Whatever you do, don’t ask your sales team if they want to enter more data into a computer. Customer relationship management (CRM) software has been around for decades but continues to gather more attention, especially since the advent of cloud-based services such as Salesforce.com. As you can read over at Sales Machine, not everyone, particularly not sales people, think that’s such good news. The claim is that tracking your sales process and forcing it into some automated system (he’s referring to a rigid pipeline of sales steps) really just amounts to busy work and data for managers to spy on sales people.

Sales people may have their own styles and they rarely include sitting at a computer instead of talking to potential customers, but, since when is flying by the seat of your pants always the best strategy? For that, a cell phone and voice mail is the alternative Geoffrey James is offering.

Some of the problems that can cause CRM to fail:

• a weak database of contacts and titles
• requiring data be collected that you don’t use, or worse use, but with no value-add
• a pipeline that doesn’t meet the typical sales experience in your business
• demanding that sales people follow every step in the pipeline with every customer

Let’s quickly address those points. A weak database is a chore to work with and drives sales people away from using the tool rather quickly. If you don’t already have one, consider purchasing a database of contacts for your market. They’re usually a few thousand dollars, which isn’t so much when you consider the investment in your sales team’s time of not having to enter names for everyone they meet. I’ve had teams rave about the CRM system: “wow! my customers are already in there!”

If you collect data, use it. Keeping track of information just to make reports is busy work. If management is using data and demanding sales people collect it (which, remember, doesn’t result in new sales for them!) then the team has got to see the benefit. If the reports you gather aren’t pointing you toward some action, don’t bother, that’s a waste of the sales team’s time and management’s too. Professionals will appreciate that there are tasks they’ve got to perform that don’t contribute to their own bottom line, but only if they can see a point and better, some results.

One of the biggest failures of the systems that Sales Machine seems to be objecting to, is forcing a series of steps, like an automated industrial process, onto sales.  Realistically, I can’t imagine denying there are some steps that nearly every deal goes through. Contacting the customer and identifying who has purchase authority sound like two that pretty much apply everywhere, don’t they? A well-tailored pipeline gives a sales person the chance to reflect during the process (which in some cases is long enough to ask: where are we here?) and ensure that they’ve done whatever they need to close the deal. Sure, good sales professionals keep all this in their head. They ‘just know’ what they have to do next and specialize for each opportunity. Frankly, we’ve seen both seasoned professionals and newbies alike claim they new exactly when, and how many of, their opportunities would close, yet still miss their forecast. Maybe ‘just knowing’ isn’t enough. Don’t force a one-size-fits-all approach to your business instead, work with those sales professionals and develop one that makes sense. We’ll try to focus on that in another article.

Finally, let’s face it, all the preparation and customization of your sales tool, and at the end of the day it’s just a tool The goal is sales, not activity. It’s surprising how often companies lose track of this. Management has invested in a sales tool, and they expect you to use it. Sales says they don’t need to do this, but they’ve got to do that, but where are the sales to prove it? Not every opportunity is going to play out the same and at the end of the quarter, the only thing that really matters, to everyone at the company, is that you’ve closed the deals. Using these tools can help a team to discover what went wrong if they didn’t meet their goals, and give them insight into what went right if they did. Using software is just another tool to reach those goals, nothing more.

The comments on Mr. James’ article point out that there are many ways to measure success. (Mr. James’ short sighted ‘are they spending less money on sales?’ is one way. Either he was hoping no one would notice the flaw in that, or he isn’t wise enough to see it, but if reducing costs were a good measure of performance, every out-of-business company would be a perfect success). Our experience with CRM has given us the chance avoid some common obstacles (and we’ve personally set up a few ourselves!). We can help your team avoid them and maybe make sure that investment doesn’t leave you wondering where the money went.

CRM software will require some extra effort from the sales team. The more data collected the better the systems perform. The only way to encourage sales people to do that extra work is to make sure they’re getting something out of it. Poor Mr. James has decided that since he’s seen the systems fail and he doesn’t like entering all that data that they don’t work. He thinks you can’t automate the sales process (he’s right) but he denies that there are any similarities from one opportunity to the next. Implementation isn’t easy. It’s going to take some time, and investment, to get it, and it might even have to change over time (hint: it will) but if you really think a carpenter can build a house with only a hammer, then go ahead, and limit your sales people’s tools to voice-mail alone. The rest of use are going to use whatever we can to makes our jobs easier.

