from blood, brains, and beer...

In his improbably entitled autobiography ‘Blood, Brains, and Beer’ David Ogilvy quoted Louis XIV: ‘Toutes les fois que je donne une place vacante, je fais cents mecontents et un ingrate.’ – every time I give someone a job, I make a hundred people unhappy and one person ungrateful. Neither party was talking about the CRM vendor selection process of course, but it’s a very appropriate observation nonetheless.

Mastering the complex sale again...

Well the invitation to vendors regarding show-case sites didn’t illicit an overwhelming response, though that could be a reflection on the breadth of readership rather than anything else. That said I did get an unexpected email from Jeff Thull the other week after my note about his ‘Mastering the Complex Sale’ book, which was a timely reminder for me to offer a few thoughts based on actually having read it in its entirety rather than the first few chapters.

The fact the book is now liberally scribbled over is a pretty tell-tale indication there’s a lot of useful material. As I mentioned before the book is predicated on the principle that ‘customers are not experienced in diagnosing complex problems, designing complex solutions, and implementing complex solutions.’ which entirely fits with what we see in our day to day work as CRM consultants. Given that the wealth, health, and ultimate survival of organizations will increasingly come down to their ability to apply the myriad of technologies at their disposal effectively, this observation is not without significance.

For the sake of brevity in this post I’ll pick up on just a couple of other strands from Jeff’s work. The first is the emphasis on performing a formal cost calculation to quantify the benefits the solution will provide. Most salespeople shy away from this, or perhaps aren’t capable of doing it. You can get away with this to some extent in boom times, but in the tougher trading environment we are starting to experience this I suspect is going to be increasingly critical.

The second aspect I liked was what I’d characterize as Jeff’s depiction of the ‘noble’ salesperson who only sells to those that can truly benefit from the solution, who will walk away if they can’t provide the most appropriate solution, and who sticks around when the sale is complete to ensure the promised benefits are actually delivered. This is in stark contrast to the sell at all costs sort-term-ism that typifies the IT industry today. I suspect what we will see in coming years is a new generation of IT vendors that differentiate simply on their proven ability to deliver genuine business benefits.

Ultimately I guess I find Jeff’s book compelling because it mirrors much of our own raison d’etre – i.e. to bridge the gap between CRM technology and ultimate profit. And while on the topic of CRM, Jeff did note that he had plenty to say on the topic of CRM failure in his book ‘The Prime Solution’, so once I’ve finally cracked Michael Porter’s ‘Competitive Advantage’ which has stared at me reproachfully from the bookshelf for way too long, I’ll be interested to see what he has to say.

Why independent CRM consultants do more than help you choose software...

When people think about independent CRM consultants they tend to see us as advisors on technology selection. While this is a key part of what CRM consultants do, in reality we tend to be involved throughout the implementation cycle and add value in ways that may surprise the uninitiated. The following article sets out how.

First of all though it’s probably wise to add some definition to the term ‘independent CRM consultant’. I tend to see the role of the consultant as helping organizations select and implement CRM technology in a way that generates business value. For reasons that are beyond the scope of this article CRM technology and business value have not generally gone hand in hand. I’d suggest perhaps 80% of CRM implementations fail to generate more than marginal value.

While we might share the same name it’s important to point out there are two very distinct types of ‘CRM consultant’. There are those who focus on the customer experience, and there are those that help organizations implement CRM technology. If it helps clarify the difference; the customer experience can often be improved without implementing CRM technology, and CRM technology can generate all sorts of benefits and efficiencies for an organization which might have nothing to do with the customer experience. In terms of this article I’m talking about consultants that work in the later camp.

It’s also worth noting – as it’s a somewhat abused term - independent CRM consultants are by definition independent, they don’t have software to sell, are vendor agnostic, and receive their compensation from the organization buying the software and not the seller.

Traditionally the CRM consultant has been heavily involved in the technology selection process because choosing the right CRM software has never been the easiest of tasks. There’s a lot of technology options, and then throw into the mix the marketing hype, the claims and counterclaims of competing salespeople, and the knowledge that the wrong selection can doom a project; it’s no surprise that organizations turn to the independent consultant for help in making the right choice.

However this is only part of the consultant’s role. There are five other key areas where independent CRM consultants are looking to add value:

Feasibility and planning – consultants are helping organizations determine whether a CRM project makes sense in the first place and in what form. This involves helping define the business case, estimate cost and resource requirements, evaluate different options and identify key implementation considerations so that organizations can make a dispassionate assessment whether to proceed, and can structure a project in a way that the potential return on investment is maximized.

