Marketing continues to heat up as the next big thing in CRM. It’s so big in fact that I can see it splintering in multiple ways to accommodate all the permutations that are suddenly possible thanks to big data, analytics, and a determination to get beyond using marketing technology as a glorified accounting system designed to limit a business’s “losses” due to marketing.
You can’t win by limiting your losses
It’s an old truism that you can’t win any game by simply playing defense and waiting for the other guy to make a mistake; you have to play the game. But for a long time (now comfortably in the past) that was the attitude of the C-suite when it came to marketing. You really couldn’t blame them. The rest of the company spoke a language of opportunities, deals, and revenue while marketers talked about booth space, impressions, and collateral. These are all essential to getting deals but they are so far removed from the revenue discussion that they could make a CFO’s eyes glaze over and that’s a neat trick.
Modern marketing solved the problem by adopting a new vocabulary and by translating soft ideas like impressions into hard numbers involving metrics. Today marketers can tell us how many touches it takes to make a deal, the cost per touch and the yields of various programs, so good for them.
Horses for courses
Marketing has become so specialized that there are now many different apps that do specific and limited things in the marketing cascade and it takes some discipline to get around the whole enchilada. At recent events by Oracle and Salesforce you could see a standard bifurcation between B2B and B2C marketing. Both companies have specific products for each and different rationales that accept the more group oriented thinking of a B2B purchase and the relatively more impulsive B2C variety.
Marketo, whose user Summit happened in San Francisco last week, takes a B2H or business to human approach. I can’t say which is best because I am a big believer in horses for courses or the idea that some horses just like to run in the mud while others prefer a firm course on a sunny day. But Marketo backs up its B2H philosophy with plenty of emphasis on the imaginative aspects of marketing. It’s messaging last week was all about inspiring creative people to do their best work, which I found refreshing.
That messaging comes with a bit of risk though since it appeals more to senior marketers with budgets rather than CFOs or CIOs many of whom still control marketing’s spending. Still, Marketo’s message is getting through if the size of the crowd is any indication. Summit took up all of Moscone West and puts the company in the odd position of needing more space next year but not as much as could be found around the corner in Moscone North or South. Did someone say Vegas? Yup. Next year Summit will move to the desert.
What’s next in marketing
Over lunch with investors we talked about the future of marketing in general and Marketo as well. My lunch mate suggested that Marketo must next develop a full CRM suite, which I disagree with and here’s why. We heard the same kind of predictions when Siebel and Salesforce became successful—many predicted they’d build ERP despite denials by Tom Siebel and Marc Benioff respectively. Neither built ERP because neither needed to and today I don’t think it’s wise for any current marketing company to build full CRM.
For marketing vendors, CRM has come and gone and they’ve adapted by creating great integrations. The real opportunity, as it was for Siebel and Salesforce, is down stream. Siebel got acquired before it could execute on a downstream plan but Salesforce is a great example of a company that could and did fully articulate a downstream vision.
CRM had significant opportunities lurking in then un-built functionality that simply needed articulation. Marketing was one such articulation but so have been social and mobile niches, which are still being built out. It took a blue ocean strategy (named after an important book with that title) to fully articulate the CRM vision but it was a better strategy than going after a crowded and already built out market like ERP.
So, marketing today looks like the same kind of opportunity. Without the distractions of a full CRM product set you could walk Marketo’s show floor and see an impressive array of ecosystem partners with products like analytics (6Sense and Infer are two of my picks), data solutions (Ring Lead, Dun & Bradstreet), consulting (Pedowitz Group), and sales oriented solutions (LinkedIn, and many others) that extend Marketo’s reach and footprint without competing directly with it.
Over time these ecosystem solutions will produce a critical mass of capability that will make marketing the new platform just in time to give SFA a run for its money as the top dog in CRM. I think marketing is a favorite to overtake SFA and it wouldn’t surprise me if at some point sales reports to marketing. The current state of tension between the two cannot be allowed to continue forever. Too much is being lost because of poor handoffs and incompatible objectives and we need a centralized authority over both. Efforts to create chief revenue officers move in the right direction but fail to include marketing as an equal.
