Customer Experience Mastery in the Cloud

Why Permission-based Marketing?

noreply@blogger.com (Kalvin) — Wed, 02 Feb 2011 18:14:00 +0000

Do you still market to people without their permission? Are you aware of how much you hurt your brand when you do so?

I was reminded this week how many people still don't understand the concept of permission-based marketing. I received an unsolicited email from one of my LinkedIn Connections which was a blatant plug for their company. I instantly disconnected from them.

I also meet with many clients who's idea of marketing is to send emails to their contact databases, where none of the contacts were added to the database using opt-in email marketing approaches. Web etiquette dictates that sending emails to people who haven't asked for them is poor form. In fact, no matter how good your intentions or the quality of information you are emailing, unsolicited emails are SPAM.

It also doesn't matter if you are a public sector organization or charity. The same rules apply. In fact there is only one rule.

Never, ever, send an email to anyone that hasn't given you permission to email to them first.

How can you build your permission-based email lists? Here are just a few suggested approaches:

Develop a following. You can do this in many ways. Building your personal and corporate LinkedIn pages must be taken seriously. Blog. Join Digg, StumbleUpon and Reddit. Tweet. Post videos in YouTube. Facebook. All of these approaches will build a community of followers who will naturally develop a curiosity towards your offerings and investigate them on their own. This will also create the community or communities into which you are ready to start building your email lists. And developing a following means creating real value with good content. It is not a simple matter of tweeting what you had for lunch.
Build the email list. If developing a following is the art, building the email list is the science. This is typically done through tastefully constructed offers to your followers. A great example might be a subscription to a newsletter. You need to ensure the content quality in the offer is as good or better than what is being offered in your social media offerings. The placement of of the subscriber offer can be placed in the sidebar of a blog or in other content you produce. It is an option the follower may select based on the promise of more good content which they have already become accustomed to consuming by following you.
Use an email service provider to maintain your email list. This is critical. It provides the double opt-in mechanism to gain subscribers and allow them to unsubscribe in the future if your content no longer interests them. It is the only viable approach to maintaining and segmenting your lists to ensure you maintain the focus of the various interest groups you will develop over time. It is also critical because it stores the approval for you to send emails to your subscribers.
Be Consistent. Once you have built your email list, ensure your content is true to the promise you made to get your followers to share their email with you and join as a subscriber. There is no better way to lose subscribers than to fall short of their expectations with inconsistent content relative to the offering you made at subscription time.

There are many organizations which understand permission-based marketing, but many more who are just plain lousy at it. If they can't SPAM you with emails because you checked "off" that option on their site, they get a telemarketer to call on to you instead. This is self-defeating. Permission-based marketing applies equally to any communication you might have with your client or stakeholder. The tools are available to nurture your following, and subsequently your subscribers, but you have to start now to develop the community.

To those that argue this sounds like it is too long term, I would argue that short term SPAMMING and cold calls generate very little in the way of results. If you compare the results of both approaches over a six month period, the permission-based marketing approach will generate significantly better results in the same time period. And you don't have to take my word for it, many others who write about this topic feel the same way.

I believe strongly that if you are not using permission-based marketing you are destroying your brand. You appear callous, desperate, and not at all customer centric. If you were to research what is being written about your company on the web through social media and rating sites, you would see first hand the damage your unsolicited emails are causing.

I strongly encourage any organization not using permission-based marketing to start today. There is no other viable approach to marketing.

Website Customer Experience Checklist

noreply@blogger.com (Kalvin) — Thu, 27 Jan 2011 16:55:00 +0000

You've decided a new website is long overdue. You are committed to getting it right this time. What key steps can you take to ensure success?

Many organizations start down the path of building a new website with an abundance of enthusiasm. On website launch day accolades are generously distributed to the marketing company for its design and the development team for its tenacity in stamping out bugs and delivering a usable system.

Six months post launch, the rumblings begin about how we might "do it" differently next time and within a year there is a wholesale movement from front line staff and sometimes the CEO for yet another new website. Sound familiar?

So how can this be avoided? How can we develop websites that are built to last?

If you've been following my blog you know I write mostly on customer experience. So you likely expect me to focus on website design principles to improve the user experience and maybe approaches which ensure your website reflects the brand you are working so hard to build. But that's not the focus of this post.

If you are looking for website experience information there are many good sources. Here are a few (you can download them without providing an email - a bit refreshing for a change):

So where will I focus? My feeling is that website success is determined before the first wireframe is developed or the first design is initiated. It all starts with a business foundation for your website project. Here is my Top 10 checklist for website development success.

Will the website reflect your primary purpose? Corporations tend to struggle with this one less than non-profits / government. Often websites are viewed as large content repositories which talk about "our organization and our offerings". Users to the website are greeted with volumes of content, with little understanding of how they can be engaged meaningfully to aid the organization in achieving its primary purpose. This disconnect often happens because the website is given a lower priority by leadership, not tapped for its true potential, and assigned lower risk transactional functions or objectives.
What's the website being built to do? This seems obvious, but when I read the objectives for web development projects they are often very fuzzy and clearly hijacked by the marketing department. An objective should have a measurable outcome (remember SMART?). Will the new website sell more products and services? Recruit more members? Increase customer satisfaction with improved service levels? Reduce operating costs? Increase donations? How much and by when?
Will it do your business? If your new website is not an extension of your business into the communities you serve (and communities include paying customers) then you should go back to the drawing board. I have talked about online customer service in other posts, but I think we need to go far beyond customer service. Your website must seamlessly integrate with your back-office and make doing business with you easy. If you collect money, customers should be able to pay online and check outstanding balances online. Product manuals and training should be online and available as video or podcasts where applicable. Online forums, newsletters, and company bloggers are now only table stakes for any website. Customers should be able to do business with you on their time and in their preferred method on your website.
Will you address the needs of key segments and communities? Not many organizations have the luxury of dealing with a homogeneous base of stakeholders. What are the key segments with which your new website needs to interact? What are the communities which already exist with which your website and social media strategies will need to interact? What are the needs of those segments and communities? Have you surveyed them to solicit their input and needs? I am often reminded of a Venn diagram I have seen many times. In it, the circle on the left defines "what we provide on our website" and on the right is "what users want on our website". The overlap of the two circles in the middle is tiny. You need to avoid this mistake by asking your users in advance.
Will the site be customer centric? This is my favorite topic. Some day the tried and true tabs across the top (Home, Products, Services, Solutions, About Us) will be replaced with something more like (Your problems, Your needs, Your potential solutions, Customers we have like you, What you might want to do next, How else can we help you?, Want to join our community?).
How will you support mass customization? Mass customization is the future of the web so you might as well get started. In the most advanced form of mass customization the user is able to store a version of your website which they tailored specifically for their own needs through their interaction with it. Automotive companies do this by allowing you to store car configurations on their site. You might have to start with some reasonable goals in this area. What are the dialogues you can offer which are customized to user's needs?
Is your team engaged? This is not a project for the marketing department. Include the CEO and ensure you have representation from all parts of the business. They all have amazing insights to share. Identify a role for providing input from your customer segments and communities, but don't abdicate responsibility to them. Your core team must decide what is best for your organization.
Have you identified the processes required to support the website? This goes beyond technical support. Who will have ownership of content development of identified sections of the site? What is the expected time budget required? Be realistic. The content on your website must be kept fresh and current - always. In addition, what other business processes (backend systems, marketing communications, etc.) must provide support and work hand-in-glove with the website? Document these processes and identify process owners who are accountable for quality and results.
Do you have an integrated social media strategy? And this isn't just a corporate Facebook page. I had lunch with a social media guru a couple of week ago who told me there about 800 social media "channels" out there. How do you navigate them, monitor them, and ensure they work collaboratively with your new website?
Have you selected the right platform? I have a strong bias here. I am a Drupal bigot. And it appears other mainstream bloggers are coming around to the same way of thinking. You require a CMS platform which can work in the Cloud, be supported by a large base of global experts, is social media aware, and can scale to meet the needs of ecommerce and high throughput, while supporting advanced search and the semantic web. We have used Drupal to deliver hundreds of client projects.

Considering this Top 10 list will put your website project on a stronger foundation. The focus provided by the checklist will ensure you optimize customer experience on your new website, while achieving your business goals.

