Customer Relationship Management (CRM) is the key business application that enables sales representatives and sales management to track the activities with customers and prospects. When used properly it is a very powerful tool. Unfortunately, CRM deployment success rates are discouraging to say the least.
To increase your odds of having a successful CRM deployment, in order to reap the benefits of the CRM system, the three critical success factors are:
- Executive support and overview during both the implementation and post go-live
- Record and Maintain Data that is accurate and timely
- Clear process rules, consistently followed by the sales team
If ANY of these three elements above are not present, at time of CRM launch, you should defer the CRM deployment. Given their criticality, let’s take a closer look at each of these success factors.
Executive Support
While most enterprise-wide system projects require executive support to be successful, this is especially true of CRM deployment projects. In fact, you should not begin evaluating CRM systems unless executive sponsorship from the CEO, COO or the VP of Sales is in place.
Without the executive oversight and support, the company will be fighting an uphill battle with little chance of success, because sales reps will most likely resist using the CRM system for a variety of reasons including:
- Input into CRM means less selling time
- Some sales reps will lose their ability to “play it very close to the vest”. This will reduce their chances for them to feed their egos by being viewed as heroes, because their ability to close deals that were not forecasted will be greatly diminished
- Sales Reps will have little desire be learn the value of a, properly deployed, CRM is to the company and to themselves. If this vision is not embraced by the sales team, CRM will be viewed as nothing more than bureaucracy that management decreed to control the sales team
Data Integrity
One of the most common and frustrating problems encountered with CRM systems is the lack of data integrity. Data integrity issues that typically appear are a) multiple instances of the same company appearing in the database, b) data entered with minimal context or timely content, and 3) data not being maintained.
Multiple instances of the same company occur, because a formal agreed upon a naming convention is not in force. For instance, without a formal agreement, four different accounts (Acme Products, Acme Products, Inc., Acme Products, Inc and Acme Products, Incorporated) might be created for the same company. The system will treat each account as separate and distinct accounts. Sales rep notes, attachments and even account contacts could be scattered across the four accounts. Think of the CRM has an obedient soldier; it will do exactly as instructed. It doesn’t know or even care the four accounts are really the same company. It doesn’t matter to CRM, because you told it, right up front, these accounts are separate and distinct. It is following your instructions perfectly. Good job, Soldier!
If the information is scattered across different accounts, the likelihood a sales rep or management will make an inaccurate assessment of a prospect increases, because they didn’t know important information was recorded in Acme Products instead of Acme Products, Inc. This will probably result in ineffective plans and actions had all the notes been recorded in the one true account.
Just as important, a flawed assessment of the prospect will likely be reached if notes are not recorded accurately with proper appropriate detail or not entered in a timely manner. If a culture of data integrity does not exist, the data will be become stale over time and information that was once accurate, can no longer be relied upon. Data integrity issues will cause users to resist using the system and by definition, the benefits derived from the CRM will be severely diminished.
Clear Process Rules
Management’s ability to interpret the entire sales pipeline, is driven by two variables; the prospects’ location in the sales cycle and the probability an opportunity’s estimated final quote amount to become revenue. The communication of the meaning of these two variable and subsequent enforcement of the application of categorizing the prospect’s location in the pipeline and the manner in which the probability percent is determined, is the only way the sales pipeline will be accurately assessed, across the management team.
As an example, during the CRM implementation process, the company will need to define its sales cycle into steps/stages; i.e. how many steps, in the sales cycle, will there be before the account reaches the opportunity stage? These steps determine the categorization of an account; i.e. at which step, in the sales cycle is the prospect?
The opportunity stage is typically the stage where the total dollar amount of the opportunity, is a variable to forecast revenue. If the likelihood of winning the deal is small, it is up to management to decide if the low probability warrants the account to be categorized as an opportunity. There is no single right answer. It all depends how detailed management wants to monitor and review the account as it marches down the sales cycle path. However, consideration must be taken to account that additional steps in the sales cycle equates to more time the sales rep will have to change the stage and the more categories management will have to review. At some point, too many steps in the sales cycle becomes counterproductive and frustration for the sales rep; less time to sell due to maintaining the accuracy of the stage.
Strict enforcement of the categorization rules are required, else different sales reps will use their own set of rules to determine a prospect’s location in the sales cycle. Different ways to categorize prospects will immediately reduce the assessment accuracy of the pipeline.
Summary
There are many benefits of having a successful CRM system deployed, but unless close attention is paid to the three key success factors, it will likely result being an expensive failure with consequences for those leading the project.
