A stack of business cards can be a daunting project, that’s if you don’t know what to do with them. At the Small Business Expo in New York, I met up with an attendee, Ben Pianko, who was starting his own photography business, Benz Lenz. He had a badge holder filled with business cards, so I asked him what he was going to do with all of them. He wasn’t familiar with Customer Relationship Management, CRM, so you won’t be surprised as to what I obviously suggested.
Building a small to medium sized business today has changed dramatically thanks to the “Amazon effect,” said Brent Leary, Partner of CRM Essentials in an interview at the CRM Evolution 2012 conference in New York City.
Before Amazon started offering web services, companies had to concern themselves with so many company-building issues that were not core to the company’s offering, such as software, hardware, capacity, and people who could manage all these technologies. Once Amazon started offering web and order fulfillment services that small businesses can take advantage of, it freed business owners from thinking about all this technology, said Leary.
While Amazon was one of the pioneers, there is now a slew of other companies offering these “in the cloud” and Software as a Service (SaaS) solutions. As a result, small businesses are building businesses and services much faster than ever before, Leary continued.
I’ve heard of this issue from IT people. They refer to it as the “consumerization of IT.” There was a time IT used to hold all the cards when it came to employees’ capability of doing anything on computers. Now that employees can access services outside of the company network, it can actually sometimes be troublesome especially for IT if workers are circumventing normal company protocol.
For small to medium sized businesses that are struggling with what IT infrastructure they have, if anything, consumerization of IT can actually be a relief. With access to these “pay as you go” services, businesses can launch quicker, operate faster, and be more agile. To easily meet customer demand and behavioral changes, it’s critical to have flexible business models. The “Amazon effect” is changing how businesses are operating and dealing with customers, said Leary.
Traditional marketing is seen as a necessary expense. It doesn’t need to be that way. The goal is to view marketing as a direct driver of revenue, said Bruce Culbert, Chief Services Officer for The Pedowitz Group, in his presentation, “Revenue Marketing Transformation and Marketing Automation for B2B Marketers,” at the CRM Evolution 2012 conference in New York City.
In his presentation, Culbert showed how companies can move their marketing department from just being seen as a cost center to a driver of revenue.
What is Revenue Marketing?
Culbert defines “Revenue Marketing” as marketing and sales working together to deliver more qualified leads to the funnel while increasing the speed and conversion rate they move through the funnel. If you’re doing it right it should be repeatable, predictable, and scalable.
Traditionally, the funnel starts with marketing. They in turn hand it off to sales who then hand it to service who maintain the customer relationship over time. In the new “revenue marketing” paradigm, marketing sticks around for the entire lifecycle of the customer.
“Marketing is one of the last functions in business to be reengineered, optimized, and held accountable for their contributions to revenue and profitability, and that must change,” said Culbert.
With non-revenue marketing organizations there is no visibility or accountability between sales and marketing, and they have competing intentions. According to Forrester Research, 47 percent of B2B marketers say they either close fewer than 4% of all marketing generated leads or they don’t even know the metric. As for how sales rates marketing, 2/3rds of salesmen say marketing needs improvement (source: CSO Insights).
Characteristics of Revenue Marketing
Culbert outlined the four stages a marketing department must go through before it can achieve revenue marketing nirvana.
Stage 1: Traditional – Characterized by ad spending, brand and awareness, marketing communications, broadcast, no service level agreement (SLA) with sales, no revenue measurement. A traditional marketing department is always viewed as a cost center because their metrics are defined by what the company does (activities such as number of impressions, ads, and tradeshow appearances).
Stage 2: Lead Generation – They begin to quantify leads that sales can take action on. Their characteristics include more viable leads to sales, an email system and or CRM, a highly manual lead nurturing campaign, and some campaign level lead/revenue goals. Marketing is still viewed as a cost center at this point although they begin to move towards customer measurement with metrics such as number of leads and number of emails sent.
Stage 3: Demand Generation – Biggest transformation happens at this stage. Characterized by marketing automation with CRM, buy cycle vs. sales cycle, SLA integrated with sales (two groups are actually talking about what a good lead looks like), lead scoring (Which ones do you take action on first?), content marketing, and social marketing. While not yet predictable there is some revenue accountability. Metrics now include number of leads scored and sent to sales, percentage of conversion to opportunity, percentage of conversion to close, pipeline contribution (Do they accept that lead and does it continue through the pipeline?), number of days to close, and some ROI.
