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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

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5 Comments

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  1. Stephen Johannes

    Tom,

    Welcome to SCN and great blog on many points that ring so true from my past and current experience.  I completely agree that unlike traditional IT solutions SFA and/or CRM needs to be approached differently than your backoffice order entry system that must be used.  I strongly believe that these systems/processes need to have a defined benefit for both management and the sales representatives using the systems.  I do not think the processes need to be fully engineered to every detail, however I believe there needs to be clear expectations of the business benefit for a particular process.

    I also completely agree that the technical issues of SFA are essentially a “red herring”.  The reason many times not to use a system is less about technical issues, but rather lack involvement from all levels of the organization on how the system is going to help achieve a business goal.

    I will be first to admit that I am techie at heart(yep even writing a technical book on SAP CRM), but my customers are Sales and Marketing.  I strongly believe that IT functions that support CRM/SFA need adopt customer-centric processes in order to help business processes/goals that use these systems to be successful.  At times IT does not live up to our internal goals and also our customer expectations, but we have to apply the principles of CRM to managing the technical side of CRM/SFA in order to enable the business to be more successful.

    Finally a lot of what you are saying is not shocking for those us who keep up with “trade publications” and social media on CRM.  I do think however that larger SCN community definitely can benefit from seeing these perspectives here.

    Take care,

    Stephen

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    1. Tom Schulte Post author

      Stephen,

      Thanks for the Welcome. When it’s your first time on a platform nobody knows you, it’s quite interesting what kind of feedback there will be. I am not even a customer or SAP vendor, although I had some projects with SAP in the past and I know some of your colleagues.

      (and this is the first text in English for the last 10 years and I did’t wanted to come up with to many strange (Germish) phrases and constructs)

      As you know there is a huge variety of possible answers and attitudes. I’ve been on some post here at SCN that had some topic that got my interest, where I’ve seen some strong comments – what I actually like.

      My post was intended to create some dissonant feelings, to force some answers, some controversial comments. Because to blog “in the lion’s den” has some advantages: You better prove what you say, because the answers might be harsh!

      I know that it is much easier to ask a “witty” question than to give a “witty” answer – an answer that actually get’s us somewhere.

      And of course I know that most employees at SAP aren’t as byte-headed as I made them look in my post. But even so, SAP does not come around finding solutions with “SAP methods” which is by definition a “limitation”. As a friend of mine once said “From the view of a hammer, the world looks like a nail”. Nevertheless will I stress this point a little longer.

      When I have posted the other topics covering process, data, sales (of course), customer’s responsibility (I wonder how many of mine read this and will rethink the partnership 🙂 ) and some others – so when the stage is set, I would be very happy when I’ve got so many interested SAP people that we can talk about how to improve customer satisfaction to 40% (to start somewhere).

      more to come – but not within the next days.

      best regards from Munich

      Tom

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      1. Stephen Johannes

        Tom,

        Hopefully you will still find that well-construed thoughts and dialog regardless of whether they follow the official “party line” are always welcomed here.  Unless your intent is sell/promote another vendor or third party commercial solution then it’s not a lion den.  In fact as much as many of us drink/live the SAP way of doing things, we are also some of the largest critics when it could be better or life is being made more painful.

        In fact currently I think apathy or lack of response will be your biggest issue here and not necessarily the ability to have a friendly debate.  You might even sometimes feel like you are preaching to the choir depending on what chords you strike with your postings.  Keep in mind many of us who “flock” here are the day-to-day supporters of these processes.  That means that we get to see upclose the crash results when things go bad and indirectly benefit when things are done right.  So the biggest challenge you might get is when the day-to-day obversations don’t match up with “long-term” thought.

        Regardless looking forward to your contributions and I hope to read as many and comment as my schedule allows. 

        Take care,

        Stephen

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        1. Tom Schulte Post author

          Stephen

          Well….,  whoever blogs about his profession cannot prevent doing some self-marketing. What should I enter when my profile editor asks me about “areas of expertise” and I don’t want to be “blank”? You not really expect things like “cooking, astronomy, Iain M. Banks CULTURE SF novels etc.” then? Every blogger blogs a significant part of himself. There’s no way to gain SCN-reputation without a little self-promotion, isn’t it. And we all want to be read and found cool. Every blogger “hears the thunderous applause of his imaginated audience” when he writes his text. But I have to stop he, because THAT is really my domain and “one” SCN portal won’t be enough for that.

          But I totally agree with you. So I “tagged” my profile entries accordingly. Nevertheless, those are my areas of expertise. When I will comment another post, I want to consider the background of the blogger, so it is easier for me to find an answer from his/her perspective and to answer according from the background he/she is likely to have!

          regards

          Tom

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          1. Stephen Johannes

            I think there is a difference between thoughtful self promotion vs “marketing-spam”.  In your case you are way far away from the “marketing-spam”.  Sorry if you misinterpreted my comment, but it was more in general how SCN community reacts to bloggers than your particular piece.  If you look at my profile there is that notorious “moderator” badge on it, so I tend to have a little more twisted view of the SCN world than others.

            Historically without naming names, there have been some bloggers who have simply copied/pasted their companies marketing brochures on SCN and called it a blog.  That type of activity is pretty much disliked regardless of who does it.  Believe it or sometimes SAP is the worst offender on this issue.  That being said I think many members on SCN have an expectation of a real engagement instead of just transferring the “glossy handouts” to another medium.    

            That being said your blog is exactly the type of content that as moderator I would show as example how to write something interesting and that should be on SCN. 

            Take care,

            Stephen

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