Back again!

To all my loyal readers,

I am now finishing up a hectic year-long contract and will get a big chunk of my life back march 1st. I will begin to add posts as well as update my research in the next while. I am now convinced more than ever that my research conclusions have merit. I have also found new tools for dealing with bureaucrats that have been extremely effective for me in the past 1.5 years.

Please keep reading and commenting and I look forward to being more involved.

Empirical Evidence Builds

Sorry it has been so long since my last post. I have been very busy putting my theories into practice. Although I consider myself a general business consultant specializing in systems, I am finding the demand for CRM consulting is very high. When I sit down with a client to discover their business needs, CRM keeps rising to the top because every business needs CRM. There is simply no escaping the reality that many top business problems today can be solved by effective use of a CRM system. Interestingly, Project Management is higher on the list than I anticipated. I am now working with a program designed for small-to-mid sized businesses that incorporates project management into CRM. The program is Outlook 2007 with Business Contact Manager. In typical MS fashion, Outlook 2007 BCM is not without "issues." It is big, ram hungry, somewhat crash-prone and awkward at times. But this program that sells for under $200 as a stand alone, or comes standard in some Office packages, is surprisingly feature-rich. I have been using BCM myself for some time, and am increasingly impressed with the tools that have been included in this program. I am now implementing this program for six of my clients and the list is growing. But this blog is about "The CRM Dilemma" so I want to share some of the results I am getting in regards to using Outlook BCM as a PACT system.

Client #1
An industrial manufacturer that has a large customer base in a declining market. They had implemented Goldmine but had abandoned the program due to lack of usage by sales reps. I was asked to meet with the entire team to demo Outlook 2007 BCM. During my initial meeting with the business owner, he had shown me a cold call spread sheet he was implementing with his sales force to bring accountability to their daily activities. After explaining my CRM Dilemma research to him, he decided to accept my research and abandon his plan to add activity controls for his sales force. With his acceptance of my research, I was able to design my demo to focus on the following key business problems:

Planning

• Knowing the right customers to target
• Knowing when to target them
• Knowing how to reach them
• Knowing the right message for those customers
• Knowing what is going on with your customers

Communication

• Easily getting your message to customers
• Gathering and viewing customer feedback
• Linking customer communications to accounts and contacts
• Managing projects internally
• Easily communicating internally that which needs to be communicated, to advance the sale and excellence in customer service

When I presented my Outlook 2007 BCM demo, I also spoke of my research and the agreement by the business owner to not use the system to bring activity controls into the equation. As expected, the response from the sales reps to the demo was very positive. Being suspicious of such feedback, because I know from past experience that sales reps will not reveal their fears about CRM in front of their bosses, I met with each of them individually and as a group after the demo. I assured them our conversations would be kept confidential and I would not share their feedback with management. Although the fear of activity controls was still evident, they all stated that the demo I presented, along with assurances of the system being used for PACT only, gave them confidence the system would actually be a useful tool for them. I feel these conversations illustrate the following important points:

1. Never assume the enthusiasm for CRM displayed by sales reps in a group setting, reveals what they are really feeling.
2. The suspicion and fear of activity controls by sales reps is not overcome by words alone.
3. PACT is much more acceptable to sales reps than traditional CRM

Over the next few days, I will post regarding the other implementations I am involved in.

A Classic Example of CRM Failure

I was contacted by a company that has experienced "The CRM Dilemma" through what is now two full CRM implementations. After reading my research, this particular executive now understands why his sales force has been giving nothing more than "Lip service" to CRM, for several years. Each time the company has met with the sales force to determine the reasons behind their lack of CRM usage, sales reps have provided a long list of excuses.

Each time, changes and upgrades were made to accomodate the concerns expressed by the sales force. Extra training was provided, mobile devices for real-time CRM were purchased, system speed was upgraded, and additional data integration was done. The sales reps had all agreed that with these upgrades, CRM would be a "Great Tool" for them.

After the second launch, of the second CRM system was completed, executives anticipated finally having a 360 degree, collaborative view of their customer relationships. Unfortunately, despite all efforts and expenditures, CRM usage by sales reps, remained the same as
before - Zero.

