2015: Where Do We Go From Here?

We ask the experts where the industry is headed in the new year

>> By Marshall Lager

 

 

Welcome to 2015, the midpoint of a decade that has seen great change. In fact, summing up the changes and developments of the past year or two could fill a magazine article by itself. Here’s hoping you’ve learned from the past, because we’re not repeating any of it here. This time, the traditional kick-off-the-year article will be entirely forward-looking.

There’s a lot to consider, so we’ll make things easy by breaking the topics down into the three standard pillars of CRM: sales, marketing, and customer service. We’ll look to recognized experts in each field to discuss the sort of shifts we can expect in the coming year, as well as goals we can hope for.

The Art of Selling

There’s a common belief that a good salesperson can sell anything successfully, and a corollary that, since this has always been the case, sales skills don’t need to change. Not only is this bad logic, it’s just plain wrong.

“What is driving companies to change how they sell is the poor performance they are seeing in closing deals,” says Jim Dickie, managing partner at CSO Insights. His company surveyed sales executives at more than 1,200 companies worldwide about the outcome of forecast deals. The average win rate came in at 45.9 percent. “To put that in perspective, the odds of winning at the craps tables on pass bet in Vegas are 49.3 percent,” Dickie says. “When the chances of you[r] being right gambling are better than the odds of closing a forecast—that, by the way, you created—[there is] a problem that can’t remain ignored.”

Part of the underlying issue is that businesses have been emphasizing the wrong technology and incentivizing the wrong behaviors. “We’ve been promising that technology would empower salespeople, but that hasn’t happened. CRM is still mostly used as a management tool,” says Jeff Tanner, Baylor University professor of marketing and executive director of Baylor Business Collaborative. “As a result, we still see salespeople not putting data into the CRM system.” 

To change this, businesses must harness the power of big data. “Deal analysis is one area that needs development. Prospecting really becomes powerful with in-line analytics,” Tanner says. “There’s been a lot of thought around opportunity management as a prospecting tool, not just a tactical one.” By focusing on these areas, he suggests, “we’re going to start to see analytics become more useful and used by sales managers.” 

“Big data holds three promises for sales,” Dickie says. “The first is helping them find more, by doing a fundamentally new type of analysis to surface potential buy cycles so the reps can proactively reach out to prospects. The second is helping them win more, by identifying the key insights needed to convince a prospect to buy from you now. And the third is helping them keep and grow more, by targeting…customers who could be ‘churn’ risks, and also identifying opportunities to sell more to existing clients.”

When discussing utility for salespeople, mobile and social technologies aren’t far behind. “We’ve been saying it’s ‘the year of mobile’ for years now,” Tanner says. “If I don’t have the mobility that actually helps the sales rep, it’s useless.” He suggests that building CRM technology directly into the data streams could be the way to go. “One pharma company gives salespeople tablets so when they’re on a call, the system collects data—interest, objections, the order of topics—and provides access to collateral to address customer concerns.” Another advantage to such a method is that it preserves context, something which regular note-taking often doesn’t.

As for social networking technology, which seems perennially on the cusp of changing sales, this might also be the year. “In transactional, simpler sales, we’ll see social media used more as a selling tool,” Tanner predicts. “The leading salesperson in sales for the NBA does almost no selling on the phone; it’s all social. Repeatable processes will make social selling more realistic.”

Lighten the Load or Sink the Boat

Not all change is about what’s coming, though. Sometimes we have to consider what’s fading away too. “Things that increase the efficiency of sales reps are not valuable today,” Dickie says. “If all we are doing is saving time, then the scenario we are setting up is that the average rep can make more average sales calls. What is really needed is for reps to make great sales calls.” Tools that increase sales effectiveness, such as sales intelligence, sales analytics, sales engagement, and sales message management solutions, will continue to have a place in the overall strategy.

Another limiting factor that must be dealt with is the halfhearted commitment to the technology already in hand. “Most sales organizations probably already have the tools they need, but need more investment in knowledge. I don’t see marketing and sales executives putting in the effort to master [the technology],” Tanner says. “They’re not doing their early due diligence on how to create a data strategy, and they’re still fighting data ownership wars. In my dream world, this would disappear, along with overlapping point solutions. The real power will be in integrated systems.”

