Turbocharging Sales with Better Leads and Next- Generation SFA

Transcription

1 ebook: Best Practices Turbocharging Sales with Better Leads and Next- Generation SFA Moving beyond Traditional Salesforce Automation By R Ray Wang Founder and Principal Analyst Copy Editor: Maria Shao March 10, 2014 Produced exclusively for Constellation Research clients

2 Executive Summary Traditionally, marketing and sales organizations often have worked in silos. Studies have shown that such lack of alignment results in significant lost revenue potential and decreased sales effectiveness, as sales representatives spend time sorting through leads that are not ready to buy and as marketing teams fail to directly link marketing investments to revenue opportunities. Furthermore, sales reps effort to cross-sell or upsell is often compromised because they lack insights into customer preferences and complete buying history. Today, with the advent of social media and mobile technologies, the amount of customer data available to businesses has exploded exponentially, presenting a great market opportunity for companies to learn about their customers, create effective and engaging strategies and programs and, ultimately, increase sales and marketing effectiveness. This report aims to provide a high level discussion of best practices in today s digital world and what organizations must keep in mind in order to fully take advantage of the data growth coming from a combination of social, mobile, and cloud technologies. With the right technology and processes in place, companies can dramatically increase revenue potential by integrating marketing and sales teams using modern marketing and salesforce automation software. This paper provides insights into two of Constellation s primary business research themes, the Next-Generation Customer Experience and Technology Optimization and Innovation. Understand the Five Pillars that Drive Digital Disruption in Sales Since the inception of the Fortune 500 in 1955, 87 percent of the list has been merged, acquired or gone bankrupt. Since 2000, the shift was 52 percent. The digital disruption that began in late 1990 s has increased the pace of change since 2000 and led to a shift in how sales must act in methodology, staffing and enablement. Five technology pillars have contributed to this acceleration of change in the digital world (see Figure 1): 1. Mobile provides the interface of choice. The world has moved to mobile first. Mobile first is more than a device; it s a shift in thinking. While there is more power on most mobile devices today than was used to send a man to the moon, mobile is about a shift in how people access computing power and engage in new experiences. 2. Social connects both the personal with the corporate. Social provides the glue to relationships that transcend space and time. As the lines between work and life blur, social brings a personal network to the enterprise upon the user s choice. Collaboration increases across all roles and across all processes Constellation Research, Inc. All rights reserved. 2

3 3. Cloud enables both computing and storage on demand and the ability to constantly innovate. Computing power accessed by mobile must come from the cloud. The cloud serves as a large server and storage in the sky for any time, anywhere access. New tools, methodologies and features can be enabled in a constant stream of improvement as sales approaches evolve. 4. Big Data and analytics bring competitive advantage to the sales team. Big Data and analytics provide the tools to democratize decision-making. The path from data to information should lead to insights that generate decisions. This datato-decisions pathway is about driving insight to action with all these new sources of structured, unstructured and data feeds. Salespeople gain insight into the propensity to buy among prospects. 5. Video and unified communications enable collaboration. Video and unified communications accelerate collaboration and knowledge sharing. Video s power is its ability to convey much information in a very short period of time. Video also adds context and personalization to a decentralized salesforce. Figure 1. Today s Sales Teams Must Embrace the Five Pillars of Digital Disruption Each pillar on its own brings tremendous change. However, the convergence of the five pillars provides the biggest shifts in not only how new business models are created, but also how disruptions accelerate in a world of massive change. These shifts have forever changed the future of sales Constellation Research, Inc. All rights reserved. 3

