SFA

  • May 2, 2018
  • We should start discussing what’s beyond CRM.

    I chose the word beyond advisedly. CRM is far, far from dead or even in decline so after would be completely incorrect. But CRM has already changed so much that it may be time for a rethink. Also, many of the tangential technologies that have turbocharged CRM in the last few years, like social media, have attracted so much attention—not all of it good—that some analysis is due.

    First, let’s state the obvious, that CRM isn’t in eclipse. It’s a $30+ billion industry with a bright future. But the green field days have passed, most companies that need it have gotten at least some CRM apps but probably not enough. More telling, a report from CSO Insights “Running Up the Down Escalator,” that I studiously review each year, tells me that most of the sales organizations that ought to be using CRM are doing so poorly. Their sales processes aren’t efficient or productive. CRM adoption is not what it should be and there’s plenty of room for greater implementation.

    On the other hand, we’re entering Q2 and tradeshow season. Two weeks ago, I was in San Francisco for Salesforce’s TrealheaDX developers’ conference, last week at the company’s World Tour in Boston. Next week I’ll be in Chicago for Oracle’s Modern Customer Experience conference and from what I’ve seen and been briefed on the new solutions on offer are very cool. The quarter continues with trips to Las Vegas, San Francisco (again) and elsewhere.

    CRM is vibrant. But its role and nature continue to change. It was once seen as an efficiency tool and a commoditization of expensive IT. The combination of cloud computing (commoditization) and database management techniques over customer data (efficiency) raised performance and expectations of what we could achieve in the front office.

    But today, the CSO Insights report tells us that last year only 53 percent of sales people made or exceeded quota compared to 63 percent five years earlier. It also says that well over half of sales organizations operate like the gunslingers at O.K. Corral flailing at their markets instead of using technology to bring order, precision, and efficiency to their tasks.

    On the other hand, marketers are now empowered with sophisticated tools that enable them to take the randomness out of their efforts replacing it with accurate programs designed to appeal to targeted needs. Of course, many marketing organizations still have not internalized these ideas and their output resembles pasta on a wall because the technology has made it so inexpensive to spray and pray.

    Lastly, with each new revelation of a data breach the business community shudders as vendors attempt to deal with risk, loss, and irate customers. At the same time, customers quake at another possibility that their identities could be stolen and their futures ruined. Trust in social media especially, has taken a hit with almost daily revelations.

    But in the efforts around platforms and development technologies I can see renewal and reason for optimism. We are in an era of consolidation through mergers and integration into huge suites of functionality. Point solutions are still viable but increasingly they are coming to market as components of larger ecosystems based on a few prevailing platforms such as the AppExchange, a trend I expect to continue in CRM’s next stage. Here are some recommendations for that stage.

    1. For individual users the path forward in CRM is to adopt the new development technologies so that they can customize apps beyond anything a vendor, even one in an industry vertical, can provide.
    2. Customers should demand and vendors should give much better data security if we expect our society, already highly dependent on data and information, to further progress in that direction. New business structures for safeguarding data along with new certifications and a code of ethics have to be part of the mix beginning with encryption.
    3. There’s ample data suggesting that employees and the public now look to CEOs to articulate visions beyond profit and loss that position businesses as responsible corporate citizens. Young people are selecting job offers based on this according to a survey by Povaddo, an opinion research and issues management consultancy which said that more than half (57 percent) of those working in America’s largest companies feel that their employers should play a more active role in addressing important societal issues.

    My two bits

    CRM began life with a heavy emphasis on management but over time the attention paid to relationships has only grown as we’ve added needed functionality to shift focus. Interestingly, the emphasis on AI and machine learning has reduced much of the rote effort to manage situations while freeing up employee time to do what humans do very well, relate to each other.

    That’s one reason relationships and CRM have become so central to business life. Another reason is the convergence of many markets as earlier disruptions are increasingly embraced and commoditized. Succeeding today means developing and nurturing relationships more than it references efficiency. So if you haven’t rethought your CRM deployment in a while or if you thought you had everything done, think again. We’re in the second half of a close game, the stakes are high, but there’s a lot of fun on the horizon.

     

     

    Published: 2 months ago


    Sales people and their managers should be celebrating the economic gains of the last few years but for many of them the gains may be illusory. In a new report compiled by CSO Insights, “Running Up the Down Escalator,” there’s evidence that these will not be remembered as the good old days in selling.

