16) The dreaded opportunities pipeline

If your company is currently using an opportunities pipeline, you are likely using it for one or both of the following reasons:

1. To understand how many units you will have to manufacture or order to fill the orders in progress


2. To put pressure on your sales force through activity controls

If you are using your pipeline for purpose number one, the system is probably working for you. Because it is used to fulfill sales rep orders, such a system is considered "High Card" by your sales reps (providing it is the only method by which the information is communicated), the reps will regard it as a tool to their advantage.

If you are using it for purpose number two, or both one and two, I am sure the pipeline is a major source of tension between managers and sales reps. The "CRM Dilemma" is epitomized by the opportunities pipeline by being the ultimate in activities control for your sales force. I would also bet that the following is occuring:

• Your highest performing sales reps use (and are required to use) the pipeline, far less than lower performing reps. This is because the pipeline is not a tool, but an accountability. Your best reps require less accountability because "We already know they are doing the right things."


• Sales reps that use the pipeline the most (If you have any) will not represent your highest performers. This is because the pipeline does not truly provide guidance to your reps - They already know how they are doing in sales by knowing their outcomes.

If your reps don't see personal value in the pipeline, they aren't using it anyway so kill it, kill it dead!

The really important pipeline

While opportunities management in CRM is the antithesis of PACT, PACT can be used as your greatest indicator about the effectiveness of your current strategies. Going back to the new product launch in Post #8, which would be the greatest indicator of the acceptance of your new product by sales reps and customers?:

1. A "hit and miss"report from CRM on which reps have said they would do the presentation, and to whom. Combined with:
2. A report on those reps that have completed the presentation. Combined with:
3. A drop-down report from reps in CRM as to why they did not make the sale after the presentation. Combined with:
4. An ERP report on orders received

OR:

1. A report from PACT on those reps that have scheduled appointments with customers during the sell-in period. Combined with:
2. A report on those reps that have requested the new product sell-in package for those customers. Combined with:
3. Feedback from sales reps and customers regarding what they said about the new product line and the presentation tools. Combined with:
4. An ERP report on orders received.

The key difference is that PACT offers a level of safety tin the minds of sales reps because it focuses on planning and communication that they consider meaningful.

15) Steps to converting an unused CRM system to PACT

If you agree with the premise of my research on "The CRM Dilemma", (Why would you be reading this if you didn't?) It probably means you have implemented CRM to great fanfare and promise, only to have your sales force ignore the tools you have given them. You may have tried various sticks and carrots resulting in no marked improvement in usage, or a move to "Gaming" by your sales force. The challenge then is how to resuscitate the system you have, without falling back into the activity control trap that your sales force rebelled against in the first place. It is my contention that this can be done, but it will require a determination to provide a system that your sales force will really view as a tool, NOT a threat. To follow are some steps you can use to achieve this important conversion in attitude.

