The evolution of Customer Relationship Management (CRM) software has truly
revolutionized how businesses do 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. CRM can
be a sales organization's dream in automating routine activities and integrating
key business functions.
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's missing is 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 uneducated buyers 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's really lacking is the understanding that a CRM application is not the
sales process but rather just a component of it. It's still the selling skills
of salespeople that ultimately determine a sales organization's success.
Accordingly, all companies should integrate the CRM application into the
seven steps of the sales procedure.
This process has been used successfully by
more than 250,000 salespeople from more than 3,000 companies. It's applicable to
every industry, product and service. The steps are:
- Approach.
The initial contact. Although brief, it's critical that the
prospect likes and trusts the salesperson.
- Qualification.
This is the information-gathering where a true sales'
professional spends 70 percent to 80 percent of his time. Need, authority and
budget are the keys, and the salesperson qualifies the prospect and learns his
needs.
- Agreement on need.
While most sales managers focus on closing skills, in
our experiences I'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.
- Sell the company.
The prospect has questions and concerns about the sales
company. This is when the salesperson shares all that is great about his
company.
- Fill the need.
Prospects want to know about the product or service that
the salesperson is recommending and the price. The salesperson shows the
prospect how his product or service solves specific problems, fills the
prospects needs precisely and the value the prospect will receive.
- Act of commitment.
This is the 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 hisproduct or service, price
or time to buy.
- Cement the sale.
People buy emotionally, then justify their buying
decisions logically. 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, trainer and consultant in sales and sales management and is president of Max Sacks International, Seattle.
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