4 Embrace the Shift in Sales Automation or Fall Behind More than just a shift to cloud computing, the advancements in salesforce automation (SFA) come from lessons learned over 20 years of customer relationship management (CRM) deployments. As the world has moved from pre-digital to post-digital, five larger trends in SFA adoption reflect a shift from (see Figure 2): 1. Sales managers to salespeople as the key design point. SFA systems originally served the sales manager more than the salesperson. Today s systems provide salesperson empowerment as the critical design point. Systems provide insight and resources to enable sales success. 2. Data entry to data delivery for system optimization. SFA systems originally forced salespeople to waste time entering data so that managers could forecast revenues and manage quotas. While reporting to management is still provided, today s systems provide valuable insight into account history, upsell opportunities, cross-sell opportunities and customer sentiment and satisfaction. Other key capabilities include better travel and expense management as well as mobile access and marketing integration. 3. Individual success to team success in sales enablement. Previous systems overweighted for the lone-wolf salesperson. As deal complexity increases inside large accounts, systems now improve collaboration tools to strengthen deal success at the team level. Team selling, improved compensation models and greater visibility into interaction history empower sales teams. 4. Best-of-breed point solutions to best-of-breed suites. A proliferation of CRM solutions in the cloud era harkens to the early days of CRM when sales, service, marketing and commerce solutions remained independent until a series of mergers and acquisitions brought together best-of-breed suites. Now in a highly fragmented cloud world, customers face the same challenge in dealing with a plethora of disparate best-of-breed solutions. In order to gain the next level of efficiencies, customers seek greater integration of best-of-breed point solutions and best-ofbreed suites. 5. Massive IT involvement to minimal IT involvement in system usage. Previous era SFA systems required massive investment in hardware, networking, installation, training, upgrades and maintenance to adapt the system to changing business requirements. Today s systems require minimal IT involvement due to cloud deployment models. More of the SFA budget can be invested in enablement and configuration instead of wasted on installation and deployment Constellation Research, Inc. All rights reserved. 4

5 Figure 2. Shifts in SFA Stem from a Post-Digital Transformation A Holistic Sales Experience Must Include Better Coordination with Marketing Sales and marketing must work hand in hand to turbocharge sales in today s digital world. Unfortunately, five key barriers impede success in sales-marketing collaboration: 1. Marketing and sales incentives massively misaligned. Marketing incentives tend to focus on the year, while sales incentives move quarter to quarter. Marketing metrics tend to focus on customer engagement while sales metrics are based on revenue. New metrics such as conversion rate optimization, cost per qualified lead, cross-sell rates and upsell rates can help improve joint metrics. 2. Lead quality often stinks is an understatement. Most marketing organizations fail to score leads and improve the quality prior to sending the leads to the sales teams. Poor quality leads to the sales team increase frustration and wasted resources. Marketing must improve lead quality before sending them to sales teams. 3. Lack of customer insight hinders upsell and cross-sell success. Poor marketing and sales coordination often leaves a void in understanding the customer. Interaction history and visibility into customer interactions can improve 2014 Constellation Research, Inc. All rights reserved. 5

6 success in identifying opportunities with existing customers. Transparency into a client account can help resolve the sales-marketing blame game. 4. Existing analog methods of marketing are failing despite continued investment. The lack of understanding of digital implications has left many organizations falling behind. Manual efforts take too much time and money to set up. Moreover, the cloogy infrastructure leaves organizations without the flexibility to adjust to changing market conditions as business models shift. 5. Speed of digital disruption is punishing to organizations that move too slowly. Digital marketing provides real time a/b/x testing, massive automation and improved customer profiling. People applying digital marketing techniques will see sales revenue and marketing ROI improve; they will crush those who fail to adopt digital techniques. How You Sell Depends on the Customer Organization s DNA A key factor in sales success comes from a close understanding of the prospect s organizational DNA. Constellation segments prospects into four categories based on degree of innovation and impetus to lead. Degree of innovation stems from those who are incremental versus those seeking transformational disruptions. Impetus to lead is based on those who are more reactive versus proactive. Organizations can be broken down into four main categories (see Figure 3): 1. Market leader organizations see innovation as a necessity to success. Organizations that have a market leader orientation push the envelope. These organizations are not afraid to try new approaches. 2. Fast follower organizations enable innovation but react to market leaders. Not shy about disruption or change, fast followers wait for market leaders to move first and then figure out how to deliver transformation faster, better and cheaper. These organizations intently examine the case studies of successful projects with an eye toward overtaking market leaders. 3. Cautious adopters proactively plan for innovation. Cautious adopters plan for innovation yet take a risk-averse approach. Projects that are too new or not well defined require a sound business case and defined ROI. These organizations often require a methodical and patient approach to innovation. The pace of change is much slower than change at market leaders and fast followers. 4. Laggard organizations wait for change. With budgets mostly focused on infrastructure and integration, little money exists for new projects and innovation. Short of a merger, a new CEO or a hot platform, very little innovation will happen on a proactive basis Constellation Research, Inc. All rights reserved. 6