After reading my research, this executive had several sales reps in the company read it and provide their opinions on it. Because the sales reps felt validated in their fear of activity controls, their response was to state that "The CRM Dilemma is bang on!"

Because the original intent of CRM at this company was not to control the activities of sales reps, my research has provided an avenue to finally get some value out of the system. I will be working with this company to determine the truth behind their CRM failures, and institue PACT for them. This company has decided there is enough value in CRM without using it for activity controls, that they are willing to make the additional investment to try to finally obtain some value from their CRM system.

Don't Fall On Your Sword - Steps to Introducing "The CRM Dilemma"

With the large number of readers this blog and my research have attracted, I can only assume some of you are preparing to "Spread the news" regarding my research.

Since I consider myself somewhat of an expert on this subject, please accept advice that I wish someone had given me.

1. Be strategic and move slowly


2. Don't try to go it alone


3. Build a strong team of supporters

"The CRM Dilemma" can itself be threatening, particularly if the CRM initiative hasn't failed yet. A slow, strategic approach to this massive change in corporate mindset, is required.

Don't Try To Go It Alone

If you have accepted my research findings, you now know the quickest way to ensure your sales force will undermine your CRM initiative, is to have "Low Card" activity controls included in your implementation. If your CRM program is currently implemented, but sitting unused by your sales force, the job of introducing "The CRM Dilemma", and my PACT solution, become somewhat easier. I have now developed situational analysis templates and refined the presentation of my research findings to assist in gaining acceptance of this phenomenon. I will address post-implementation and pre-implementation individually.

CRM Has Been Implemented, But Remains Unused

• Review the original goals of the project with management
• Focus on "High Card" benefits not being achieved (Customer feedback, planning tools, communications)
• Gain agreement on the critical values that are missing because the system is not being used
• Presentation of "The CRM Dilemma" research
• Review the current CRM application with management, to identify "Low Card" activity recording elements
• Present the PACT solution
• Gain management agreement on the value of the components in PACT, versus CRM with activity controls
• Gain agreement to conduct sales force workshop, to validate if "The CRM Dilemma" is in fact driving the lack of CRM usage
• Conduct confidential, one-on-one interviews with sales reps and sales managers, that were involved in the original CRM implementation
• Stress that the truth, not blame, is the goal of all interviews
• Conduct one or more confidential focus group session(s) with sales reps, not involved in the original CRM implementation
• Review the current CRM program with sales reps to identify "Low Card" reporting elements
• Present and validate the PACT solution
• Once the truth about "The CRM Dilemma" has been acknowledged by sales reps, the PACT solution can be reviewed honestly through the same lens.
• Gain agreement on the value of the PACT solution
• Discover and document sales planning informational requirements
• Present aggregate interview results and PACT agreements to management
• Plan the IT side of providing informational requirements of sales planning reports
• Work towards relaunching CRM as PACT

The CRM Implementation Has Begun, But Not Been Completed

The same steps as above apply, but additional up-front work must be done to convince management of the inevitable failure of the program due to "The CRM Dilemma"

The CRM Implementation Has Not Begun

This one is tricky. Likely you are in a CRM consulting role, and you may be wondering how your clients will accept the inevitable failure of their CRM project. On the other hand, you will be the hero if you provide them with a valuable solution that will actually be used by the sales force. The best way to approach this I feel is to utilize me to present "The CRM Dilemma" research to clients. The question then will be:

"Do you think this will apply to your CRM implementation?" If they say no, you have done your honest due dilligence. If they say yes, once again you are the hero for saving what would have been an expensive disaster. At the very least, if the client feels "The CRM Dilemma" will not apply to them, you have opened the door to being brought back in to rescue them when their sales force is not using CRM.

As I said before, I have developed some great tools to assist you in bringing this new concept to businesses. With the high number of failed CRM initiatives out there, the opportunitity for success by "Taking the high road" is much larger, than ignoring this research and staying on the "Low road" to failure. Please feel free to contact me if I can be of any assistance.