Many sales veterans still cling to the idea that if they’re still successful today, they must be doing something right and don’t need to adapt. This mindset is another relic that must be abandoned. “Reps are bombarded by…changes related to their customers, the competitive landscape, and their own product mix; these are in turn impacted by changes in the economy, the political landscape, social pressures, etc.,” Dickie says. “These changes create opportunities for those firms that are able to respond quickly to them and also [to] threats that can negatively impact performance if they are not neutralized quickly.”

To put it another way, “if you’re not getting all the benefits you can, somebody else will eventually leapfrog you, and you won’t have the capacity to catch up,” Tanner says. “Competitors who dead-end will be outcompeted.”

Super Market Science

The discipline of marketing has gained much in recent years from the ability to track results and experiment with new segmentation, data collection, and delivery methods. In many ways, what has often been regarded as an art is becoming more like a science. Or has it?

“My assessment is that ‘more scientific’ is highly relative, depending on the perspective of an audience or role,” says Leslie Ament, senior vice president and principal analyst at Hypatia Research Group. “From the line-of-business perspective, [marketing] has certainly become more data-driven, with marketers and others relying on dashboards, lead scoring, and metrics such as customer annual value or lifetime value to inform their marketing strategy and planning cycles.”

While marketing may be growing more scientific, marketers themselves are more problematic. “It’s a huge opportunity, but marketers are still catching up to the technology,” says Michael Fauscette, group vice president of software business solutions at IDC. “Many organizations have gone out and done their own thing with cloud solutions, disconnected from IT. There’s no easy way to get one cohesive picture.”

One potential solution is to follow the apparent swing of the pendulum back from targeted best-of-breed solutions in favor of integrated suites of tools. “Putting together a model to solve marketing means sorting through seventy-eight different potential systems for the marketer to use,” Fauscette says. “That’s an unreasonable task for any sensible span of time. Marketing should be presented as a unified system, with the data model moved to the back.”

At the heart of any modern marketing application, though, is the intelligent use of customer data—the more the merrier. “Multisource information gathering and big data insights will have a positive impact on marketing,” Ament says. “More information often translates into higher model accuracy and confidence levels when analyzing large amounts of information.” Research by Hypatia shows that larger enterprises ($2 billion–plus in revenue) use more than eight information sources when analyzing enterprise data, and rely on this information for a variety of business purposes—marketing being one of them. “In short,” Ament says, “big data analysis techniques may very well improve personalization, accuracy, relevancy, and results for marketers if performed effectively.”

This also points to a change in priorities for marketers, with a shift from tactical goals to strategic ones. “In the recent past, marketers often focused on personal major business objectives, such as number of newsletter clicks, downloads of collateral, social community or Webinar registrations, or conference attendees,” Ament says. “Now that budgets and resources are tighter, we see that marketers are better at justifying their contributions to the organization at a more strategic level. Our research shows that marketers are much better at tracking metrics that align with corporate or business unit goals, such as customer retention, share of wallet, increase in profits, and cost reductions.”

Changing priorities means changing culture. “We’re starting to look at priorities differently; there’s major cultural disruption, but I don’t think we’ve disrupted enough yet,” Fauscette says. “Some companies are really bleeding edge, others are still caught in the journey mapping exercise. It’s another tool; you can’t be tied to it. [You] can’t truly predict based on one map—it’s more of a model.”

To get the most out of a more scientific approach to marketing, businesses may start to hire more scientists. “Part of being data-driven is building behavioral models from social data,” Fauscette says. “I still think there’s art in how you interpret and use them. We need more social science experts in marketing.”

While we’re waiting for those social scientists to finish their orientation with HR, we should see improved access and utility for the rank and file as well. “I predict that vendors will provide more user-friendly business intelligence and analytics tools designed specifically for the line-of-business user rather than business analysts and statisticians,” Ament says. “These tools will integrate with digital marketing and customer engagement solutions so that marketers are able to use them efficiently.”