7 Figure 3. Organizational Personas of Digital Disruption Determine Success Recommendations: Seek New SFA Systems that Enable Success in a Digital World In speaking with hundreds of sales executives, Constellation has identified five important factors when selecting a new SFA system for the digital world: 1. Design for mobile first. Mobile is a key gateway for not only user adoption, but sales empowerment. Apps should work in disconnected mode. Usage should be more than just mobile enablement. Expect responsive design to play a key role in usability and adoption. 2. Ensure consumer-grade user experiences. Training cost reduction, higher productivity and greater sales satisfaction can be linked back to user experience. Enterprise apps should take design cues from consumer-grade applications for front line users. Power users may require a different user experience, but keep in mind, simplicity is key to success. 3. Enable social collaboration at the process level. Collaboration tools must be enabled at the business process level in order to avoid moving in and out of systems and losing context. Too many SFA tools have bolted on social capabilities that don t allow for sharing of content and retention of security policies. 4. Move beyond reporting and invest in analytics. Most cloud SFA systems have decent reporting but poor analytics. An analytics core is key to long-term success. Sales leaders and sales professionals would like to ask questions, identify insights 2014 Constellation Research, Inc. All rights reserved. 7

8 and determine what the next best actions should be. Static reports are not enough for success in a digital world. 5. Improve master data management efforts. The proliferation of data and data types creates havoc on internal sales tools. The ability to master data, remove dedupes, enforce governance and preserve lineage in data requires strong master data management capabilities. Master data management is a long-term investment with continual payback. Disclosures Your trust is important to us, and as such, we believe in being open and transparent about our financial relationships. With our clients permission, we publish their names on our website Constellation Research, Inc. All rights reserved. 8

9 Analyst Bio: R Ray Wang Enterprise Strategist and Disruptive Technologies Expert R "Ray" Wang is Founder, Chairman, and Principal Analyst of Constellation Research, Inc. and the author of the popular enterprise software blog, "A Software Insider s Point of View." He previously was a founding partner and research analyst for enterprise strategy at Altimeter Group. With viewership in the millions of page views a year, his blog provides insight into how disruptive technologies and new business models affect the enterprise. A background in emerging business and technology trends, enterprise apps strategy, technology selection, and contract negotiations enables Ray to provide clients and readers with the bridge between business leadership and technology adoption. Expertise Buyers seek Ray s research in disruptive technologies and their impact on business processes, business models and organizational design. Business topics focus on harnessing innovation, creating next-generation business and IT leadership and applying the new rules of business. Technology topics include Social, Mobile, Cloud, Big Data, Next- Gen ERP and apps, business analytics, business process transformation, Project-Based Solutions, Order Management, Master Data Management and middleware technologies. For technology sellers, Ray provides strategic guidance in go-to-market strategies, reviews and designs software licensing, pricing, support and maintenance policies, delivers competitive assessments, evaluates software partner ecosystems and researches business processes such as the perfect order and customer experience for the enterprise and SMB markets. Media Influence Ray blogs at The Wall Street Journal s CIO Journal and for Harvard Business Review. News organizations such as The Wall Street Journal, Bloomberg, Business Week, Fortune, The Associated Press, CIO Magazine, Information Week, ComputerWorld, Financial Times, eweek, CRM Magazine, IDG News, ZDNet, TechTarget and Tech Crunch frequently seek his point of view. Ray is an energetic and passionate keynote speaker and has also been featured on major TV news outlets such as CNBC. Industry Recognition In 2008, 2009 and 2012, Ray was recognized by the prestigious Institute of Industry Analyst Relations (IIAR) as the Analyst of the Year, and in 2009, he was recognized as one of the most important analysts for Enterprise, SMB, and Software. In 2009, A Software Insider s POV was listed in the top 20 of Jonny Bentwood s Technobabble 2.0 Top Industry Analyst Blogs. In 2010, Ray was listed as one of the Top 5 Analyst Tweeters in Edelman s TweetLevel Index, recorded as part of the ARInsights Power 100 List Of Industry Analysts, and named one of the top Influential Leaders in the CRM Magazine 2010 Market Awards Constellation Research, Inc. All rights reserved. 9