Requirements definition – defining and documenting business and functional requirements for a CRM system, and helping organizations re-engineer or introduce new business processes in order to benefit from the technology, can be a demanding process. It is also essential to being able to make the right technology choice, and has a big impact on the speed of the downstream implementation. However it’s not easy to do unless you have a good working knowledge of CRM technology, which means it’s often an area best performed by an outside specialist

Negotiating pricing and terms – while many organizations would feel they are strong negotiators, CRM consultants have very specific knowledge as to what’s achievable through negotiation with each vendor, and perhaps more importantly can review implementation estimates to spot any excess fat. It’s not uncommon for a consultant to reduce the initially quoted price very significantly, and clients can get a very big return from a very brief engagement.

Implementation - the implementation phase is also an area that consultants are increasingly playing a role, either as project managers, or more commonly mentoring the client’s project manager, who may not have extensive experience of managing CRM projects. While the instances of outright project failure are rarer these days; budget overruns, and missed live dates are common place, which means that companies look to get specialist advice to keep things on track.

Working with existing systems - the big growth area in CRM consultant involvement has been for organizations wrestling with the decision as to whether to replace an existing system. Systems often under perform as a result of a poor implementation or user adoption issues, rather than a fault with the underlying technology. Re-implementing existing software can be considerably cheaper than buying a new system, but organizations often need outside guidance as to whether they are ‘salvageable’. For those that choose the re-implementation option, getting help ensuring ‘it’s done properly this time around’, is also common theme.

While many may continue to associate independent CRM consultants primarily with the vendor selection stage, many organizations are finding we can add value throughout the life of the system. It may not be the most common approach to implementing CRM technology – most organizations will continue to work solely with a CRM vendor- but for many, working with an independent consultant is proving the key to unlocking CRM’s often elusive promise.

It's not the done thing old chap...

I’ve been doing the CRM equivalent of wearing neon pink in a Wimbledon final, coughing when your opponent is about to take a vital putt on the 18th, or bowling underarm in a test match, in other words going against protocol. More specifically we’ve been asking for reference sites before we’ve even started a formal vendor selection process. It’s not perhaps something I would normally do, but one of the key sponsors for a forthcoming project is a great fan of learning from others, so we’ve been asking prospective vendors, if they’d like to showcase their talents and take us to one of their sites.

The response has been interesting – rather like a new mother who has been informed their baby is rather ugly – in effect ‘it’s not the done thing old chap’. Ask to see some software and you are likely to get trampled underfoot. Ask to see some real-life examples of the application of technology to beneficial effect and the room goes rather quiet.

Traditionally site or reference sites are generally an afterthought in the due diligence part of vendor selection, a rubber stamp exercise long after the actual decision has been made. They shouldn’t be, but that seems to be the accepted norm.

Which raises the question why are vendors so squeamish on site visits. There are, I suspect a number of good reasons. Firstly it tends to involve calling in favours from customers to host these events, and secondly you can never be quite sure what that customer might actually say on the day.

That said, these are manageable issues, I’m a poacher turned gamekeeper don’t forget, and in my previous lives I went to great lengths to ensure we had both good showcase sites and that customers were prepared to host visits. If we were negotiating terms on a project we would make sure that if we had to give something away we got something in return, often a commitment to host a certain number of visits per year.

I suspect the real reason is – and yes I’m going to hark back to a familiar theme – that a lot of vendors don’t actually have that many good, slick, revenue enhancing sites to showcase, for the reason I frequently go back to in this blog, that very few CRM implementations manage to bridge the gap between technology and a revenue enhancing system.

So, if you are a UK vendor and have sites that showcase you as a stand out implementer of high return CRM technology, then feel free to contact me, I have a large membership organization who might be interested in talking to you.

An unhealthy influence...

Nice piece in BusinessWeek entitled ‘Just say no to drug reps’ about a programme to help doctors to resist the influence of pharmaceutical salespeople. The article cites some interesting research:

'A doctor who spends just one minute with a sales rep typically ends up prescribing 16% more of that rep's product than he or she was prescribing before. And a four-minute encounter is likely to prompt a 52% jump in prescriptions'

It would be very interesting to get similar research about how influential IT sales people are. My own feeling is that the majority of major IT investments are made on the basis of trust/rapport with the salesperson rather than an un-influenced analysis of functional fit. Sadly something many live to regret.