"The Patient Has Died" - A Pre-mortem

I read a great article in the September, 2007 issue of HBR. In the article, Gary Klein writes on the value of determining the death of a project, before it starts.

Prior to my research on "The CRM Dilemma", a pre-mortem on my CRM project, would not have included the certainty of death that my research revealed. I now know that activity controls are like a surgeon carrying the plague.
(The analogy carries on from here and although it might be "Over the top," I had a lot of fun writing it and I believe the points are valid - AH)

If the infection is allowed anywhere near the patient, the patient will die a painful death. For years, few have suspected this "Deadly surgeon" but has instead blamed other people and circumstances. Over and over the operation is performed using different techniques and people, but someone keeps inviting the "deadly surgeon" into the room. The patient rarely recovers after the operation and most often dies.

There are groups of upcoming patients that suspect the "deadly surgeon," but they are afraid to say anything because he is so well liked and accepted by the medical team. The "deadly surgeon" has become such a part of the medical team that they can't imagine the operation would work without him. Yet up to 80% or more of these operations fail and the patient dies because no one will take the "deadly surgeon" out of the room.

So what do you do once the finger has been pointed squarely at the "deadly surgeon"?

Are you willing to take responsibility for asking him to sit out of a few operations?

There are people that you report to that really like the "deadly surgeon" and what he brings to each operation. They may not be willing to accept his culpability in all those past patient deaths.

You may end up with a severance package, writing a blog, and changing careers if they would rather keep their "angel of death" in the operating room.

But isn't the overall health of the patient more important? Now that you know CRM will die if activity controls are allowed in, are you willing to force "Him" to sit out a few operations?

CRM and The Law of Unintended Consequences

When a mechanism is installed in the world, things can happen as a result, that the original creator of the mechanism may not have intended. These consequences may also run completely contrary to the original intent of the mechanism. There are three basic reasons for this phenomenon:

1. Exploitation - The mechanism is used for purposes other than was originally intended. (Examples: GPS for finding the nearest Starbucks, or fertilizer being used in bomb making)


2. Avoidance - Because the mechanism exists, people change their behaviors (Examples: Tax avoidance strategies, driving habits in a GPS tracked vehicle)


3. Culture Shift - The mechanism has created a cultural expectation and people come to expect things they otherwise would not expect (Example: Cell phones)

Here are a three classic examples:

• Sophisticated alarms and immobilizers on vehicles, have resulted in more violent and dangerous carjackings, because the thieves needs to have keys directly from drivers in order to steal vehicles.
• The popularity of cell phones has been putting pay-phone companies out of business, while forcing more people to get cell phones because of the shortage of available pay-phones.
• Telephone systems adding prompts, ie: "For customer service, press 3" have resulted in less customer service communications being done over the phone

CRM is very interesting because it has had unintended consequences due Exploitation, Avoidance, and Culture Shift.

Exploitation

• Credit card data from massive amounts of customers is stolen from a major retailer's database
• An employee takes customer data when moving to a competitor
• Data provided by a customer results in the customer being "Value classified" in no receiving a lower level of service than before the data was provided

Avoidance:

• Consumers not wishing to provide personal information, intentionally forgo "Loyalty Club" discounts provided by retailers.
• Users avoid CRM due to fear of the information being used in performance measures
• False email addresses are created in order to avoid providing an avenue to send marketing materials
• Callers press "0" to avoid phone prompts and go directly to the switchboard

Culture Shift

• Consumers expect their contact information to be transferred along with their call and remembered for the next time
• The details of a transaction should be available long after the transaction is complete

None of the examples given above have been taken through their full progression. Avoidance is fascinating in that there is usually an escalation for each avoidance:

• Retailers create larger pricing disparities for those refusing to join their "Loyalty club"
• Fake email addresses, led to requiring email verification before the services are delivered.
• Because people learned that pressing "0" on their phone, would connect them with the switchboard and avoid the prompts, companies disabled this feature, forcing the prompts to be used
• Companies create performance measures for CRM users, that are based on CRM usage as a performance measure

Do you see the pattern here? That which was created to make things better, is perceived as making things worse, by those that were supposed to see an improvement. Avoidance of that which was created to improve service, leads to escalations, in order to force those that are avoiding the improvements, to accept that which they see as negative.

