Why CRM Systems Don’t Generate Leads By Che Crockatt, President, MBSC This White Paper has been principally written for IT Vendors. Its purpose is to clear up some common misunderstandings that many people have about what CRM systems can and cannot do, and for what they should and should not be used. We have tried to take a reasonably objective approach.
What do CRM systems do?
The term “CRM” can mean many things to many people, which is not surprising since CRM systems vary widely in both their purpose and functionality. Some CRM systems, for instance, really do focus on Managing Customer Relationships (CRM), particularly where there are either large volumes of customers or large volumes of transactions, such as a Bank or Telecommunications Company. A number of these systems integrate into corporate ERP and Accounting Systems and are usually only appropriate for large organisations. Other CRM systems tend to focus on Sales Force Automation (SFA), where the main emphasis is on managing Sales Opportunities and Forecasting. These systems tend to be stand alone and are principally used by sales people.
CRM Systems do not generate leads by themselves
The fact that CRM systems don’t generate leads by themselves is a stunningly obvious and important point which many people fail to grasp. To generate leads using a CRM requires manual intervention. The CRM system stores the data but to communicate with prospects, someone usually has to pick up the phone or send an individual email. It is the sales people who do the communicating, not the system. This is in marked contrast to a Marketing System, which is designed to do the communicating. It can communicate by email, in volume, at low cost and automatically. This will be addressed in greater detail later in the paper. The fact that one type of system is manual and the other is automated makes a massive difference, once you start to calculate the Total Cost of Prospecting. Basically manual is expensive, whereas automated processes are not. To illustrate this point, let’s consider two typical scenarios: Scenario 1: CRM System with 4 Sales People doing Prospecting To calculate the Total Cost of Prospecting, you simply add up the cost of the CRM system, the cost of 4 sales people’s salaries and incidental costs such as cars, computers, mobile phones, PDA’s, recruitment and training. In almost any situation, this is going to be a big number. So let’s come up with a rough number. Say $400,000. Scenario 2: Marketing System with 1 Marketing Manager To find the Total Cost of Prospecting, under this scenario, you add up the cost of the marketing system and the cost of the Marketing Manager’s salary and incidentals. Just because less people are involved, the number is going to be much smaller, say $100,000. Four times less expensive than the manual approach of Scenario 1 and furthermore it’s likely to be a lot more effective (see later).
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How Marketing Systems can generate leads automatically
The fact that Marketing Systems can automatically generate leads is a fairly recent development. Here is some of the new capability that you should be aware of: (1) Marketing Automation to manage individually-based Prospecting Campaigns Marketing Automation allows you to vary the content, timing and even the channel of your marketing communications for each and every one of your prospects, based on their own ongoing responses. Here are a few examples to illustrate what we mean: • If a person indicates that they are interested in a specific issue, then your Marketing system should be able to automatically adjust the content of future communications to ensure that they address that issue. Example: This person indicates that they are interested in this topic. The system will now send them a series of emails on that topic. If two people respond to the same email in different ways then you should be able to automatically adjust the timing of your next communications to each of them based on that difference in response. Example: We sent this email invitation to download a White Paper to Person A and Person B. Person A downloaded the paper. Person B ignored the email. The system will now send Person A this next email invitation in 3 days time, but will send Person B the same email invitation in 2 weeks time. Your Marketing system should be integrated with your other marketing channels. Example: If this person responds to this campaign then automatically put them into this telemarketing campaign.
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This represents a fundamental shift in the way we think about marketing. “From the idea of sending out 1000 emails to a thousand prospects, to the idea of sending out 1000 campaigns, where each campaign contains multiple campaign elements, and where each campaign re-adjusts itself according to the responses of each recipient and the “Logical Rules” of the campaign.”
(2) Automatic Update of Lead Status Tracking Your Marketing system should be able to update the status of your leads automatically based on each individual’s campaign responses and behaviour. Example: This person attended this event. Therefore we can change their lead status to “Concept Educated” This ability is completely beyond the scope of nearly all CRM Systems, which are based on manual processes where, for example, someone in sales is obliged to update the lead status of each prospect one by one. To use sales people to do prospecting and update lead status values is very expensive.
(3) Profile scoring on the basis of your Ideal Customer Profile The idea behind customer profiling is that you identify the key characteristics of your best Customers, so that you can identify Prospects that share those same characteristics. Basically, you’re looking for “more of the same”. Profile Surveys use survey scoring to compare the characteristics of your Prospects with the known characteristics of your best Customers. Survey scoring allows you to assign a number of points to each survey response. So as a simple example, you might ask the question: “Do you have an XYZ problem?”, and then allocate 10 points if someone said Yes and 0 points if they said No. Profile Surveys can be combined into aggregate results, which is useful because it allows you to rank your Prospects by order of their overall percentage score. As an example, you might rank the top 20% of respondents as “Hot Leads”, the next band of 60% as “Warm Leads” and the bottom 20% as “Cold Leads”.
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You can then allocate greater resources to the Hot Leads and qualify out the Cold Leads. But most importantly of all, Profile Scoring will save you time and money because you will not be wasting valuable and expensive resources (such as your sales people) on prospects who do not fit your correct profile, in the first place.
Integrated eMarketing Fulfillment and Campaign Registrations
While some CRM Systems do contain Marketing Modules, they usually require that the data be exported from the CRM system and then sent to some third party for processing and fulfillment. As an example, if you wanted to run a seminar, you might export the data from the CRM System, send it to an Email Bureau to send out the invitation and have a Web Designer create a registration system on your Web Site. This is a very manual, expensive and inefficient approach which works OK if you are doing small amounts of marketing but not if you are committed to a continuous and effective lead generation program. A Marketing System, such as CRM, provides you with the ability to write and send emails, which pre-fill registration forms to maximise response rates as well as improve marketing efficiency. Addendum 1, provided at the end of the document, provides you with a Check List of Marketing Functions not provided by most CRM Systems.