The positive vibe I’ve seen in all the marketing shows contrasts with the more forced march approach in selling, which may have peaked in its ability to drive greater results on its own. Amalgamating marketing and sales seems logical but we don’t need to start from scratch by rebuilding CRM to do it.
I wonder if a watch could change the world. The introduction of Apple Watch could be such a game changer but not in the way you might expect. A straight line analysis of the Watch’s importance might tell us to expect greater efficiencies in business with all the reminders it can deliver but let’s face it, reminders come at us all the time on our computers and phones.
Another device doing the same thing is not going to change the world by emulating older technology. That is the way of technology introductions though. First they do what older tools did, just better, faster, and cheaper but soon enough we all realize that old processes are not what the new device is for. Just as information is the addition of data to other data and information to produce some new insight, an accumulation of the newest technologies might offer a glimpse into the uncharted future.
I am thinking of the combination of the Watch and Apple Pay or any other payment service that uses the hardware for instant payments. That’s not enough though, I am also thinking about the European continent and specifically the self-inflicted economic malaise brought on by the euro and austerity budgets. This is complicated and I will try to be brief.
The euro is a currency without a nation, which has caused all sorts of problems. The greatest is that no user of the euro can do much to adjust naturally occurring differences from nation to nation such as GDP, inflation, productivity, and spending. This has placed a straight jacket on the member states of the European Union with some doing well, like Germany, while others suffer.
Southern European countries like Italy, Spain, Portugal, and especially Greece are having to run severely austere budgets that are crippling their economies and hurting a lot of people. For sure there is no common agreement on the root causes of the problem but my lying eyes and Nobel laureate Paul Krugman both tell me that the European experiment is going at least sideways because we can’t figure out the euro.
So what’s the Watch’s connection?
Simply this. The common currency was established to create a common trading area across Europe to facilitate exchange and trade and bring the nations closer together. It has too, though but at the price of austerity, which might be too much to bear.
But I suggest that a common currency to speed transactions by individuals and businesses is no longer needed. As the Euro has grown up, technology to effect transactions in any currency has matured to the point that today, you can pay in one currency such as the euro but still keep your wealth in another currency.
We see this all the time. You use your credit cards in any country and the back end computing apparatus does the conversions for your monthly statement. The Watch and Apple Pay can do the same thing with the result that you could pay your international debts in euros but still maintain a domestic currency.
Doing this would enable Eurozone countries to have their own currencies again and to let them float in the marketplace. Inflation is a big scary thing for many European countries like Germany and they’d want to hold it down. But countries like Greece, Italy, Spain and others could significantly benefit from having the ability to manage their own currencies again.
While it’s true that countries would be exposed to currency risk from other countries’ inflation, it would be limited to new purchases; old debts in euros would be unaffected and debtor nations would be on the hook to pay back the euros they borrowed by buying euros with their less valuable sovereign currencies. Thus a more natural control apparatus emerges.
It sounds complicated but the point is that we have the ability to reintroduce some of the benefits of national currencies while still preserving the euro and its trading area. Skeptics will say that paying for gum and a newspaper with something like Apple Pay isn’t going to solve the problem of business-to-business commerce but I disagree. Currency transformations already happen in those larger deals.
For instance, a French company buying British goods still has to convert euros to British Pounds at some point. That mechanism is alive and well. Introducing personal technology and services that enable individuals to manage their spending and conversions would provide the necessary stimulus to get many economies moving again. Of course the rub is that they’d need more hardware and software than many people currently have. But as a wise woman once told me, that would be a high-class problem.
I have been expecting this announcement for a long time but it still came as a surprise when Keith Block, vice chairman Salesforce, made an off the cuff remark in Boston at the Salesforce World Tour event last week. In February Sage and Salesforce announced that they’d work together with Sage moving some of its undisclosed ERP applications to the Salesforce Cloud. But the word didn’t seem to spread and it remained off my radar for nearly two months.
No matter. Sage has been a mainstay of the SMB market for business apps for a long time. With global reach and customers that push the envelope for what an SMB is, the company enjoyed great success in prior decades. But lately, the company’s legacy has been a drag. The apps have needed refreshing for a while with some of them still operating on flat file system back-ends rather than relational databases.
