9) A "True" CRM Dilemma

If you Google "CRM Dilemma", you will find the list comprised of decisions between software, vendors, hosted or on-site. You will then see provocative references from my blog telling you that CRM isn't going to work, no matter what you do. A true dilemma is one that involves more than one person or group, making a decision that impacts both the outcome and the decision made by the other group. The CRM Dilemma I have defined through research is a Trust or Don't Trust Dilemma between employers and employees that heavily impacts resistance to CRM.

• An employer requesting that "Low card" activities be recorded in CRM, causes users to distrust, and fight CRM because:
• "If our employer trusts us, and does not plan to use our recorded activities against us, why do they want us to provide quantitative data about our activities?"
• The resistance by users to providing information on their activities, causes employers to distrust, because:
• "If our employees are doing what they are supposed to do, resistance to providing this information can only mean they are not doing what they are supposed to be doing."

The most fascinating part of this dilemma for me is that it can't be spoken with the other party in the room! As soon as you validate the concerns of the other party, there is no longer a dilemma and "Distrust" can be the only choice. The only element to be decided is whether the employer or employees will "Win." A win by employees means no one is using CRM to record any activities. I believe the CRM failure rate provides the answer on who really has the power to make or break CRM against this dilemma.

I

8) New Product Launch - PACT versus Traditional CRM

In order for PACT to replace traditional CRM, Planning and Communication need to be the focus throughout the organization. As posted before, tremendous planning needs to be done to ensure sales reps have all the information they need in order to plan a successful sales call. Sales reps also need to be held accountable for proper territory and sales call planning as many sales reps are lacking in these important skills. This does not mean that we are telling sales reps how to plan, but rather, guiding them in what to plan. The following hypothetical company statement illustrates how PACT is supposed to work.



PACT - "High Card" Approach

"In order to prepare for our new product launch, our goal is to have 300 new product presentations conducted with customers next month. In order to assist field sales in achieving this goal, we are adding the following sales call planning reports in PACT:"

• Data sheets on the new product line


• Sell-in sheets


• A copy of the suggested presentation format


• Customer leave-behinds customized to each customer.


• Target demographics for the new line


• Product photos


• Independent reviews of the new line


• The latest competitive intelligence for this line

"When planning sales calls for next month, please select this package of information for each target customer. Please note that customer feedback on these tools is very important, so please pass along any feedback you receive. You will also be able to view cumulative reports on the feedback that has been received."

Accountability in the "High Card" approach:

Before I give the "Low Card" approach to this scenario typically found in CRM, it is important to understand how using PACT has shifted the accountabilty for the sales reps involved. Again, with apologies in advance to the IT experts, I am a "Sales Guy," not a "Network Guy".

In the above scenario, sales reps have been made accountable for 1) Planning and scheduling appointments with customers. 2) Selecting the new product line package for target customers, and 3) Providing customer feedback on the presentation, which they can also access cumulative reports on. (This last add also tells reps that management will be reading the feedback as well).

CRM - The "Low Card" approach to this same scenario:

Even if all the same sell-in tools were provided, "Low Card" reporting is added to satisfy quantitative reporting. The added statements are in red.

"In order to prepare for our new product launch, our goal is to have 300 new product presentations conducted with customers next month. In order to assist field sales in achieving their portion of this goal, we are providing the following tools in CRM:"

• Data sheets on the new product line


• Sell-in sheets


• A copy of the suggested presentation format


• Customer leave-behinds customized to each customer.


• Target demographics for the new line


• Product photos


• Independent reviews of the new line


• The latest competitive intelligence for this line

"On the attached template containing a list of all your customers, please check off the customers you will be doing the presentation with next month. In CRM, each customer will now have a check box added that should be selected once you have completed the presentation. You will also find a drop-down lists to indicate the results of the presentation and, if the order is not placed, the reason the customer has given."

Accountability in the "Low Card" approach:

In this typical "Low Card" scenario, sales reps have been made accountable for 1) Selecting the customers that will receive the presentation so as to provide their "portion" of the total goal. 2) Provide "proof" that they have completed the presentation by checking off a box in the customer record. 3) Provide further "proof" that the presentation was completed by choosing the results of the presentation from a drop-down list. 4) If the presentation did not result in a sale, to provide the reason the rep was unsuccessful.

Such data is fantastic at providing quantitative reports on the activities of reps, right? Wrong!

1. In selecting which customers reps intend to do the presentation for in advance, reps will satisfy their portion of the goal for the quantitative report which will satisfy or exceed the overall 300 presentation goal. BUT...They haven't made the appointments yet! The time to state the intention to do the presentation is at the time the appointment with the customer is made.


2. Proof the presentation was completed: We seem to forget sometimes that most sales reps hunger constantly for new products to present and sell to customers. I know that having a nice report on "X Presentations completed = X% sell-in success rate", but this is achievable in PACT, without forcing the reps to create this report for you.


3. Results of the presentation: Your ERP system will tell you if a sale came out of the presentation. This drop down is designed to put further pressure on reps to account for their activities and builds on the battle to make CRM go away.


4. What did you do wrong? I guarantee you the drop-down selected here (If chosen at all) will be the one that puts the least responsibility on sales reps for the sale not being made.

"It is a rare dog that will carry the stick with which it is to be beaten." - Douglas Hartle

I will let this sink in while I prepare my next post.

7) Instituting a PACT takes courage!

