Where CRM Falls Short

Transcription

1 Where CRM Falls Short Understanding the Problem Lead Management Facts Resistance is Futile Building a Monster Building vs. Buying a Solution

2 Understanding the Problem Big and small companies that rely on leads to feed their call centers and sales teams have to deliver those leads and phone calls to many diff erent sales units at breakneck speed in order to close leads at optimal ratios. What s optimal? Responding to Int ernet leads in less than 5 minutes for B2C in most call centers. For B2B and sales that are high dollar it may be higher, around minutes. Every minute you reduce provides more probability that you will win the sale. We all know that statistics, like being the first to call a lead, increases the probability to close a deal exponentially, or that calling particular leads 6 times or more, results in much higher sales conversions. The problem is that many sales managers and marketing managers do not know how to easily track this activity, let alone give their teams solutions that simplify what needs to be done. CRM has some great functions, don t get me wrong, but most companies want something easier for their salespeople or their call center agents to utilize. Most CRM solutions are just way too complex and tedious for the average salesperson or call center agent. What usually ends up happening is the product that you pay for is utilized very little and mostly becomes a contact management solutio n with some reports that don t really provide valuable and timely information. Realistically, how many times do you have to ask your sales team to update their leads in their CRM? The problem according to many industry insiders is, and has always been, ease of use coupled with accountability. With barriers to entry lower than they have ever been, it is easy to understand that if your company is not optimizing how they manage leads, you can bet your competitors are. Most companies these days have both internal sales teams as well as call centers, and some have work from home sales agents, and franchise teams that need to access the CRM system and get leads. Traditionally, business sectors from manufacturing to financial services would push leads to these teams manually or with very little automation using a CRM solution. Optimally, your leads are being routed to each agent based on things like skill, their ability to close, percentage, weight distribution, zip code, area code, country code, and mo re. Additionally, we are expecting that this system will somehow ensure leads are followed up, when we all know that most sales people have a hard time following up past the 3rd call.

3 Do you know of a CRM system that enables the management team to easily make lead delivery changes if they spot problems in the lead routing? What about real-time reports that show which leads have not been contacted or touched? What If they haven t been responded to, does the solution ensure someone contacts the customer? These are the issues that drove many business executives to try and develop internal lead management solutions, or rely on consultants to implement their sales best practices. Many companies have spent countless hours trying to get a CRM solution to be a lead optimization and lead routing solution. CRM in most cases was built with the intention of being contact management, sales fulfillment, and a customer service tool. While all of these features are great, the problem occurs when you try to optimize how your team works with leads. With lead management the objective and the goals are clearly different from CRM activity. For instance, you don t really care if a sales person has filled out a PO, you care about what he is doing on a daily basis with the leads your company is paying for. Are they calling, are they ing, are they following up? Additionally, you need a powerful solution for your management team and a simple solution for the sales team; one that enables them to move quickly through lots of available leads while following an easy road map to improve their own sales. Sales team members will use anything if they know it s helping them close more business. My 2 year old will play with an ipad all day because it s easy and the reward is immediate. Steve Jobs explained how iphone would change the world by being both smart and easy-to-use, whereas most smart phone were smart but incredibly difficult to use. With lead management the focus is on leads, nothing else.

4 In case you haven t read the statistics about the effect lead management, lead nurturing, and lead distribution can have on your organization; take a look at these statistics: Lead Management Facts In a March 2011 an independent study conducted by the Harvard Business Review found that only 37% of 2,241 audited companies responded to their leads in one hour or less. In 2012 we conducted our own research that showed several large call centers with over 1,000 agents each increased their closed deals by nearly 20% by reducing contact time from 45 minutes to 5 minutes on average. In case you need further evidence that this is not an isolated incident don t just take our word for it. 1. Leads that are called in the first 5 minutes increases the ability to convert to a sale by 200% (Source: MIT) % of sales go to the vendor that is first to respond (Source: InsideSales.com) 3. Companies with mature lead generation and management practices have a 9.3% higher sales quota achievement rate. (Source: CSO Insights) So, based on this information every company that creates and purchases sales leads must be using lead distribution or lead management to enable these best practices, right? Wrong % of businesses claim they do not have standardized sales and marketing processes (Source: Forrester Research) 4