CRM was not created to become an instrument of fear for customers or employees.

The Riddle Within The Logo

The game of Tic-Tac-Toe has been around since the 50s. In the logo to the right, the game that has begun cannot be won, only tied. In Tic-Tac-Toe, there are three possible outcomes; Win, Lose, or Draw. When both players understand the game however, there can only be draw, after draw, after draw. In this game, a draw is ok because it means you had the best possible outcome you could have.

I have taught many people the two moves seen in the logo. If I hand you a piece of paper with four lines and an X in the corner, if you do not put your O in the middle square, you will lose. So the best outcome of this game is to not expect to win, but to obtain the best possible outcome - A draw - With neither side winning or losing.

Winning is nice, but if you can't win, does that mean you don't play the game at all? In CRM, there is much more value in a "Draw" than in Tic-Tac-Toe.

The message of my research is that we need to fully understand the value in the "Draw" of PACT. CRM users, fully understand the game they are playing, and they know where to put their "O". If they are willing to play in a game that ends in a draw. Are we?

Lies, Damned Lies, and CRM Reports

SalesForce.com has just released a report by CSO Insights, on how to benchmark your sales force. This report is called the "Sales Performance Optimization Report."



A year ago, I would have read this report much differently. Through the lens of "The CRM Dilemma", it was like listening to Michael Scott from "The Office" speak his words of wisdom. I had tears rolling down my cheeks I was laughing so hard. The assumption is now that CRM is fast, mobile, and user friendly, sales reps will tell you every activity they are doing. This activity data can be used to evaluate their performance through the wonderful charts, graphs, and reports available in today's CRM. This is known as "Magical Thinking."



Does anyone really think that sales people will faithfully provide their activity data, so their performance can be optimized?

Talk about "Carrying the stick you will be beaten with!"


CSO Insights put a lot of work into this report. Like all CRM sales documents, they use the word "Can", like it is actually the word "Will."


Sales data from your ERP system is usually pretty reliable, so go ahead and make charts, graphs, and analytical reports to your heart's content. Why did we ever get the impression that sales reps would provide all this data that can be used against them? I am amazed now that I used to think they would, and I was a sales rep.

The Invisible Precipice - User-Created Solutions to Combat Fear of Performance Measures in CRM

As I delve even further into my research, I am discovering yet more implications about the effect "The CRM Dilemma" may have on CRM users. There are two important things to remember whenever CRM users feel threatened by what they are asked to enter into CRM:

1. One or more of them will figure out a way to avoid the threat
2. The threat, and the user-created solution, will be shared amongst users, and any complicit managers
3. For every accountability measure you come up with to combat user-created solutions, users will create several more

Indicators of these user-created solutions can be extremely subtle:

• A pad of writing paper on every desk in a call center.
• Increased usage of Gmail or Yahoo Mail by employees
• A decrease in VPN usage by sales people

The fine line between users viewing CRM as a "Great tool", and CRM as "A threat that must be eliminated."

Every user-created solution to combat "The CRM Dilemma", is a slippery slope to total CRM failure within that user group. Here are some examples from an actual CRM implementation, to illustrate the point.

1) Call Center CRM

Call Center CRM viewed as a great tool by users (Spoken)

• Recording customer feedback
• Providing easy access to customer data
• CRM linkage to phone system for customer information pop-ups

Call center CRM viewed as a threat by users:

• Time-stamped input in CRM, may or is used in employee or departmental performance measures

Call center - User-created solutions to combat the threat:

• Pads of paper may be used to record information prior to entry into CRM. There will be many excuses given as to why this "provides better service to customers".
• By limiting "Real Time" usage of CRM, users negate any value in time-stamped data, so the threat is eliminated.

2) Call Center Complaint Handling

CRM for Complaint Handling viewed as a great tool by users:

• Intuitive solutions are provided based on user input
• Easy access to solution documentation is provided
• User is able to choose from a list of approved solutions provided to them in CRM.

