Transcript The CRM Textbook: customer relationship training

The CRM Textbook:
customer relationship training
Terry James
© 2006
Chapter 3: Sales
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Is CRM a sales tool?
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Many people think of CRM as a sales
tool. SFA or sales force automation.
Sales is considered a logical starting
point because sales people are the first
to deal with clients.
Sales people should know the client
well given the opportunity of sales
meetings, business lunches, and followups.
Some vendors with Sales Tools evolved
into CRM or 'CRM-like' products.
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Is CRM a service tool?
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Many companies feel the Service (ie.
Support) is the starting place for CRM.
Sales deal with prospects who may
never become customers.
Service deals with every confirmed
customer through fulfillment (ie. send
them the product, welcome letter,
signup).
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Do you start CRM in sales or service?
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Trick question. Either/Or fallacy.
CRM is an integrated solution
Corporate strategy – not a sales tool
About culture and people – not
technology
If you think CRM is only sales or
service, you miss the key value of CRM.
CRM is about how you think and work.
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Sales Funnel
Call 100
clients
Present 10
clients
Sell 1
client
If you want to improve these
ratios, then you need to know
more about clients before you
call them
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Sales quality
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The traditional sales funnel does not scale.
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1 sale means 100 calls
100 sales means 10000 calls
1000 sales means 1000000 calls
Too much effort
Goal is 1 call : 1 sale
Total Quality Management (TQM for sales)
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Like manufacturing, nothing is wasted.
You improve- no time or part is thrown away.
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Leading SFA product.
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Let’s look at the Siebel product, the
most well-known and successful CRM
tool.
Many people think of Siebel when
thinking about CRM.
Siebel bought by Oracle in 2005.
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Problem
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I am walking in COMDEX, the largest
computer show in the world. I see an
interesting product. I ask to speak to
the technical expert. The sales person
tells me the technical expert is busy,
can I come back in an hour. He was
very polite. How does this sound to
you?
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Solution.
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1.
2.
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Yes, very, very wrong.
The sales person should talk to a potential
client, should ask for a business card, or
name and phone number to follow-up.
The sales person at a MINIMUM should
have asked how many units are likely to be
purchased, and how firm the order is? This
sales guy may just have blown the biggest
commission of the decade. He has no clue
what business he just lost, and no way to
follow-up.
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Account number or client number
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My wife gets 5 separate letters each month
for 5 different accounts, all from the same
company.
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They could reduce postage costs by 5x by putting
all statements in one letter.
They could consolidate the statements into one
statement to show total portfolio for all accounts.
Less paper, and easier for the customer.
Why don’t they do it? Obvious win?
© 2006 Terry James
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Account or Client
T.James
-Savings
Account 05001
Tom James -Stocks
Account 09008
Have
a client
number that
Are these
3 accounts
for
shows
whatperson?
a client owns
the same
across all lines of business
T.James
Client 999003
Account 09008
T. P. James -Pension
Account 02008-23
© 2006 Terry James
10.00
Account 02009-23
9,000,000.00
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Account or Client Number
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If you don’t have a client number:
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You don’t see the complete customer value
You can make mistakes about the
importance of the customer
You will struggle to know what to sell a
customer, calling them on products they
already have.
You will look incompetent, and you are.
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The power organization chart.
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What is an organization chart?
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Org. Chart shows who reports to who
The org. chart is very handy for sales.
Ms. Big Mean -CEO
Mr. Softy -Secretary
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Mr. Mean - CFO
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The power organization chart.
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What is an power organization chart?
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This chart shows who actually makes
decisions
Mr. Softy -Secretary
Ms. Mean -CEO
Mr. Mean - CFO
Ms. Mean, the founder, is basically retired and spends all her time
in St.Kitts with the cabana boys learning to surf.
Mr. Mean, her son, gets a big salary, but after one fight with Mr.
Softy, gave up control. Softy makes all the decisions.
Sales time spent trying to talk to Mr. or Ms. Mean is wasted time.
Talk with the person making decisions, and chart the actual
power.
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The new car
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The new model just arrived.
Same performance as a Porsche, but
half the cost, and exciting colors and
design
A brand new customer arrives for their
appointment. You are the sales person.
What do you do next?
Class discussion
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Sales Process
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Preparation
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Needs
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If you know your job, you did work before the
customer arrived
Past purchases, credit, service, complaints
Ask the customer what they want
Don’t start by telling the client what you have until
you know what they are looking for
Sale - should be easy after previous work
Follow-up
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A good sale never ends with the money
You check back, you ask for feedback, deepen the
relationship.
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Sales Process
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Sequence of steps
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Guides salesperson, provides training
Forced compliance through compensation
and commission tie-in.
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Big issue with CRM is sales people don’t use it
They will if the commission is tied to CRM
Tracks sales goals.
Generates standard letters, leads, every
element of the sales process.
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Know your customer (KYC)
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Know everything you can about a client to
make the best decision for them
360 degree
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All products, all divisions, all subsidiaries
House holding?
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You understand the relationship and business
value of everyone in the clients home. Parents,
children, spouse,…
If the client is happy, why not sell to her parents
or children?
Can you claim to know a client and know nothing
about the people she lives with?
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Client Profile
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Shows almost everything on a client
How do you get the profile?