As an employer, you have every right to ask your employees to log their activities into a centralized database. My research does not advocate removing accountability, but rather, seeks to demonstrate how the aversion to recording activities, that can be used against them, drives employees to mutiny against traditional CRM. Believe me, I found the conclusions of my research to be hard to swallow, but undeniable. If you have the courage to implement a PACT, rather than traditional CRM, there will be departments or individuals, that will push to add activity controls. Because the CRM Dilemma is so counter-intuitive to the ethos of most organizations, unless you fully believe in a PACT, rather than trying to force sales reps to log their activities, you are better off not trying to go down this road. Unless you are willing to institute a "No Low-Card Policy", (Except for training or discipline as noted earlier) my research concludes you will be back to a failing CRM system in no time. Remember that a "Low Card" is anything that a sales rep is asked to record about their activities, that only forms quantitative data and does not help progress the sale, benefit them, or the customer.

6) PACT - Communication after the sales call

NOTE TO READERS: This blog is NOT meant to be read "Top-down". Please explore my research starting with the oldest entry to understand the logic behind the CRM Dilemma.

After the sales call
With traditional CRM, after the sales call the sales rep is supposed to enter the details of the sales call into CRM. Typical details of a sales call include:

• Date of visit and customer


• Primary objective(s) of the call, by category or categories


• Items discussed, or presentations made by category are recorded


• Agreements reached with customer


• Customer feedback is recorded


• Evaluation if objective(s) of the call are or were achieved


• Follow-up activities or appointments required by the sales rep, are recorded


• Follow-up activities or appointments required by others, are recorded

There are many benefits to the sales rep, the company, and the customer in recording the above details of a sales call. Whether or not CRM is used, many of these details are recorded by the sales rep in a paper or contact management format. To follow, I will evaluate the benefits and implications of each of these activity details as they relate to the sales rep, the company, and the customer. Each detail of the activity will also be evaluated from the sales rep's perspective if entering it into CRM, rather than a paper or contact management system only the sales rep has access to.

Date of visit and customer: The vast majority of sales reps record this information as a reminder to themselves or evidence that the sales call was made. Usually, in the hands of the company this information is only used for quantitative and analytical purposes. This information has some value in the customer record if another employee is going to visit the customer and needs to know the last time the sales rep visited. In PACT, this information will be revealed based on the planning that was conducted for the appointment. This information is "Low threat" to the sales rep provided it is not categorized and only in the customer record.

Primary objective(s) of the call, by category or categories: Every sales rep should have an objective when they make a sales call. These objectives should line up with strategic initiatives set out by the company as well as the goals the sales rep is working towards. What differentiates PACT from traditional CRM, is that because reporting these objectives back to the company is strictly "Low Card", quantitative data, such reporting is not required.

Items discussed, or presentations made by category are recorded: Most sales reps will record this information for their own records. In CRM, this information is "Low Card" used for quantitative reports of negative value to the sales rep. PACT does not require this information, but does allow for uncategorized text notes created by and for the sales rep, if they choose to do so.

Agreements reached with customer: Such agreements usually have "High Card" value (Someone needs to know this agreement has been reached). The progression of these "High Cards" in PACT (Or CRM for that matter) is of high value to the sales rep provided the quantitative element of this information is kept to a minimum. Quantitative reporting (Usually indicated by "Tick boxes") can have the negative effect of causing the sales rep to use email to progress the "High Cards" because email is less quantifiable.

Customer feedback is recorded: Reporting the feedback provided by customers is of critical importance in PACT. Unfortunately, traditional CRM lumps this tool in with activity controls and as a result, many companies are not receiving this key information from customer-facing employees. By removing activity controls in PACT, employees will be more willing to record this feedback because they will not have to employ all the "Excuses" for not using the system. An important note: In my considerable experience, customer-facing employees need to be given access to cumulative customer feedback. Having access to these reports encourages employees that "Someone is listening." If possible, an automated "Thank you for recording this feedback" is also a good idea to encourage this behaviour. They also need to be encouraged to provide positive feedback from customers.

Evaluation if objective(s) of the call are or were achieved: In traditional CRM, this reporting is placed under the guise of "Program evaluation" or "Employee coaching." Employees see right through this and know that these "Low cards" will only be used for quantitative evaluation of their performance. Employees want to be judged on outcomes, not the activities completed to achieve those outcomes. Because this reporting is viewed so negatively by employees, they usually cause employees to avoid the reporting system altogether. Very often, this activity reporting doesn't jive with actual outcomes anyway. The reporting of these activities is not required in PACT.

Follow-up activities or appointments required by the sales rep, are recorded: Once again, because the quantitative reporting of sales rep activities is eliminated in PACT, the sales rep will be much more open to using the tools provided to record follow-up activities. Such a system works far better than paper-based systems because of the "Reminder factor."

Follow-up activities or appointments required by others, are recorded: The key in PACT is to attach these "High Cards" to the customer record. Even if the preferred method of "High Card" communication at your company is email, most systems integrate with Outlook so the customer can be attached to the email. In this way, anyone that opens the customer record will see the email or appointment that has been attached. Important Note: You may be tempted to create workflows to address these sales processes. I caution against applying accountability to those in the sales processes that receive these workflows. I offer the following scenario to illustrate my research findings:

Each stake holder in the sales process gathers in a room, to place parameters around a particular sales process from start to finish. Each department in the process is asked how long they feel it will take to complete their portion of the sales process. Their response is recorded and the entire process is agreed to by all stakeholders with a clear timeline firmly in place from inception, to completion. Each department will be accountable for the timeline they have agreed to live by. This is a process that goes on at most companies, with or without an automated system for tracking the progress. With an automated system, managers and others can receive delinquency reports on departments not achieving their portion of the workflows, in the time period agreed to initially.