Website projects are perhaps one of the most important pillars of implementing your business strategy. I believe we often don't assign the correct importance to our online presence through lack of focus, stingy resource allocation (in terms of budget and key internal resource participation), and by treating the exercise as a marketing project instead of what it really is - a critical business initiative which requires a strong business focus. And just like any other investment you make in your business, your website investment must produce business results.

Customer Experience and the Cloud

noreply@blogger.com (Kalvin) — Tue, 11 Jan 2011 17:16:00 +0000

Are you using the Cloud to deliver a superior customer experience? This is the year to add it to your todo list.

When I talk about customer experience, inevitably people start rolling their eyes in their heads and hoping I don't plan on talking too long. Usually it's because, like me, they are tired of hearing about the one recent lousy customer experience in their organization which created the fire drill where management and unlimited resources were deployed to get the customer happy again. Like most organizations faced with this situation, they provided hundreds of good customer interactions before this poor, highly visible customer experience sabotaged all of the excellent work.

While the fire drills are mostly avoidable with good business practices, it's not my primary focus when I talk about customer experience. With most organizations we focus on the changes required to close the gap between the customer's current experience and their expectations. For organizations which consistently meet customer expectations across customer touch points, the next goal is exceeding customer expectations. My work usually requires that we evaluate each of our primary customer touch points and re-design the customer interaction.

Before any work can be done in developing new customer-facing processes, I believe an organization must adopt some critical design principles in creating an optimized customer experience:

Consistent - we need to say the same things, make the same promises, and deliver the same capabilities across all of our communications, websites, customer-facing organizations and front-line staff. Certainly our solution performance has to back our claims.
Customized - every communication, buying and service interaction needs to respect the unique wants and needs of the specific customer. All customers have preferences with respect to the level of detail they require, expediency, needs discovery, and psychographic tendencies. We may also need to tailor the discussion to match the individual's authority within their organization.
Socially aware - we need to acknowledge the communities where customers discuss our brands, service levels, solutions, and integrate these discussions into our customer experience strategy. Savvy customers always discover disconnects between the community and any claims you make - you will pay heavily for it.
Content rich - customers require valuable information in their interactions with you, whether it is detailed business discovery in the buying process, comprehensive use cases and customer testimonials, or extensive online training. This information must be available in different media formats to match the consumption preferences of the customer. YouTube has proven that while the information must be of acceptable quality and professionally delivered, in general audiences will not penalize you for less than perfect production values. In other words, get the information to customers versus waiting to make it perfect. Customers will also accept, in fact encourage, beta tests of new information offerings.
Permission based - OK. I could have included this in the customized design principle, but so many organizations are screwing this up I have included it as its own design principle.

I don't include design principles such as "visually engaging", "interesting" and other such principles. It goes without saying we need to engage the user. Assuming you can offer an experience which addresses these critical design principles, you will be well on the way to improving the customer experience you offer. Sure, you need to design the processes and conduct change management / training, but in general I see too many organizations start with process design before getting the design principles right.

At some point you might be asking yourself - "Why is Kalvin emphasizing the Cloud in this blog post (and actually almost every other post)?" "Is Kalvin trying to optimize his blog for search terms?" Well, actually not. There is one primary reason why I include the Cloud (and even with a capital "C") when I talk about customer experience...

It's because that's where your customers hang out. (sorry...you knew that was coming)

The majority of solutions we use to enable improved customer experience will either reside in the Cloud or use Cloud technologies to enable communication, whether on a PC, Netbook, Tablet, or mobile phone. And what do we believe will be the emphasis of these Cloud-based solutions over the next couple of years?

A new online experience - our websites need to move from online brochures to mass customized engines to allow user-driven discovery. Websites will adapt to the needs of the customer. Our direct communications will also become customized to the needs of our customers based on critical customer segmentation information volunteered to us through permission-based marketing approaches.
CRM becomes CEM - CRM has evolved from contact management, to pipeline management, and perhaps in its latest form, to some form of adversarial sales process where we evaluate and document our strengths and weaknesses in an account plan with a view to closing a particular piece of business. When CRM finally evolves into a collaborative, problem discovery and solution building process directly with the customer, it will become a true Customer Experience Management solution. This will not likely be achieved by the traditional CRM vendors, but more likely through the addition of bolt-ons which bring the customer into CRM through a collaborative, online front-end. The bolt-ons will live in the Cloud.
New measures are needed - we need to revisit our measures for customer experience. Of course sales are the ultimate measurable result, but not a reasonable proxy for measuring customer experience. Results are created through day-to-day activities which need to be measured for quantity and quality. What activities will we measure in our new socially enabled world? What is actionable social traffic versus noise? How will we achieve the necessary transparency we require to measure new KPI's? Expect to see an explosion in new analytics and measurement tools which seek to create transparency in the Cloud.
Customer 360 on steroids - it will be an exciting time for anybody tasked with implementing the design principle of consistency and attempting to measure it. Regrettably, it is going to be difficult. Pulling together information from Cloud-based solutions is still difficult to achieve unless the service provider has already built an interface you require. Integration of information and processes in the Cloud will require investment.
Product management in real time - I don't want to appear to be too "far out there", but social media and crowd sourcing present opportunities for real time customer feedback which may be harnessed to gain a deep understanding of high value problems we currently solve, or could solve, by brokering our strengths.

In the coming weeks I plan on discussing these topics in more detail, both to look at the business-ready Cloud computing technologies in play (always with a view to business impact), and the business functions and processes impacted in your organization. The overall focus will always be Customer Experience Mastery - mastering the art of exceeding customer expectations.

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Not delivering customer service in the cloud?

noreply@blogger.com (Kalvin) — Tue, 07 Dec 2010 19:24:00 +0000

What are you waiting for? Online customer service is easy and inexpensive to implement in the cloud. And the best part? It has one of the highest ROIs of any cloud-based service.

I am still surprised at the number of organizations which have not moved their customer service delivery into the cloud. In fact, many still attempt to manage customer cases (or tickets) with systems behind their firewall where customers cannot get online self-service access to check on the status of a case. Worse still, we see many organizations delivering service management without any case management or ticket tracking support at all. Cost and the resources to implement customer service solutions have typically been significant barriers to this lagging group.

The cloud provides some extremely cost effective approaches. In this post I will discuss two options; they are: 1) An integrated sales/service cloud using salesforce.com; 2) A newly launched standalone offer called SmartQ from the makers of 5pm Web, a project management solution we use daily for managing client projects. Both approaches offer a powerful solution. We will discuss the pros and cons of each later.

The Integrated Sales & Service Cloud from salesforce.com

salesforce.com has developed its sales and service clouds to work hand-in-glove to provide an integrated solution. You are able to follow the customer through a complete life cycle from lead, to opportunity, and finally to becoming a customer account. During the customer life cycle there are many points of contact where it makes business sense to allow the customer to have direct interaction with the salesforce.com environment. This is easily facilitated by salesforce.com. Having been developed as a cloud-based application, salesforcecom is architected to provide open APIs which allow interoperability with other web-based services.

We have written in the past about the integration of a web form on your website into the lead management process using salesforce.com. Using a similar philosophy, salesforce.com provides a web-based front end which may be used by your customer which provides direct access to the case management functionality of salesforce.com. This allows customers to create their own cases, check a standard solution library or the status of cases, and much more.

We implemented the salesforce.com Service Cloud Portal over 18 months ago. We were in a hurry to implement it so we took most of what was provided as the default setup and did very little customization. We essentially followed this approach:

Enabled the self-service portal.
Created our portal, selected font colors, tabs and fields we wanted to display (this can include custom fields). We also removed the salesforce.com logo so our portal only has our logo on it.
Created a portal profile (for salesforce.com knowledgeable users this is where you specify page layouts, list views and search layouts). We kept this very basic.
Enabled portal user access and login.
Setup users who could access the portal - contacts already in salesforce.com.

It took us less than half a day to set it up. We decided to run the salesforce.com Service Cloud Portal as an iFrame (perhaps kind of low tech) in a private customer area of our site. While all customers are given a login to the private customer area on our site, only client-nominated users have access to the Service Cloud Portal. salesforce.com generates the code you require to install the frame on your site to run the Portal. We have also since installed this code on sub domains (collaboration sites using Drupal) for some of our large clients and also on some internal pages for customers for whom we have developed new websites. Our philosophy is to provide access to the portal from where it is most convenient to the client.

