7 Signs of a CRM Failure

By:  Ken Thoreson  ~

Customer relationship management (CRM) systems are hard on sales managers’ careers. There are many reasons that the job tenure of a person with sales management responsibility averages only 14 to 18 months. But in 14 years of consulting with organizations, I have consistently found that much of senior management’s frustration with sales leadership is traceable to the expectations that CRM systems create yet fail to meet.

Vendors lead senior management to expect improved salesperson productivity, effective insights into pipeline management, effective lead management, improved account management, and improved sales and marketing metrics. Although those may be valid messages, sales management must focus on much more to build a high-performance sales organization and predictable revenues.

CRM’s failures to impact sales aren’t linked to a particular product. We’ve found identical problems in a variety of organizations no matter what CRM system was in use.

Can you identify with these examples?

  1. Pipeline values and forecasting are neither accurate nor updated in real time.
  2. Sales opportunities aren’t properly updated to reflect the appropriate sales stage.
  3. Outdated sales opportunities linger in the system.
  4. Each salesperson uses the system differently.
  5. Sales activity codes are redundant or not used.
  6. Marketing leads and their sources aren’t tracked.
  7. The database is not current or only partial information is recorded, ensuring that marketing can’t use the system effectively for campaigns.

Those kinds of challenges stem from senior management, sales leadership, and sales management failures. What’s the fix? There must be a commitment by all levels of management to institutionalize the CRM system. After that, it is simply sales leadership’s responsibility to set the vision and sales management’s job to focus on execution and training.

The first step is to ensure there’s a written sales process map, with definitions and detailed action steps for each major stage in the sale. This will help each salesperson understand what’s expected at each stage and allow the CRM application to be defined to meet the written sales process map.

Once the sales process is mapped into CRM, continual training for all salespeople must occur. Vendors may say their CRM systems are designed for a one- or two-hour training session, but during the first six months as you roll out the application, sales management must train everyone to use the system identically. They must ensure that there’s a clear understanding of how to use the system and why the system was designed the way it was. This will help everyone enter the data properly and in the same manner.

Sales management’s other role is to “inspect what you expect.” That means conducting random salesperson audits and coaching when the system isn’t utilized as designed. Just because one salesperson has been with you for 10 years and is highly successful, it doesn’t mean he has the right not to use CRM. This relates to the discipline, accountability, and control that sales management must exercise to succeed.

The next phase is to set quarterly data-cleansing objectives. This means sales leadership defines new data-entry and data-collection goals, such as adding one more title/contact name to each account or correct email addresses for all names in the database. This phase of CRM could also be used to cleanse old and non-active sales opportunities.

How to Avoid CRM Failures

Successful sales leaders use CRM to also enhance sales culture and improve all aspects of the sales and marketing organizations. In many CRM applications, sales management is aware only of the “historical element of their salesperson’s activity or business opportunities. Creating a forward-looking perspective by including account planning, territory business plans, and development programs are all important elements in creating a successful CRM implementation.

CRM applications can assist sales management in achieving the right culture. But most sales managers are promoted to their positions having no training, limited exposure to successful sales management systems, and limited opportunities to be mentored. They rely on limited experience, and they simply do not know how to use these applications effectively.

The element most often overlooked by new and even experienced sales managers is an understanding of their individual team members’ personal goals, skill-development requirements, and business-development needs. Sales management must focus on building individual salesperson creativity, helping their salespeople develop territory or account business plans, and setting standards of achievement. By adding process and commitment, sales management invokes each salesperson’s personal commitment, accountability, and emotional buy-in to achievement.

The role of sales management is to create a culture in which salespeople feel free to carefully establish strategic and tactical objectives that directly impact their success. This belief that they have created their plan for their own territory and accounts heralds an environment that fosters self-managed sales teams.

By adding the element of planning with CRM applications, sales leadership will have a much-needed higher degree of implementation success. When salespeople believe they’re personally accountable for achievement based on their mutually agreed upon account or personal business plans, they then view CRM as a tool to achieve their plan rather than a product that sales management uses to track their activity.

What’s truly required as a long-term solution is for companies to implement effective personal- and business-planning systems. These types of commitment systems will aid salespeople in more effective execution, as well as provide a process or system for the sales manager to effectively coach, mentor, and manage members of the sales team.

An online sales management system—versus a salesperson/pipeline view of CRM—enables a quick and easy way to review the effectiveness of previous tactics against the strategic plan. It also makes it easy for salespeople to refine their plans each quarter or whenever factors like new or discontinued services require revisions. An easy process for refining salesperson business plans ensures that longer-term forecasts will be more credible, sales professionalism will increase, and, most important, sales activities will be more proactively designed.

Proactive planning by salespeople of their own sales and marketing programs, activity goals, and personal objectives for their own general business territory or named accounts changes the landscape of sales management. The entire sales team becomes energized as they view their teammates’ plans, strategies, and tactics—and as they watch their individual achievement grow. The quarterly review of plans and actual accomplishments in a group setting becomes a tremendous training program for management, as well as for each salesperson.

Sales management requirements must be addressed in CRM systems. Sales management is more than pipeline management; it’s creating the environment for success. Acumen Management Group calls this process the Optimization Theory of Sales Management, which aligns the soul of the person with the goals of the corporation. Successful sales management must focus on all aspects of organizational and personal development, and it’s time that CRM systems provide these tools to assist sales management.

 

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