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Thursday, 24 June 2010

Sales Force Automation places too much stress on Salespeople



anxiety maleThe evidence is that Sales Force Automation (SFA) and Client Relationship Management (CRM) place too much stress on Salespeople, by producing a

'crisis of information'.

The crisis comes from the overwhelming input and output of unrelated Data, without apparent application. This Data Storage Fortress has become so complex it needs sophisticated software to access, read, display, interpret and manipulate.



Hence, the output read and accepted by Managers,
bears no relationship to the input presented by Salespeople.

The problem BMAC set out to overcome

by analysis and diagnosis was the following dissonance.


    • The principle Inputs are Qualitative.

    • The principle Outputs are Quantitative.


    The evidence for this is that the outputs produced at a Management Level are Numerical and time based.

    A 'Sales Forecast' the amount of expected Revenue, from which Customers, by which date.

    However, the inputs are the subjective view of the Salesperson.

    The Sales Executives describe and categorises their own Activity on a 'best-fit' basis, usually from a drop down list.

    The Salesperson then second-guesses their Client's view for Value of Potential business, likely Close dates, and most improbably their own likelihood of success as a Percentage. All of this subjective information is coloured by the salesperson's desire to 'look good', by presenting a strong pipeline, a portfolio of well attended accounts, a well managed and worked territory and therefore a strong likelihood of future sales success!



    This whole process is so inherently unstable, that the Sales Manager adds their 'view' nominally subtracting 20%-40% from Sales Data. This 'modified view' is then further modified, up or down, by a 'C-Level correction' based on Historical Trends,
    or The Business Plan Forecast!


    SFA and CRM have led to a lack of socialisation, affecting negatively on the ability of the Organisation to Learn, for peer sharing or replication and roll-out. The measured impact of SFA and CRM, as currently used, has been to lower Sales Revenue Generating Activity, and has substantially reduced Sales Productivity while increasing 'efficiency'.
    The claimed benefit of 'Sales Performance Improvement' through SFA and CRM relies on anecdotal evidence,
    with little correlation to actual Sales Revenue Improvement.

    There is at least the same amount of anecdotal evidence that SFA and CRM is 'padded' or manipulated by sales people with exaggerated pipelines and 'early' close dates to show good account husbandry.

    The greatest failure of SFA and CRM, in their current form, is to accurately represent reality, the actual 'on the ground' Sales situation. SFA especially fails to account for Contingencies.

    Great difficulty is experienced by the Salesperson when reporting a Reversal of the Sales Stage or Phase.

    Environmental Data is ignored or often it is disallowed.

    Sales Velocity is presented as fixed speed, and Sales Acceleration (or Deceleration) is not treated as a variable,
    but used as a constant.

    The view that SFA/CRM 'drive' Sales by encouraging Sales to 'drive' Buyers to the 'Close' on a specific date for specific revenue amounts, is FALSE.

    It is as deceptive as believing the Sun rotates around the Earth,
    it denies the fact that Sales revolve around the Buyer, and the Buyer's local conditions.

    To use an analogy from Coal Mining, then SFA fails to take account of 'local disturbance'.

    In Mining, these can be "rising floor" or "falling roof" where for geological reasons the mine floor alters or the roof collapses are both phenomena outside of the miner's control. Huge varieties of unfavourable and changing environmental conditions happen at the coalface; most of which are impossible to predict, and of the predictable conditions, most are impossible to alter.

    In mining these are described as 'bad conditions' and are treated distinctly from 'bad work' where errors of judgement or activity are attributable to the miner. Both 'Bad Conditions' or 'Bad Work' will lead to much additional, but unproductive, work to get back on stream. The interaction of both 'Bad Conditions' and 'Bad Work' can be catastrophic.

    Recognition of 'at the coalface' in Sales situations,
    demands Customer time by Sales Managers,
    Structured Customer Time
    specifically planned to examine
    and determine Local Disturbance 'Bad Conditions'.

    Additionally, time spent by the Sales Manager with the Salesperson in the Customer environment enables diagnoses of 'Bad Work'. It is worth giving a clear example of each:



    • 'Bad Conditions', the Customer has decided to postpone the RFP, ITT, or Request Price Quotations.
      The Project is on hold.
      Normal SFA or CRM input "pending".Delay causes forecasting problems, the Salesperson is criticised for lack of account control.
    • 'Bad Work', the Sales Team have failed to respond appropriately (i.e. they were late) to the Buyer's RFP, ITT,
      or Request Price Quotations.
      The project proceeds without us.
      Normal SFA or CRM input "lost on price".
      Sales person avoids the consequence of 'Bad Work'.

    The problem we set out to overcome by Analysis and Diagnosis was the following dissonance.

    • The principle inputs are Qualitative.
    • The Principle outputs are Quantitative.

    In Sales we have come from an Executive Decision Making and Planning Basis:
    i.e. experience, knowledge and skill to be replaced by charts, spread sheets, ratios, graphs and calendars
    'paper clipped' by software into The Monthly or yet still worse, The 'Weekly' Report.

    These reports are then analysed for fault, or explained away, but always without validation, hence without judgement.

    Opinion is fact.

    The solution is, as you may expect, is both difficult and slow,
    it requires Leadership, Inspiration and a Systematic Approach based upon evidence and validation, not anecdotal vindication.

    At BMAC, we have conducted extensive research using validated models for Sales Performance, Sales Velocity, and Sales Acceleration to Validate Quantitative Input. BMAC then developed a proprietary model for Buying Behaviour and Sales Process, which enables the effective functioning of both Sales Force Automation and Client Relationship Management.

    Do you agree? Why?

    Do you disagree? Why?

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