CRM for Complaint Handling viewed as a threat by users:

• Users are required to create and document their own solutions
• User solutions may be deemed as right or wrong
• Complaints that come in through the web or email will be particularly challenging if a user-created solution, must be provided to the customer, and the solution provided may be right or wrong.

Complaint handling - User-created solutions to combat the threat:

• Because solutions will have to be validated before being documented, phoned-in complaints will either be kept outside of CRM (Paper), or delayed while conferring with others
• Users may avoid responding in writing, choosing instead to phone the customer to avoid documentation. This is done "To provide better personalized service."

If CRM is not being used "Real Time" for customer complaint handling, it is little more than a costly drain on valuable resources. If there is a pad of paper on the desk, demanding it be removed will not work by the way. Quietly ignore most of what is said in the excuse category as well:

• Ignore the excuses about system speed, when you know the page-load time is two seconds.
• Ignore that if the system goes down during entry, the information will lost. Yes, it did happen a few times during the initial roll out!
• Ignore that crap about the customer refusing to provide their name when they call in a complaint
• Ignore the calls for more training after the deskside trainer has spent months working with users

You will not succeed in CRM, unless you understand the truth that comes out by the water cooler, in the breakroom, and at the bar after work on a Friday.

3) Linking customer emails to the customer record in CRM

Customer - linked emails viewed as a great tool by users:

• Seamless integration within outlook
• The user chooses which emails are "important enough" to be linked to the customer
• Confidential emails are linked, but with limited viewing by other employees

Customer - linked emails viewed as a threat by users:

• All customer emails are linked to the customer record
• Negative emails regarding employees, may be recorded in the customer record, with access by all

User-created solutions to combat the threat:

• Employees may use secondary email (Gmail) to avoid linking all their customer communications to the customer record
• Company web mail client may see increased usage if it is not linked to CRM

These are just a few examples of how user perception is affected by the smallest details. Make no mistake, users will evaluate every angle of how their employer can turn any piece of data into a performance measure. Time-stamping of data entry will likely only be deemed a threat to users, if the corporate culture or management of a company lends to using such data. In this case, a policy (Before implementation) of never using TS data in performance measures, would ease user fears.

Unfortunately, policies and statements will not combat "The CRM Dilemma," when any reasonable person must assume that user- provided data in CRM, must at some time be used in performance measures.

To all you CRM Developers out there....

I know "The CRM Dilemma" blog has a following from the Developer community. I would like to ask a favor of you. Please send a link to the page that has my basic research paper to some sales reps in your company. Here is the link: http://thecrmdilemma.blogspot.com/2008_03_02_archive.html

I have gotten a lot of great feedback from the development community but I am lacking in feedback from the sales community.
Everything I have heard says that CRM sales reps don't use CRM to record their activities, any more than non-CRM sales rep do. I would very much appreciate hearing from more sales reps and sales managers. I am hoping I can rely on my readers to forward this link around. Thank you very much.

Testing my PACT Solution

Unemployed no longer! I am in the process of joining a business consulting firm, and I am very excited about the possibilities. I received a call today from a company that is considering implementing CRM. They would like me to work with them to determine the viability of implementing a CRM solution for their company. This will be interesting for three reasons:

• They don't yet know that I have authored "The CRM Dilemma"
• Because I do not rely 100% of my income on CRM consulting, I can share my research with them, without concern about losing my livelihood if they choose not to implement CRM.
• If they choose to go ahead and implement my PACT solution, it will be the perfect opportunity to test "True" user adoption when activity controls are removed from the equation.

I know that not everyone agrees with my conclusions on "The CRM Dilemma." Testing my hypothesis will give me the opportunity to build a case study on PACT versus CRM. The framework in the CRM application chosen (Assuming they go ahead) will be the same, but how the application is used will be entirely different from traditional CRM with activity controls.

Since understanding the customer is what most customers are really looking for, I have little doubt that my client will explore the opportunities in my PACT solution. As always, I will continue to honestly update this blog with my progress. If they choose to not implement CRM, or use another more "Compliant" CRM consultant, I will post that as well. I am not determined to be "Right" about "The CRM Dilemma," in fact, I wish I was wrong. But I think history has shown us that sales reps will work very hard to defeat CRM. If we can create a successful solution that will be used and accepted, simply by removing that which causes the greatest fear, why not give it a try?