The major culprit, from my perspective, has always been the Sage resellers. The partners have built great businesses on delivering services for customizing and training for Sage products and were reluctant to change their cash cow businesses. A succession of weak CEOs didn’t help much either. Several thought they could ignore the problem of modernization or cajole partners into adapting with the backfiring result that the forward thinkers abandoned ship leaving the more conservative partners with increasing influence.
This is my analysis and you should look for confirmation but my point is that we have arrived at a time when Sage is getting off the dime by getting onto the Salesforce1 Platform and with it joining the ecosystem. This is great news but it also has its own issues for competitiveness.
Although Salesforce CEO and co-founder Marc Benioff long ago disavowed any interest in building an ERP product, the availability of the platform has been more than inducement enough to get others to do so. Companies like FinancialForce, Intact, and Kenandy and others all have products on the AppExchange that will compete in one way or another with anything that Sage brings to the party. Also, there’s no shortage of non-Salesforce oriented ERP in the cloud happy to do battle with NetSuite being the 800-pound gorilla.
But Sage still has a big user community around the world, products that reach smaller users than those that other ERP/accounting vendors target, not to mention a partner base that can still deliver so it will be Sage’s relationships, I think, that either make or break this move. Also, being able to show up with the world’s number one CRM in tow and a slew of modern business apps to boot, should make a powerful combination. Just ask the other ERP players.
It is still unclear which Sage products will be converted or which ones first. I hope that the company will see this as an opportunity to move everything so that for the first time, the product lines that grew by acquisition, will have a common platform.
This is a big test both for Salesforce and for Sage. For Salesforce it’s a great way to grow share and gain influence in more parts of the world. For Sage, it represents a chance at redemption and a new start as a more integrated software company with deep expertise in the back office and multiple verticals such as real estate.
In my mind this doesn’t leave much room for a Sage CRM product though. They had three CRM solutions at one point including ACT! And SalesLogix that they sold off. Sage is now left with a cloud product that by all accounts is good but Sage has always been a company by and for accountants and front office automation was never something the company put its back into. I can name other vendors that were in the same situation but who for multiple reasons became CRM oriented enough to talk the talk, so can you.
Sage Summit happens this summer and it should offer some very interesting keynotes. Will a Salesforce executive attend to welcome the company to the cloud? To be continued.
This article originally appeared at SalesCoachWorld.com
One of the significant benefits of modern sales technology based on things like the cloud, social media, analytics and journey maps, is our ability to widen the sales funnel. Unfortunately, we might not be taking advantage of this.
You know the drill. We start the quarter with a pipeline full of opportunity and over the course of 90 days we winnow it down to a few select deals that we must close if we are going to make the number. The winnowing happens, at least in part, because as the quarter goes on, the amount of data about the pipeline grows exponentially forcing us to make decisions about what to pursue which, in turn, is responsible for nail biting in the last week or two.
The pipeline is a good metaphor for more than one reason. Did you know that if you double the diameter of the pipe, you can halve the flow and still get the same throughput? The application for sales is that the fatter our pipelines, the more ways we have to make quota but we often don’t pay much attention to this.
Widening the pipe requires us to keep more deals active for a longer time before we need to close business. You can only do this if you have good analytics, often based on machine learning, and you stick to a sales process proven to work in your business, which your machine learning system will be happy to document for you.
If this sounds terribly obvious or even old school, keep in mind that according to an annual research study conducted by CSO Insights, only about 20 percent of businesses do this and their results are better, especially in reducing the number of no-decisions. Alarmingly, half of the businesses studied have random processes and free form approaches to technology. Not exactly a recipe for success.
Left to our own devices—a pen, paper, perhaps a spreadsheet, perhaps even contact management software, and a salesperson’s intuition, we get what we have. According to CSO Insights, that means about 60 percent of the sales team makes or exceeds quota. In business, what other process tolerates such low yields?
Upgrading to a process and analytics based approach is tricky business because it tends to ruffle sales reps’ feathers. One company I studied ran a double blind study applying analytics to all deals at the start of a quarter and letting the reps proceed with their conventional approaches. The analytics system was able to predict, even at the start of the quarter, which deals held the most promise and targeted them for close on a prediction list. At the end of the experiment the results were compared with the early forecast and to everyone’s surprise the predictions were on target.