Stage 4: Revenue Marketing – At this stage you get all the elements of demand generation plus it includes forecasting that’s repeatable, predictable, and scalable (RPS). Metrics are also the same as demand generation, but you now have sales, revenue, and ROI. Marketing can now finally say they drove sales and revenue.
To define your journey, said Culbert, look at each level and see how mature your company is against strategy, people, process, technology, content, and results.
Marketing automation is becoming the system of measure for marketing, said Culbert. It takes a technology stack to create revenue marketing. If you use marketing automation you can increase leads, your sales department will respect the leads more, and as a result you’ll increase revenue. Marketers can get to these levels of achievements.
Marketing automation must haves
According to Culbert, to achieve revenue marketing, you must have:
Email design and send
Web asset development landing pages, forms, and microsites
Web activity tracking
Personalization and dynamic content
Content marketing and syndication
Workflow and lead routing
Ability to publish track and leverage social channels
Integration with CRM or other customer systems
Metrics and reporting
Sales enablement and insight
High value use cases for marketing automation
While marketing automation can be used in a number of different areas, Culbert suggests starting with:
Multi-step nurturing campaigns
Webinar registration attendance and follow up
Up sell and cross sell
Adoption and support
Content marketing – Thought leadership, blogs, high value web content
Share to social – all emails and web content/experiences
Lead scoring MQL, SQL, SAL
Lead routing and sales SLA’s
If you want to see if you’re ready to make the transformation to revenue marketing, take your own assessment from the Pedowitz Group and see how you stack up against hundreds of other companies.
There is an endless number of CRM applications, and while we at Zoho always recommend choosing Zoho CRM, we thought we’d hand off the advice on how to choose a CRM vendor to a few consultants, Jim Berkowitz, CRM technology Coach for CRM Mastery and Eric Pozil, Managing Director for CRM Northwest.
The two led a discussion on “How to Select a CRM Vendor” at the CRM Evolution 2012 conference in New York City. They broke down the decision process into five stages: discovery, evaluation, vendor interaction, selection, and negotiation. Here are their guidelines for each stage.
Stage 1: Discovery
Form a CRM selection tiger team
Review effectiveness and efficiency of current processes
Determine needed functional requirements
Document current IT infrastructure and skill sets – Where is all your knowledge and data currently?
Determine preferred CRM delivery platforms – Cloud or on premise?
Review technical and administrative resource availability – Who is going to run this thing? What can people with no experience, a little, or a lot of experience do by themselves?
“CRM is a process not a project,” said Berkowitz. This is the most common mistaken perception about CRM. It’s not the same as an accounts payable solution for which the process really doesn’t change.
Stage 2: Evaluation
What are the CRM solutions that your company should be considering? When evaluating, separate into two camps: core functionality and non-core functionality, said Berkowitz. Core is a capability that must be in the system, and should be there, but non-core are capabilities that you would like to have because they have specific value to your industry.
Develop new or updated process requirements
Development of CRM vendor long-list
Conduct CRM vendor due diligence – Understand what these packages do.
Select short-list vendors – Once you know they do everything you need them to do, look at how they work, not what they do.
Stage 3: Vendor Interaction
How do we leverage the vendor’s experience?
Develop an internal vendor scorecard tied to top CRM properties
Provide a vendor script – Break it into precise business processes such as lead assignment, execution, and customer service escalations
Create a post-RFP discovery summary and FAQ
Implementation, training, and total cost of ownership (TCO) plan – Define all tangible costs for five years and include vendor/partner add-ons
Stage 4: Selection
Survey – Have employees fill out a score card to see what it is people like.
Compare – How do you compare the results with your business priorities?
Validate – Are there any deal breakers? Do you have any global data issues? Try to find your own references, not just the ones the vendor gives you.
Stage 5: Negotiation
Best offer – Always start with this.
Ratchet user deployment – Pay for the ones you need upfront and then add when you need more add them on.
Resource/reference exchange – Think about things you can give to the vendor that isn’t money.