The dilemma occurs when internal departments start moving away from the automated workflows that have been created and agreed upon. After a time, many revert back to old systems such as email or phone calls, and avoid putting the workflows into action. The reasons for this are very complex and hard to pin down. Inevitably, excuses blaming the "System" will arise as to why the automated workflow is not being used. The "truth" of the matter seems to point to human nature being the cause of reverting back to "Less trackable" systems for the following, usually unspoken reasons:

• You can't "talk" to an automated system. The "system" doesn't care if you or someone in your department is sick. The "system" doesn't care if two people in your department just quit. If your department is assigned a workflow, a delinquency report WILL be generated if you do not complete your assigned portion on time. You can't phone the "System", explain your problem and ask for more time. It will then be up to you to explain why you are delinquent after the report is generated.
• In an automated workflow process, if you need more time you can't simply phone or email the one that instigated the workflow. Instead, if you are unable to complete your portion on time, you will need to call everyone in the process and explain why you will be delinquent.
• This dilemma seems to happen more often in "Team-based" corporate cultures. Because no one likes delinquency reports generated against them, empathy can cause a move away from automated workflows.
• Automated workflows with accountability reporting, can have the negative effect of not being able to accelerate the process under special circumstances. Sales Reps and others usually try to form positive relationships with those they rely on to produce, ship and deliver the products or services they sell. Often, a phone call is made saying "I know you guys usually need two days to do this, but I need a big favour......". Usually the last thing someone wants is to create an adversarial relationship with those they rely on, by instigating an automated workflow process that will cause problems for those receiving it.

There are times of course when such tools are required and appropriate. This scenario is only designed to point out that agreements reached in stakeholder meetings, do not always result in "real life" work flow parameters.

The sales call by the rep has been well planned. The sales rep had a clear understanding of their objectives based on company initiatives and guidance that was provided in their planning process. The sales rep was also well-armed with information from PACT, that would help him or her both sell to the customer, and build relationships by providing valuable information and service to the customer. PACT provided this information customized as both a working paper and a customer leave-behind.

After the sales call, the rep was only required to enter "High Card" activities and customer feedback into PACT, so that recipients would quickly receive them and the "High Cards" would be attached to the customer record. The sales rep was also able to schedule any follow-up activities for themselves.

In my next entry, I will build on the value of PACT for companies and users. I hope to show that a tool based on Planning and Communication, even without activity controls, is far superior to a CRM system with activity controls, that no one is using.

5) PACT - Getting the most out of a failed CRM system

You've spent a LARGE sum of money to bring the dream of CRM to your company, but no one is using it despite your use of incentives, threats, and agreements. You've probably heard every excuse in the book as to why the system is not being utilized:

• "The system is too slow"
  
• "Paper notes are just so much faster and convenient"


• "I don't want to carry my laptop into calls"


• "Entering stuff into CRM is cutting into my selling time"


• "You want me to enter my activities into CRM at night, instead of spending time with my family"

Mobile Access to CRM must be the answer then.

You may have tried, or are considering giving mobile access to CRM to users through company Pocket PC's or Blackberries. Technology today allows for quick and secure access to all CRM information by mobile users. I can tell you from my own experience, despite rave reviews during training and implementation of complete CRM access on company Blackberries, it made absolutely no difference in increasing CRM usage. Mobile CRM access was provided at large expense and was designed to reduce the excuses noted above. Unfortunately, mobile access simply added new excuses to the list while maintaining old ones:

• "The buttons are too small for typing"


• "The screen is too small for viewing"


• "Paper is just so much faster and convenient"


• "I KNOW I should be using the system, but........."

Now that the wedge of distrust has been firmly placed between those needing the information and those being asked to provide it, a completely new approach is needed. This is NOT the best solution, but my research has shown it to be the only solution that has a chance of succeeding against the CRM Dilemma. The key is to turn attention to planning and communication, and away from user activity controls.

Planning

Planning happens at many if not all levels of an organization. Planning involves the analysis of leading indicators (What is happening) and lagging indicators (What has happened) to determine direction and actions. Businesses today are dangerously reliant on lagging indicators because of the relatively easy access to firm information. I offer the following common scenario to illustrate the point:

Sales to one of your largest customers have been steadily increasing month after month. You can therefore extrapolate those sales to a large increase in the next year based on lagging indicators from your ERP system. What you don't know is the leading indicator that one of your low-cost competitors is courting this customer and the customer is considering switching. What could you do if you had this information?

There are several ways this leading indicator could come to you (If it does) before the customer makes a decision:

1. The customer calls you and lets you know
   
2. The customer tells one of your employees and the employee tells you


3. The information comes through a third party (Supplier, customer, media partner)

Situations like this happen every day in business. What you really need is the knowledge that your competitor is going to make a move on your customer, before they even walk in the door. Let's take a look at some ethical ways you could determine this likelihood, through leading indicators, if you had the information.

1. Your customer has been unhappy about an element of your value proposition


2. One of your employees or managers has gone to work for the competition


3. Your customer has hired an employee, that used to work for a company that purchased from your competitor


4. Your competitor has just lost a major account


5. Your competitor has hired a new CEO or executive


6. There has been a merger or acquisition in your industry


7. Your competitor has launched a new product line or initiative


8. Your competitor has suddenly become more aggressive in another area or market segment

In this simple example, several of these leading indicators would be available in the public domain and company executives should be aware of such industry changes. CRM is supposed to solve several of the business problems involved in gathering and communicating leading indicators, between decision-makers and front-line employees. The sad truth is, if users are not entering information into CRM, they probably aren't looking at the information that is being passed to them through CRM either.