I thought it would be instructive to show some of the Service Cloud Portal screens. In the example below we have a private member area on our site called "Subscribers". When authenticated users are given access to this area, the subscriber has a new menu item called "Subscribers". One of the sub-menu options within "Subscribers" is "Customer Service Portal". Once selected the user is presented with the login below as a frame within our website (Please note that the menus on the bottom left are expanded because they include options I have as a site administrator).

Once logged in, the user will see a list of current outstanding cases. We don't have any for this specific user at this point.

Let's add a new case.

Once the case is saved I can always check its current status by clicking on the "View Cases" tab.

We have complete control over which fields appear on these screens, in addition to which tabs are displayed. Additionally, there are several interesting options which we elected not to implement to save time; they are:

Salesforce Content - a library of information which may be shared with customers in various document formats.
Ideas - salesforce.com Idea sharing portal.
Answers - a library of answers to common customer problems which you populate based on your product and service offering.
Entitlement Knowledge - a system which tracks customer entitlements for service based on contracts.
Salesforce Knowledge - a salesforce.com specific knowledge database.

To close the loop on our demonstration, we will revert to the role of internal customer service representative. The customer service representative has the power of the salesforce.com customer service application at their fingertips. Once logged in the customer service representative will find the case created by the customer using the Customer Service Portal.

Clicking on the case will provide the same detail we saw earlier in the Customer Service Portal.

smartQ Visual Project Board for Ticket Tracking

Now I'll switch gears and show you a newly launched stand-alone option which is now available in the cloud. Introduced by the same provider who brought us 5pm Web, this new solution is called smartQ. smartQ uses the term tickets instead of cases. We were given access to a beta system for our testing.

The front-end is basic, but provides for the basic requirements of logging a ticket.

Once the call is logged, a customer service representative may view their list of outstanding problems according to their position in the internal service work flow. While it is cut off in the screen shot below, the open tickets will show up in the columns titled "Submitted", "Assigned", "Work Started", "Completed", and "Approved". More on this work flow concept later.

smartQ provides some very good levels of customization. You can add custom fields to the ticket layout using the Ticket Form Designer.

You may also customize the workflow itself to more closely match your customer service process.

Implications

We have demonstrated two viable approaches for implementing customer service for case management (or ticket tracking if you prefer). How do you choose which is right for you?

Integrated sales and service versus stand-alone service - If you are using salesforce.com you have either implemented the Service Cloud Portal, or will soon. The benefits of an integrated customer life cycle view in which all client information resides in one place can never be overstated. This provides your organization with a 360 degree view of the customer - all open cases, opportunities, contacts, account information - including contracts in a single repository, available at all times. About to pick up the phone to call a customer? Check the status of outstanding activities, events and cases from a single screen before you do. Our preference leans towards an integrated sales and service cloud where time and budget allow.
Legacy CRM - Perhaps you have an existing CRM system which does not provide a service component or customer portal? In your case it is simply too expensive to implement the customer portal component of the CRM system you have installed. Maybe you have already implemented a solution like Highrise and need to epxand with a standalone ticket tracking system which will not be integrated. In these cases it makes sense to implement a service like smartQ.
No solution installed -Where no solution is currently installed, I would recommend you proceed with caution. It might make sense to install smartQ as a temporary solution until you can make a CRM decision. For organizations with a heavy service component it is more important to have an online customer service portal than to wait for other decisions to be made. At any time you elect to migrate away from smartQ, the company will provide you with a download of your data which may be uploaded into your CRM solution. When selecting your solution for CRM, an integrated sales and service cloud with a fully enabled and customizable Customer Service Portal as we showed in this blog post is the gold standard.

Forrester Consulting conducted a research study in which they assessed the economic impact of Salesforce CRM Customer Service & Support, including the Customer Service Portal and Knowledge Management. Not surprisingly, they uncovered significant benefits. I will summarize them here, and if you want the details you can get a copy yourself:

Fast Time to Value - driven by faster deployment (a prevalent benefit delivered by the cloud), rapid customization, and add-ons from the AppExchange marketplace.
Empowering Agents - through fewer clicks, customer visibility, and performance analytics
Self-service as a Preferred Destination - Customer self-service (your customers want this!) and integrating consumer wisdom (customers share challenges)
Knowledge Management - Time relevant knowledge

Our recommendation is to start down the path of enjoying some or all of these benefits by implementing customer service in the cloud.

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Disclosures:

My company is an ISV partner for salesforce.com. We have never received cash from salesforce.com for any of our business activities, including blogging.
My company is an affiliate partner for 5pm Web. As of this writing we are not an affiliate partner for smartQ.

LinkedIn Profiles in your CRM Cloud

noreply@blogger.com (Kalvin) — Tue, 30 Nov 2010 19:56:00 +0000

Today started like every other day until I received an unexpected gift. It came in the form of a cloud service to integrate LinkedIn Profiles into my salesforce.com contacts.

When reading my email today I received the AppExchange Digest, which is a regular update salesforce.com sends out to users to provide updates on new Apps. One of the small updates on the list was a hyperlink to the LinkedIn® Connector for Salesforce CRM from redkite. This looked interesting to me, so I read more about it. The basic idea is that when you pull up a contact in Salesforce CRM, you will also see the LinkedIn® Profile for the user.

I decided to install the software and followed the documentation from redkite, which basically involved:

Downloading the App into my salesforce.com instance
Registering for an API key in LinkedIn®
Entering the API key into my salesforce.com instance
Modifying the contact page layout in salesforce.com to move the new LinkedIn® display object into my standard contact page layout.

I completed the installation and setup in less time than it took me to drink a cup of coffee. The first time I used the newly saved contact screen it confirmed with me if it was okay to use my LinkedIn® account to access LinkedIn® Profiles. After this confirmation the LinkedIn® Profiles began to appear on the contact screen.

The integration works like a dream. It knows which contacts to which I am connected and those to whom I am not. If I want to view the contact's complete profile I simply click on the button which says "View Profile in LinkedIn". These has tremendous potential for those wanting instant access to more information about their buyer directly from within CRM. It is convenient and demonstrates excellent interoperability between cloud service providers. Here is what it looks like with the contact information from my account rep at salesforce.com.

It's easy to see how this will be a benefit for sales people in helping them to better understand the buyer - in one screen they can see key information from LinkedIn®:

Degree of Relationship Display
Current and Previous Employers and Titles
Summary Profile and Education
View How You're Connected
Seamless navigation to full LinkedIn® Profile
Secure authentication directly to LinkedIn®

This a super example of how applications working together in the cloud create tremendous value. If you use salesforce.com, have your administrator install this App today. If you are using another CRM system find out how to access it from your system.

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Exploiting the Cloud to Sell Value

noreply@blogger.com (Kalvin) — Wed, 17 Nov 2010 20:20:00 +0000

Adversarial selling approaches don't work, especially in our socially networked world. How can you use the Cloud to be customer centric, while collaborating with your buyer to progress the buying cycle?

We achieve this by following some simple approaches, which we also recommend to our clients:

Select a cloud-based collaboration tool which will be used by you and the buyer to structure the buying process. We call the implementation of this tool the Value Roadmap. The primary goal of the Value Roadmap is to develop a collaborative plan which is essentially the road map for the buyer to achieve value from your service.
Stop doing account planning without the buyer present. Two hours of planning without the buyer can likely be replaced with five minutes of interaction with the buyer. Account planning is a hypothetical exercise without direct input from the buyer. If you have developed a trusting rapport with the buyer and are creating value during the buying process, the buyer they will gladly share the information you require for success.
Develop a library of customer Top Challenges your solutions address to be used during the needs discovery process. These are worded in the customer's language and are used to keep the buying process focused on buyer needs and the relationship of your solutions to the buyer's needs.

I should state that while this approach may support the buying process for commodities, it works best for those selling services (either delivered by consultants or delivered through an online service such as an SaaS application).