PACT = Planning and Communication Tool

1. Admit the problem: This may be the hardest part. I am no longer employed because I did this before the problem was identified in our North American role out (The Canadian implementation had failed because of the "CRM Dilemma".) To state that "Our sales force is not willing to record their activities, because they don't trust that we won't use the information against them" is a very bold step that will be welcomed by the sales force, but may be panned by others. This admission shows that we are virtually powerless to understand the day-to-day activities by sales reps, in a quantifiable fashion. You will be amazed at the audible sigh of relief you will hear from your sales force when you remove this tremendous burden from them.
2. Restate the original goals of CRM for your company: You didn't implement CRM in order to control the activities of your sales force, activity controls are an unintended by-product stemming from the desire to offer better service to your customers. By restating these original goals, you set the stage for a new understanding with your sales force and open the door for a new PACT with them.
3. Do an analysis of current planning practices: There needs to be an admission from the sales force that they could do a better job planning their activities. If I were hired by a company to perform this task, I would spend time travelling with various sales reps to identify gaps in activity planning. There needs to be a level of trust in identification of these gaps that does not single out individuals. Planning practices by department heads and executives must also be evaluated to ensure the messages that are reaching the sales force are clear and consistent. I have personally seen situations where sales reps are confused as to their objectives because different departments are giving them conflicting messages on what priorities they should be focused on.
4. Evaluate the information needs of customers: I have always been a top salesman, not because I was a "close friend" to my customers, but because I was able to identify what they wanted to know. Not just about the products I was selling, but providing them information that they would be interested in, and that would impact their business or their lives. For example: A contractor customer is interested in your products, but provide him or her with a market analysis of their industry, and you become a hero to them. Help them to get more business and they will buy your products.
5. Evaluate the information needs of your internal customers: Yesterday, I spoke with a friend that had a problem because she wasn't able to obtain a particular piece of business information on a consistent basis. I showed her how by creating a simple "Google Alert," she could have this information delivered to her as soon as it was made available. I suspect there are many people like her in most organizations. Now she will be able to plan her activities easily because she will be able to consistently get the information she needs. In previous posts, I outlined some ideas on the types of reports sales reps need in order to effectively plan their activities. Providing these reports is key to a successful PACT with users.
6. Plan to provide all the required information: This is where I get into trouble with my friends in IT because I do not provide a magical application to accomplish this, nor do I offer a solution package. The key is that in order to plan activities, employees need to go to one source to find the information that is customized to the customer.
7. Understand and declare what is and what isn't required to be communicated: For the new PACT to be successful, (Used consistently) "High Card" activities (Information that must be communicated in order to progress the sale, or provide feedback that MUST be acted upon) can be the only recording required in PACT. With the exception of training or disciplinary "One offs" identified previously, departments cannot be permitted to add "Low Card" activity recording to PACT. This may have the same implications identified in step one, so executive champions are required to keep consistency in this message.
8. Remove all "Low Cards" from your current CRM application: As painful as this sounds, the days of the "Tick box fields" need to be over. You don't trust the information anyways, so in order to send a positive message of change, all quantifiable information on "Low Cards" needs to be deleted. You will hear yet another cheer from your sales force when they see this has been done! Please don't assume you can leave the information in and it is enough to say that your sales force no longer needs to populate the fields. Quantifiable data remains a "Threat" as long as it exists.
9. Add "High Card" fields and tags to PACT: This step shouldn't be too difficult assuming your company email system is integrated with your CRM system. If "High Cards" are currently communicated through emails, there simply needs to be a link between the customer and that email. If you open the customer record, you need to be able to see the "High Cards" recorded against that customer. There also needs to be customer feedback fields, suited to your organization, that customer-facing employees can use to provide "High Card" feedback. As mentioned before, the ability for employees to view cumulative feedback is as important as managers viewing it.
10. Conduct a pilot of PACT: CRM training has long been forgotten. Users need to be retrained and reminded what the new PACT is all about. Conduct a pilot study to ensure user understanding and acceptance.
11. Make sure the PACT is being honored: With the removal of "LowCard" activity recording, comes new accountability in using the PACT system to its' fullest. Sales reps cannot assume the company has "Rolled over" but rather is providing new tools that are designed to help them sell, instead of watching and quantifying their individual activities. Users and managers alike must be held accountable for their planning and communication activities on a continual basis. Reports of appointments being recorded against customer records and the planning reports requested will be the key indicators of user acceptance.

In my next post I will continue to provide evidence of the value of the information gathered through the PACT system and tackle the issue of The dreaded pipeline.

14) PACT - Change Management Required

By my definition, PACT stands for Planning and Communication Tool. In the dictionary, a pact is defined as an agreement or treaty. In any agreement or treaty, both parties give up some the things they want, in order to achieve a desired outcome that is adventageous to both parties.
The CRM Dilemma Restated:
The problem with agreements on traditional CRM, between companies and users, is the CRM Dilemma causes users to decide that submitting to activity controls is too high a price to pay. They enter in to these agreements knowing that they will not keep them, and yet they say nothing because doing so would validate the CRM Dilemma for the company. The company enters into the agreement knowing full well that they will use activity controls because quantifiable, "Low Card" activity data, is too valuable to ignore. Yet the company doesn't say this because to do so would validate the CRM Dilemma for users.

A PACT gets the truth "Out on the table" by finally admitting that "Low Card" activity controls are the primary cause behind user mutiny against traditional CRM.

Yet, even with a new PACT, there are elements of change management required. New accountabilities are added to the sales force and to managers with this PACT. Because communication in the PACT only involves "High Cards" (What others need to know in order to progress a desired action), change management is more a functional element that can be addressed in training. Planning on the other hand, is an element that many sales reps and managers have not been held accountable for, on an ongoing basis in the past. In instituting the PACT I have outlined, you may want to consider an incentive program to ease the transition into a focus on effective planning.

In my next post I will present some recommendations on incentives you may want to implement along with the new PACT.

