The tyranny of choice in CRM configuration

If you are in the market for a CRM solution, you will ignore Salesforce.com at your own peril.

Salesforce.com has an awesome product; flexible, customizable for many uses and markets. Salesforce has a plethora of add-ons you can pick from their partners (Appexchange); to enhance the product functionalities.

Salesforce changed the way we think of buying and using enterprise software, particularly sales and marketing automation products; all others who have followed Salesforce in that space have been largely following the same model of configuring and pricing their solutions. You pick what you need and pay as you go; what can be better than that?

I am not so sure the actual experience will match the expectation though; especially if you are a relatively small business with less than 20 sales/ marketing users. You see, most small businesses are, well, small. You are assuming that a surfeit of choices in the configurations, menu customizations, add-ons, license-choices etc work to their advantage. Nothing can be farther from the truth. I looked through the list of features from a few leading CRM vendors and I am sorry to say, I could not understand the relevance of many of the specs in a small business environment. See Sugar, Salesforce and Zoho. All the SAAS CRM offerings seem like the small business focus is an afterthought; so, the tendency to over-profile, over-log (have a workflow for everything) and offer an abundance of choices for customization.
What an SME or its employees want is to focus outside and not spend a substantial amount of time on logging the daily grind everyday. None of the CRM systems I have looked at, offers a respite from this workflow induced drudgery.

Let me use primarily Salesforce as an example of how the configuration and pricing works in the SAAS based CRM landscape.

An entry level package is offered for virtually no price at all (Salesforce offers one for USD 5 per user licence per month) with little better functionality than Outlook contact manager. Okay so, it is cheap. It is not apparent to me, however, if it does anything useful.
This is available for 1-2 users; more than that and you need to move to a higher priced license, costs 25 USD per user per month but will not add much to functionality except integrate with a webform for lead capture, tracking sales opportunities and running sales reports. Upto 5 users only. Hmm..
You want to add email marketing and a facility to send unlimited emails and remove restrictions on the number of users? No problems. There is a package at 65 USD per user per month. This also does Campaign Management (though, this seems to be a limited time promotion valid till 31st Dec, 2009).

Let’s not worry so much about the Enterprise (USD 125 per user per month) and Unlimited editions of Salesforce (250USD per user per month) as I do not expect small businesses to be interested.

Now, each of the above packages come with severe storage limits. When you pay USD 65  (Rs 3200/ approximately) per user per month; you are allowed only 20MB of usage space per user. Pay more to upgrade storage as your contact bases increase. How does your storage needs increase? Everytime you use a CRM system, you store details of the transaction including, call logs, literature, quotes.

And, what do you get for the money? Confusion. A list of features you are never going to use; a bunch of workflows which will ensure that you spend all your day on the software rather than meeeting customers and getting the job done. Bah!

Two things to monitor in social media: CRM perspective

How CRM can absorb messages from social media
A quick follow up on my last post; not least because I want to bring the focus back on CRM and also touch upon what is the current rage; what is sometimes very loosely defined as linking social media with CRM.

At a very philosophical level; I do not see a contradiction between the two ways of connecting with customers. CRM helps in profiling your customer base so that you can tune your message and value propositions as close to the actual needs of the customer as possible. It recognizes, through its alter-ego, Closed Loop Marketing (CLM) that:
1. Customers at different stages in the buying process/ awareness of your products and solutions have different information needs.
2. An “installed base” customer needs and wants to be treated differently than someone with no “history”.
3. A successful sale (or a botched one!) is not an end but the beginning of another sales cycle.

The social media landscape conjures up visions of many customers, individually or as part of a group, talking and sharing experiences with direct and indirect bearing on your product, market or technology. It is as possible to have a one on one conversation or participate in a large group. Here is a very interesting post that shares some of the exciting possibilities in that space. I have talked about some of the challenges before,  here and here (CRM 2.0: Limited to campaigns?).

When you say integration, which way is important for you?
Simple question: do you see value in capturing the conversations to enrich the customer profiles in the CRM system or would you rather use social media to engage the contacts in the CRM system who need more long-term hand-holding, information sharing and so on?
If your answer is the latter, it is relatively easily done.
If your answer is the former, I have further questions:
Are you capturing incidents (meaning someone mentioning you or your product in a blog or a tweet) or are you interested in knowing what they said and using that information to influence your customer profiling?
Both are useful; the latter more so.
Making changes to the CRM application:
- creating fields to capture incidents: easy; automating the capture: not easy, but not impossible.
- creating fields to capture actual snippets of the conversation: easy; automating the capture: not at all easy, but not impossible either.
What to make of the information thus captured? Well, the “customer profile” is a lot richer now and you now get to see, what your key contact is concerned about in addition to the limited interactions with your company or product. You can mine this data within your CRM application and turn up leads, potential issues or just rich engagement opportunities.

