CRM is powerful as tool, but can't make any sales
The evolution of Customer Relationship Management (CRM) software has truly revolutionized how businesses do business.
From the collection of key demographic data during the prospecting stage to the automated fulfillment of contracts and customer updates, the power and impact of communication has exponentially increased with CRM.
It's easy to see why, as the benefits of such a system are endless. CRM can be a sales organization's dream in automating routine activities and integrating key business functions.
As great as CRM is, however, the more discussions I have with professionals from all industries, the more obvious it is becoming that something is missing.
Generally, there is nothing tangible missing from most CRM applications like increased scalability, additional options or specific functions, provided a business purchased the proper CRM solution.
What's missing is the understanding, at the core, of what CRM is, and what it is not.
Let me explain.
There are many common pitfalls companies encounter when implementing a CRM solution, several of which are created by CRM developers and resellers themselves.
Research suggests that at least 50 percent of all CRM solutions do not fulfill a customer's needs or expectations. Often companies are expecting a CRM solution to translate into an actual sales process, and many providers position the offering as such. This is absolutely wrong, and sets the relationship up to fail unless major backtracking and re-education occurs.
Why is it wrong?
Often it's a bait and switch scenario in which providers position their offering to uneducated buyers as a total sales system. They make tons of promises but fail to mention that it is still incumbent upon salespeople to sell. Customers buy the application expecting a process, only to learn later that it's an automation tool. No matter how functional the application, salespeople must still manage the application.
A colleague of mine runs a direct sales organization with more than 200 salespeople. He tells me that he receives calls weekly from CRM vendors telling him that if he uses their product, he can eliminate his more costly salespeople.
This could not be less true because a CRM application does not become the sales process, which means it can't replace salespeople.
Now, can it help to reduce overhead or cut expenses by automating certain functions?
But this doesn't mean companies should say, "Hey, we're saving in these areas, so let's cut salespeople."
If anything, they ought to reinvest the savings into professional sales training for their people and add additional salespeople, as selling is the only activity within a company that directly generates revenue.
Recently while visiting a prominent CRM provider's Web site, I found that the company is dead-right when citing the key CRM benefit as: "Effective Sales Process Management - A Competitive Differentiator."
Note it does not read, "Effective Sales Process."
It includes 'management' because CRM can help an organization and its salespeople manage the sales process. However, it cannot circumvent or replace it.
What's really lacking is the understanding that a CRM application is not the sales process but rather just a component of it. It's still the selling skills of salespeople that ultimately determine a sales organization's success.
Accordingly, all companies should integrate the CRM application into the seven steps of the sales procedure.
This process has been used successfully by more than 250,000 salespeople from more than 3,000 companies. It's applicable to every industry, product and service. The steps are:
The initial contact. Although brief, it's critical that the prospect likes and trusts the salesperson.
This is the information-gathering where a true sales' professional spends 70 percent to 80 percent of his time. Need, authority and budget are the keys, and the salesperson qualifies the prospect and learns his needs.
- Agreement on need.
While most sales managers focus on closing skills, in our experiences I've learned that it's much easier to walk through an open door than a closed one. This makes the "agreement on need" the most important step in the sales process.
- Sell the company.
The prospect has questions and concerns about the sales company. This is when the salesperson shares all that is great about his company.
- Fill the need.
Prospects want to know about the product or service that the salesperson is recommending and the price. The salesperson shows the prospect how his product or service solves specific problems, fills the prospects needs precisely and the value the prospect will receive.
- Act of commitment.
This is the closing step in which the salesperson asks for the order. Closing requires the ability by the salesperson to overcome the prospect's fears, uncertainties, or doubts about hisproduct or service, price or time to buy.
- Cement the sale.
People buy emotionally, then justify their buying decisions logically. The salesperson "cements" in his prospects' minds the logical reasons for buying the product or service.
With a clear understanding of what CRM applications are - and are not - sales organizations can thrive with their implementation. And upon basing such applications on the seven steps of the sales process, the results of all sales organizations can increase rapidly and dramatically.
Roy Chitwood is an author, trainer and consultant in sales and sales management and is president of Max Sacks International, Seattle.