For several of the leading indicators in the above scenario, it is very likely that someone within the decision maker's sphere of influence, is aware the occurance has happened. The four questions are:

1. Are they aware what information is important and needs to be communicated?


2. Are they aware what information is ethical to pass along?


3. Do they know who (or whom) to pass the information along to?


4. Do they know how to best communicate the information to the right person, people, or departments?

The interdependencies of an effective PACT

1. Planning requires Communication


2. Communication requires Planning

Field Level PACT

Every sales rep and sales manager has heard the terms "Plan your work and work your plan" and "Fail to plan and plan to fail." While effective planning is critical to the success of sales reps, the personality and skills that draw people to this profession are often not condusive to proper planning. I have traveled with many sales reps that start their days without any kind of plan for that day, let alone the week or month. Effective planning at the field level involves many company directed and self directed competencies and elements.

Arne's Dream for PACT

I want to say up front that while I am highly computer literate and a sought after "Go to" for my exceptional ability to problem solve hardware and software issues, my official computer training consists of a two day course in 1994, called "How to Turn It On"(I am not kidding). I do not fully have all the answers as to how some of the information in this scenario is going to be disseminated and delivered to the user. I get "Google Alerts" every day on various topics, and I love them. I do not suppose to say that Google Alerts could translate to an enterprise, but they are a concept that most people can understand in delivering timely, specific, user-requested information. I am not a network or data warehouse guy, I am a sales guy with a lot of CRM knowledge, experience, and a dream...Just make it all work and I will be happy.

Sales Rep Planning Scenario #1 - Retailer that currently sells a product we manufacture

I will be visiting this customer next week and have created an appointment in Outlook which integrates with PACT. I need to have information that will help me sell my products to this retailer, be of particular interest to this retailer, and show the retailer that me and my company truly care about the success of their business. When I select the customer from my Outlook appointment, a menu pops up with a check list of reports to choose from:

• Retailer Details Report (Address, staff names and positions etc)
• Sales, Payment, & Product Mix Analysis
• Co-op Advertising Report
• Current Initiatives Report
• Retailer Goal Report (Goals determined for this retailer)
• "High Card" Report (What actions have been created by me or others for this retailer)
• Staff Training Report (Which staff have or have not had training on our products)
• Value Proposition Report (What our company has to offer this market segment)
• Demographics Report (Automatic based on where the retailer is)
• Retailer Competitive Intelligence (What is happening in their industry)
• Competitive Intelligence (What is happening in your industry based on retailer location)
• Community Highlights
• "Google Report" for this retailer
• Retailer Best Practices General
• Retailer Merchandising Best Practices
• Retailer HR Best Practices
• Consumer Trends
• Report on Latest Retailer Technologies
• Give me all reports
• Always give me these reports for this customer

Depending on the reports requested, they will be delivered in two formats:

1. Designed to be used by me only, for planning my sales call
2. Designed to be reviewed the retailer and left behind

The option is then given as to when I would like these reports delivered to me:

• Deliver these reports the day before my appointment (Via email)
• Deliver these reports as soon as they are available (Via email)
• Deliver these reports now and again the day before my appontment

The key is to make the reports valuable and compelling enough, that the sales rep has incentive to PLAN their activities in advance and are specific to the customer. Just imagine the value of these tools when the sales call is made!

Sales Rep Planning Scenario #2 - Prospecting

I will be calling on a particular area or specific prospect next week. Based on the categorized prospect or location in my Outlook calendar, a list of reports to choose from pops up.

• Leads for the area
• Current Initiatives Report
• Goals Report (Goals for this area, prospect or segment)
• Value Proposition Report (What our company has to offer this market segment)
• Demographics Report (Automatic based on prospect or prospecting area)
• "High Card" Report (What actions have been created by me or others for this prospect or area)
• Segment Competitive Intelligence (What is happening in their industry)
• Competitive Intelligence (What is happening in your industry based on prospecting location)
• Community Highlights
• "Google Report" for this segment or prospect
• Segment best practices
• Latest technologies used in this segment
• Job leads for the prospect
• Give me all reports
• Always give me these reports for this area or segment

Depending on the reports requested, they will be delivered in two formats:

• Designed to be used by me only, for planning my sales calls
• Designed to be reviewed the prospect and left behind

The option is then given as to when I would like these reports delivered to me:

• Deliver these reports the day before my appointment (Via email)
• Deliver these reports as soon as they are available (Via email)
• Deliver these reports now and again the day before my appontment

These are only examples but hopefully you get the idea. The reports required for your industry may be very different but the focus on planning remains the same. The key elements are the ability to select specific reports that will be considered valuable by the sales rep.

In my next entry, I will move to communication at the sales rep level after the sales call. I will then go back to planning at higher levels based on the information gathered through customer feedback and "High Cards" created after the sales call.

4) P.A.C.T. - A New Way of Looking at CRM

If my research is to be accepted, it means that CRM users will strongly resist recording their "Low Card" activities into a centralized database. It means that users will work individually and as a unified group to defeat CRM. It means that, if forced to record activities into a centralized database, users may sanitize or falsify their entries so as to not "Carry the stick that they will be beaten with." Mutiny against CRM is the preferred method because it deflects blame whereas falsifying records can lead to additional problems for the user.