5 We have all heard these statistics, so why have companies been slow to adopt lead distribution and or lead management solutions with these kinds of statistics barraging corporate America at every trade show? 2. 90% of sales leads are won on the 6th or 7th call depending on vertical (Source: ClickPoint Software) 3. Of the 80% not ready to buy 79% will never be followed up on (Source: Marketing Sherpa) 4. Only 13-20% of leads are ready to buy now (Source: ClickPoint Software) 5. 80% of sales agents have given up on leads by the 3rd attempted contact 6. 79% of leads never convert to sales. Lack of lead nurturing is the common cause of poor performance. (Source: Marketing Sherpa) 7. Nurtured leads produce a 20% increase in sales opportunities (Source: DemandGen Report) 8. Implementing lead nurturing will decrease cost per lead by 33% (Source: Marketo)

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7 Resistance is Futile Why then are companies resistant to launching a lead distribution, a lead management, and lead nurturing solution? 1. It could be lack of a clear best of class solution that is easy-to-use, deploy, and adopt. It s one more piece of complicated software to roll out, right? 2. It could be that companies just figured CRM was doing a good enough job and that if everyone else was doing it, well that was good enough. Or that CRM could be slightly changed to handle this little problem. What the teams failed to realize is that CRM is already complex, and when you add lead management on top of it, you have a total nightmare for salespeople. 3. It could be time and or budget constraints, but given the statistics it would seem the other two reasons would be more likely. The biggest pain point we have seen from clients in all kinds of business verticals is that CRM just doesn t have the tools to route leads and phone calls based on sophisticated logic. Additionally, sophisticated logic is complex, often many marketers are left to wonder if the lead delivery they set up is really working as intended. Also, knowing how difficult it was to train your sales team on CRM why would you want another add-on to an already complex solution? Many companies also wonder how easy this solution will be to set up, configure, and train sales agents. It becomes even more of a challenge if you had a CRM deployment that didn t go well. Now, you are asking everyone to go through the same thing all over again. The good news is, there are lots of choices for lead management these days. It really comes down to which one is right for you. Most of the customers we talk to are most concerned with: 1. Ease of implementation 2. Ease of use Does the lead management solution meet all of the cornerstones and can we make it easy, are the main questions we routinely get. Multichannel Lead Database Lead Process Management Lead Distribution Lead Scoring Augmentation KPI & BI Lead Nurturing & Telephony Easy to Use

8 Building a Monster Recently, many software companies have changed their whole model and are scrambling to create Marketing Automation solutions to meet lead management requirements. They want to not only provide deep analytic information regarding marketing campaigns, but to also provide an all in one solution to handle lead management as well. From our analytic data, experience, and work with Fortune 500 call centers and sales teams, we believe that Lead Management by itself is one solution that should be independent from other solutions. That doesn t mean a lead management solution can t hand off closed deals to your CRM, or integrate with your marketing automation solution, in fact we have done this for most of our corporate partners. What we have seen is that Lead Management deserves its own corner office because frankly leads are the lifeblood of your business. Implementing bolted on solutions to solve a complex issue is like using duct tape to fix your radiator, and you usually end up with a Frankenstein solution. Your leads deserve better and so does your sales team. So, why would a company want to build a Frankenstein solution or try to build onto an existing CRM? Maybe they don t want to make the team learn a new system. Whatever the case, here are some of the pitfalls we offer as warnings. WARNING: CREATING FRANKENSTEIN MIGHT BE BAD 1. Likely, there is a team of developers that come and go and have been building on top of the existing system for years 2. Outages are frequent 3. Updates like setting up a new lead source will take a week and a statement of work will need to be added before IT will help you get an integration completed 4. Likely there are many manual functions like retrieving reports or importing data 5. There are most likely breakdowns on a monthly basis

