The Sales Side – CRM: So why does SAP considers CRM to be successful?

The year is 2012 A.D.

Companium is entirely occupied by the ERP Empire. Well, not entirely… One small department of indomitable sales people still holds out against the invaders. And life is not easy for the professional-service legionaries who garrison the fortified camps of SAPium, Oracolum, MicroDynamicum, SaleVirtutem and PopulisMollis…

This is today’s situation (and I humbly apologize for misusing those legendary lines)

My name is Tom Schulte and I am a consultant for sales & communication.

Welcome to the kick-off of my blog “The Sales Side”!

It’s going to be about the most important issue in any business: successful selling – or in our case CRM support in B2B sales environments.

I first intended to publish it on my own website or some CRM/Sales blogging platforms, but I was convinced to use SAP SCN to get good and adequate feedback.

My customers are not the IT departments but Sales & Management. Those guys who initiate, pay and hopefully benefit from a CRM/SFA project. So my contributions are pure non-tec. Some of you might find the articles quite (SAP / CRM vendor) controversial, but to show my point I will reference either directly to SAP material (videos and text) or to public available and generally accepted sources, and of course personal experience.

And like most customers I will use the term CRM as a synonym for SFA, a TLA many customers haven’t even heard of!

My credo is based on three axioms:

• Sales is the only department that brings money into the company,
  while all other departments can only spend or save what Sales earns.

• Only a successful sale defines the real value of a solution.
  The buying decision is made by the customer and at the customer’s site – and not by the vendor processes.

• Successful selling is successful people communication!
  You never sell to or by from a process, because the buying decision is never based on infrastructure or specs. Specs are only for justification.

OK – so do I really doubt the success of CRM?

Well, no – a big fat NO!

Only a fool would rate an approximate 20 billion US$ (IDC & Gartner for 2012) market as not successful – at least for the vendors. And all projections show only one direction: UP! (IDC: plus 11%!)

So what’s my point in here? We’re getting closer with a new definition:

the (mutual) success of a solution is defined by the value it delivers!

The value for the vendor is obvious: revenue and long term (binding) customer relationships that guarantee revenue (surprise!).

What is the value for the customer? Customer value is defined by expectations and how they influence business.

Therefore the top reasons for touching big budgets to get a CRM up and running are:

• Accurate forecasting
• Cost cutting
• Sales rep controlling / performance
• Sales & Opportunity management
• Information leverage

There are more reasons, but those here are the big 5.

Please note that those are no technical reasons. Customers expect that the vendors master the technology they sell, so they don’t need to worry how you get it done. That’s what they pay SAP for! Every technical request on the initial specification sheet came from the customer’s IT department and not from Sales or Management – but that will have an own article.

And customers do not distinguish between more than 50 different CRM flavors (Gartner), a circumstance with an immense impact on customer expectation!

At least in Germany “#3 – sales rep controlling” is an issue, you hardly find on spec sheets (unless disguised as a euphemism). But it turns out to be important when you talk to sales directors and others. About 70% of the members of a Munich based “SMB club” rate taming the indomitable sales people into proper process as the second important issue on their regular agendas.

So customers have a very strong and clear expectation about their return-on-investment – expectations not necessarily written in the initial “wish-list”.

And do they get for what they paid for? Oh YES – absolutely!

But do they get what they have expected? Well – not really. By far not really!

When we look at the various reports and customer surveys generated by vendor neutral companies like Gartner, IDC, Standish (CHAOS-Report) and many others, we see that a significant number of customers are not satisfied with their CRM implementation.

The oldest ICT-Barometer from Ernst & Young I know is from 2006 and said exactly the same: a customer disappointment of more than 70%. ZDNET (Germany) recently published a survey done by SugarCRM. All mentioned figures had negative values of 70% or more (means worse) expect one which was 69%. Nevertheless was the conclusion of SugarCRMs product evangelist “Users with existing CRM systems tend to be dissatisfied”. To call a 70%-result a tendency is like calling the recent hurricane Sandy a tendential increase in relative humidity.

And… (Quote) “CRM will work as soon as we have seamlessly working processes”.

The only purpose of a process is a meaningful result and not “seamless working”! Pressing Sales into a formal process is absolutely contradictory to what the essence of sales and therefore the sales success actually is – no matter how seamless this is going to be! But I will cover that in an own article.

I really don’t want to blame or point at SugarCRM. But that was the most recent report I’ve seen and I appreciate that they published it. Their survey is a confirmation of a situation that exists for many years and their appraisal shows the difficulties when a technology company is dealing with a non-technology problem.

ALL CRM vendors are selling technology, so they all think in technology-based solutions. And if that turned out as insufficient/not enough, the only answer a technology company can give is “Let’s wait for the next technology!” – which nowadays became a Praise the Cloud! (own article to come)

And even when looking at the 25% to 33% of successful projects – we should not forget that big projects NEVER fail! Those who launched them are those who decide about the success! And how likely is it, that they admit failure in public? It is human nature to “make the best out of a situation” – a reaction called cognitive dissonance.
No…, big projects are destined to succeed!

And besides all marketing texting – customer satisfaction is not generated in SFA-based processes. According to the famous Einstein quote “we measure what’s easy to be measured”, we “process, what’s easy to be processed”.

A paper from business economics at the University of Saarbrücken about Analytic CRM describes the whole complex of customer satisfaction in just TWO sentences:

The satisfaction of a customer is hard to analyze. Most estimates are based on the subjective perception of employees or on questionnaires filled out by the customer.

Which is a description for: “we don’t analyze it (customer satisfaction) because we don’t know how, and if we would do, the result is dubious because perception is subjective and our (sales) employees and the customer cannot be trusted.”

This attitude is quite common throughout the industry (and of course will get an own article).

To summarize the above we can say, that from a customer point-of-view just about a third (don’t want to be too pessimistic) of all CRM/SFA projects is seen as a success. That means that about 12 billion US$ had been invested without getting the expected return! Twelve billion US$ of Disappointment!

Conclusion:

If you made it up to here, you probably (and for good reason) ask: “Well – what’s the whole point in reading this? All of the above are primarily no-brainers”.

The point is that they ARE no-brainers merely for many years and nothing has changed!

I can go to any company with a SFA solution and ask three simple questions, important in any sales project and taught in every better sales training. And you won’t get the answers neither from the SFA and nor from most sales reps, and even if so, you would get different answers all the time.

Successful selling is not a technical problem that can be solved using a SFA! The technical issues are solved for years and the success of SFA or CRM is not bound to BYOD, Cloud, …aaS or what so ever!

Successful sales depend on many factors that cannot be controlled by or mapped on a process or sometimes not even from within the company. Ask your most successful sales reps at SAP what they sell in the first place – and the answer won’t be “software” (or licenses, service, PS, etc.)!

In my next articles I will describe in detail the major non-tec but sales success relevant topics.

Punch line

Failed CRM/SFA projects are a result of hard to hold promises (vendor), wrong expectations (customer) and, not to forget, bad project management. Besides the indisputable advantages of a CRM solution in operational environments, it will obviously fail when a formal process-based approach is used in Sales. Customer satisfaction in CRM/SFA project will only get better, when both parties take a step back and have a sober look. AND (and that’s the real punch line) better integrate the Sales department into the project.

If you can’t get Sales in the boat, SFA is promised to fail!

Thanks for reading and hope to see you next time

Tom