If my research is to be believed, it casts serious doubt on the ability of CRM to be an effective tool for companies to understand their customer relationships by having a record of activities with those customers. This detrimental view is not considered helpful to the notion that by following proper change management principles, users can be convinced to enter their activities into CRM.



Why Even Bother With CRM Then?

The simple fact is that companies must continue to strive to understand the needs of their customers. They must provide every available tool to their employees to help them sell more of their product to more customers. Employees must have a system to effectively communicate customer feedback and activities that must be dealt with by other employees, suppliers, or partners, in order to increase sales and customer satisfaction. Sales Reps need to be provided with key and timely information that will both help them sell to customers and make them look like heroes in the eyes of their customers.



Steps to A New Perception of CRM



Step 1: Completely remove CRM from our vernacular

• To a Sales Rep, CRM stands for "Controlling Remote Management"
  
• SFA stands for "System Forcing Accountability"

Step 2: Remove the Trust/Don't Trust Dilemma from the Equation by removing the recording of "Low Card" activities

• If companies truly trust their employees, managers and executives do not need employees to record their "Low Card" activities, but rather they need employees to tell them what customers are saying and doing ("High Card Activities") so they can plan and adapt.
• If companies do not trust their employees, managers and executives need employees to record their "Low Card"activities so they can direct employee activities. They also need to know what customers are saying and doing ("High Card Activities") so they can plan and adapt.
• If employers trust and do not plan to direct employee activities, why do they need those "Low Card" activities recorded?
• If employees truly trust their employers, they would accurately record their "Low Card"activities with no concern that managers and executives would try to direct their activities based on what they are recording. They will also record what customers are saying and doing ("High Card Activities") to the benefit of themselves and the company.
• If employees do not trust their employers, they would fear their "Low Card" activies will be controlled and directed if they provide this information to managers and executives. Customer "High Card" activities would also be withheld because it would demonstrate the usefullness of the system and reduce excuses for not entering "Low Card" activities.
• Even if employees trust their managers and executives, why would they record "Low Card" activites, if they did not perceive a personal benefit in doing so?

Step 3: Form a PACT between the company and users

P.A.C.T. - Planning and Communication Tool

• Pact - No recording of "Low Card" activities will be required (Exception noted below for training or disciplinary action)
• Pact - Users, managers, and executives will record all "High Card" customer activities and feedback in the system.
• All "High Card" activities will be attached to the customer record, and will not result in quantitative "Low Card" reporting upon completion ("High Cards" often become "Low Cards" in the view of the user, once the sale or activity is complete)
• Pact - The system will contain no "Tick Boxes" for the purpose of quantitative reporting of "Low Cards"
• Pact - "High cards" will not be communicated via email or telephone, unless attached to, or recorded in, the customer record
• Individuals may be required to record "Low Card" activities for a period of time, in a training or disciplinary capacity. Such recording will be in text form viewed by the manager working with the employee
• Pact - Users agree to be open about, and accountable for, their "High Card" activity planning
• Pact - Users, managers, and executives will be provided with useful, timely, and customer focused information that will help them plan their selling strategies and improve customer relationships

In my next entry, I will break down each component of the Planning and Communication Tool and how it can greatly enhance performance and user acceptance.

3) Activity Control Versus Outcome Control

Now we are getting down to the nitty-gritty of why the majority of CRM initiatives fail. For most CRM initiatives to succeed, users must be willing to record their activities with customers. The benefits in doing so cannot be denied however in most cases, users strongly resist entering their customer activities into CRM, forgoing the benefits of doing so and despite their assurances that they will use the tool. From my research, I now believe this "Trust Dilemma" is articulated very well in a quote by Douglas Hartle

"It is a rare dog that will carry the stick with which it is to be beaten."


Perfect Versus Imperfect Knowledge (Outcome control versus activity control)
Typically, evaluative processes in business are focused on outcome controls such as sales numbers and product mix because sophisticated ERP systems should provide perfect knowledge of these results.
Perfect knowledge in activity control is rare in that it involves knowing exactly what steps were done by individuals that led to the (overall) documented outcomes, as well as the results of each individual activity.

Current examples of perfect knowledge in activity control include:

• 
  Professional televised sports where the activities of each individual player and position are recorded during play using video and manual documentation by others. Combined with the final game result and individual player statistics, this information exists as perfect knowledge of individual activities and overall team performance.

• High level chess where player moves and counter moves are documented and published along with results. 2,138 games played by chess master Garry Kasparov, against all opponents, have been meticulously recorded showing each move and countermove by each player, and the final result of each game.
  The benefits of perfect knowledge of past activities (and results) by coaches and upcoming opponents are obvious. Such knowledge allows for decisions to be made and strategies to be created that can dramatically affect future outcomes. An important note
  here is since, in these two examples, every activity and result is always recorded without input from the players themselves, players cannot choose to “opt out” of activity controls, if they wish to continue to receive the benefits of being in the game. This study will attempt to demonstrate the length that players will go through to “opt out” of activity-based control systems that do not provide a disproportionately larger reward to perceived risk ratio.
  