13) I thought we could encourage CRM Usage through Incentives

Back when I still believed that sales reps would record all their activities, as long as the benefits outweighed the perceived risks, I created an very elaborate and lucrative incentive program to encourage CRM use. When I presented this plan at a Gartner CRM conference, it was very well received and I had several people ask for a copy. The incentive plan was designed to engage users and groups of users. To follow, I will lay out the incentive plan and then discuss how the plan was impacted by the CRM Dilemma I later discovered. I have taken out any company references. The numbers given are only an example and would vary by industry.

CRM Incentive Plan
Submitted by Arne Huse

How MS CRM is intended to benefit this company

• Allow for timely sharing of customer activities and information between business units. This will make for less frustration for employees and more importantly, our customers.
• Improve customer activities documentation being passed on to incoming employees when the current individual leaves the position. This will allow for an easier transition for both the customer and the new employee
• CRM will provide a centralized database of customer information. This will improve privacy, security and accuracy of all customer information.
• Less time being spent by employees looking for information.
  Better goal and opportunity management by market facing employees
• Far better sharing of competitive information

Situational Analysis
MS CRM was rolled out in three phases. In each Region, two ½ day training sessions were held for Sales Reps and Managers. Overall the feedback was the program was easy to navigate and understand. Deskside trainers were established in each region for additional training when requested.
As is common in 50% of CRM implementations, adjusting to the “New habits” of using CRM has been a challenge since the introduction. The introduction of Blackberries created less of a need to use laptops and so CRM usage became sporadic for most. The pilot of a mobile solution (Ten Digits) brought CRM to the Blackberry and continuing to roll out a mobile solution to the field is a crucial step in the success of CRM
Increasing CRM knowledge, usage and comfort level in the organization will be the first area of responsibility and focus. We need to create a “New habit” for sales users. Using a graduated introduction, we can embed usage with our customer facing employees and create a habit that will yield long-term benefits.

Three Categories of Sales People, Motivations for using CRM
And Success Factors
With regards to what I call “Organizational habits” I have generalized salespeople in to three categories in order to best create solutions and incentives to encourage regular CRM usage. This encompasses all field sales roles and is general in nature.

1) Unstructured Sales People – With no structured systems in place, while these individuals may have been effective in the past, and in some cases may continue to be effective in the future as further demands are placed on them the need to better organize their time (calls) becomes increasing apparent. These individuals usually do not pre-plan calls, occasionally miss appointments and with a little more planning and the right tools, can provide much more timely information to
their customers. They may not have established a fax or email communication system in place for quick information dispersal to customers. The benefits of an effective and well-designed CRM solution will impact these individuals in a positive way in a relatively short period of usage. The key elements are to offer specialized training, coaching and to get them to begin using the program by pre-planning and entering activities and using it regularly for six months to establish good habits. Key benefits include happier customers, better performance evaluations and bonuses, and more job satisfaction. These individuals will often agree with the statement “My best days are the ones I wake up knowing exactly what I will be doing that day.” CRM can help them to obtain that.

Key CRM success factors for the unstructured user
Identify who they are
Provide basic CRM training, coaching and ongoing follow up
Manager accountability in pre-planning and entering activities in CRM by the Sales Rep
Provide incentives for beginning and continuing to use the program
Involve peer accountability and support through team incentives

2)_Somewhat structured Sales People – These individuals use a manual system of notebooks or file folders to keep track of customer interactions. Pre-planning of sales calls may or may not be happening on a regular basis. These individuals sometimes spend extra time looking for past information as used notebooks are not carried and files are often started fresh at the beginning of each year. With no system of reminders or task planning, some tasks fall through the cracks but they can often tell you their schedule for the coming weeks. Most likely they do not create opportunities and goals that are regularly reviewed, updated followed. These individuals may or may not have a fax or email system established for quick information dispersal to customers. This group is where I feel the majority of our sales people fall in to. This group will seriously struggle to see the benefit to them in using CRM on a regular basis. They will likely be attached to the system they are currently using and will need to be encouraged to adopt the habit of using CRM. The target here is six months of usage. Once the six month mark is reached, they will have information invested in CRM and they will see the benefit of faster information retrieval versus the old way of searching through files or notebooks. Effort must be put in to make sure the CRM solution is fast and convenient to use with proper training, a good CRM Mobile solution and every manager and support person entering activities in to CRM. Incentives and accountabilities need to be put in to place to encourage the beginning and continuing usage of CRM.

