In the CRM space, it is a big help to us when a business has figured out what they’re trying to accomplish. Unfortunately, we often still get told “I need some CRM”, which leads us to ask the question “Well, what do you mean by that?” Those letters mean a lot of different things to different people and that makes it hard for us as the vendor to really understand whether we’re a good fit or not. So it’s important for the business to have some internal framework to help them structure the discussion with the vendor.
That’s one of the reasons why we started rolling out workshops to help businesses with customer journey mapping last year – it’s something that is vendor independent and it’s a great exercise for a business to go through because it builds a framework for them to have a discussion internally about what they’re trying to accomplish. Customer journey mapping helps you build a roadmap for how somebody becomes a customer of your business from the customer’s point of view. It’s a good starting point because it’s not about your internal organisation and so you can take all of the internal politics out of it. It’s purely about someone from the outside of the business, going through the process of buying. And this is very typically not aligned with the way your company is structured!
Once you’ve got that framework for the discussion, you can step down to the next level and having understood how the business is organised, you can examine what gaps you need to fill. And from that you can begin to go down into use cases.
MyC. What advice can you share in terms of how practitioners should go through the process of requirements gathering?
LA. The thing about requirements gathering is that, typically, end users are not good at expressing requirements. The usual process is that you have a team that interviews all the users; they understand what users ask for; they build a very detailed set of specifications and requirements; they’ve done all their research and are very thorough and they use this to select a vendor, implement a system and then roll that back to the users. And this usually fails even though they deliver to the users what the users asked for! This is because users typically don’t understand what to ask for. They understand what they do and they understand what they’re trying to accomplish but they don’t typically understand how to ask for the systems or tools to help them do that job.
So there are two practical pieces of advice I give people. First of all, you can build a very iterative process – so although the big requirements document is designed to fail, you can still interview the users, find one painpoint and act quickly, implement and then iterate. Agile methods are a great way to do this but the only way you really understand what the user wants is to get something in their hands quickly – then, if they realise it isn’t what they really wanted, at least if you did that in a two-week period instead of a 12 month period, you still have time to recover from that, and the recovery is then the actual process. So you don’t want to get into that long cycle.
The other thing you can do – and this is a little bit harder – is get a team with some consulting or domain-specific experience, who have been there before and done enough of that work so that they understand the difference between a user’s asks and a user’s needs. And a big part of the way you get there is you don’t actually ask the user what they want – you observe what they do and then build a requirement based off of that observation and an understanding of their process.
The thing about requirements gathering is that, typically, end users are not good at expressing requirements.
MyC. What kinds of questions should organisations ask themselves?
LA. First of all, there has to be a clear understanding of your goals and what you’re trying to accomplish. So you should ask yourself ‘what are my goals?’; ‘what am I trying to get to in a quantifiable way – is it customer satisfaction and how do I measure that?’ Asking yourself how you’re going to measure the impact of this is very important. That will cause you to focus on the problem you’re really trying to solve. So at the beginning, if you say ‘here’s my world today; here’s what I want my world to look like for the future; and how can I quantifiably measure that difference’ then that quantifiable metric will guide you. For instance, in customer satisfaction, is it Net Promoter Score, is it customer retention or is it length of sales cycle? That quantifiable metric will help guide the process.
MyC. When it comes to actually making the investment in a CRM solution, what advice do you have for practitioners in terms of making the business case and getting buy-in?
LA. You must make the business case based on a quantifiable outcome. So if you go to the CFO and ask for money, he/she will ask what the outcome will be from spending that money. You can say that you want your Net Promoter Score to increase and that the ROI is an improvement in customer retention. Retention is a huge one. If you’re a business that has an ongoing revenue model of the customer – whether it’s ongoing services model or subscription model, or an ongoing purchasing model – retention is massive because of the compounding effect of interest rates. If you improve a retention number by one point per year, that adds up significantly over the lifetime of a customer. So a small swing in customer satisfaction resulting in a small improvement to retention can have a very big financial impact.
That’s one way of quantifying and making the business case. Also, there are things like sales productivity. Sales productivity often comes down to quotas or what my assignment per salesperson can be. Those are all great ways to measure the impact. If it’s a customer satisfaction piece, naturally you turn towards NPS or retention metrics. If it’s a growth sales acceleration, you tend towards those metrics that are all about the sales cycle and sales productivity.
MyC. Are there challenges specific to the CRM software market that buyers need to be aware of?
LA. One of the complexities of the market is the very large problem set that people are solving, and that’s why understanding your use cases, your metrics, and what you’re trying to accomplish, is so important. You can go to an analyst firm – for instance, Gartner – and they are going to give you a huge definition of all the different areas that fall under CRM. There are hundreds if not thousands of companies that serve across those ecosystems. Understanding where you fit is very important in that selection process.
The degree to which you can give the vendor visibility into your business goals, not just a technical specification, is very important.
I’ll give you one example area – configure price quote (CPQ) applications. CPQ falls under the CRM umbrella and there are 10 or more vendors that have really deep CPQ functionality. Sometimes we’ll have customers show up and say ‘I need CRM’, but when you dig in, what they really need is a better quoting solution for their sales team – their painpoint is that they have a very complex and configurable product catalogue and it’s difficult to pull all that together. Well, sure, SugarCRM are going to do some of that and maybe we’re a fit, but they may be better off going to a different set of vendors in the space for that kind of solution. So that’s one of the big challenges – the space is just so big.
MyC. Once practitioners are at the solution selection stage, what advice can you share to help buyers find the most appropriate vendor for their needs?
LA. I would tell them to be very open and transparent in that process with the vendors. The degree to which you can give the vendor visibility into your business goals, not just a technical specification, is very important. During the vendor selection process, some businesses build requirements and do a request for proposal (RFP) that is overly constrained to tactical or feature-level comparison. Sometimes you see RFPs that have 10 pages of feature comparison check boxes. The business doesn’t care about feature comparisons – they’re trying to do something like increase retention.
The good vendors will have a lot of experience, and can provide a lot of best practices, and help to optimise use cases and work flows and support business and sales transformation. Give the vendors a chance to help you solve your business problem. A good vendor sees a lot of business problems and the odds are they’ve seen your scenario before. You’ve got to be open and give the vendor a chance to be part of the brainstorming process. If you try and run this really strict RFP feature comparison, you’re not going to get a strategic relationship. And you want someone who’s going to be a business partner
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