    According to CSO Insights’ continuing research that stretches over more than two decades, 63 percent of sales reps made quota in 2012 but five years later despite an improving economy that number dropped to 53 percent. A variety of factors account for the drop. One nugget from the report,

    Buyers are getting better at buying faster than sellers are getting better at selling. This creates downward momentum: Standing still (trying to maintain the status quo) is actually moving backwards. Successful companies are running up the buy/sell escalator fast enough to counteract the forces (buyer expectations, new competitors, etc.) that are combining to pull them down.

    In other words some companies are just better at selling and in prior years that logic made some sense. But companies are still making their numbers which suggests to me that they may have over hired sales talent which is puzzling.

    A traditional sales manager plugs bodies into territory to ensure no opportunity is ignored. That was once understandable. But today we have so much technology to plan territories, guide sales people, suggest next best actions, and which targets to go after given the time left in the quarter that it stretches the mind to think that much is falling through the cracks. In short all the sales tools that have come on line in the last two decades should have enabled everyone to do more with less.

    If so then the clear conclusion I draw is over-hiring or under use of the technology but the question is why?

    Perhaps, and this is just a hunch, although we have lots of sales tools today, we’re still planning and managing territories by hand. Estimating the number of target companies and dividing them up, keeping notes in our phones or scraps of paper, relying on memory to call someone back. It’s a long list.

    Maybe a better analysis is that according to the data nearly half of the companies surveyed (48.4 percent) have mediocre sales processes while another 24.8 percent have chaotic ones.

    CSO identifies four levels of sales process Random, Informal, Formal, and Dynamic and nearly 75 percent of sales organizations don’t get out of the first three process categories.

    CSO has also identified five types of sales organizations as they present to the marketplace. From low to high they are Approved Vendor, Preferred Supplier, Solutions Consultant, Strategic Contributor, and Trusted Partner. The higher you go in the hierarchy the better things get. Trusted Partners have earned a place at the decision table, they discuss bigger deals, and those deals close faster.

    It’s the trusted partners—with dynamic processes—that make the deals while the others are working very hard hustling to bring in some revenue—any revenue. Of course, this is an over simplification but aspiring to the combination of process optimization and becoming a trusted vendor have been around longer than SFA.

    It’s hard to get to those lofty places. Reps who are new in their jobs know they have to produce or perish and the churn results in bad habits like using a random or informal sales process and not being too picky about what products the customer buys as long as they buy something.

    Perhaps this results in too many sales reps chasing too few opportunities. Or maybe it just results in sales rep churn with the result that territories have new people running them all the time making the same rookie mistakes over and over. Whatever the analysis this all suggests that some attention paid to how people sell and how we support them might pay real dividends.

    My two bits

    One of the great thigs about CSO Insights is that they’ve been collecting the same data each year for a long time. The Sales Relationship Process Matrix has been around for a long time too and while the percentages move a bit from year to year, I have not seen an appreciable change in the distribution over time.

    I wish there was more data. Things I’d like to know:

    • How has sales headcount varied over the last 5 years as quota attainment has tanked?
    • What’s the average time in position for sales people?
    • Of the 53 percent of people who make or exceed quota, are they attaining more or less as a percentage of goal than the 63 percent five years ago?

    Bottom line, sales is a GIGO business. Garbage in, garbage out. Most of all it’s a process and if you aren’t attending to the fine points of your process you are losing more often than you should. My hypothesis is that the people who make quota today are killing their numbers by bigger margins than they were 5 years ago. To change that dynamic we don’t need less software but we do need to spend some time learning how to optimally use it and we also need to think hard about why we still allow random or even informal sales processes to exist in our businesses.

    Published: 3 months ago


    Denis-PombriantI haven’t sold for a living in almost 20 years but then again as an independent analyst I am always selling my ideas. I’ve also studied selling for a long time both as a rep and now as someone who tries to understand how we apply technology to a very human-to-human process; I think my opinions are well informed.

    Something crystallized for me in a recent briefing meeting I was discussing sales acceleration with a CEO. I’ve long thought that sales acceleration is not only an archaic term but also a dangerous delusion that could prevent greater sales success. It’s an idea you might be familiar with if you read this space occasionally.

    It’s my position that sales acceleration has seen its peak and has been declining as a driving force in sales management for many years. Certainly there are many, many people and organizations practicing a form of acceleration and there are more than a few software vendors poised to assist that effort. But as a practical matter the attempt to accelerate to me is like pushing on a string. That’s because there doesn’t seem to be much left to accelerate.

