s one component of the selling process, and then integrate the CRM application into the seven steps of the sales procedure.

The following brief overview of the seven-step process that has been used by more than 250,000 salespeople from more than 3,000 companies is applicable to every industry, product and service.

The steps are:
Step 1: Approach. The initial contact with the prospect. Although very brief, it is critical that the prospect likes and trusts the salesperson for the sales process to continue.

Step 2: Qualification. This is the information-gathering period where a true sales professional spends 70-80 percent of his time. Need, authority and budget are the keys, and the salesperson qualifies the prospect, learns her true needs in preparation for making the best recommendation.

Step 3: Agreement On Need. While most sales managers focus on closing skills, in our experiences we’ve learned that it’s much easier to walk through an open door than a closed one. This makes the Agreement on Need the most important step in the sales process, as it is where the salesperson summarizes and verifies for his prospect the information gathered in Steps 1 and 2. The salesperson can only continue toward a sale by receiving an appropriate Agreement on Need from the prospect.

Step 4: Sell The Company. The prospect has questions and possible concerns about the salesperson’s company, and this is when the salesperson shares all that is great about her company.

Step 5: Fill The Need. Prospects want to know about the product or service that the salesperson is recommending and the price. In this step the salesperson shows the prospect how their product or service solves specific problems, fills the prospects needs precisely, and the value the prospect will receive.

Step 6: Act Of Commitment. This is the previously mentioned closing step in which the salesperson asks for the order. Closing requires the ability by the salesperson to overcome the prospect’s fears, uncertainties, or doubts about their product or service, price or time to buy.

Step 7: Cement The Sale. People buy emotionally, then justify their buying decision logically. In this step the salesperson “cements” in his prospects’ minds the logical reasons for buying the product or service.

With a clear understanding of what CRM applications are—and are not—sales organizations can thrive with their implementation. And upon basing such applications on the seven steps of the sales process, the results of all sales organizations can increase rapidly, and dramatically.

Roy Chitwood is an author and consultant on sales, sales management and customer service. He is the former president and chairman of the Board of Sales & Marketing Executives International and is president of Max Sacks International, Seattle, (800) 488-4629, www.maxsacks.com. To subscribe to his free Sales Tip of the Week, e-mail info@maxsacks.com.