Carrier, Know Thyself

Jim Dickie is managing partner with Insight Technology Group, a research firm specializing in marketing, sales, and service. He said there are several key steps involved when the CEO decides it's time to get some of those huge sales hikes he's been reading about.

"There has to be executive sponsorship on the business side," said Dickie. "Don't make this a pure IT project. When the CEO says, 'Why can't we double our sales?' you need to survey the market and find out what your own people think is the right course of action."

Too often, companies let the technology dictate the way they run their business. "You may need to change the way you work, but get tools to support that-don't let the technology dictate things," said Dickie.

When it comes time to make an investment, make sure you're spending the right amount of money. Throwing a million-dollar investment at a $500,000 sales increase doesn't make much sense unless you're looking for a tax write-off.

"You have to find the answers to some questions," said Dickie. "What is the cost of doing it right? What's the cost of not doing anything?"

'Technology in search f a problem'

Dickie believes one of the problems involved in CRM solutions is that people look for all the answers in one box. The key is finding what your company needs and hooking up with those vendors. Across the CRM industry, the average installation involved 4.7 packages. "You don't just buy a package," said Dickie. "Today, you have to buy packages."

Unfortunately, those solutions don't always work. According to Dickie, only 24 percent of those who bought solutions a year earlier reported significant improvement in sales last year; 51 percent reported minor improvement and 25 percent "can't point to anything getting better," he said.

"That means only 24 percent of those installing CRM packages hit the ball out of the park," Dickey said. While throwing money after a problem isn't always the right answer, Dickie did point out that the companies reporting significant improvement were those that spent more than $18,000 per rep. (The overall average was just over $10,000.)

The weakness for most companies is not being aware of what their sales and service problems are. "Without identifying and fixing process holes first, you will only end up doing inefficient and ineffective things faster than you have done them before," Dickie said.

One of the problems could be the crowded market. There are 850 vendors in Insight's database that consider themselves CRM solutions. "And we don't have them all," Dickie said. He likened the purchase of CRM solutions to hunting. "Some people go hunting with the wrong dog," he said. "Others have skilled hunting dogs, but they don't know what they're going to hunt." More than one company has "bought the technology and then went in search of the problem."

A lot of times, the answer to what a company needs can be found with the people who are doing the work, not with outside consultants. Dickie told of a company that took its sales force to an off-site meeting and asked them to come up with 50 ways it could improve its sales. The company took the top three suggestions and found the technology to solve the problem.

Finding the right answer for your company can be like finding the secret to eternal life. There are no standards or rules like you find in other segments of your business; accounting and manufacturing have standards that make problems easier to solve. "You can't take what worked for Clairol and make it work for Cigna," said Dickie. "You can't even take what worked for Chubb and make it work for Kemper."

So Dickie suggested that insurance companies have to "take the mystery out of it. You can do this if you ask your sales people." Companies need to "challenge the sales process. Find out why we do the things that we do."

"CRM isn't software, it's an attitude."

Denis Pombriant is CRM research director for the Aberdeen Group (www. aberdeen.com), an IT market analysis and positioning firm. He agreed that looking to a competitor-or even an ally-is unlikely to yield the answer to your company's problem. "Every situation is different," he said. "In the early days of CRM, it seemed like every implementation was a custom implementation. I don't think that's true anymore, but what you have is a different constellation of modules. CRM isn't software, it's an attitude."

Many companies feel that only someone from outside the organization can analyze their problems, but Pombriant disagrees. "Don't go to outside sources to analyze your problems," he said. "You need to understand your current processes and have at least a fuzzy vision of where you want to go. Only then should you bring in someone from the outside," he said.

There is no secret to a successful CRM solution. "Those that are successful have a good understanding of themselves," he said. "There are too many stories about companies forcing CRM on their organization only to find the staff resistant to any changes."

The CRM field is crowded, but Pombriant said that most vendors have historical tendencies that can be discerned. "One may have tendencies toward sales and marketing and another may have tendencies toward sales and service. After some heavy diagnosis, you should be able to understand whether your problem is customer service oriented or sales and marketing oriented."

In the insurance industry, many carriers look for cross-selling opportunities with the existing customer base. "You have to know the customer's background and look for ways that the customer service people can sell or enable the customer to go on the Web site to make any changes," Pombriant said.

"It's like teaching an elephant to dance."

Why do CRM solutions fail? "It is usually because the company buying the solution doesn't have a clear vision of its problems or of the solution," he said. "There has to be a commitment to the project from the senior officers of the company to the end users."

Pombriant also believes that any changes must be in stages. "Don't try a big bang implementation," he said. "If it is rolled out incrementally, you are able to achieve goals and then move on to the next problem. A common mistake is organizations try to take too big of a bite. It's like teaching an elephant to dance."

Carriers that have good relationships with customers are ones that have established a dialogue with those customers-they don't develop a product and tell customers they need it; they ask the customers what they need and then try to fulfill that need. "Dialogue needs to be expanded," said Pombriant. "A good relationship depends on a continuing dialogue to solve the business problems."

That can make for the best relationships. "If that happens, each side receives greater information," he said. "The vendor discovers trends in the product and the customer becomes wedded to the vendor. That's what the future is all about."

The battle over customers is never-ending. A satisfied customer will keep buying from you if you solve his problems and provide a respectable level of service. Getting the right tools to provide those services and create those selling opportunities involves more than looking through a catalog. To find answers, you have to ask yourself questions, and your customers, too. And then comes the tricky part-listen to what these people have to say. That's good CRM.