Pipeline and Forecasting

In my experience, pipeline/forecast is one area of a CRM system that changes frequently. Way to frequently.

Fortunately, these changes require less coding changes today through Windows Workflow Foundation (Dynamics CRM) and Workflow Automation (Salesforce) that in CRM days of old.

Not going to comment on whether it is right or wrong, just that it happens, often, as a matter of fact in many organizations. Change Sales VP, there will be a change to the sales process. Change the compensation model and the forecasts will change. It happens all the time and makes numbers from sales very short term and difficult to do long term trends. The best way to improve accuracy, find a sales process that works and then measure the core of that process. Less change, more value.

Social CRM Strategy

Social CRM came up in a recent conversation. Microsoft’s acquisition of Yammer and Salesforce’s multiple buys in this area has validated a market that was a huge question mark 3 years ago. Like any business process application I recommend that following:

Keep it simple. Know your customers. Show them the love.

Ask yourself if you can honestly answer these questions. They will help guide you CRM, social or “traditional”, strategy:

  • Where are your customers?
  • Where do they go when they have issues with your products and services?
  • How open is that conversation?
  • How are you making them successful?
  • What keeps them from flaming the CEO?
  • How many are willing references?
  • Where is your organization’s focus?

CRM Integration

One of the biggest challenges that CRM systems have is integration with back end systems. In the cloud with hosted CRM, this in some ways is actually a bigger challenge than it was in the past.

From CRM to ERP
Pipeline and Forecast data are the most common and most important data from CRM into an ERP system. Business process determines the complexity of the integration.

Examples of complex integration requirements can be found with just in time manufacturers (e.g., Dell). These organizations will integrate forecast data into their supply chain for competitive advantage. More common CRM to ERP integration is less complex. Generally and regardless of complexity, this integration occurs on set schedules (e.g., Weekly) as part of the sales process. True real-time capabilities are not required or necessary. Real-time availability by a vendor (product, SaaS, or ISP) will be of more concern.

Some Sales organizations have a culture of frequently adjusting pipeline and forecast requirements. This is often seen with changes in Sales and Executive management. Ideally, the change in business process would not impact the data integration; however, the technical configuration may need adjusting as well.

From ERP to CRM
Product and Price List data from ERP to CRM is always a complex integration. Technical configurations can be complex. The volume and frequency of updated data can also be complex.

Most large contracts are negotiated with customer specific pricing, terms and conditions. For many organizations negotiated contracts are the norm and the lifeblood of the company. As a result there are typically no set of constants or rules across all negotiated customer specific prices lists. Individual negotiated contracts for all large customers would create a scenario of hundreds or thousands of unique price lists. This creates tremendous complexity for technical configuration as well as the volume and frequency of updated price list data.

From CRM to Business Intelligence/Analytics
While the two previous requirements focused on the sales force automation areas of CRM, integration with business intelligence and analytics tools could and often cover the spectrum of CRM applications: Sales, marketing, customer service, etc. Each department has their own tools and key performance indicators.

Functional requirements arise from leveraging the right data to enhance the customer relationship. Three areas of concentration are data mining, decision support and analytical tools. These integrations often are “nightly data dumps” from the CRM system into the business intelligence tool.

The 4P’s and pricing data

The 4 P’s (Product, Price, Place and Promotion) are the standard Marketing Mix. This is not just MBA “marketing fluff”, the P’s are where the rubber meets the road in CRM, namely quote generation. There is a bigger but untalked about 5th P (Problems) that haunts pricing and quotes.

Product and pricing data are integrated with ERP systems. This data is updated on a variable frequency rate. I have seen a range from quarterly to every 2 days. More frequently is not necessary better in my experience. Place in the CRM parlance is the here and now. Sales is looking to book revenue today. The revenue pipeline needs to flow so that the company can grow. It is amazing to me that 5th P (problems) still exist with product and pricing. Often the integration does not handle changes in frequency well. A pricing update may run well over a weekend, but not complete overnight. How are customer price lists generated? Most are a combination of fixed pricing and percentage. How do you validate that these are correct? These problems existed in CRM a decade ago and are still around today. They are process problems and involve people. No amount of technology will fix people. Companies have this problem and no one really solves it. Why? Likely the P (price) to fix the P (problem) is way to high and no P (product) or P (promotion) have incentives to fix it in the P (place).

The inevitable gCRM

Will Google enter the enterprise applications market?
It is a matter of time.

The recent GM announcement signal that the company is almost there. For many enterprises, the first business process to be put into place is CRM. Google will enter the enterprise application space in CRM to better leverage existing services.

1) gMail is becoming widely used in the enterprise. The cloud is proving privacy can work.

2) Email is the de facto CRM application. Sales, service and marketing all rely on email to connect with customers.

3) Google has great corporate data research with finance.google.com.

4) Searching for anyone (customer, prospect, etc.) involves a Google search in addition to searches in other services like LinkedIn, Jigsaw and Gist.

5) Alerts could be configured to prompt action based on search results.

