Marketing Expert's Corner

This article written in 2009


"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. 

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 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, 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%.

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. "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.

  7. 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.

  8. 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.

  9. 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.

  10. 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.

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