  
  

Hypothetical Suppositions
If an active, professional basketball player could, through self-effort, remove their image from all previous game recordings (Activity controls), so only their comprehensive individual and team outcomes (Stats) remained http://www.databasebasketball.com/about/aboutstats.htm
-Would they choose this option?
-If yes, would they encourage others on their team to do the same?
-What if they were given the option of only removing themselves from select games?
It is conceivable that players would prefer outcome controls over activity controls, particularly during “Slumps” or if they received any negative feedback based on activities, rather than outcomes. This decision would be much easier if other players also opted out of activity controls to spread the blame or justify the decision.
If, when Garry Kasparov was actively playing chess, he could choose, through self-effort, to remove his previous individual moves from public record, leaving only win/lose outcomes http://www.chessgames.com/perl/chessplayer?pid=15940
-Would he have chosen this option?


“CRM has to be easy for users to input their activities into or they won’t use it”
How easy does CRM have to be for users to input their activities?
Before one can answer this question, it is important to look at user resistance to automatic activity control systems in use, that require no effort by users to provide the information about their activities.

Opting out of a non-user-inputted, automated activity control

For users that have been assigned an automated activity control system, any opportunity or decision, to disengage or “mutiny against” the control system, will be weighed against perceived value or penalty by the user in doing so. One such anecdotal example came out of a conversation with a friend that has served with the Canadian military in Afghanistan. All Canadian military personnel are equipped with GPS transmitters that provide their information and location, to officers remotely guiding their actions. These GPS transmitters are used both in non-combat maneuvers here in Canada as well as in combat situations in Afghanistan. The purpose of GPS in training situations, is primarily to evaluate the activities and movements of troops as they perform their maneuvers to documented results (Low Cards).This information provides perfect knowledge of user activities and subsequent results, without any effort required by users to provide the information. Unlike peacetime training, in combat situations air cover is provided and GPS information is used to keep bombs from being dropped on troops and to generally keep them out of harms way (High Card), as well as activity controls. While activity control in peacetime serves to prepare troops for combat situations and thus protect them from harm, the perceived value by troops is far less and “Big Brother” is the common term used to describe GPS-based activity controls in training situations. My friend confided that a course of action sometimes taken by troops during training, is to turn off the GPS transmitters whenever possible. This collaborative, “Mutiny” approach against the “Low Card” activity controls, are often endorsed by junior officers that are held accountable for activity control information gathered about troops under their command. The same users, I was told, would never consider “opting out” in combat by disabling their GPS transmitters because the perceived value of higher safety outweighs activity controls.

Customer benefit is often weighed against the self-interests in activity controls
No where is this statement more appropriate than in the bitter battle between Yellow Cab drivers in New York City (NYC) and the Taxi and Limousine Commission (TLC) regarding the “Low card” activity controls of drivers using Global Positioning System (GPS) transmitters. Historically, NYC Taxis were not dispatched but were “flagged” by passengers and only accepted cash as payment. Manual “Trip sheets” were maintained by drivers listing pickup and drop-off points and the fare amount. This documentation formed the basis of declared income by drivers. In 2005 the TLC mandated that as of October, 2007, all NYC Taxis must have GPS transmitters installed with passenger terminals that also allow passengers view their location and pay by credit card. Passenger pickup and drop-off points with fare paid are recorded automatically recorded by the GPS units and transmitted real-time to the TLC. This system eliminates manual trip sheets and provides the TLC with an accurate and unbiased view of NYC Taxi driver activities and income. Many punitive controls have been put into place by the TLC to ensure compliance by drivers and continuous system usage is mandatory for employment
NYC taxi drivers have rallied heavily against these new “Low Card” activity controls, complaining about the cost of the units as well as the loss of privacy and autonomy. Interestingly, no statements by drivers admit the benefit to passengers of paying by credit card, nor address the (unsubstantiated) possibility that drivers rely on undeclared income made easier in a manual trip sheet system. TLC statements have focused on benefits to
passengers and for drivers, the end to manual trip sheets. To my knowledge, driver income accuracy has not been addressed in statements by the TLC except that the automated trip reports will only be available to the IRS by subpoena. The TLC has also addressed driver concerns regarding the issuance of tickets for traffic by stating “There are currently no plans to issue traffic citations based on GPS data.”

Hypothetical Suppositions
When the IRS is aware that automated, accurate records of taxi-driver income are available, will subpoenas for these records increase over those for the manual trip sheets?
If a taxi-driver is involved in a traffic accident and there will be a GPS record of how fast the cab was travelling, will the claimant demand the record?
If the TLC receives traffic complaints about drivers, will they be forced to look at GPS driver data?
Can activity control (Low card) data such as this be left unused once its existence is known?

Automating the decision to “Do the right thing”

If toll booths were completely run on the “Honor System” without automated enforcement, would drivers stop to pay the toll for the good of all or would they justify to themselves why they do not need to pay?

If the TLC allowed cab drivers to choose whether or not to install GPS and rely on “Market forces” instead, would drivers install the units to the benefit of passengers or justify to themselves why they do not need such activity controls?

When police departments can decide whether or not to have forward facing video cameras in their patrol cars, why does it usually only come about after racial-profiling lawsuit settlements?

A study on medical morbidity published in 2003 by Folkman, McPhee and Lo found that of training physicians who made serious errors causing death or injury to patients:

• Only 54% shared the error with a colleague
• Only 24% told the family of the patient

The bottom line is that people are highly resistant to providing any information on their activities that can be used against them.

My next post will explore how CRM can actually succeed if activity control elements are replaced by P.A.C.T.

2) "A Beautiful Mind" that started this journey

My research into the real reason behind CRM failures started after watching the movie "A Beautiful Mind".