9 If this sounds familiar it should. We encounter these very issues with every corporate team we meet that has built or attempted to build an internal solution. Building an internal solution is just not the core of your business. You built it because you had no other choice. You had no way to compare the cost to do it internally vs. an outside provider. If you are confused by all the different types of software; i.e. marketing automation, CRM, lead management, and lead distribution, you should be. It s a lot to take in. CORE DIFFERENCES BETWEEN CRM CRM Lead Management Ability to capture phone and internet leads Generally integrations Yes Ability to deliver leads based on Push or Pull No Yes Ability to deliver leads based on zip code, No Yes AND LEAD MANAGEMENT are very cumbersome country code, sortation, postal code Ability to create sales workflow with multiple Possible with enterprise Yes, out of the box with most lead buckets versions Ability to create status, actions, filters, and Possible with enterprise Yes move leads from each workflow versions Ability to create simple call center solutions Possible with extensions Possible with providers like Inside for call center agents for some providers Ability to nurture leads with automated Possible with many now Yes campaigns but generally with an Ability to easily integrate landing pages, Very difficult with most Sales, SalesExec, Vanilla Soft add-on third party lead sources, and marketing CRM applications Ability to score leads in real-time and Yes, many now offer Yes sources append information to leads Yes this but it seems disjointed with the ones we reviewed

10 Cost of Building an Internal Lead Generation Software Is it worth it? Well, think about the costs associated with running an internal system, not to mention the time it takes to execute a software development roll-out. You can use the Software Advice, Total Cost of Ownership Calculator, to get a better idea of what it might cost to implement an internal solution vs. purchasing a Software as a Service solution. Keep in mind the statistics we covered earlier and use them to establish an ROI based on instituting a lead distribution solution vs. doing nothing. Link to Calculator We have found many companies that spent on the low end around $200K and upwards of $3MM to build internal Lead Generation Software. You should ask yourself if you are in the business of creating leads, selling a service, selling a particular product, or building software. Yes, that opinion is slanted, but the reason is simply because we get calls from both big and small companies where building internally has not worked. We don t really get calls from companies where it all worked out. It s actually really easy to validate cost if you know a few key statistics. 1. How many leads do you currently generate monthly? 2. What is the current closed sale value? 3. What is your current close deal percentage? 4. What is the total monthly revenue generated from leads? If you take these stats and add them up you will get something like this:

11 Close Leads Closed Revenue $3,500 24% 240 $840,000 33% $2,000 23% 138 $276,000 11% $1,000 19% 38 $38,000 Lead Type # of Leads Monthly % Total Avg. Closed Deal Lead Type 1 1,000 56% Lead Type Lead Type % Total Monthly We can get all kinds of crazy and add things like monthly recurring revenue, long-term value, cost to acquire a customer, but remember that were trying to keep this simple. You create leads; lead distribution optimizes the delivery of leads. There is value in showing simply that if you are able to reduce contact time by 20 minutes, it could have a 10% increase in monthly revenue. In order to prove this you need to know what you are currently doing. If you are doing nothing you have an even more compelling case because you don t have the benchmark data to make key decisions. If you reference the statistics from our infographic, the only thing to establish is if your sales team is really working their leads at optimal levels. Before you put your neck on the line you need to know answers to these questions. 1. What is our lead nurture program? 2. What is our contact time on new leads? 3. How many times do we call leads? 4. Do we have sales best practices? 5. For external teams, do we track if they working the leads we provide? (Do we even know if they have looked at the leads, responded, or talked to them?) If you have this information it is very easy to compile and make a case that you could be bringing more bottom line revenue to your organization by implementing a better lead generation solution and lead management program to protect your investment.