10 Education Ray graduated from the Johns Hopkins University with a B.A. in natural sciences and public health. His graduate training includes a master s degree from the Johns Hopkins University in health policy and management, and health finance and management. He is also certified in SAP FI/CO modules, facilitation techniques and program management office. Ray currently serves on the Board of Advisors for the University of Toronto s Rotman School of Management s Centre for CRM Excellence. Ray can be reached at R@ConstellationR.com Constellation Research, Inc. All rights reserved. 10

11 About Constellation Research Constellation Research is a research and advisory firm that helps organizations navigate the challenges of digital disruption through business models transformation and the judicious application of disruptive technologies. This renowned group of experienced analysts, led by R Ray Wang, focuses on business-themed research, including Digital Marketing Transformation; Future of Work; Next-Generation Customer Experience; Data to Decisions; Matrix Commerce; Technology Optimization and Innovation; and Consumerization of IT and the New C-Suite. Unlike the legacy analyst firms, Constellation Research is disrupting how research is accessed, what topics are covered and how clients can partner with a research firm to achieve success. Over 225 clients have joined from an ecosystem of buyers, partners, solution providers, C-suite, boards of directors and vendor clients. Our mission is to identify, validate and share insights with our clients. Most of our clients share a common trait - the passion for learning, innovating and delivering impactful results. Organizational Highlights Founded and headquartered in the San Francisco Bay Area, United States, in Named Institute of Industry Analyst Relations (IIAR) New Analyst Firm of the Year in Serving over 225 buy-side and sell-side clients around the globe. Experienced research team with an average of 21 years of practitioner, management and industry experience. Creators of the Constellation Supernova Awards the industry s first and largest recognition of innovators, pioneers and teams who apply emerging and disruptive technology to drive business value. Organizers of the Constellation Connected Enterprise an innovation summit and best practices knowledge-sharing retreat for business leaders. Founders of Constellation Academy, experiential workshops in applying disruptive technology to disruptive business models. Website: Contact: info@constellationr.com Sales: sales@constellationr.com Unauthorized reproduction or distribution in whole or in part in any form, including photocopying, faxing, image scanning, ing, digitization, or making available for electronic downloading is prohibited without written permission from Constellation Research, Inc. Prior to photocopying, scanning, and digitizing items for internal or personal use, please contact Constellation Research, Inc. All trade names, trademarks, or registered trademarks are trade names, trademarks, or registered trademarks of their respective owners. Information contained in this publication has been compiled from sources believed to be reliable, but the accuracy of this information is not guaranteed. Constellation Research, Inc. disclaims all warranties and conditions with regard to the content, express or implied, including warranties of merchantability and fitness for a particular purpose, nor assumes any legal liability for the accuracy, completeness, or usefulness of any information contained herein. Any reference to a commercial product, process, or service does not imply or constitute an endorsement of the same by Constellation Research, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold or distributed with the understanding that Constellation Research, Inc. is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Constellation Research, Inc. assumes no liability for how this information is used or applied nor makes any express warranties on outcomes. (Modified from the Declaration of Principles jointly adopted by the American Bar Association and a Committee of Publishers and Associations.) San Francisco Andalucia Austin Belfast Boston Chicago Colorado Springs Denver London Los Angeles Monta Vista New York Pune Sacramento San Diego Santa Monica Sedona Sydney Tokyo Toronto Washington D.C Constellation Research, Inc. All rights reserved. 11