Managing Qualified Sales Opportunities is not the problem
Most CRM systems are pretty good at managing Qualified Sales Opportunities (QSOs) and most vendors that we speak to, tell us that once they have a real Sales Opportunity then they can be pretty confident that they will be able to convert somewhere between 1 in 3 and 1 in 5 of them into a sale. The problem is not, therefore, managing QSOs. The problem is being able to generate enough of them. To solve this problem you need to ensure that you have a Smart Marketing System.
If CRM systems won’t generate leads for you, then what’s the solution?
The solution is to use a Marketing System for your marketing and then use your preferred CRM system for Managing Sales Opportunities. To synchronise your data, you can integrate your Marketing System with your CRM System. There are two approaches to CRM Integration, depending on whether your CRM system is an online or offline solution. The Online Solution: One advantage of online CRM systems (such as Salesforce.com) is that they can communicate directly with an online Marketing System. This means that data can be exchanged between the two systems on a nightly basis. This is relatively easy to set up as a scheduled task. Each system simply transfers a copy of those records that have been updated in the last 24 hours to the other system, which then updates these records. The Offline Solution: Offline systems are less easy to integrate because the two systems cannot talk to each other. However, integration is still possible although it does require one manual procedure. The way it works is that the marketing system generates a weekly export of records that have been updated. These records are then sent to the Systems Administrator, who then uses a third party integration module like Inaport to map the data to the correct fields in the offline CRM system.
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What to do next?
To find out how MBSC can assist you to generate significantly more Qualified Sales Opportunities so that you have a better chance of hitting your Sales Targets, contact us by: Web Contact Request Form: www.macoem.com Email: sales@macoem.com
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Addendum 1: Check List of Marketing Functions not provided by most CRM Systems
Please consider the following Marketing functions, which you will not find in most CRM System: Bulk Email Marketing • Write, edit, test and send batch emails in Text, HTML or Graphical format in bulk volumes • Manage failed and bounced emails so that the information is automatically updated in the Marketing Database • Suppress email invitations, in real time, where individuals have either unsubscribed, have a failed email or have already responded to a campaign • View post campaign reports including known opened emails, failed, unsubscribed and response rates Opt-In Management • Comply with the SPAM Legislation including the provision that emails not be sent without either inferred or expressed consent • Track all opt-ins with a date time stamp and how opted-in so that you can protect yourself from erroneous claims that you are guilty of spamming • Review the opt-in statistics of your database and create appropriate telemarketing and direct mail campaigns Tele-marketing • Undertake efficient telemarketing campaigns to identify key individuals in Target Companies, obtain email opt-in’s, qualify leads and support marketing campaigns • Review sophisticated telemarketing reports which record every telemarketing transaction in a telemarketing log with a date and a time stamp enabling you to monitor telemarketing performance Event Management • Create and add new events to the system, within minutes, and have them displayed instantly online • Register delegates online, automatically send email confirmations; send reminder emails, track events cancellations and no shows • Enable pre-filled forms where the contact data exists in the database, making it easy for delegates to register • Track the source of all delegate registrations to review campaign effectiveness White Papers • Add new papers, articles or brochures to the system, within minutes, and have them displayed instantly online • Enable prospects to register and download or email themselves copies of your papers or brochures via self-service fulfillment • Track every paper, article, or brochure request that every prospect downloads from your system. Webcasts • Add new Webcasts to the system, within minutes, and have them displayed instantly online • Develop campaigns to encourage Webcast participation • Develop Webcasts for scheduled times or set up the web cast to be continuously available 24/7 Online Surveys • Create and add new surveys to the system, within minutes, and have them displayed instantly online • Develop campaigns to encourage registered prospects to participate in your surveys and enable them to immediately see the aggregate results of any survey they complete, if you choose to allow them to do so • Track every response from every Survey Respondent and download complete response data for offline analysis List Survey participants by response for a specific survey question and select campaigns based on these responses Active Profile Surveys and Survey Scoring • Active Surveys allows you to attach a series of surveys to the bottom of registration forms so that if a prospect has completed survey 1, they will be presented with survey 2 the next time and survey 3 after that and so on. • Profile Surveys are a type of Active Surveys, which are created to help you qualify leads automatically. This qualification data can be used as the basis for subsequent campaign selections and as evidence for determining Qualified Sales Opportunities. • Survey Scoring allows you to calibrate leads on the basis of survey responses. This allows you to automatically identify the top 20% of the leads you have generated from a campaign and immediately assign them as “Best” prospects.
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Scripted Campaigns • Scripted Campaigns allow you to set up a calendar-based series of email campaigns for an individual prospect • The Marketing System then sends those campaigns intelligently so that a campaign will not be sent if key circumstances have changed between the initial setup and the time of sending • Scripted Campaigns are vital for nurturing leads, keeping them “on the boil” and for drip-feeding valuable information Online Advert and Link Tracking • Track the number of "Click Throughs" received for each Online Ad • Link each Advert response with an individual in your database for post sales analysis • Evaluate which Ads work best for different types of campaigns • Track responses for campaigns promoting third party web sites (link tracker) Email Newsletters • Write and send regular e-newsletters via email • Include links to allow individuals to respond to multiple offers (events, papers, surveys, web casts, etc) • Track responses by individual article and reader • Select email, mail or telemarketing campaigns on the basis of list codes, position codes, industry codes, type codes, previous responses (ie: seminars delegates or people who have downloaded brochures), survey responses • Create multi-phased campaigns (this group first, then this group, then this group last)
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