The Hidden Dangers of CRM Systems and Sales Force Automation Platforms

I write about strategies to turn fans into customers and customers into fans. I also share ways to use real-time strategies to spread ideas, influence minds, and build business.

Worst Practices  |  New Rules of Sales & Service  |  Research and Analysis  |  Business to Business

Today buyers are in charge.

As you consider real-time technology to help you with agile, social selling, you’ll need to be very careful about the role of your Customer Relationship Management System (CRM) and Sales Force Automation (SFA) Platform because it is unlikely that agile, real-time social selling is optimized by software products designed before social networking was mainstream.

We’re in a new world.

The idea of mystery in the sales process is over. We research companies online before reaching out to them. We fire up LinkedIn an hour before an initial business meeting. We check out the CEO’s Twitter feed to see what she is up to.

But you know that—because you’re living this new world every day just like I am. You know the new rules of sales and service.

Contemporary CRM and SFA software still reflects the old paradigm in which the salesperson initiates the action, and therefore it is flawed.

HIDDEN DANGER #1: Your Customer Relationship Management System and Sales Force Automation Platform is likely out of date because its algorithms were built using the old rules.

shutterstock_111334919Using a typical CRM or SFA system today is like still using a manual typewriter to create proposals. It’s the wrong tool.

Many medium-size and large organizations have an enterprise CRM and SFA system in place that the entire sales force uses. Frequently the marketing and customer support staff use the system as well.

This software is used by organizations to manage a company’s interactions with current and future customers. It is used to manage the process of how people inside a company interact with existing and potential customers, and typically it includes an automated component that tracks a particular buyer’s history of contacts by a salesperson. There are many specialized CRM and SFA systems for industry-specific applications such as the insurance industry, healthcare, and nonprofits, as well as general systems for B2B and consumer businesses.

The large providers of CRM and SFA software designed their products in the 1990s, before social networking.

The category of enterprise customer management and sales force automation grew quickly with the widespread availability of networked computing during the 1990s, and then the shift to software as a service (SaaS) computing in the first decade of the 2000s.

Be careful of your CRM and SFA systems because it is unlikely that agile, real-time social selling is a component of they way they work.

HIDDEN DANGER #2: These software systems were developed in the era of traditional selling, when salespeople made cold calls and followed up on sales leads.

CRM as it exists today wasn’t designed and built for a world in which the buyer is in charge.

Today, the buyers decide when they want to engage a salesperson. When the salesperson was in charge, the old CRM work flow model—charting a path from initial lead, to the first call, to a face-to-face meeting, to the negotiation phase, and ending with the close—made sense. No longer.

Today, if I’m interested in buying something, I go to a dozen websites and do the research. And then at some point when I’ve built up my body of knowledge, I reach out, typically electronically, and tell the company that I’m ready to take to the next step. The old CRM systems don’t manage this process well.

HIDDEN DANGER #3: The word “relationship” in customer relationship management isn’t even that accurate, because the software isn’t really about relationships at all.

Instead, CRM systems are a transactional database for management reports. They’re optimized for sales management reporting based on a hierarchical, top-down, command-and-control processes where sales management doesn’t trust salespeople.

While there is certainly benefit for salespeople to use today’s CRM and SFA platforms, most people in sales don’t like them because the platforms require them to log in and record their every action with a potential customer. This takes valuable time away from their primary task—selling—and diverts it toward updating and maintaining the activity log so that sales management can see what they are doing. Salespeople are required to estimate the likelihood that the deal will close primarily so that sales management can run a forecast report for senior executives.

CRM and SFA platforms were built in an era when sellers controlled both information dissemination and the selling process.

The problem with these systems is they don’t work well when buyers are in charge.

HIDDEN DANGER #4: CRM systems should do a better job of helping sales representatives understand buyer context, but CRM wasn’t built to do that. Instead the systems were created to help sales reps organize how they’re going to take a prospect through the sales process, and bubble it up to the sales VP.

And now, in a world where there are so many signals coming in from potential or hungry buyers when they visit your website, interact with your email campaigns, or enter discussions on social media, modern and effective CRM technology should be aggregating all this data.

For example, if someone posts a comment or a question to your company blog, there should be a mechanism that analyzes the context of the post against all potential customers and alerts salespeople exactly which buyer would be interested. Yet existing CRM systems don’t do this. CRM should be much more focused on helping salespeople to deliver a better buying process.

The problem here is huge. Modern social selling just doesn’t work on the CRM and SFA platforms that were built during an obsolete era when sellers controlled both information dissemination and the selling process.

And it certainly doesn’t work on burdensome systems that were designed as reporting tools for senior management.

New Call-to-action