In the movie, Russell Crowe plays the role of John Forbes Nash, the Nobel Laureate who suffered from schizophrenia. After watching a movie purporting to be based on a true story, it is my habit to do online research to find out what the "Real" true story is. While this often sucks the life out of the pure enjoyment of watching a movie, it feeds my inquisitive nature and my love of learning.
In reality, Nash was contacted by aliens, not the CIA, and his ever supportive wife divorced him but remarried him years later. Nash shared his Nobel Prize and no Laureate gets to make a speech at the ceremony. The key point here is I discovered the thesis Nash wrote at Princeton.

In his Princeton University doctoral thesis "Non-Cooperative Games", Nash expanded the concept of Game Theory by looking at a simple poker game. In all Game Theory, players will always do that which will give themselves the biggest payoff, with no consideration to the payoff to others.

I had no intention of entering into a research project at this point. I came up with an idea to create a game that would demonstrate to CRM users the benefits to themselves and to each other in using CRM to record their activities. This is the actual game paper I created:

CRM
A Card Game Analogy
When looking at any business report or situation (Poker Hand), there exist “High Cards” and “Low Cards”. High cards are those pieces of information a player feels will impact their hand the most .

These high cards often change and fluctuate depending on job role, culture and corporate direction. Because high cards can be subjective, incentive and corporate programs are often created to reflect (and drive) high card values and behaviors.

If you are left with high cards at the end of a hand, they count as negative.
Low cards are those pieces of information that in and of themselves do not command attention but in a cumulative way have an impact on high card values.

If a particular low card value is impacting, or needs to impact a high card value in a disproportionate way, it may be deemed a high card value for a period of time. Low cards are one to one issues
Often people leave the company and stacks of cards are found that should have been played, but were not.
If players never know if the other players are blindfolded or not, they cannot trust the game and will look for alternatives to ensure cards played are being acted upon.

High Card Dilemma: If a high card is played in CRM, assuming it will be read (and acted upon) and it is not, the player could be in a worse situation with the customer. If players assume the high card may or may not be read and acted upon, there is no point in playing in CRM because sporadic action will result in conflicting communication that may exasperate the issue even more (Blindfolded players). Players cannot win the game unless they play the high cards.
Low Card Dilemma: Over time, as all the hands I play are recorded and analyzed, others will know exactly what patterns I use in playing. I will lose my ability to bluff and others will be able to critique my playing. But if many players are recording all hands played, I will be able to view playing patterns of successful and unsuccessful players and allow experts to coach me to being a better player.

The coaches must also show all low cards played. Discarded low cards may be picked up and used by other players
THE DEALER IS ALWAYS THE CUSTOMER although wild cards are decided by players at the beginning of each round.
Discards are low cards deemed by others to be high cards
Endless deck with an equal number of high and low cards
Players may opt out of the game at the beginning.

What happens if players leave the game but don’t tell anyone?
High cards are recorded in your hand and then also sent to other players (Partners) that you think can also use them. Whoever receives the card either plays it or sends it to another player. Unplayed high cards at the end of the round, count against the holder and those that sent the cards.

You are all playing against the “HOUSE”

Game Theory Simplified

Game theory seeks to understand the rational choices that people will make to receive maximum personal payoff in a given situation. The most famous game theory is "The Prisoner's Dilemma".

The Prisoner’s Dilemma
In 1950, Rand Corp. scientists Merill Flood and Melvin Dresher, researching game theory in terms of its possible applicability to global nuclear strategy, came up with a series of non-zero-sum puzzles. From this evolved the Prisoner’s Dilemma:
Smith and Jones are arrested on suspicion of a crime. Their attorney tells them the evidence is flimsy, so if they both stay silent, their sentence will likely be a year at most on minor charges. The suspects are put in separate cells and each visited by the district attorney with the following deal:
If you cooperate and confess to the crime but your accomplice remains silent, you will go free because you cooperated, and we will jail your partner for 20 years.
If you confess and your partner does, then he will go free and you will get 2o years.
If you both confess, you’ll both get 10 years

A strategy of mutual silence results in the best collective outcome, but it requires the partners to trust each other because it places the silent player at risk of being exploited for the other’s gain. The dominant strategy therefore, is to confess (Defect).

John Nash took this theory one step further by mathematically proving that individual players could benefit by understanding that the other players will consistently do that which will give themselves the biggest payoff.

What this all has to do with CRM

CRM is sold to users under the premise that recording their activities in CRM will be beneficial to them.

Despite what is said in the room, users will inevitably make the decision whether or not to support CRM by recording their activities in a centralized database.

We know from many studies that CRM most often fails, because users choose not to use the system rather than support it. Although I strongly believe that consistent use of CRM will help employees be more successful, users will inevitably weigh any benefits in recording their activities against any percieved threats in doing so, when deciding whether or not to use CRM.

My study took a comprehensive look at what really goes on in the minds of CRM users, between the stated intentions to use CRM, and the inevitable failure of the program due to the lack of input by users, or distrust in the data provided.

My study does not support the conventional view of what CRM can or will achieve, in terms of allowing companies to have users submit to activity controls, regardless of how benignly these controls are presented to users.

Examples of common statements include:

• “The company has neither the time or inclination to watch your activities”
• “Information sharing is important with so many people calling on the same customers”
• “The information will not be used against you but we do need reports in order to measure the success of the ____________ program”
• “As long as you are getting results, we have no interest in monitoring how you are getting those results”

If the dominant strategy in a Trust/Don’t Trust Dilemma is “Don’t Trust”, by either the company or CRM users, the factors causing the distrust must be removed or CRM will fail.

