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Why Sales Leads Fall Through The Cracks,
And How SFA Can Make The Difference

Five Minutes With Paul Petersen • Senior Director, FrontRange Solutions’ CRM Business Unit


Question: Recently you highlighted the fact that 70 percent of sales leads never receive proper follow-up from the sales department. What is the reason and how can companies improve this?

Paul Petersen: That is a startling statistic, and I think a lot of executives don’t even know they have this problem in their company. Leads that fall by the wayside are off the radar and it can be an invisible problem.

We see several root causes. Often, prospect names are captured by marketing, but those leads aren’t automatically imported into a common database on which both sales and marketing staff rely. Also, there are often workflow bottlenecks as companies import leads into a system. The bottom line is that both the marketing and sales departments need access to a central repository of all prospects and customers — a “corporate memory” where employees can track responses to marketing campaigns and look at the history of sales efforts. As the company interacts with that prospect or customer, every history item needs to be in one spot. You can call that a CRM system or a sales force automation (SFA) system, but the key is to get marketing, sales and, if possible, other departments to work from the same contact record; after all, you communicate with individuals.

As an example, if a prospect visits your Web site and fills out a form, does that lead automatically import into your SFA system? Is the lead automatically assigned to a sales rep, and does that rep get an e-mail notification? Did you automatically capture the type of opportunity and the source? Was a response automatically sent back to the prospect? Your Web site and telesales teams offer economical ways to collect prospect details, and if you pass that info to your sales team, it turns a “lukewarm call” into a warm one with instant rapport that builds the relationship.

You can see a big part of the answer is the “A” in SFA — automation. Automation gives marketers more time to be strategic and monitor campaign effectiveness, and tweak programs on- the-fly. Automation also gives your sales staff a better way to receive opportunities and track them. Busywork is also minimized, so sales people have more time to meet with customers.

Question: Leads can also get “lost” after the fact, correct? Meaning, there are no data on the conversion ratio for a particular marketing campaign?

Paul Petersen: Right. As a marketer, you want to know that seven percent of your Google (quote - news - alert) advertising leads have been converted to sales. That’s the holy grail of marketing ROI, but it is nearly impossible information for most companies to collect and analyze. Once marketing delivers a lead to sales, that trail goes dead. However, a good SFA system captures that and allows you to slice the results to learn more. That’s because sales is working from the same contact record that marketing uses. When a sales person converts a “prospect” to a “customer,” the results of the campaign are updated and marketing sees the big picture. That becomes a strategic advantage as you decide which marketing projects to fund.

You can also lose track of a lead when the sales team determines the prospect isn’t ready right now, but will be later — a “future prospect.” In most organizations, sales can’t return these to marketing and they are “lost” — but with a central database, you could “tag” the contact for ongoing marketing, and that keeps your brand and value proposition in front of them till they are ready to buy. Managing leads this way is a real secret to ROI.

Question: Those are compelling reasons to adopt SFA, but sometimes these SFA implementation projects initially meet resistance, correct? What are your thoughts on that?

Paul Petersen: Sometimes there is resistance when the individual workers don’t see the benefits of the new system. For example, management might want a new SFA system for the real-time forecasting roll-ups, but that doesn’t motivate the sales staff. The sales staff might see the system as a time waster. So it’s important to show the sales and marketing people how this will improve their lives and help them work more effectively. A good SFA system will reduce reporting requirements for sales people, keep them abreast of what the marketing department is doing with the prospect, and help them track follow-ups. So, if you involve the users in the design stage of an SFA rollout, get their buy-in and listen to their needs and make their job easier, then there is almost no resistance to a new system. Conversely, it’s a bad idea for the IT department to pick the software and to push the deployment through unilaterally because there will be a lot of resistance and low user adoption.

Question: Why aren’t more companies using SFA systems that unite marketing and sales?

Paul Petersen: If you think about the organic evolution of any sales and marketing operation, both departments had a job to do, and they started using tools to get the job done. So it’s not a surprise that we see disparate systems, a lack of automation and loose coordination. But a business should outgrow that approach if it’s going to reach its potential. The benefits to both marketing and sales teams are huge.

Question: What is the hottest new trend in SFA, and why?

Paul Petersen: An emerging area of SFA that is having a real impact on sales effectiveness is the concept of the customer record as an information portal. As a salesperson, I want more information at my fingertips — if it’s fast and easy to see. For example, I’d like to know if the customer is on credit hold before I call. I’d like to know if a shipment went on time. I might even like to know what the weather is like in that prospect’s city. Good SFA software is now providing very simple ways of introducing this real-time information into a customer contact record.

For example, in GoldMine we have taken the approach of embedding browser windows right in the contact record, and it’s quite easy for the administrator to set up “views” of internal systems like credit, or views into external Web data. Now, when I start my call, I can scan these real-time data and have a much more informed conversation with my customer. And I didn’t have to call the credit department or open up other applications to get this information.

Companies are starting to use these “views” in really innovative ways. For example, when a sales person opens the contact record, a map and directions to the prospect’s location will appear in the window. I recently visited one company that provides that map, and they go a step further to show existing customers that are near a prospect. That really helps plan travel, and gives you some good local references to mention to your prospect.

The other hot trend is that businesses are rejecting lengthy CRM implementations that require lots of costly customization. The ideas of quick time to deploy, quick time to value and low totalWhen a sales person
opens the contact record,
a map and directions to
the prospect’s location
will appear in the window
cost are really dominating the buying agenda now — integration without the heavy lifting, and quick usability. That’s good news for us, and we see that market shift as permanent. Also, a phased approach to implementing your SFA system lets you keep focused and adapt to changes; after all, marketing and sales evolve in response to the market.' CIS

Paul Petersen is the senior director, CRM Business Unit, for FrontRange Solutions (news - alert). In his 30 years in IT management, development, sales and marketing, Petersen has built, bought and sold solutions for major companies, including McDonalds Corporation, GE, Arthur Young, Delrina and Symantec. He also holds the Professional Certified Marketer designation from the American Marketing Association. He welcomes questions at [email protected].

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