More than once in my career, I’ve been asked to help sales people to sell a product that just wasn’t as important to them as it was to me. The sales team was talented and motivated, but they still struggled to sell ‘my product’ no matter how much I’d done to ensure they understood the technology. During customer visits with them, I came to realize that the problem wasn’t that they weren’t talking to their customers enough, or that they didn’t know what the technology we were offering did. Instead, they just didn’t really know what questions to ask to discover if this customer really had a need or not. In each of these situations, the sales team was responsible for a wide range of products and part of what is commonly called a ‘matrix sales organization’.

It’s rare that smaller companies even have to worry about the complexity of matrix organizations, but, as soon as your company starts selling multiple products or adapting its offering to multiple markets, organizing a growing salesforce is a critical challenge. Small companies find themselves in pseudo-matrix sales style when they hire representatives in different geographical regions. Managing them will put up some of same roadblocks I encountered. Serious obstacles stand between you and a successful matrix organization, and many companies don’t get the most out of them. With liberties from a famous quote by Winston Churchill: ‘It has been said that a matrix organization is the worse form of selling except all the others that have been tried.’ (Sorry Mr. Churchill….)

In most every large company, the sales department is organized in some sort of a matrix. Here’s how it works: Acme Corporation sells so many different widgets that no sales person could be an expert in all of them. Acme could send a specialist to each customer, who really knows the right questions to ask to close a deal, but the customer is going to wind up meeting dozens of different Acme sales people, maybe one a week, and getting pretty tired of seeing Acme business cards. Plus, it’s embarrassing when the customer asks about a specific product or service and the sales person looks blankly back and states that it’s not his area. It’s not a good way to treat the customer and, likely, a pretty big waste of time for everyone involved.

Instead, Acme can hire product managers for each of their product lines and it becomes their job to train the sales team and go with them to appropriate sales meetings after the individual sales people have identified a lead. It’s called a matrix because the sales people will divide up geographical, or market-based territories, and the product managers will go the other direction, dividing up products or applications. Where the difficulties lie, like almost everything, is in the incentives. Typically, sales people are commissioned on sales volume. If one product, for example, sells for much more money than another, taking only a bit more work to sell, then the lower revenue product is going to have a difficult time getting much mind-share from the sales people.

Good product managers recognize that they have little control over the price and that really, they need to market to set prices anyway, not the sales team, so they have to come up with other ways to motivate sales people. Usually this will be somewhere around that ‘effort’ part mentioned above. If the product manager can make it so easy enough to sell his lower revenue product such that sales doesn’t find it a distraction, then there’s a good chance numbers will increase.

Sales managers and other members of the organization can address this problem as well, by adjusting incentives. Perhaps the lower revenue product is strategically important to the Acme Corporation. Sure they don’t make as much money on each one, but maybe selling that low revenue item might keep an important competitor out of the market. One losing way towards increasing these strategic sales is simply to explain this critical strategic decision to the sales team at a regular sales meeting.

Professional sales people aren’t stupid. Of course, they may very well understand why the company is so keen on this little orphan product, but they are there to earn money and feed their families. No matter how professional or generous a sales engineer might be with her time, when push comes to shove, she’s going to go where the opportunity is—and it’ll be the one that maximizes her commission.

Many options are available, and it will depend on the situation at each company. Incentives might kick in only after a minimum number of the strategic product is sold, or maybe specific sales work as a multiplier for commissions earned on more ‘interesting’ items. Alternatively, an aggressive product manager might be given more leeway to approach customers that normally would be the sales person’s responsibility. In some cases, it makes sense to just raise the price of a related offering and throw in this new feature as a differentiator. Whatever is appropriate, what we’re looking for is some system that takes advantage of the focus of a small company with a tiny offering, while using the reach of a vast network of sales people.

Sales people, whether they work for a small company, a separate division, or a separate representative company, want to be successful. They want to prove to themselves and to everyone else they’re selling better than anyone. The question is, do we all agree what “better” means? Understanding the incentive system, in detail, is the key to making sure the sales team has the same idea of success as the people paying their commissions.