Hunting, Farming and CRM

We all know the mindset difference between hunters and farmers. “Hunters” have a strictly “one-time engagement” model with their prey as to salesmen or companies who have modelled their business on hunting. “Farmers”, on the other hand, cultivate their customers, their accounts and take a long term view of every relationship.

Both are useful. And, at different stages of the company, one role is better suited than other. It is however safe to say that as in the history of human evolution, farming follows hunting. And, it is a rare business model and in my opinion, even rarer to find a successful one, which stops at hunting.

Closed loop marketing: it takes a lot of effort to convince a customer to buy from you the first time. As you move the customer from a state of non-awareness to indifference to active interest to trial and purchase, it is important to understand that each purchase is potentially the door-opener to another, future opportunity.

So, even if you are a month old start-up to whom new business from new contacts is life-blood, I hope you treat your first sale as an opportunity to gain a customer for life. And, what better way to do that but to invest some little effort to log what you know about the contact, about his/ her employer, about the transactions that you have with her and her company in a systematic, easily retrievable way?

Memory is short; you are better off trusting a computer program to do that. That, in a nutshell, is all there is to CRM. A CRM system/ software is an important facilitator to close loop marketing. Happy farming.

Developing an automatic “lead recognition” algorithm

Why automate lead-logging in a CRM system?
We have made the following points repeatedly in this blog:
1. Marketing and sales need to feel that they have joint ownership of the entire business process, from creating awareness in the prospect to generating and capturing prospects’ interest (lead and opportunity) to taking it to close.
2. The primary job of a sales or a marketing guy is not to spend time on the CRM system in use. Their primary focus is the customer and the support systems like the CRM systems should track the customer activities that are relevant to be pursued.
3. A lead happens because of the efforts (some seen and some unseen) of many people in the organization and many activities performed. From the client side, more than one person is involved and their roles in the purchase process need to be logged along with the lead that they influence; preferably automatically.
4. Customer activities are the activities that are more relevant; different activities have different weightages, as any seasoned sales manager will tell you.

A lead is NOT an individual or a contact. However, a lead arises out of actions taken by one or more contacts working in a buyer organization (account).
There are 2 parts of the lead-scoring algorithm:

(1)     Fitment score: Assigns a score to the appropriateness of the target market, account and contact. For example:
(a)     If your product is primarily sold to the automobile industry (let’s say you make automobile painting machinery), then enquiries received from a related industry (lifts, washing machines) will not have a high score.
(b)     Let’s say you make forklift trucks of capacity appropriate for large structures (100 tonnes or above). If a small building contractor called you, you may give that inquiry very low score.
(c)     If your product is primarily sold after a long evaluation cycle by first working with your customers’ R&D department, then cold inquiries received from the purchase department will get a low score vs a high score if someone from the R&D department made the initial contact.

A fitment score is usually arrived at from the “profile” data of the target account and contact. In the absence of the “Interest score”, this is of use only to determine usefulness for targeting these contacts through marketing activities.

(2)     Interest score: Assigns a score to the logged activities of contacts pertaining to a product/ product category, within an account.

FS:  score of industry  (related to the product/ category) * score of account * score of contact profile

FS is a static score, based on profile of the account and contact related to the particular product/ category.

IS: (Interest score) is the sum of the scores of all activity scores related to a product or product category in a particular account.

For an account, we have to count as lead for a product or product category if IS is greater than a certain threshold provided FS is not less than a certain threshold.

Now, for a lead to be counted, we have to define necessary and sufficient threshold values for both FS and IS. This will most probably vary from company to company and will need to be defined and refined per actual situation and experience.
Some definitions:

Activity: Something that the customer does which we log into our system. Each activity is pre-defined and has a value assigned in our system.

Campaign activity: Activity initiated (typically by marketing department of company) targeting multiple contacts over multiple accounts to get them interested in a product or product category.

Sales activity: Direct contact by sales executive or his boss with any contact in an account.

Why activity value: A customer through his actions demonstrates his propensity to buy. It is rarely one action, but many actions which add up to a strong “buying signal”. There are activities, as experienced sales managers know, which are strong buying signals and there are those which are weak or even negative buying signals. In real life, if a customer sends a lot of signals, then the probability of a deal is high. So, we assign values to significant activities undertaken by the contacts.

Relative weightage of activities: Customer activities have normally more weightage than any activity done by us. However, there could be some activities done by sales which may have overriding weightage.

What do you think? Makes sense?