Street price discovery
Negotiate at C-Level
In today’s competitive business world, many businesses are cutting expenses and saving money on payroll taxes by using independent contractors. Small businesses can be competitive and even experience growth by using contractors and keeping prices in check, however, there are criteria to consider before going this route. Be advised that the government isn’t a fan of losing employment taxes, so it is extremely important to follow the rules or find ways to work around them.
Independent contractors have a place in most companies.
When your company requires assistance from workers who can perform their duties on their own schedule without outside aid, independent contractors make the most sense. If the duty must be performed at a mandated time and in a specific place, the worker will be considered an employee by the Employment Development Department (EDD).
That is one of the first criterion the governments looks for during audits. Independent contractors must be able to perform the task at hand “independently” and without assistance from other staff members who might be on salary.
A word to the wise: Never have employees perform the same duties as contractors. The different compensation structures alone will be a red flag.
Make sure independent contractors have their own equipment.
Most small business owners think that throwing a contractor out there to perform a task is all you really need to worry about, but that is not the case. Independent contractors must have their own equipment and must lease or purchase any supplies to perform their duties. As an owner, you can’t just give them equipment or supplies or else they are technically not functioning alone. Setting up equipment leases or requiring them to buy equipment are the two most common ways to handle this EDD criterion.
Uniforms can also be tricky, but most businesses using contractors can get away with requiring uniforms as long as it is a client preference, visibility issue or even a safety concern. If it is important for your company’s branding and cohesiveness to mandate that contractors use uniforms, then make sure the contractors understand that clients demand it in order for them to feel comfortable working with an ‘outside’ professional.
Charge them a small marketing fee.
Most businesses using contractors spend money marketing their services and use hourly or salaried employees to accomplish this task. Charging your contractors a small marketing fee will legitimize this support and keep this arm of the business well within the range of compliance.
Allow for refusal of work.
You might need contractors to start at 8 a.m. but never demand that they do. Those who do make it in early will get work and those who do not, will not get any work. In fact, if you wish to create a schedule, then get all contractors to provide their availability then use it to “record” the individually created schedules. If any contractors change their availability they can turn away the work without obvious repercussion, however, if they refuse any work you can refuse to use them again. Make sure they understand how this works beforehand.
Pay them by job, not by the hour and pay them fairly
Be very careful about paying hourly for their services. Set lump sum payments for each individual job and your better contractors will simply make more money and accomplish the work faster. Make sure the demands of each “call of duty” are spelled out and adhered to or work will become shabby. Eliminate contractors who cut corners to get more work or clients and your business will suffer.
Save money on taxes, but don’t aim to make more money on their efforts. Keep the savings in perspective and try not to pay less for their efforts by switching over from employee to contractor.
NOTE: Take the time to study your state’s laws carefully and eliminate all reasons to be audited. Most states are looking for extra revenue, so the more you play by the rules the more likely you will sleep easy at night if an audit does occur.
“CRM applications are very data centric in nature, but if you’re actually going to use one you need to be process centric,” said Bill Band, VP and Principal Analyst Serving Business Process Professionals for Forrester, in our conversation at the CRM Evolution 2012 conference in New York City.
“While a CRM is great at collecting and storing customer information, it’s not so good at connecting business process from end to end,” said Band.
To be able to handle a case from beginning to end and deliver a great customer experience, Forrester’s clients are trying to add business process capabilities on top of their CRM systems.
While it’s key to have process, it’s often not necessary for a simple customer interaction into the CRM. Overloading the CRM with unnecessary processes is one of the key pitfalls Band sees with adding business process management.
“Business process management can help you deliver a better customer experience but you should only be focusing on things such as customer service interactions, client on-boarding, load applications, or things where there’s a lot of complexity in the business process. If you don’t have that kind of complexity, a traditional data-centric solution will work just fine,” said Band.
How do you improve the sales efficiency of your workforce of around 300 sales people, who document and submit their daily sales activities on paper forms? Simple. By moving them to a paperless system, that involves smart phones, a smart data collection app (eSurvey) and a reporting service on the cloud (Zoho Reports). That’s what the farmer owned cooperative, Southern States did.
Know more about how Southern States achieved an increase in sales of 20% and data accuracy of 100%.