The great learning from the experiment is that sticking with the analytics approach produced less wheel spinning and wasted time and effort leaving more resources for pursuing better (machine selected) opportunities. I am leaving out the end user company’s name because I am not sure it’s widely available but the analytics vendor is Lattice-Engines. Others that support similar strategies include 6Sense, Aviso, and many others.
All this is relevant in the context of my current book, Solve for the Customer. It nicely shows how we can harmonize the roles of people and technology in standard business processes. People, process, and technology is a cliché for many people but it has stuck around because it reveals some essential truths. If you are a student of selling and any of this sounds intriguing, it’s time to reexamine your business in light of those three essentials.
Self-service is generally considered a good thing, especially in CRM where there has been significant investment in empowering people to take on more responsibility for provisioning service or making purchases. But it’s not all great and there is some interesting blowback that is causing vendors to reconsider how their offerings work.
In sales, self-service has resulted in truncated sales cycles and fewer invitations to the dance—you know this problem. Customers do their own research and engage a company and its representatives later when they are looking for pricing for their final decisions. Once vendors could control the information flow and customers would need to engage just to get a basic fact, that’s not true today.
We all know this happened as an inevitable consequence of the Internet and now vendors are struggling to find ways to engage customers earlier in their processes so that they aren’t locked out of deals before they can even find out about them. Also, nobody wants to be engaged at the last minute when all they can do is price, propose, and pray. We’re definitely dealing with unforeseen consequences.
Interestingly, and perhaps ironically, self-service has an equal and opposite effect in customer service. Customers are very happy not to wait in phone queues to ask simple questions and as a result, social media, FAQs, knowledge bases, and communities are supplying solutions for many of the issues that once consumed service reps’ time—another benefit of the Internet. This also means fewer touches, fewer chances to make impressions of try for the additional sale.
This doesn’t mean service is dead. In fact, with the easy questions handled by other means, more or less, the volume of issues might go down but their complexity has risen. As a result, engaging with contact center folk might take longer because even these veterans no longer have answers on the tips of their tongues and they have to do research. I don’t think this is as simple as a training issue. To be a service rep today means juggling more information, harder issues, and more customers.
This argues for a paradigm shift in sales and service, which is being driven by analytics and journey mapping. Previous approaches to sales as well as marketing have been reactive—the customer asks and the vendor responds. That makes a lot of sense because it is the nature of a conversation. But I’d suggest that conversations are not what customers seek. What they want is a relationship based on authentic engagement that is there when you want it but then vanishes.
Certainly, as customers, we seek and expect professionalism in all dimensions from the speed of dealing with us, to the correctness of whatever is provided as a solution to our needs. Too often though, we get wound around the axel of personalization because we erroneously believe we need to develop a personal relationship with customers but I think that’s a misunderstanding of the R in CRM. There are lots of ways to relate and most of them don’t become personal.
Let me suggest that the real goal should be the authenticity that’s born of professionalism and steeped in the understanding that as customers we’re busy and we want to get our issues dealt with so that we can move on to the next thing on our daily bucket lists.
That’s where analytics, especially machine learning, and journey mapping come in and while we’re at it this is the nub of what I am calling Customer Science. Machine learning can analyze your customer data and tell you where the clusters are, where the largest proportion of issues are and what the successful activities will be. With a product, you might discover through machine learning that many people get stuck at the same place or that they have a specific difficulty at the same place in a business process.
Armed with this knowledge, you can become proactive by building journey maps of your processes and thus prepare for the inevitable. Should you also use this knowledge to fix or improve a broken product or process? Absolutely. But that’s another department. In service and sales you have to deal with today’s reality today. So building out your repertoire of solutions for known moments of truth is a great way to build authenticity. It ensures your precision and professionalism and gets your customers back to their lives with minimal fuss.
So what’s better authenticity or personalization? Why must we think we need to choose? A warm greeting is always welcome and demonstrating empathy for a customer issue is not only good business, it is humane. It just shouldn’t be the only trick in our kits because no amount of being nice substitutes for a solution.