The basic premise of the Value Roadmap is to build a plan which is built collaboratively with the buyer to document all of the necessary steps, starting with problem discovery and ending with the implementation of the services, which will both solve the buyer problems and provide the expected value. Depending on the scope of your services, this may include activities such as demonstrations and perhaps a business case. The most critical goal of the Value Roadmap is to focus the buying / evaluation activities on high value customer problems which drive a compelling business case. Rather than discussing endless lists of features or providing services which will be need to be priced lower because they solve low value customer problems, the Value Roadmap strives to keep our activities focused on higher value and can be used to challenge the addition of unrelated activities.

The Value Roadmap is an extremely powerful tool in its own right. When complemented by sales representatives who have been trained in customer centric selling techniques - either SPIN or Customer Centric Selling, it can improve opportunity close rates substantially.

But I started this discussion by presenting the need for a collaborative, cloud-based tool to drive the Value Roadmap process. This is mandatory because:

In the online world face-to-face meetings are no longer the primary method of contact. You need a tool which represents you professionally and demonstrates your understanding of how to conduct a sales process collaboratively. Email fails completely (even if you copy the emails into your internal CRM system).
Time zones and flexible work hours require a tool which is accessible from any device at any time, to allow the sales process to keep moving.
Personal preferences of your buyer dictate how they want to interact with you. Some will work directly in the cloud-based environment, while others will ask you to maintain the online plan on their behalf. Both approaches work - we end up with agreed upon next steps which are transparent to the buying and selling organization at all times. Without an online tool accessible by the buyer, your plan is no better than an account plan collecting dust on your shelf.
It forms the repository of all evaluation information, including RFPs, business cases, and presentations. Your client will appreciate the value of this repository and view you favorably as a result.

There are many options for providing a tool for delivering the Value Roadmap online. For companies with large budgets this can be done with the development of an online tool which supports some level of mass-customization. One company I worked with considered the development of a tool which would provide a customized web page for every buyer. Most clients, however, will likely implement Value Roadmaps using one of the readily available online project management / task collaboration tools.

We have used both Basecamp and 5pm Web. Our current preference is for 5pm Web because it is more oriented towards project time lines and our Value Roadmaps are designed as projects with specific delivery dates.

Below is a hypothetical sample of a Value Roadmap from our 5pm Web system. Our guided customer buying approach, which is deployed via the Value Roadmap, starts something like the picture below and is then customized for each client situation.

While we don't represent 5pm Web, we have found it to be a very useful cloud-based service which we use on our client projects (we have joined their affiliate network). Using it for our Value Roadmaps was a natural extension of our use of the tool. If you check their website you will find very competitive pricing plans.

Implementing Value Roadmaps using an online tool where you collaborate with your buyers has many benefits:

The buying process is "always-on" and fully transparent to all stakeholders within the selling and buying companies.
The seller is viewed as progressive, professional, and value-focused by the buyer.
Expensive proof activities, such as demos, are focused on high value customer problems. Low value activities can be negotiated out of the sales process.
The approach is customer centric and teaches sales people to make use of that expensive sales training you sent them on (SPIN or Customer Centric Selling). It provides the content that is required to make the sales methodologies work.
It accelerates the sales cycle with the buyer's approval.
Using the online tool as a central document store saves the buyer and seller time when looking for documents, notes, and next steps.

The Value Roadmap approach can be implemented with very little preparation. You can be executing them in less than a week with your buyers. Follow some simple steps - select a tool like 5pm Web, build your standard plan similar to the example above, and start experimenting with your sales team and selected buyers. The approach is made more powerful by using one of the sales methods described above, and is made most effective when you develop your Top Challenge library as a knowledge repository for your sales team to conduct the Value Roadmap exercise. I will end with a shameless plug - we work with clients to both develop their Top Challenge library and to implement a Value Roadmap selling approach.

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Do you know what your customers are thinking?

noreply@blogger.com (Kalvin) — Thu, 11 Nov 2010 18:31:00 +0000

Right now your customers are experiencing your services or interacting with your company. Can they easily interact with you to provide feedback, or do they have to vent their frustration into other communities?

I am still surprised at the number of organizations that don't offer their customers the opportunity to provide real-time feedback about how things are going. Many companies rely on the age-old monthly, quarterly or (yikes) annual courtesy call initiated by a sales reps to touch base with the customer to see if they need to buy more stuff. Many companies also incorporate an annual or bi-annual survey (which are now mostly conducted online) into their customer feedback loop, and many others use automated surveys which are sent to a customer after closing each case (or problem ticket).

Do these approaches go far enough? Well, not really. Why?

Often the annual survey tries to do too much and in the end only a couple of questions really matter. The questions in the annual survey are broad in scope and typically everything hinges on the responses to two critical questions - "How are we doing overall?" and "Would you recommend us to others?". Usually team bonuses are linked to these two questions and the account team mobilizes (reacts) to focus resources on bringing these scores back in line. Usually at all costs.
The periodic survey also lacks any spontaneity. Usually good and bad experiences are not remembered and the general impression "today" is used to complete the survey.
The people who generally complete the case-closed surveys and in some cases the periodic surveys are generally focused on day-to-day issues and may not have an awareness about other important questions (often never asked). They may not have a handle on the critical problems your solution is addressing and the resulting value it delivers. In short, there is no guarantee the person completing the survey understands the business impact of your service.

We believe there is a simple solution to this problem. We also believe cost effective cloud-based tools will ensure you appear caring and professional in the eyes of your customers.

Our recommendation for collecting immediate and relevant customer feedback is twofold:

Always-on Feedback - Provide an immediate feedback mechanism for customers on your website through which feedback may immediately and easily be submitted. In its most basic implementation this is an online form. In its most progressive usage this is a forum on your website where the issues are discussed amongst all customers. Using this approach, customers are allowed to post new forum threads and interact on any number of topics. Your organization assigns forum owners and ensures each thread is followed. For some of our larger projects we have also implemented private forums with specific customers using Drupal to create highly interactive communities for collaboration and content sharing across all issues of a major project implementation. Drupal also gives us the full power of a Content Management System to create private areas for specific sub-groups. In one implementation we created a private area for the CEO to document and discuss specific ideas, programs and measures.
Where's the Beef? - In the days before super-sized fast food this was the question asked by a fast food chain when it talked about its competitors' "more bun that burger approach". In the case of your customers the bottom line question is - "where's the value?" Companies grow their customer base by delivering value. We need to be continually confirming the value we are delivering to our customers. Recently, our company delivered a project for a client where we designed a value discovery survey using Survey Gizmo where we asked specific questions about the value received from their solutions. The potential respondents were selected in our salesforce.com database based on contact attributes we had assigned in salesforce.com. The list was exported to MailChimp, which is our email management tool of choice, due to its capabilities and direct integration to the salesforce.com API. Survey Gizmo has a direct integration to Mailchimp, which allowed us to use the capabilities of viewing email opens, click thrus, and ultimately responses, directly in MailChimp. While we used the survey dashboard and reports in Survey Gizmo to analyse the results, management at our client company simply used MailChimp to view all of the results. In this particular case the value of the solutions were validated through the survey responses and the information collected will be used to launch a very important new partnership and marketing program. We expect to drive even more value for customers and significant new revenues.

As usual, the cloud services we mentioned in this post are tools we use with customers all of the time. We are not paid to write about them, however, we have joined the affiliate programs of some of them.

The online value survey we developed will be made available through the corporate website for any customer to complete at any time. The information collected through these value surveys will have many purposes:

Add to our library of top challenges faced by our customers and how our solutions address them.
Influence our marketing collateral development and demonstration scenarios used during the buying process.
Validate our pricing strategies.
Enhance the conversation about customer challenges and value we are having both in sales and through our online presence.
Influence our product management function and determine the highly valued features and those which are not valued.
Train our customer service representatives on how our solutions create value for customers and how they should be assisting customers.

When you implement a program of soliciting Always on Feedback and Where's the Beef feedback from your customers, your customers will view their relationship with your organization more strategically. In it's simplest form of implementation using Survey Gizmo, you can be doing it in an afternoon. Don't start the program with endless internal meetings to get the questions just right. Just get started!

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Converting Eyeballs into Leads

noreply@blogger.com (Kalvin) — Wed, 03 Nov 2010 18:13:00 +0000

How can you convert anonymous visitors to your website into actionable leads? A combination of cloud-based services and a good partnership between sales and marketing is the critical first step.

