Intelligence Sells

Intelligence Sells

In an increasingly competitive business environment, maintaining margins and increasing turnover becomes more difficult each year. Front-line sales executives have ultimate responsibility for bringing in more revenue – the buck stops with them. During the late 1990s there was a great deal of hype around CRM technology, to which many companies turned to in response to a tougher selling environment. CRM vendors made lofty claims about increased sales and improved customer retention, but it was almost impossible for them to meet the inflated expectations of their customers.

A decade on, Gartner analysts correctly predicted that by 2005, 75 percent of CRM projects will have failed to deliver measurable ROI in most industries. One might argue that the ROI lies in enhanced customer service or improved processes in other areas of the business, but try telling that to your CFO. The only meaningful ROI is increased sales and improved margins.

CRM solutions promise increased sales through Sales Force Automation (SFA). This is essentially the bit of CRM designed to support the sales function. The software gives sales representatives access to contacts, appointments and notes. They are effectively a way of capturing soft information about customers: names; addresses; whether or not they play golf.

It’s a useful tool that allows your sales reps to organise their day and jog their memory about what happened at the last meeting but ultimately it doesn’t do very much more than Microsoft Outlook. In addition to contact management, SFA also provides opportunity management tools that allow sales teams to manage lengthy, complex sales cycles by tracking the status of deals. This is fine if your sales executive only has to worry about a couple of product lines or three major accounts but what if he/she is dealing with thousands of products and hundreds of accounts?

The sales person who goes out and sees lots of different customers and talks about lots of different products doesn’t need to know the inside leg measurement of all of his prospects and doesn’t track the status of sales cycles. What he needs to know in order to start a meaningful sales conversation and identify sales opportunities is what the customer bought last time, what they didn’t buy and whether there are any changes in spend.

It is through this failure of SFA to deliver factual information about customer history and buying patterns that CRM fails to address the fundamental business issues of most manufacturing, distribution and wholesale companies. Many companies in this sector have businesses that are based on repeat sales into highly competitive and price sensitive markets.

In a bid to hold on to existing customers and milk them for all they are worth these companies have adopted a number of different strategies, including merger and acquisition, which has resulted in a steady shrinkage of the marketplace.

Many have weathered consolidation storms and tough recessions but customer loyalty in these industries is low and not dependent on product or service differentiation. Thanks to the Internet, customers can cherry-pick from multiple suppliers and shop around for the best price 24 hours a day.

In order to stay ahead of the competition manufacturing, distribution and wholesale businesses need dynamic solutions designed to take control of the sales function by enabling sales people to sell more on every call. While SFA software supports the process of managing sales people it does not support sales people in the act of selling. What sales people need are sales intelligence tools that generate leads by automatically identifying new sales opportunities within their existing customer base, therefore improving sales effectiveness.

Sales intelligence software makes sales professionals more successful by giving them instant access to vital information about customer buying patterns and account status, helping them sell more effectively at every sales appointment. To the sales executive, a good sales intelligence solution should become as essential as a mobile telephone or a diary. Sales intelligence applications should also enable sales and marketing managers to analyse customers’ buying patterns and develop strategic promotional campaigns or notify sales people in the field of sales opportunities within their accounts.

Unlike SFA, sales intelligence solutions deliver measurable business benefits in two key areas: they provide management with an insight into customer, product and sales trends so they can modify sales strategy and processes to make sales teams more successful, and they proactively inform sales people of sales issues and deliver sale opportunities so they can sell more effectively and intelligently.

They enable businesses to achieve an increased share of customer spending, higher profitability per order and increased returns on marketing efforts. By using sales intelligence solutions, sales professionals can make better decisions and more informed calls based on more meaningful insight of their sales history data. It also gives more power and control to sales managers, allowing them to understand the reasons behind under or achievement and take appropriate action.

The results speak from themselves. At bathroom fittings manufacturer Deva Taps sales have grown by as much as 66 percent in some regions since the company implemented sales intelligence. At electronics accessories distributor Hama PVAC Ltd, one of the key drivers for investing in sales intelligence was the need to improve profit margins by changing the business mix to more own-brand products sales.

Using VECTA software one member of the team who was selling a 60/40 mix in favour of OEM products has changed the mix to 60/40 in favour of own-brand products, which has an instant impact on margin growth. And at Ridley Quiney, a distributor of wholesale packaging and janitorial products, each member of the sales team is achieving a 20 percent average increase in revenue since the company deployed its sales intelligence solution.

These companies – and many more like them – have woken up to the fact that in order to make more money you have to give your sales executives the tools they need to go out and sell. It doesn’t take a genius to work out that time spent feeding lots of subjective information into a CRM system is time that would be better spent selling. To misquote John F. Kennedy: Ask not what your sales team can do for you but what you can do for your sales team. There are solutions out there that will enable your sales team to sell more but you won’t find them under the banner of CRM.