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You cannot send out a 100 page survey as
no client will spend the time or give away
that much information
You collect the profile every time you talk
to the client
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Make it a goal to learn one new thing and
record it each time you talk with a client
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Segmentation
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Level 1
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This is the top 20% of clients that make 80% of
your profit.
Level 2
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Perhaps you should have 3 or 4 segments?
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Top clients, worst clients, 2 middle groups?
Micro-segmentation
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If 2 is better, and 4 groups is better still, then how
about 100, 1000, or 1 million groups?
Yes, treat every client as an individual is better.
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Micro-segmentation
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The idea is 10 million clients should have 10
million segments
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Every client has their own strategy
If you pull the profile, there will be a pre-planned
strategy on what to sell this specific client next,
and how much she will save.
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Also a pre-planned question to ask next so you
improve the profile?
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Overdraft protection is next service, at a discount?
Are your kids accounts with us as well?
We offer free savings accounts to children of clients
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Credit scoring
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It is amazing how much time sales staff
spend with clients who have no money
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A real estate agent spends 2 days driving
around a family who are living in a dream
rather than saving for a dream home
A boat saleswoman is wasting time on a
couple with too many debts. They need a
boat to sink their debts, not a new
purchase.
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Demographics
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Demographic studies can show you the
income by town, or neighborhood.
You can see ratio of male to female, the age
distribution, and many other factors from
census, government statistics, and other
demographic studies.
If you are doing cold calls, why not call
people that fit the profile and target
demographics for the new product?
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Sales Platform
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Metrics
Lead management
Mobile sales
Channel management
Contact management
Configuration management
Standard forms
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Metrics
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Your sales platform should track the targets,
and you need targets for sales management
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Cold calls – so many a week
Referrals – so many a week
Follow-up – so many a week
New sales – dollar amount
Sales staff have targets, district managers
have targets as a summary of their staff,
country managers as a summary district
managers.
You can pull from the sales system where you
are for at any given moment on targets.
© 2006 Terry James
Lead management
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Sometimes called Opportunity management.
Make sure no opportunity gets missed.
Monitor leads and turn them into deals.
Automatic routing to the right person based
on credit, qualifications, referrals, etc.
Full cycle
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leads vs. orders vs. close rate = productivity of
sales
Advanced lead management tools can
calculate the probability of the sale.
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Lead management questions
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Where in the pipeline do we lose the
most sales?
How many sales appointments did Bill
cancel?
What percent of leads are in Chicago?
How long is the median sales cycle?
These are largely sales questions, and
the tie to CRM in connotation only.
© 2006 Terry James
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Mobile sales
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Sales using mobile devices get information to
the customer quickly.
The key for CRM is have client needs drive
your sales technology, not have the tail wag
the dog.
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Technology is not a panacea.
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If the client wants faster response, provide mobile
updates to the sales team where needed.
People are the key, right customer, right product,
right time, right sales person. .
Sales should focus on sales, CRM should
focus on the whole customer experience from
sales to delivery.
© 2006 Terry James
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Channel Management
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What is a channel?
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What is the client preference?
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Use it
Don’t send emails to clients who like the phone.
Integrate
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Email, Internet, Phone, Face-to-face
Input on one system should be available to all
systems, or you can’t service the client properly
with missing, recent information.
Consistency
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To avoid looking incompetent, reversing impact
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Contact management
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Clients hate repeating the same story giving a long
history that wastes client time.
As you hear the story, and shuffle the client
around, you are wasting company time and money.
Keep a good log of past client calls, when, what,
why.
If you can see past promises or interests, you can
talk in a context that can show a relationship.
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Did you want to complete the purchase you discussed
with our team last week, Mr. Nixon?
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Contact management - 2
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If you show the last 5 calls, you can see a
client may have a persistent problem and so
handle it with more care and sensitivity.
With good contact management, the biggest
company can appear to carry a conversation
from one service person to the next like a
small company.
Show at least the last 5 calls, and provide a
way to drill into more detail if needed.
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Class discussion
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Can you think how a contact manager
could be useful?
Discuss in a small team, then share
with the class?
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© 2006 Terry James
e.g. Change address
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Needs
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Selling to needs is critical to CRM.
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Old model, product focus
New model, client focus
If you are not aware of needs, you
could be wasting your time for hours?
Know the psychographic, cultural,
demographic profile. Do homework.
Needs come first, products later.
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Configuration support.
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Configuration for some products can be
complex
What options go with what model, how much
do they cost, is their bundling discounts, are
their incompatible matches, does it change
shipping dates…
Make it very easy for a client to find,
configure, and price combinations without
mismatches or errors.
This is not really a CRM tool, but can help
understand requirements.
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Standard Forms
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Pro
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Con
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Provide a consistency to client communications
Speeds up responses.
Constantly improving from experience
May not be a perfect fit
May sound like a form letter
Microsoft Word can tailor documents with
fields for names and other unique items so it
looks like it was individual crafted per client.
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Summary
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Sales is important area, but every department is
important to CRM.
Many accounts, but one client number
SFA (sales force automation) and sales funnel
Build a power organization chart
Know your customer
Determine needs first, then products.
Segment, segment more, segment more,…
Credit score, demographics, lead management,
channel management, mobile sales, configuration
management.
Contact management critical to sounding and acting
in a relationship where you know what the client is
doing with the firm.
© 2006 Terry James