Empowered Customers, Empowered Service

Developments in sales and marketing are critically important to the future of business, but what about customer service, where the rubber meets the road? This area of business is by nature more reactive than the other two, as its purpose is to respond to occurrences outside the company. Received wisdom tells us that the customer is in control of the conversation—at least in control of when and where it takes place.

“Forrester says that we are in the Age of the Customer. Customers control the conversation with companies that they do business with,” says Kate Leggett, vice president and principal analyst at Forrester Research. “Companies must become more customer-obsessed to ensure customer satisfaction and long-term loyalty to their brand. Customer loyalty correlates to increased top-line revenue as loyal customers are less likely to churn, more likely to buy additional products, and more likely to serve as…advocate[s].” 

“Customers select when they want to interact with you, and the channel for the interaction. After that, I think today’s customer is more willing to go where you take them,” says John Ragsdale, vice president of technology research at the Technology Services Industry Association. “Product complexity is rising so quickly that customers struggle to use or consume new products; nearly a third of tech support questions aren’t break/fix issues, but procedural ones. How do I use the tool? How do I complete a process? Both with consumer and enterprise technology, products are so difficult to learn and master that customers feel less in control, and just want help.”

This creates an opportunity for businesses to reframe the engagement. “Once that connection is established, support organizations can be creative,” Ragsdale says. “You can fire up a remote control session and walk…customer[s] through the process. You can take them to an online learning site and show them how to access product training. You can browse your video portal and show all the how-to videos you have created. You can point them to the community and show them conversations on the topic.”

Self-service is one of the last remaining places where companies can reduce costs through the contact center. “When consumers switch from the Web to the phone, email, or chat, a company’s cost to serve them goes up dramatically,” Leggett says. Quoting an August 2012 report, she notes that retailers showed an extra $22,567,967 in sales and service costs that could have been avoided if their Web sites had enabled users to complete their goals online.

Further development of the tools we’ve already become so comfortable with will improve the experience. One intriguing example of this is a new model of social customer support. “One of the hottest topics with our members is the move to a swarming model, eliminating tiered support,” Ragsdale says. “For this to work, you must have a strong collaborative model with expertise management to identify who knows what on any topic. This is a true embodiment of social networking, and ultimately delivers faster resolution and more satisfied customers and employees.”

Other cool new things will take customer service to higher levels of satisfaction for the consumer. “The technologies of the future are technologies that support the four Ps of customer service: pain-free, proactive, personalized, and productive service,” Leggett says. Technologies that fit here include annotated video chat, remote control, voice biometrics, outbound notifications, and predictive engagement. 

Increased understanding of what customers go through in their product adventures could further boost the effectiveness of customer service representatives. “I’ve been hearing a lot lately about customer effort scores,” Ragsdale says. If products are too difficult for customers to easily master, vendors endanger customer success. “I’m seeing more products coming to market that help companies monitor how customers use their products—common process flows and features, how long it takes to complete certain tasks, etc.,” he says. Ragsdale recommends that businesses invest in tools to understand how customers use products, and work with product development to boost usability and eliminate common stumbling points.

Whether trying to improve customer centricity, advocacy, engagement, or what have you, shortsighted efforts will continue to miss the mark. “Very often, it seems the company is fixated on moving a single satisfaction or loyalty metric because bonuses are based on the number,” Ragsdale says. “Many companies don’t really seem invested in improving the experience for the customer; they just want to know how to ask the question or construct a survey panel to get higher numbers so the bonuses pay out.”

Some things remain unchanged. “Whatever the buzzword of the day is, it’s about putting customers first,” Leggett says. “It’s about delivering the right engagement to the customer to entice their loyalty. I think all the words mean the same thing. Think outside-in and do what is right for the customer.”

Follow the Compass

Thanks to the input of the preceding researchers and thought leaders, we have a solid sense of where the three pillars of CRM stand. Using these, we’ve triangulated the current position of the CRM industry, and also have a strong sense of which direction to move for success. The only remaining question is whether to follow the indications or stray from the path into unknown territory. 

Marshall Lager is a freelance writer and founder and managing principal at Third Idea Consulting. He can be reached at marshall@3rd-idea.com.