    By necessity most acceleration happens on the vendor side. So we have all sorts of ways to reduce latency in vendor processes and actions. We speed up configuration, pricing, and quoting so that we can put offers in front of customers before anyone else can. Or we use the latest social media tools to be in the moment with customers whenever they have questions or even stray thoughts. But there hasn’t been much change over many years in what customers do. They take in vendor information and process it as they must and reach decisions, even deciding not to decide.

    Customers’ deliberations are not guided by much more than spreadsheet analysis and decisions arise from thinking about the collected information from various sources. So I don’t think there’s much further to go in actually accelerating because I don’t know how you speed up the way other people think.

    Acceleration is a relic of a much different time. In 1911, Frederick Taylor published his famous time and motion studies and inaugurated the age of acceleration. But Taylor’s goal was to eliminate wasted time and motion in manufacturing processes, to get humans to function as much as possible like the robots that have continuously replaced them over the intervening century.

    Taylor’s efforts gave form to the industrial age and time and motion became cornerstones of business processes everywhere whether or not they were appropriate. Perhaps selling is one of those areas. Efficient selling has been a goal for a very long time and at first there were many efficiency gains to be had. Giving telephones, cars, computers, among other things, to sales people gave them the ability to reduce the inherent latency of selling. Today we’re at an intersection point of two important trends going in opposite directions. The drive to make selling more efficient is heading south while the need for reps to intuit, empathize, and adjust to customers has never been greater.

    If you look at the sales tools that have been released in the last decade, most of them (certainly not all) aim not at efficiency in the Taylor sense, but at capturing various forms of data that enable better understanding of customer situations so that reps can focus their time and attention on the deals most likely to close. In effect, this has provided the ability to accelerate revenue if not individual situations because the automation we have makes it possible to keep tabs on many more situations. The net effect is more predictable revenue even if it doesn’t do much to accelerate a specific deal.

    This is all very good but it brings into high relief the place of efficiency and acceleration in modern selling. Why are we still banging on the efficiency and acceleration drum? My thought is that acceleration has become a meme; something each of us inherits as sales people. It’s a bit of social genetics that we don’t think much about because, hey, it’s groupthink.

    But I’d suggest that two things are happening. First the concept of acceleration is morphing to be more about revenue acceleration than about deals, which therefore accommodates the new reality. Second, at some point we’ll realize the gap between what we say and what we mean and we will adjust selling to better reflect the realities. If that happens across a broad swath of the profession it could usher in a new golden age.

     

    Published: 2 years ago


    Siebel saved my life.  Not really but sort of.  By the early 1990’s I had been selling software for what seemed like a lifetime and dealing with the typical frustrations of life in sales.  There weren’t enough leads and there was always more work to do than you could squeeze into a day.  I kept records on legal pads and file folders and I had a Rolodex that I would never update because it was way too much work.  And then there was forecasting.

    Fortunately, I was young and gifted with a great memory so I could remember everything that was relevant in a deal.  Beginning in the 1980’s I had worked for a succession of DEC partners and I found that I could memorize whole catalogs — VAX and PDP-11 were separate — without trying.

    But, yes, Siebel saved my life because by the early 1990s I was burned out — the mini-computer boom was fizzling, the dotcom boom had not yet started, and there was a recession which made everyone skittish about installing systems on PC networks because they were also skittish about network operating systems.

    Finding leads was hard.  No one would spend much on marketing and bingo card leads were of such low quality that it was easy to return them to marketing with a heavy dose of scorn.  Cold calling was a way of life.  There was no Internet to speak of and researching prospects was tedious.  The early market euphoria in which every company was a prospect had given way much too quickly to a war of attrition.

    I was not a Siebel user but it nevertheless saved my professional life because it showed there was a better way to sell that didn’t involve dialing till you dropped, unmanageable paper records, and monthly forecasts — little fictions whose greatest quantitative attribute was that they were rendered in spreadsheets.  Siebel wasn’t even the first tool of its kind.  ACT! and Goldmine were already on the market but Siebel took what had been a single user experience and made it germane to selling in the enterprise.

    It would still be many years after Siebel’s founding before we would see integrated marketing and customer service but true to form Siebel was one of the leaders in consolidating the CRM suite at a time when public companies would buy other companies in simple swaps using their stocks like cash.