My clients typically use opt-in email campaigns to market offers to their open leads, newsletter list and other opt-in lists they may be managing. We use cost-effective and powerful tools to monitor the effectiveness of our campaigns (see last week's blog). Our tools allow us to track email opens, click-thrus, and landing page hits. Using this information we are able to determine the strength of a buyer's interest in our offers, even if we don't get a conversion (i.e. the online form submitted).

This is tremendously powerful. But what if we could take our analysis further and actually track the progress of the buyer's hits to specific pages on our website? Using this information we could see what information resonated with the buyer and perhaps where our content was not viewed. To put together this picture of visitor behavior, we could likely use the reporting from our CMS and Google Analytics, but it would be an extremely laborious process.

One of my clients decided to close this gap without the manual effort and is conducting a trial of a service called LeadLander. My first impression of the service is very positive (and no, they are not compensating me in any way to write this post).

First I will show you how we are using the tool and then describe the potential benefits.

The purpose of LeadLander is to track the companies or ISP's hitting pages on your site. You insert the LeadLander code into your pages, much the same way you insert the Google Analytics code. I have inserted the code into the site pages and also into Unbounce landing pages. It does not seem to degrade performance of the pages as near as we can tell.

We have noticed that about 80% of the visitors to our site are reported to us as companies, while the other 20% are reported as ISPs. This makes sense as this client sells a B2B offering primarily to large and mid-sized enterprises.

When you enter LeadLander you enter via the dashboard. On the left of the screen you will see a running list of the hits to your pages. It looks like the picture below. You may click on any of the links to see the detail of the company's visits. If you click the search term link in the lower box, you will see the companies who arrived at your page(s) via that specific search term.

On the right of the dashboard page you see a summary of statistics as shown below. There are some very useful stats about the most active companies on your site, number of unique companies visiting your site and what State or Province they are visiting. This helps you to get a picture of who is active on your site.

We have used this information to correlate the activities of accounts in active campaigns, in our sales pipeline or on our open lead list. As you might expect, this has been very revealing. We have also noticed a high degree of activity from companies where we have had no recent contact (or maybe not ever). More on that later.

When you follow a search term link from the dashboard you are taken to the company detail page. You will see the information below on the left of the page, which is the list of companies using the specific search term to find your site.

On the company detail on the right of the screen you see information about the company and the pages visited by that company.

LeadLander has a few standard layouts which are very useful, one of which is the most active visitor page. This tells you how many times a company has hit your pages. We find this to be very interesting when compared against our sales and marketing activities for campaigns and sales. This is the left side of the page.

And on the right we have the detail for any company selected on the left of the page.

When using a service like LeadLander, it is critical (like every other tool), to integrate it into your periodic processes - daily and weekly. This is an extremely valuable tool for synchronizing the activities of sales and marketing. Often these two groups will work at cross purposes and LeadLander can help to get them working better together. Depending on the volume of activity on your website, a periodic meeting (and daily might be the right frequency) between sales and marketing to compare the website company visit activity from LeadLander to your active campaigns, open leads, sales pipeline, and companies who are completely new to you, should produce action plans which will lead to proactive conversion of eyeballs, leads and opportunities.

We also think it is important to be ethical in your approach to using the information in LeadLander. All the principles of permission-based marketing still apply. When you find a new visitor which you want to pursue you will need to approach them and gain their permission to begin the sales process.

For your existing target companies, LeadLander can validate their interest. More progressive conversational websites (instead of pure brochure sites) can exploit the knowledge LeadLander provides that much more.

To summarize a few of the benefits:

Validate the interest of active buyers (in a campaign, open lead, or active opportunity) and focus your efforts to convert/close them quicker
Determine which content gets used the most on your website and develop more of it and get rid of less-used content to streamline and improve the buying experience
Take your sales campaigns further by tracking the click-thru patterns of email targets and others within the same company to obtain a better return on campaign spending
Create leads from eyeballs. One of my clients receives about 5,000 visits per month to their website. Of those, about 500 open the registration page (our permission to sell to them), and of those 500 less than 10% sign up (or convert from an eyeball to a lead). If we could successfully target another 50 of those in a month we could double our eyeball to lead conversion rate!

LeadLander has a lot more functionality that what I have discussed here today. It is configurable, can provide alerts, and also sends out daily summary emails. There are a number of other vendors offering solutions in this arena. Assuming you can build a service like this into your processes, it is worth evaluating.

I would not recommend implementing a solution like LeadLander in a chaotic sales environment where you have not first implemented good processes for permission-based marketing, email and landing page campaigns, and good sales execution, including lead and opportunity management. It will simply add more "todo's" in an environment where things are already not getting done.

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Online Campaigns at Cloud Speed

noreply@blogger.com (Kalvin) — Wed, 27 Oct 2010 21:03:00 +0000

Executing online campaigns has never been easier using tools in the Cloud. No experience is required and certainly zero technical skills. You can deliver high impact and polished campaigns using a couple of very affordable online solutions.

Let me start by saying I am not receiving any compensation for the tools I am about to talk about in this post. Our client experienced such good success we felt we had to write about it. You can emulate this success quite easily yourself.

These are the steps we took in developing and executing our campaign using tools exclusively in the Cloud:

Designed our campaign - First we determined our offers for the campaign and the targets for those offers. In our particular case, we were emailing to a fairly large list of targets who had expressed an interest in our solution offerings by registering on our website. The contact form on our website links directly to our salesforce.com system and automatically creates leads. The leads we decided to target were essentially leads that had not been converted to opportunities, but were still considered valid, open leads. Our client (Safefreight Technology) provides comprehensive GPS Tracking solutions for everything from large truck fleets and heavy equipment to personal recreational vehicles and automobiles. Knowing the typical person completing the web contact form is either looking for a solution for themselves, or for somebody else, we designed three offers for our campaign - a trade-in credit program for buyers with existing competitive systems, a referral program for those researching solutions on behalf of others, and a newsletter sign-up for those not shopping right now, but who wanted to keep in touch with us through our newsletter.
Set up our mailing list - We used MailChimp to load our list of targets. We downloaded our contacts from salesforce.com after attaching them to a campaign. MailChimp allowed us to easily upload our data. It also has the added advantage of some super reports which our CEO was able to use without any training. He was able to track opens for our offer email and click-throughs. This is very powerful and reduces the need for creating additional campaign reports. MailChimp also integrates with the salesforce.com API and allows results to be written back into salesforce.com. We created our offer letter using the theme and HTML design features of MailChimp. Within the email we detailed our offers and provided the associated links to the related landing pages (more on that in a minute) and to our consumer product (because our target list was B2B buyers, but perhaps some of the list might be interested in our consumer offering).
Setup the Landing Pages - While we have control over our website in a CMS, from a time to market perspective we decided to implement our landing pages using Unbounce. This ended up being an excellent move for a few reasons : a) Unbounce provides an easy to use tool for developing landing pages. You can build a page with your offer content and include a form which captures conversions, which are reported in the Unbounce dashboard. You can monitor the number of people viewing your landing pages and the conversions in the dashboard. Unbounce also provides A/B Tests to determine which of your landing pages variants convert better; b) Unbounce integrates with MailChimp, allowing us to record our leads in one place for the CEO to review and also pass data back to salesforce.com; c) The dashboard provides everything you need to know about your landing pages, tracking unique visitors, overall page views and conversions. d) Implementation time is extremely rapid. After our designer gave us a concept and some graphics, we had our three landing pages ready to go in under one day.
Monitor and followup - We generated more leads than we expected from the program and are in the process of following up those leads. We also learned a few things which will result in improvements to our next campaign. We have already started to design a campaign which will focus on a specific segment of our market and will execute in the first week of November.

Another overall benefit is cost. We are maintaining an opt-in email list on Mailchimp of around 6,000 contacts at a cost of $75/month and Unbounce costs about $25/month for 1,000 unique visitors per month. Aside from our time and the design work, the costs are minimal for such a broad reach with such effective tools for us to deploy.

Here are the landing pages (if you are coming to this article some time later after writing it is possible the links will no longer work - landing pages only live so long as the offer on them is still valid):

The CEO of Safefreight, Curtis Serna, is progressive in his approach to marketing and demand generation. His company is the Official Mobile Security Provider for the Indycar Series, and they have engaged JustBusinessResults to streamline their selling and marketing processes using salesforce.com and additional Cloud services to optimize business results. This campaign is one of the projects for which we are providing assistance. We expect to train Safefreight team members to execute all future campaigns in-house using these methods.