6) Sales, service and marketing are becoming more about individual and less about the company due to social tools.

7) Microsoft and, Google partner, Salesforce are battling it out for cloud-based CRM. gCRM would be less robust, but give companies a reason to move from Office to Google Docs.

So what does Google need that they do not have today? I see 3 big pieces.

One, process across marketing, sales and service:
Process is a must. Organizations turn to a CRM system to give them best practices and process flows that they do not have. In my experience, all CRM clients are looking to improve process through technology — not the other way around. Process for marketing, sales and services organizations are very different, but all have a common thread of measuring the cost per call (also called contact, customer, or incident).

Two, sales pipeline and forecasting
Sales pipeline and forecasting is an extension of process, but it needs to be more flexible and dead simple to configure. Why? Because the average VP of Sales is on the job just 19 months. Every new VP of Sales will want to be measured by his or her own agreed to metrics, not by the old metrics that got the last VP ousted. This is very common and will be so for the foreseeable future.

Three, integration to back-end systems. Integration with back-end systems is one of the constants in CRM. This can be any system from ACD call routers to an ERP system. In the 30 or so CRM deployments I have been involved with, integration has played an critical part every time.

If Google will address these three missing pieces in a way that is robust yet flexible, gCRM will be a winner.

Lessons in salesmanship

Had a great lesson in asking for the business from an unexpected source last week — my landscaper.

Now I do not have a regular service, but did have some work done last summer. Living in the Pacific Northwest, I have come to learn that lawn aeration is not optional. The yard needed it, so I looked around at renting an aerator. Running rate for 2 hours is $125. I called Derek at Rainbow of Magnolia who did the work last summer. For my small yard, he charged less than half of the rental price. Sold.

Now, turns out I happen to run into Derek all the time in the neighborhood village. He is a marathon runner and often catches me finishing a 10K while pushing my 2.5 year-old daughter. He chat about running or exchange greetings. After the aeration, he was all salesman — but not in a bad way. He wanted to make sure I was satisfied. Since I was, he asked if I needed anything else or would refer business to him. This caught me by surprise since it is not often that I see anyone ask for the business.

Not only did Derek ask for the sale but he asked for my help. He and his company are extremely charitable. This year, the entire company voted to donate 1 week of wages to their Rainbow of Magnolia Fountains of Life Charity to build an addition to a school in Uganda. Pretty amazing.

I am a repeat customer and will have Derek and his crew back in the Spring. If you live in Seattle and need some landscaping, give Derek a call and tell him Max sent you.

Questions to ask: Social CRM

Amazingly my $0.02 on questions you need to answer in mapping out your Social CRM strategy still ring true:

  • Where are your customers?
  • Where do they go when they have issues with your products and services?
  • Is that channel cost effective for you?
  • How open is that conversation?
  • How are you making them successful?
  • What keeps them from flaming the CEO?
  • How many are willing references?
  • How many are actively referencing business to you?

Any others?

Why Focus Intent?

I have been revisiting the idea of customer intent and its implications. Social media has exploded given customers and prospects the ability to express intent. Buyers signal. Customers signal. Competitors signal. These signals are important data points for the Sales, Marketing and Service — the 3 big users of CRM systems.

A great recent example of this phenomenon is the Netflix price increase. Customers revolted and the company found itself in reactionary mode. Reid Hastings’ blog post will be remembered and studied for years. Is it a coincidence that Amazon’s (Disclosure: The wife works at Amazon, but does not read my blog) Kindle Fire announcement states the following?

There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less.

The real interesting thing about these two companies is one forget their competitive advantage and the other did not. Kindle Fire and the new Kindles look like winners, Netflix is left spinning Qwikster, which is already being compared to New Coke. Amazon listened to customers, Netflix did not.

This example shows the implications for CRM. Signals are positive or negative. Sales, Marketing and Customer Support have to be able to filter and respond to the signals that matter to their mission. In the end, it is all about how you support the customer across the customer life cycle. The next evolution in CRM will be how to focus on the signals and understand customer intent.


Consultants are trained to ask questions. Some good, most are bad and total waste of time and energy. This has the effect of making clients feel like you are wasting their time. I like to keep it direct and too the point. Inital client engagements are a success if I can answer these 5 questions in no particular order:

1) What do your expectations of a service provider?
2) How do you see out team helping you address challenges and opportunities?
3) Why are you changing providers?
4) How do we learn about the business since we are responsbile for action and implementation to ROI?
5) What are the good, the bad and the “do not repeat”?

I do not necessary ask these directly. It entirely depends on the client and situation. Think about what you need to know and why that knowledge will make you and you client better. Then ask those questions. Seems obvious, but it is not.

What is your go to question?

The Sales Learning Curve

There is an old adage that is all too often followed, “Want more sales? Hire salespeople.”

Sales and who you hire to represent your company is critical. The success or failure of CRM, revenue generation and the company in general are dependent on how the organization learns from prospects and customers.

A terrific read on this by Veritas founder, Mark Leslie: The Sales Learning Curve