Key success factors for this large group

• Discover what frustrations can be reduced with CRM usage by themselves and the team
• Draw a picture of what successful CRM will mean to them and the company
• Six months of regular CRM usage to create “Investment” in the data
• Buy in and CRM usage by area managers with training on running reports and team incentives
• Provide basic CRM training and offer more advanced training based on business process
• Provide a good mobile CRM solution
• Provide incentives for beginning and continuing to use the program
• Involve peer accountability and support through team incentives

3) Structured Sales People – These individuals are already practicing CRM whether or not they use an electronic system. They pre-plan calls and have developed a solid system for follow up and providing information to their customers. These individuals may have also started using a contact management system like ACT or Maximizer on their own, because they see the value of using such a system. They regularly send information to their customers through a system of fax or email broadcasts. They may or may not be using opportunities and goals well. The challenges with getting these individuals to use the company CRM system are surprisingly difficult. These individuals are very fond of the systems they are using and they often enjoy the fact that others cannot look in to their system to see what they are doing. One frustration for these individuals is not being made aware of interactions with their customers by other company employees and managers. These individuals will buy in to CRM much faster if their managers are also using the program and they can get a true “360 degree” view of interactions with their customers. The Marketing Campaign features in MS CRM V3.0 will very much appeal to these individuals as well. One key is also to provide a good mobile CRM solution to replace the on site system they are now using. Advanced CRM training should be established for these individuals to include analytics, reports and opportunity management. Incentives should be put in place to encourage these individuals to use MS CRM to its fullest extent in setting goals and following them through to conclusion. Once these individuals have begun to use CRM they will likely be excellent champions for the program.

Key CRM success factors for the Structured group

Identify who these individuals are ( Managers and peers)

Interview them to discover what systems they are using

Do crossover analysis between their system and MS CRM to discover the benefits and offer data conversion

Make the transition as smooth as possible

Discover what frustrations can be reduced with CRM usage by themselves and the team

Draw a picture of what successful CRM will mean to them and the company

Provide training alternatives based on their level of knowledge

Use them as champions of the program and acknowledge them

Ensure they have elevated privileges in CRM

Offer incentives that will challenge them to use CRM fully and be rewarded for doing so

CRM Incentive Program Proposal

Goals of this incentive program

• All Competitors be entered with profiles and current information in to CRM
• Every Field Representative and Manager demonstrate the ability to enter Account Activities in to CRM
• Every Field Representative enter at least forty and every Manager at least twenty – Pre-Planned Account Activities in to CRM
• To reward and recognize those Field Representatives that achieve the CRM Mastery level with at least one hundred fifty Pre-Planned Account Activities in to CRM this year
• Advanced sales users be encouraged to and rewarded for entering their territory goals in to Opportunities in CRM, updating progress against those goals in CRM and providing success milestones for the year. The intent is to expand this particular goal for next year.

Details
Entering Competitor Profiles – Contest
Rationale: Having current and relevant Competitor profiles in CRM is very valuable and will allow company employees to gain an understanding of competitors S.W.O.T, key products, and general information. Information discovered such as press releases and sales literature can be attached to the Competitor profile on an ongoing basis. Completing a Competitor profile takes about 30 -60 minutes and requires knowledge and research about the particular competitor. The creator and last person to update the profile are both easily identified in CRM
Cost: $120 for every five completed National and Regional competitor profiled
Eligibility: Sales Reps
Criteria: Every eligible employee that creates and completes a competitor profile will be entered twice to win an IPOD and any eligible employee that adds either a significant note or sales literature to the profile will be entered once to win an IPOD. The draws will be conducted at the end of each month and one IPOD will be added for each five completed profiles. The intent is to have them all completed over a short period of time.