Because this study and its conclusions may seem to cast doubt on the overall value in even attempting a CRM implementation, recommendations are made on how companies can increase the odds of a successful implementation substantially. The results of this study have been validated by sales reps and sales managers from several companies.

**The term “Activity Controls” does not refer to activities or information currently communicated between customer facing employees, via emails and/or phone calls, to achieve a specific outcome desired by the originating employee. Activity controls simply mean the ability to observe and record current activities and through analysis, the ability to change future activities and behaviors.

On my next entry, I will address the topic of perfect versus imperfect knowlege of activities and "High Card" versus "Low Card" activities.

Best Regards

1) The true killer of what should be a great tool for companies and their customers.

About Me
I have been a sales rep for various companies for over twenty years. Since I got my first 486 laptop, and took my first (And only) computer course called "How To Turn It On" (I am not joking), I have been using CRM. I have (of my own accord and expense), purchased and used almost every contact management program, owned six Palm Pilots, two Pocket PC's and a Blackberry. All of this has been in search of the best way to manage my customer relationships.
In this I have been very successful, and have always maintained an exceptional sales record. I am very much a "Go to guy" for computer and software related issues, despite my lack of formal training in IT.

Three years ago, I was asked to lead the Canadian CRM implementation for my company, as well as continue my role as sales rep. After completion of the roll out, I was asked to lead the North American CRM project full time.

I have conducted two full research studies on CRM failures. The first study was in university, the second was on my own, in an attempt to understand why the same employees that told me CRM was going to be a "Great Tool" for them to use, weren't using it at all.

My research paper "The CRM Dilemma" has been validated by many people in sales and sales management from companies where CRM has been implemented, and has failed. My presentation of this research to my company that had not yet fully implemented CRM, ended my career with them. I continue to be passionate about providing a tool that employees will actually use, rather than neglecting and conducting mutiny against something that will help them because of one element of CRM.

The CRM Dilemma

Let me caution that if you have not yet implemented CRM at your company, you should probably not continue reading this blog. If like me, you implemented CRM to great fanfare, using all best practices available, only to find no one is using it, you may be very interested in this research.

My wife speaks of the day I discovered the CRM Dilemma and how shocked and depressed I was. I really believed that I had chosen the wrong career path in moving from sales to CRM. Although my findings have been validated time and time again, they are hard to accept.

After presenting my research, the IT Project Manager said "If I was considering CRM and heard your research findings, I would probably recommend we don't even try implementing, and save the money." Usually, the problem is easy, but the solution is hard. In this case, the problem is much harder to accept than the solution.

To follow I will list the six most commonly held best practices for lessening the odds of failure in your CRM implementation. These are directly from my group university research project "Avoiding the Pitfalls - A framework for Successful CRM Implementation" (We got an A+)

1. Have a clear CRM vision and communicate it often from the executive level
2. Focus on your customer strategy
3. Focus on collaboration with all stakeholders
4. Evaluate all business processes (Don't automate a bad process)
5. Use proper training and follow up with users
6. Ensure data quality

Your list may vary slightly, but it has been said that your odds of successful CRM increase substantially if you achieve all these steps. Because these steps are so difficult to achieve, it is easy to believe your CRM failure was because you didn't have enough_____(Fill in blank from above list)

On this blog, I will begin to lay out my research that proves traditional CRM will fail, even if all these steps are followed, because of The CRM Dilemma. With the exception of compliance-regulated industries (Financial, Legal, etc) which I will address separately, the definition of the CRM that will almost always fail can be taken from the "What Is CRM?" line from any CRM company. An example from Sales Force.com:

"The simplest, broadest definition can be found in the name: CRM is a comprehensive way to manage the relationship with your customers — including potential customers — for long-lasting and mutual benefit. More specifically, modern CRM systems enable you to capture information surrounding customer interactions and integrate it with every customer-related function and data point. The resulting information mosaic is then used to create and automate a variety of processes that identify, and describe, valuable customers. Most important, these processes help you personalize new and ongoing interactions to cost-effectively acquire, stay close to, and retain these "good" customers."

This sounds like something every company needs and should be striving for. It would quite frankly be career suicide to stand up at a meeting, and say that what is described above would be bad for your company. Nor can an employee stand up and say they do not want CRM and they will do everything they can to sabotage it, and make it go away.

On this blog, I will conduct a staged argument of my research that involves a very diverse group of subjects, from Chess Masters to New York City Taxi Drivers. I have no doubt that many will disagree with my research findings. I welcome the opportunity for someone to prove my research wrong.

If I am wrong, I can become a successful CRM Implementation Consultant. If I am right, I will be able to help extract value for companies that have CRM systems in place that employees aren't using, by changing what CRM is used for. This change by the way, has nothing to do with words or promises to CRM users about what CRM information is to be used for.

CRM needs to removed from our vernacular. There needs to be a fundamental shift in our understanding of how users view these programs, and most importantly, what lengths they will go to as a group to get rid of the threat of CRM.

Exceptions

There are true CRM success stories (To a point). CRM can work when the intent is to record strictly what the customer is saying. Typically, call centers and web forms work in this fashion. As mentioned before, in highly regulated industries, a minimum standard of record keeping is required for oversight compliance. In some companies, commission sales reps are told "If it isn't in CRM, it didn't happen" meaning that commission payment is contingent upon a minimum standard of record keeping. None of these examples really fits the definition of "True CRM" but they are held up by the CRM industry because for the most part that is all they have.

On my next entry, I will address Game Theory in relation to CRM.

Best Regards