    Siebel also hired aggressively.  EVP David Schmaier would routinely visit his alma mater, Harvard Business School, each spring and round up its best and brightest for export to San Mateo.  As a strategy it worked reasonably well and the company was always awash with smart, talented people, not just the Harvards by the way.  Many of them are still in The Valley, populating other companies including Oracle where some settled after the buyout.  Today having Siebel on your resume is akin to having Oracle or HP back in their heydays.  It says you were first, you were prescient, you’re a survivor

    The company was never loved, in my estimate, and that is a key lesson for all those who come after.  They played by a script that was pure Geoffrey Moore.  Not that Moore is like that, I don’t know him.  But in “Crossing the Chasm,” Moore set down some absolute truths about how paradigms shift and how the eventual winners conduct themselves.  Early markets are take-no-prisoner ground acquisition games. Capture as much territory as you can to deny it to your competitors; deal in a general-purpose product and accept customization ideas with great reluctance and great cost; expect the customer to figure it out and provide adequate but no frills support because most of your energy is dedicated to capturing more, more, more.

    It was a brilliant strategy that some might say was invented at Oracle so it was only commonsense that Tom Siebel and several other titans of today’s software landscape would come out of that culture.  But the strategy has a down side too.  As I say, Siebel may have been respected for its execution but I doubt if it was ever loved in the way that Apple was loved, for instance.

    The lack of love made it easier to accept the assertions of an upstart analyst firm at the time that Siebel’s marquee customers could not show an ROI.  A scandal erupted that took a good deal of wind out of the company’s sails.  Then, too, a Gartner analyst famously forecasted in off the cuff remarks that half of all CRM efforts would fail.  Many people grasped at these factoids like they were drowning.

    If all you read are the headlines, then your world is rather black and white but if you delve just a bit deeper you understand that the world is rather gray and this situation was no exception.  Frustrated by the charges that the company believed were bogus, they hired me to evaluate not the charges but their customer base.  My partner at the time was fellow Aberdeen analyst Harry Watkins who happened to hold a Ph.D. in Marketing and also taught at the university level.

    Our work was clean.  We were separated from Siebel by three thousand miles and given broad latitude to question their customers.  What we discovered in many cases was exactly what Geoffrey Moore might have predicted.  Major corporations had bought Siebel because it was the market leader and because they didn’t want to lose a step to a competitor.  They were early adopters after all.  The result, our research showed, was that a whopping half of the customers never bothered to conduct even a rudimentary needs analysis before or after purchase.  Many could not quote an ROI because they had no relevant starting point to compare with.

    Also, in a great bit of statistical analysis, Watkins discovered that some of the companies that were reporting ROI numbers were among those who failed to perform that needs analysis.  When he compared this group with those who had actually performed needs analyses, he found that in aggregate the faux reporters had lower ROI to report.  Our conclusion was that without a valid starting point for ROI the faux reporters either developed amnesia about how bad things had been prior to implementation or they’d downplayed their results so as not to contradict the evident truth of the herd and the headlines.

    When we published the results, a few people in the industry, whom we had thought of as friends, demanded our heads on platters.  It was all good fun.  But that’s not the whole story.  In direct follow up interviews with some customers we discovered additional truths.  Siebel really was hard to use, especially for people who had never followed organized business processes and organizing sales people of that era was like rustling cats.  Its client-server architecture, the most advanced for the times, required a great deal of handholding.  One major company I spoke with had three teams of technologists dedicated to Siebel — one each for the last release, the current release, and for the next one.  They were tired but curiously not angry.

    Siebel had the lifecycle of a meteor — a bright youth and an ignominious end.  In subsequent years, relative newcomer, Anthony Lye would do much to integrate Siebel into Oracle and flesh out the product line with a SaaS architecture and many auxiliary functions — other free standing companies bought with Oracle cash to fill out the very complete suite we see today.

    Siebel got started in 1993, which means this is the twentieth anniversary year of its founding.  A lot has happened in the interim.  Siebel is no longer a standalone entity having been acquired in a greater version of stock market brinkmanship than even it had participated in during its growth phase.  But in many ways, Siebel still is the market.  Go into a Global 2000 company and you will see a Siebel system; today Salesforce users might flank that system’s users too.  For many of these companies Siebel is a workhorse system that has been through some of the wars and continues to be serviceable.

    But markets and vendors are changing.  Oracle has Fusion and is slowly merging it with Siebel while Salesforce continues to be the juggernaut that prematurely challenged Siebel in a joust of jests.  If you follow Bruce Daley’s recent survey work the customer base is in good shape so you might wonder what’s next.  Customers seem to genuinely like Siebel these days, a good omen for sure.  But current mainframers still love their big iron too.  For all that, however, we aren’t building and selling mainframes very much and the installed base is shrinking if only because COBOL/CICS programmers want to retire and kids in school today don’t want to be big iron museum docents.