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Does Cloud Computing maximize customer value?

noreply@blogger.com (Kalvin) — Wed, 17 Mar 2010 18:46:00 +0000

Is there a case for maximizing customer value by exploiting business-ready cloud computing? I think so. But why maximize customer value instead of shareholder value? And what is business-ready cloud computing?

I recently read a compelling case for maximizing customer value ahead of shareholder value in HBR (there will always be a place for magazine print editions on my stationary bike). The article by Roger Martin is called "The Age of Customer Capitalism". Roger refers to the famous Druckerism that "the purpose of any company is to create a customer" and then goes on to discuss why optimization theory will only let you optimize one thing at a time while all other variables become constraints. His view of corporate success is to optimize customer satisfaction, while "providing an acceptable risk-adjusted return on ... equity" for shareholders.

He compares the superior long term performance of companies like J&J and P&G which "tell shareholders in no uncertain terms to get to the back of the corporate bus", with companies like GE and Coca-Cola which were managed through the 90's by leaders whose mantra was shareholder value optimization. Roger makes the argument that shareholder value optimization is simply not sustainable in the long run because the market comes to expect too much and eventually the company falters when it falls short of expectations.

I obviously agree with Roger's assessment, having myself worked for publicly traded tech companies based in Boston, California and Germany my entire career (and a few years at the head of a small publicly traded company in Canada). In those companies we all marched to the tune of shareholder value creation, although at the field level we cared a lot about customers too. It was very confusing most of the time. Most major customer decisions revolved around margins, which created a fair amount of friction.

If you buy into maximizing customer satisfaction as the corporate purpose, at least for the moment, you might be wondering why I throwing around the term "business-ready cloud computing". First off, I apologize for being like everybody else and using the term "cloud computing". I particularly like Simon Wardley's "Cloud Rant" on this topic. He dislikes the word "cloud" being used so regularly to describe every new IT service. He believes many are being dishonest when they apply it to their service offering. In Simon's view, cloud services must provide the "standardization of an activity and its provision through utility services."

He discusses a great example, which is close to home for me, of how most companies believe they get very little or no value from the expensive customization of their ERP systems. I was at SAP for over a dozen years and it was sometimes impossible to convince customers to use standard out of the box processes instead of re-creating their complex processes in organizational concrete. Every customization implemented today was sure to slow them down in the future.

Accepting Simon's definition of cloud computing, I feel it is useful to further differentiate a class of cloud computing which is "business-ready". This class of cloud computing is quite different from the services provided by Amazon EC2 or GoGrid Cloud Server. Using these services I am probably months or even years away from being able to provide something that is truly business-ready. To be business-ready, the following criteria must be met:

No assembly required. A business user is the consumer of the service. Once business user accesses the service they are able to execute work processes, whether company workflows, social media interaction, or office productivity applications. The service must allow customization, but the service supports a business user.
Device independent. The service is available exclusively through a browser on a PC or through the tools provided on a mobile device. Browser plug-ins or local software installations undermine business-ready computing by tying the user to a specific device. Business-ready computing is also mobile enabled. And what about the age-old arguments about whether it should be PC or Mac? In business-ready cloud computing we no longer care.
Social media conversant. To be truly productive the business user must have access to customers, social media tools, corporate applications, and corporate ecosystem partners within an integrated environment. This implies a strong collaborative focus amongst disciplines that are often separated in the organizational design and within the application portfolio.
Customer driven. OK. Now I've put a stake in the ground. The customer is now in the center of all those pictures you draw instead of the shareholder, or the products, or the employees. I believe this is an essential element because it changes the nature of where process design starts and ends. It calls for us to completely overhaul our online presence, which today is mostly brochure-ware. It also dictates integration between applications which for some reason or another we have never integrated.

How does business-ready cloud computing help maximize customer satisfaction?

Let's start by looking at areas where we can greatly improve customer satisfaction and identifying some application process scenarios (or business scenarios) to enable them. This is not the complete list, but it will give you some ideas:

Buying experience. This is perhaps the nemesis of buyers we hope to turn into customers. We provide buyers with a great deal of information on our websites and ask them to figure it out on their own. If they make the mistake of registering on our website, we set our inside sales reps onto them to hassle them with qualification questions. We need to overhaul of the buying experience using a front end which is community based and provides mass-customization / one-to-one marketing (I talked about this in another blog post). A Content Management System / Social Publishing platform such as Drupal may be used to provide a problem solving customer dialog with buyers, with important results being stored in a CRM service such as salesforce.com. This greatly enhances the customer buying experience while automating the collection of key buyer information captured during the buying process. Ultimately we should be capturing critical information about the entire customer life cycle using this approach.
Online customer service. This one is obvious. Customers should experience exceptional online service. On the back-end we need to ensure access to customer service information is made available to all of the roles in our company and our partner's organizations with customer touch points. The same tools we discussed in the online buying experience fit the bill here too.
Mobile computing. We need to use cloud computing services which enable mobile services for all customer related processes. Access to these processes must be made available to all stakeholders with customer touch points.
Training and education. Training as a service makes a lot of sense, but why is it that we build a product or service and then sell ourselves short by not delivering top notch online education to allow our customers to get the best out of it? This is a no-brainer. Buyers would tap into this during the buying process as well. Our own people could benefit from this tremendously - we call them knowledge workers for a reason. We need to focus on motivating them by investing in their knowledge. This requires thinking outside of the box and not restricting our view to conventional training offerings - sales training and product training come to mind. As Drucker said, "most sales training is totally unjustified. At best it makes an incompetent salesman out of a moron"... whew...he was never one to hold back his punches...
Social Publishing and Communities. We need to organize some of the efforts of our companies to social publishing and community development. There are many platforms available for this, Drupal being one of them. This will be key to moving our organizations from product-driven companies to customer-driven companies. Emerging technologies, such as crowdsourcing add the potential to tap into large customer communities to evolve offerings to match customer needs.

The are many other business scenarios which may benefit directly from business-ready cloud computing. We'll dive into more of them in future blogs, as well as the benefits they bring to your organization.

Business-ready cloud computing will co-exist with your existing infrastructure. The best place to start in applying business-ready cloud computing is to focus on maximizing customer satisfaction. In many cases your current ERP and back-office solutions do not perform adequately to support the goal of maximizing customer satisfaction. Moving into the cloud with re-vamped customer facing processes is achievable once you have identified the business scenarios and technologies to enable them.

Total Cost of Ownership - Is Cloud Computing really cheaper? TCO for SaaS versus On Premise

noreply@blogger.com (Kalvin) — Thu, 11 Mar 2010 17:21:00 +0000

Recently I had one of those client experiences we all need to keep us grounded. It helps us remember that perhaps not everyone has jumped onto the same band wagon as we have.

I recently met with an old friend, who we will call Bob, who owns his own successful services business. He engages with a high number of customers through a fairly low volume of transactions. Their contracts with customers are fulfilled exclusively using contractors. I had done some consulting work in the past to help the company reduce its IT costs while improving service levels using third parties exclusively - the company has no internal IT resources and wants to keep it that way. The company uses an IT solution which is similar to an ERP which is purpose built for their industry. This one was built in the early 1990's and is starting to show its age in many ways. It is difficult to use, expensive to change, and has none of the capabilities of a modern application.

Given Bob's desire to keep a lid on IT costs and address the shortcomings of his current application I decided to approach Bob with a cloud-based solution which would deploy salesforce.com and use the Force.com platform to develop the customized bits to make the final solution business user ready for Bob's company. Bob agreed to see a demo and go from there.

I prepared for the demo by prototyping a small component which was critical for their business using the Force.com platform.

The demo took about two hours and Bob was fully engaged, asking questions and clearly quite impressed. I navigated my way through an action-packed demo of salesforce.com, complete with customizations for Bob's industry, integration to a web page to collect leads, online case management from the web, mobile integration, and real-time synchronization of information in Outlook. Before I could even wipe the sweat from my brow, Bob asked the all important question, "How much?"