Demonstrated ability to enter account activities in to CRM – LEVEL 1 - Beginner (10 Activities)
Rationale: The two key elements in increasing customer satisfaction and effectiveness in sales calls are Pre-call planning and Post-call follow up in CRM. This simple achievement level is simply to demonstrate to the user how simple and effective the process is, and draws out any additional training required. The Team Challenge is designed to encourage peer accountability both for Field Reps and Managers. Updates will be put on the CRM Home Page daily.
Cost: $
Eligibility: Sales Reps
Criteria: Every eligible employee entering ten - Account Related Activities or five with pre-call planning in CRM will receive a $25 gift card
Team challenge: The first region to reach this level at the 100% level (All Field Reps AND Managers) will have their rewards doubled

Entering Account Activities in CRM – LEVEL 2 - Proficiency (40 Pre – Call Planned Activities)
Rationale: This incentive simply encourages the continuation of entering Account Activities and pre-planning sales calls. At the point of payout, the individual will be proficient in navigating CRM and will have been using it for pre-call planning and follow-up for six to eight weeks. This is a very good indicator of continued and effective use of CRM. The Team Challenge has also been added. Reports will be run and updated weekly on the CRM Home Page
Cost Estimate:
Payback: At the 100% level, this represents over 2000 Pre-Planned and followed up sales calls.
Eligibility: Sales Reps
Criteria: Every eligible employee pre-planning and following up forty – Account related Activities in CRM will receive a $100 gift card
Team Challenge: The first Field Sales Team to reach 100% will each receive a double reward only if ALL Managers have reached 50% of LEVEL 2 (20 Pre-Planned activities)

Entering Account Activities in CRM – LEVEL 3 – Mastery
Rationale: This incentive rewards the top Field Sales CRM users that choose to embrace the concepts and spirit of Customer Relationship Management. This incentive is based on qualitative as well as quantitative use of CRM
Cost:
Eligibility: Sales Reps
Criteria: To be eligible, each Field Sales Representative will have entered at least one hundred fifty- pre-call planned activities (At least one per day) in to CRM this year. Each Representative achieving this level this year will receive $500.The user judged to have made the best use of CRM Activities in 2006 will be awarded an additional $1000 and the runner up will receive an additional $700.
Team Challenge: If a region achieves 100% CRM Mastery Level by Field Sales Representatives and 50% (75 Activities each) by Managers, the awards will be increased to $1500 from $500.

Using Opportunities in CRM to track and achieve Territory Goals

Rationale: This incentive encourages and rewards those Field Representatives that have decided to use Opportunities in CRM to track and follow their territory goals through to conclusion this year. Having territory goals and opportunities top of mind all year AND focussed on the Accounts, Prospects and Activities related to those goals, can only increase the chance of achieving them. This challenge will be used to build case studies and testimonials to be used in the roll out of CRM.

Cost:
Eligibility: Sales Reps that have also reached the Activity Mastery Level
Criteria: The top two CRM Opportunity users this year will receive the rewards. To be eligible, the Field Representatives must have 1) entered all Territory Goals in CRM Opportunities prior to a set date 2) reached the Mastery Level in CRM Activities usage this year and 3) worked through each of the goals in CRM this year, adding notes and Activities towards achieving those goals. In January, judging will be done to determine the two Field Representatives that have best used Opportunities to work towards achieving their Territory Goals. The winner will receive a reward of $2000 and the runner up will receive $1500

CRM Incentive Scenarios

1) CRM Activities usage by Field Sales Rep
Reward Single With Team
Level 1 (Beginner) reached $25 Gift Card $50
Level 2 (Proficiency) reached $100 Gift Card $200
Level 3 (Mastery) reached $500 $1500
TOTALS $625 $1750

Best use of Activities award - $1000
2nd Best use of Activities award - $700

2) CRM Opportunities used to track Territory Goals

• Best use of Opportunities this year $2000
• 2nd Best use of Opportunities this year $1500
• Total reward this year for the top CRM user will be $3625 or $4750 with Team
• Total reward for the second CRM User will be $3125 or $4250 with Team
  

Everyone was very pleased with the Team aspects of the incentive program I created and the payouts were approved by executives.

Would the incentive program work once the CRM Dilemma was discovered?
I designed this incentive program to get users in the habit of using CRM to record their activities. I believed that once users were invested in the data, they would continue to record their activities, even after the incentive program ended.
Remember, the CRM Dilemma says that if asked to record their activities, users will weigh the benefits of doing so, against the perceived threat in providing the information. In understanding the CRM Dilemma, we know that such an incentive program will likely cause the following to occur.

• If the program is considered lucrative enough, users will use CRM during the incentive period but only to put in enough information to earn the incentive.
• CRM will not be seen as a tool to manage customers but rather as a way to earn bonuses.
• As soon as the incentive program ends, they will stop using the program
• If, during the incentive program, users begin to feel controlled, they will decide whether to game the program or give up the bonuses and stop using it altogether.

In my next post, I will look at how such incentives (With smaller rewards) can be used with PACT