    So where is Siebel at twenty?  Somewhere in middle age.  There might be a Siebel named product twenty years from now but it will be very different from what we have today, which s very different from what we had ten years ago.  By and large, that’s a good thing.  So, happy birthday Siebel.

    Published: 5 years ago


    I flew home from Microsoft Convergence in New Orleans arriving back in Boston around 9:00 PM last Thursday.  I was tired from capturing a week’s worth of information from the Microsoft fire hose for the previous four days.  But on Friday a Tsunami named Salesforce.com blew into town to inaugurate a world tour trumpeting the company’s new messaging centered on enabling enterprises to become “customer companies”.

    The tour and the messaging was field tested in New York last month and refined over the past few weeks to produce the Boston show and if Salesforce and its CEO Marc Benioff run true to form, the message will continue being refined throughout the spring and summer and delivered in final form at Dreamforce to be held this year in December in Salesforce’s home town of San Francisco.

    The big news coming out of Boston, if I understand it right, is that Chatter will become Salesforce’s primary interface.  Prognosticators peeling that onion got immediately weepy eyed citing the risks involved.  Surely, the logic went, when you change sales people’s UI you are asking for trouble.  These people are not happy change agents after all — look what happened when SFA came onto the scene, they opined, look how poor adoption was and how passively aggressively sales people didn’t adopt.

    Yadda, yadda.  Have they forgotten that early SFA sucked?  But look how they took to Salesforce like ducks in your swimming pool.

    That was then and then was different or as Mark Twain liked to say history doesn’t repeat itself but it rhymes.  So what’s the rhyme?  Actually, it comes from two sources as I see it.

    First, we need to Segway to Peter Coffee, Director of Platform Research at Salesforce, and this is not a non sequitur; it has a purpose, I promise.  If you’ve been to a Salesforce event in the last five years or so you know that Coffee does a pre-show to warm up the audience.  Coffee is not an entertainer happy to give away prizes or perform skits the way others do at conferences.  Coffee’s orientation is news.  It’s focused on the matter at hand so that his effort bridges nicely into Benioff’s main event.

    So, one of Coffee’s interview guests last Friday was MIT professor, Andrew McAfee who, along with fellow prof, Erik Brynjolfsson just published Race Against the Machine a short book about the ways we will work in the future.  The subtitle provides the Cliff’s Notes: “How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy”.  Got it?  No?  I will post a review of this fine work (which I am not sure I agree with in all its particulars) soon.  My point here, and I guess it was Coffee’s point too, is that technology is racing ahead and changing how we work and that people who don’t adapt and adopt will be left in the dust.  That’s point one.

    Point two is the long evolution of CRM, SFA and mobility.  For many years we have been touting mobile SFA applications as tools that sales representatives can use to report to their bosses upon leaving the big sales call.  But now imagine if during the sales call, the rep had the ability to reach out through the mobile umbilicus to get help on any subject.

    Sure, the mobile phone has always been available to do the same but few of us took advantage of it because its use was so disruptive in a meeting setting.  But a collaboration feed is more discrete so that not only could a rep report back after the meeting but he or she can now reach out through a collaboration product like Chatter rather than saying those dreadful words, “I’ll have to get back to you on that.”

    Put the two ideas together and making Chatter the primary interface for CRM or SFA makes all the sense in the world.  Also, you need to consider that just as we can dream up a realistic use case for selling, the same is true for service and support or even marketing.  Quick aside, CMO, Kendall Collins, who was also at the event told me, “There’s only one sin we won’t forgive inside Salesforce and that’s losing alone.  If you’re going to lose, lose with all the support you need.”  In other words go down swinging and in other, other words, business is now, more than ever, a team sport.

    So I am more sanguine about the move to make Chatter the primary interface for Salesforce.  It’s a natural evolution, something whose time has come.  Cue the music.

    I am also skeptical that the big news coming out of Boston was this Chatter tidbit.  The discussion involved people from not only MIT but Harvard Business School and Yale as well as representatives from the private sector like the electronics giant Phillips and Stratus the fault tolerant computing company and they are all and already moving the collaboration needle.

    Salesforce, as usual, is on to something.  The messaging about becoming a customer company is almost right and will improve over time.  And if Coffee’s intuition about having Andrew McAfee in the pre-show is right (and I think it is) then in a couple of years we’ll see other vendors ponying up with their own similar messaging just as sure as today they are (finally) “all in”, as someone once said, about the cloud.

     

    Published: 5 years ago