Well, those of you who make your living selling know this is one of those very important questions that demonstrates real interest on behalf of the buyer. All those expensive sales training courses I took over the years drilled it into my head this is a critical moment and the very last thing you do at this point is quote a price. All the training will tell you to begin the process of reeling in the fish very carefully to ensure the hook is set before scaring them away with price. So what did I do? I promptly forgot about all the sales training and blurted out the annual subscription fees for salesforce.com for the number of users Bob would need for his company.

Now Bob said, "Well that's more than I'm paying in maintenance for my current solution."

Having worked with Bob to reduce his IT costs I knew how much he was paying for maintenance on his current solution and replied, "That's true Bob, but software maintenance is just a part of your annul cost to support the application. What about the servers (3 that I knew of), database licenses, IT support (all of which Bob had outsourced at commercial rates for all IT services), virtualization, and backup services?"

And because it's always best to try for the knock out blow before the buyer can catch their breath, I added, "And remember last fall when you lost your application for three days because the disk mirroring wasn't working and you had to go to a backup to recover? Well, that kind of thing isn't going to happen anymore."

Bob now looked at me like he either had a very bad case of stomach cramps or was thinking about committing violence, "But Kalvin (and he might have felt like adding - 'you moron'), I've already bought all of that stuff. And my current application works just fine for my business needs. And the backup recovery process worked just like its supposed to..."

I had now turned the conversation into a debate, or perhaps even worse, an argument. It dawned on me at that point I would not recover from my enthusiastic rant and it would be best if I backed off for the time being. We both agreed to talk at some point in the future when I had something compelling to share with him (and he was likely hoping whatever happened next didn't involve me continuing to tell him he wasn't 'getting it').

I have a background in cost benefit analysis and before starting a process of cranking the numbers myself I decided to see what was available online. In earnest I started my online research and found various cost calculators. The free ones are mostly provided by vendors of products and to me demonstrate a bias towards the vendor's products. There are also a number of companies offering value calculators or TCO calculators as their central offering and they, of course, require compensation for efforts. I didn't want to go down this path for an opportunity which was still speculative.

I decided to build my own simple model in an Excel spreadsheet. You may download a copy if you wish. I discovered very quickly is there is no such thing as a simple TCO model. In the case of Bob's company, to obtain enough value to justify the implementation of a new solution would also dictate integration from the cloud-based solutions to both in-house applications and the company's online presence. The online presence is hosted with a third party hosting company. It would also mean a redistribution of IT services from their conventional supplier of in-house services to a cloud services provider. It is also has a profound effect on current development costs and time to implement changes.

The important point here is for many companies with a base of legacy applications, the introduction of SaaS applications will require integration and sustainment activities with in-house or other outsourced applications.

I therefore organized the model recognizing an investment in SaaS may also involve an investment in in-house applications and a change to the shared services model for the entire IT environment:

SaaS costs

subscription fees based on multiple billing models per solution
premium support fees (for 7x24, for example)
incremental device costs required to support the solution (does everybody get a PDA to run the app?)
complementary services - startup, development, testing, documentation, ongoing configuration, etc.
expenses - T&L, etc.

On Premise costs

license costs
maintenance and premium support
incremental devices
servers
network
environmental - facilities, power, recycling
hosting
complementary services - startup, development, testing, documentation, ongoing configuration, etc.
other expenses

Shared Costs

business continuity
business practices
interfaces
desktop support
server support
database management
storage management
security management
network management

I completed the model twice for Bob's company. Once for the status quo, where we simply keep everything as-is and complete some enhancements to the current in-house application to address some glaring problems. I completed the model a second time for the SaaS option, retiring the current core application.

Working through the TCO model for Bob's solution, it is very clear the TCO will be lower for the SaaS or cloud-based solution. The principal reason is the core application we are replacing is the mission critical application for the business. We will be reducing the shared costs by 70% and in-house costs by an equivalent percentage. The new SaaS costs are very manageable as the number of users required in the business is not significant and number of users is the primary pricing mechanism for salesforce.com.

The interesting learning for me, however, is in future I will not likely be so quick to assume TCO will always be lower for a cloud-based solution, especially in a legacy environment with many established systems where the introduction of the proposed SaaS application does not significantly displace some existing costs, or where the foot print of the SaaS application is not significant enough to drive the value of its incremental cost.

TCO only the starting point. It comes down to value.

So while I believe it is meaningful for us all to crank the TCO model using something like the model provided here (we don't ask for your email id or other info), we also need to assess the value of the respective solutions being evaluated, whether they are SaaS or on-premise applications to ensure we get the best possible return on our investment.

The bottom line - TCO is only the first step in comparing solution alternatives, whether they are cloud-based or on-premise. While important, it is only a determining factor in influencing solution alternatives where the cost of on-premise or shared services can be significantly reduced. In most cases we need to evaluate the business impact of the various alternatives in the form of a cost benefit analysis, where TCO is one component of the business case.

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Why does CRM sometimes not deliver?

noreply@blogger.com (Kalvin) — Wed, 03 Mar 2010 17:47:00 +0000

CRM is a one of the most popular cloud applications, so why do some executives question its value a year after installing it?

I'll answer this question by focusing on some big issues:

Sales and marketing are different departments and like it that way
Glengarry Glen Ross School of Selling
The 80's buying experience
Service and support ghetto

Usually when planning CRM implementations we focus on resolving 'sales issues'. We focus on resolving problems we have been programmed to think about by CRM vendors. Spend a few minutes watching some of the videos on the salesforce.com website and you will be exposed to endless functionality. Here's a small sample of what it can do for you:

Sales - Much needed visibility into the sales and pipeline, lead conversion rates, competitive losses. Sales dashboard. Manage complex sales with ease (incorporating sales methodologies into salesforce), customize salesforce for unique needs, and manage complex territories. Everything a rep needs on their desktop, exactly when they need it. Improved processes such as lead routing. Integration with service and support to get a complete customer view.
Marketing - track ROI instantly, conduct marketing analysis - campaign performance, campaign to sales life cycle tracking.
Service - ensure agents have access to information they need, managers and execs have access to key performance indicators to improve service and decrease costs.

And I have no argument with any of these claims. The services offered by salesforce.com do all of these things and more (and it’s called a service instead of software because it is delivered via the internet cloud - a class of applications we call business-ready cloud computing).

The reason our executives are questioning the value of CRM has nothing to do with the capabilities of CRM, but rather the problems in our go-to-market approaches which remain long after CRM is implemented. These problems exist because we tend to focus solely on the needs of the sales team when implementing CRM - usually because we are looking for the quickest return, which we hope might come from increased sales. Without looking across the organization for all buyer touch points, however, we miss out on some great opportunities for a better return on investment.

A broader view of CRM as a true Customer Relationship Management system is our starting point. We need to focus on our relationship with buyers through higher quality interactions with them. CRM implemented right should improve the way everyone in our company interacts with buyers and customers.

So let's dive right into the problems we identified at the beginning.

Sales and marketing are different departments and like it that way

This is likely the biggest problem and I will talk about it the most. In any implementation of CRM the gateway between marketing and sales is a lead. While this makes sense from a sales process perspective, it leaves a lot to be desired as the only integration point. When lead management is the only bridge between these two groups there tends to be a lot of friction between them. When I hear sales people complaining about lead quality and marketing complaining about sales' ability to convert leads into opportunities, it provides me with evidence of the typical sales/marketing relationship.

The problem originates when marketing is creating 'impressions' based on positioning your brand and solutions. The solution positioning is usually the result of research which identifies the top pain points for each of your target markets.

Marketing creates leads based on this high level solution positioning, often creating a high volume of interest, which it channels into the lead funnel. Many leads originating from this process are of poor quality. Even after a first call by inside sales, the lead quality is still suspect. It may still take sales considerable effort to make any progress in processing these leads and once they process too many bad ones in a row, they begin to lose confidence in the leads generated by marketing altogether. This is very distressing for the marketing lead who has invested marketing dollars in generating every one of these leads.