If my PACT solution can provide the planning and communication tools that sales reps are looking for, not dreading, this company will have far greater quality information than can be found in most CRM applications today.

Wish me luck! Thank you for your continued interest in this blog. As always, I welcome your comments and emails.

Best Regards

Arne Huse

The mystery of MY "CRM Dilemma"

Brad Wilson, the General Manager of Microsoft Dynamics CRM, was interviewed for the CRM Buyer Magazine.
http://www.ecommercetimes.com/story/exclusives/60933.html

In this article, he said two very interesting things on the subject of user adoption.

"CRM went through a period where there were a lot of inflated expectations that were not met," Brad Wilson, general manager of Microsoft Dynamics CRM, told CRM Buyer. "The biggest problem for a lot of people was that the technology wasn't well suited for the people who were using it."

"User adoption has been the biggest problem in CRM for the last 10 years," Wilson concluded.

What I find very interesting about these comments, is it seems like he is saying that technology has been responsible for poor user adoption.

Having been using CRM in various forms as a sales rep for many years, I don't think the user experience has changed that much but for a few notable exceptions:

• CRM is generally faster in opening, navigation, and saving information
• Better Outlook integration with CRM
• Better field customizations

But all this needs to be kept in perspective. Back in the the early 90's, I was using Maximizer on my 486 laptop. It was slow and crashed sometimes, but it did integrate with Outlook. I think I had five custom fields at the time. But I have to say I LOVED Maximizer because it was brilliant for managing my customer contacts. This was back when it just took longer to do things with a computer. I was willing to wait and put up with crashes because it was such a great tool.

But when my boss asked me to print out my activities, I would say it took too long and the system was too slow. I continued to love and use Maximizer and he never did get thos reports.

Then I upgraded to ACT and I loved it even more because I could go mobile on my Palm Pilot with all my customer information. It was faster, crashed less often than Max, and integrated with Outlook even better.

But when my boss asked me to set it up, so my system would email my activities to him...Well, let's just say that never happened. I think I must have had good excuses and I was the top salesman. Besides, I was the only rep using such a system.

While I was a sales rep, I was also leading the Canadian implementation of MS CRM for our company. I started using MS CRM in my territory so I could demonstrate the value of using CRM to my fellow reps.

The original 1.2 version of MS CRM was a lot slower than my ACT was. Outlook Client was a nightmare to say the very least. I had Ten Digits on my Blackberry which worked well and offered real time access, so I used that quite a bit.

Remember, I was a sales rep that was leading the CRM initiative. I am seeing much of what I did back then, through the lens of "The CRM Dilemma." I found more and more that I wasn't using CRM as much as I had used ACT to manage my customers. I had created tick-boxes and drop-downs in CRM that I didn't like using as a sales rep. I told myself it was because the system was slow and not as intuitive as ACT. When I looked back at the notes and activities I recorded in CRM, I realized I had turned into a sales rep that was reluctant to use CRM. But it really was slower than the MS CRM of today and the Outlook integration really sucked as well. In hindsight, I believe I had fallen into the trap of "The CRM Dilemma." By the time we upgraded to 3.0, I was leading the North American implementation full time so I didn't get to test my theory.

In Maximizer and ACT, I used to record only what was important to me and my customers. I required no "Low Card" reporting from myself. I would never be held accountable for my entries so I had no fear of what I put into my system. As soon as someone asked me for the information, I had a list of excuses why I could not provide the information on my activities.

While the user interface has improved in most CRM applications, how "Fast and easy" does it have to be before sales reps will use it to record their activities? If my theory on "The CRM Dilemma" is wrong, sales reps will be willing to use the newer, faster, more intuitive CRM applications on the market today. I believe adoption of CRM by sales reps will continue to be dismal, unless the issue of activity controls is addressed. I have a theory that even if CRM was a "magical application" that merely required a rep to "Think" what he or she wanted to put into CRM, it still wouldn't have the adoption it deserves.