This happens for some very basic reasons:

Marketing is under pressure to create a high volume of leads. In fact they usually have lead creation targets. Any lead is a good lead to marketing. And yes, I know marketing has other measures - I have seen everything from 'lead to opportunity conversion rates' to 'opportunity acceleration' (one of my personal favorites). But when the President joins the marketing meeting he wants to know one thing - 'How many leads am I getting from having these marketing guys around?', followed by 'Is my brand being mentioned at kitchen tables yet?' (and if time allows, “Are people's appetites affected in a positive way when they are talking about my brand around the kitchen table?”)
Inside sales is ill-equipped to process leads. Marketing is casting a very wide net, often handing a high percentage of leads over to sales for qualification. Normally some leads should be filtered out and some sorting done before the leads are sent to sales. And maybe at this point you say, "Wait a minute, our telesales / telemarketing colleagues process the leads and send the best ones to sales". To which we say – these inside sales roles generally earn some percentage of their compensation based on lead creation volumes. Additionally, telesales / telemarketing generally have poor tools and training for sorting through leads, sometimes relying almost exclusively on BANT (qualification using Budget, Authority, Need, Timing) as their only tool.
Marketing operates at a high level with positioning that does not resonate with buyers. One of my favorites is the Volkswagen commercials with the 'das auto' delivered at the conclusion of their commercial by the big German voice (have you figured that one out yet?). Our buyers are dealing with day-to-day problems at a much more granular and much less sexy level than the high level marketing positioning. As a result, marketing is able to generate a small glimmer of interest (or sometimes more) from a buyer, which puts the buyer in a slightly vulnerable position where we are allowed to market or sell to them one-to-one. Unfortunately, our first response is to hammer them with the hard-selling telemarketer / telesales person. The telemarketer / telesales person is either trying to convert the lead into an opportunity, or determine if it is a cold lead to go into the nurturing bucket (which is generally a dead-end). This results in the buyer experiencing an entirely different dialog which ignores their problems and our solutions to address them. Instead, our inside sales person qualifies them. Many well organized buyers with low vendor expectations make their way through this process just fine, but if you look at the percentage of leads on average that get closed or rejected, this is clearly an issue.

So, what's the solution?

Buyers desire an entirely different dialog with us early in the sales process (back when we are still trying to put them into the lead management process or convert them into an opportunity). My work has led me to believe this dialog changes based on any number of attributes of the buyer and the buying organization. Attributes of the buyer organization such as industry, country of operation, global-reach, and company size have a significant impact on the dialog with anyone at the buying organization. In the case of the individual buyer, their role in the company and various psychographic variables will greatly impact both buyer solution preferences and their approach to acquiring it. You can't sell leading edge technology to an individual who is risk averse.

Once again, this is an opportunity for many of you to say - 'We are already doing this.' On some level you likely are, as you may already have whole areas of your website dedicated to your target segments, perhaps by industry or company size. A classic example might be solution offerings specifically for mid-sized professional services companies.

While this might be a great start, it does not go nearly far enough. Static pages which offer specialized information are necessary, but don't qualify as a two-way buyer dialog. Online product configurators are better, but only if they configure solutions based on buyer needs and not solution features.

We need to move to a buying process where the dialog goes to the heart of the buyer's problems. This requires mass customization and one-to-one marketing which in turn requires a deep understanding of buyer’s problems, the impact of those problems on their business, resulting needs, and how your solutions address them. Secondly, this dialog must be conducted consistently throughout all of the buyer touch points, whether automated through an online presence, email or in a real-time conversation.

This means a lot of work for Marketing. Also, this information needs to be delivered to your organization and your buyers via a repository which resides in your CRM system. All of the buyer touch points must also be tracked and stored in CRM.

Glengarry Glen Ross School of Selling

If you haven't seen this movie yet, put it on your list of movies to see. Here is a refresher of one of the best parts (don't forget to come back and read the rest of this blog!). My entire career has been spent in and around sales. I was always amazed to see the new sales people pick up all of the same habits as the more experienced sales people. Regrettably, they learned many bad habits.

With technologies we have available to us and the sophistication of most buyers, I am surprised to see most selling models are still quite adversarial. It's ‘us’ trying to convince the buyer to acquire our solutions through a process of us being better sales people than the competition. Now, I'm not saying being good in sales isn’t important. Obviously, well trained sales people with good selling skills make more sales than those without the skills and training.

But have you ever closely watched a sales person who is consistently successful over many years (and maybe even over a career that spans many different companies and products)?
In short, sales people who excel over a long career are good problem solvers and team players. They build strong internal networks in their own companies to allow them to broker the best capabilities of their company to create solutions to solve buyer problems. In a buyer dialog, most of the questions they ask go to the heart of uncovering buyer problems and the impact of those problems. Early in the process, very few questions are asked which only serve the interest of the seller, such as pure qualification questions. When the accomplished seller resorts to asking qualification questions, they do so after earning the right to ask them, having created some value for the buyer by helping the buyer to better understand their problems and potential solutions.

We call this the Problem, Impact, Need, Solution selling model (lousy acronym – maybe we’ll think of something better later). It forms the basis of our Guided Customer Buying go-to-market framework. We believe sales must be trained to sell this way. And we think the marketing content that we identified earlier must be provided to sales as “sales-ready” content to be used in customer dialogs.

The 80’s buying experience

We can no longer provide static web pages with tons of content for buyers to sort their way through as our only approach to engaging in an online dialog. The very same content marketing is creating for sales to support real-time dialogs must also be made available through your corporate website to facilitate one-to-one dialogs with buyers.

This would take the form of an online interaction where the buyer identifies their problems and the impact of those problems. Throughout the online interaction the buyer would be provided with supporting information to facilitate learning. This learning is valued by buyers, and it does not simply imply teaching them about your solutions. Buyers want to learn about the problems other customers in their industry are facing, how to assess the impact of various problems, and finally, how others may have successfully addressed those problems.

If this dialog is done well, the buyer should uncover problems for which they might not as yet have visibility. If you do a good job providing this online dialog with the buyer, you will allow the buyer to learn a great deal about the depth and impact of their problems. This online dialog can be further enriched with the deployment of community tools to facilitate an interaction between your buyers and your customer and partner community.

As we mentioned earlier, psychographics will also impact the way the buyer wants to buy. Some buyers will require a great deal of information and will invest significant time in an exhaustive dialog, while others will desire a very high level, rapid fire dialog where they can get to the solution as quickly as possible. Your selling process and sales-ready content must facilitate all types of buyer preferences.

Service and Support Ghetto

For solutions with a significant implementation or post-sales support component, we find the poorest served team within the selling organization is the service and support group. Usually the promises and expectations made by sales are not well documented, other than in the proposal or quote completed mid-way through the sales process. This puts service and support in the position of “promise breaking”. Nothing is more devastating for a buyer, now turned customer, to deal with the frustration of re-educating a new team, only to discover the vision they bought from sales looks unattainable or more expensive. In defence of the sales team, these broken promises are not generally a misrepresentation of the solution capabilities, but rather a lack of understanding on behalf of service and support about the priorities that were agreed upon during the buying process.

As a result, the buyer feels they are re-educating the seller’s organization, and service and sales will eventually do everything they can to avoid the conflict that may arise while the customer’s frustration elevates. This leads to eroded service margins, and even more mistakes. It becomes something of a downward spiral.

You’ve likely already guessed where I am going with the solution to this problem. If the information we collected from the buyer during the buying process, either through our online presence or from buyer conversations with sales, were made available in our CRM, service and support will have a critical repository from which to identify the promises and customer priorities identified during the sales process.

In progressive companies, sales and service partner early in the sales process prior to the buyer becoming a customer. A CRM-driven approach as we are discussing here serves as a tool to be used during business discovery, and also ensures service and support are aware of customer priorities and expectations set during the sales process. The customer information and approach to conducting business discovery also becomes a great learning tool for everyone involved, including the service and support team.

Implementing CRM as the repository with sales-ready content to support customer dialogs is a powerful tool. Sales-ready content developed by marketing in partnership with sales, using a standard framework such as problem, impact, need, solution will be embraced by your sales team and buyers. Your online vision of this sales-ready content facilitates a one-to-one dialog, which is supported by mass-customization. The addition of online communities to this environment will enrich the buyer experience substantially.

We are no longer limited by technologies to implement a powerful vision of the guided customer buying experience. CRM technologies are easily customized to enable this vision and community/social networking tools may be integrated into our online presence. We simply need to overcome the limitations we impose on ourselves, whether it is the inability of sales and marketing to partner to develop sales-ready content, the adversarial nature of our selling approaches, our lack of imagination in envisioning an interactive online dialog with buyers, or our inability to go the extra mile in providing our service and support teams with access to critical information collected during the sales process.