In the olden days (you know, about a week ago), before the rise of cloud computing, software vendors could use a lot of big words, slick demos, and fancy marketing props to entice people to buy a system. They were selling hope.
Sales are easy. Customer Retention is hard.
And many vendors are feeling the pain. The above video from Adobe does a great job of highlighting the issue. SaaS systems, with low upfront fees and the relatively easy ability to switch to a completely different system, enables customers to learn for themselves what your system can deliver.
Subscription pricing means you need to prove your worth. Everyday.
The impact: every time you have a renewal sales discussion, your customer immediately knows if you are BSing them or not. And they won’t tolerate BS.
Ensure your customers' success if you want to keep them.
What this means is SaaS vendors need to ensure they stop BSing customers and start ensuring their success. Make sure your customer has achieved measurable business value from investing in your system. To do this, evolve your sales, implementation, and customer management processes.
Help customers address the two biggest issues they face – namely, driving and maintaining full, effective user adoption of the system AND realizing the clear, measurable business benefits. If you can’t do this, your only choice is to try to BS your customer.
Good luck with that.
Please share your thoughts and experiences on the Customer Success Practitioners group on LinkedIn.
1. Expected ROI over the life of the CRM investmentDon’t just look at implementation costs or total cost of ownership (TCO). Make sure the expected return and lifetime value is both positive and significant enough to warrant the time and effort required to implement and maintain the system. Perform a scenario analysis to weight the expected ROI to adjust for different levels of user adoption. Will this still seem like a good investment if you don’t get effective adoption?
2. Current level of user adoption of existing systems
3. Impact of future changes to users’ jobs and performance requirements
4. Identification of all drivers and barriers to IT user adoption
6. Identification of resources & budget required to drive initial user adoption
7. Plan and budget resources for sustaining user adoption over the life of the system
8. Defined approach for ensuring the CRM system stays relevant
There are many lessons here for IT departments (and, arguably, the organization as a whole) before it invests in a CRM System.
New 2014 mortgage rules require lenders consider customers’ ability to repay a loan before extending credit
Lenders (and others) need to consider their ability to achieve ROI before investing in CRM systems
1. Look at how much money you send out now (license and implementation costs) and how much value demand to get back (increase in sales, decrease in costs, or other measures of ROI on your CRM investment).
2. Critically examine and rate your ability to actually achieve the returns you require (ability to drive and sustain user adoption and benefits realization).
3. Oh, and depending on the size of the investment, you may require some sort of collateral to help incentivize successful payback of your investment (for CRM investments, this may be tying executive compensation to CRM success).
Don’t invest in Sub-Prime CRM.
Before you write a check for any CRM system, make sure it is worth it. It is better to not make any investment than to throw away a pile of money and waste tons of time on a system that is doomed to failure before it even begins.
Require a User Adoption & ROI Plan before you spend a dime on CRM!
1. Is there a written plan for how we will ensure a positive ROI on our CRM investment?2. Have we done a thorough analysis to identify all the drivers and barriers that will affect user adoption (and ROI)?3. Have we defined exactly what ROI goals must be achieved in what amount of time before we proceed?4. Is there a single, senior executive who will be held accountable (including having a personal financial stake) for meeting ROI goals on the CRM investment?
If you can’t say yes to all of the above questions, then the loan is not approved!
Here is a fun game to play – I call it “jacklighting executives”. The way it works is you ask an executive (the more senior the better) a question (often an obvious one) to which they have no answer and see how long they stare into space. You get 1 point for every second they are stymied.
My record score is 4 years, 8 weeks, 14 days, and approximately 11 hours.
Just kidding. (Sort of.)
The question that gets me this result is simple. I ask, “Who owns CRM user adoption in your organization?”
Immediate supervisors are the biggest drivers of CRM user adoption
Many organizations spend millions of dollars on CRM implementations without having thought about what it takes to ensure success and whose job it is to make it happen. This, as history has shown, is a great recipe for disaster.
If you want to improve effective CRM adoption within your organization, don’t just look at the end users. Look at their immediate supervisors. Managers and direct supervisors have the biggest impact on making sure CRM systems are used consistently and effectively. If the manager insists that their team use the system, it gets used. If they don’t, well, I think you know what happens.
Manage your managers for improved CRM adoption
When I work with clients, I often ask them, "what role do you expect your managers to play in driving CRM adoption?" Often times the answer is, “we hadn’t thought of that”.
It turns out that direct managers, those who are the most influential in driving CRM success, are typically not even asked to make sure their team uses the system. Managers typically don’t have this as one of their official job responsibilities. And they are often not given the tools and support they need to ensure their team adopts the CRM system.
Managers need to be held accountable for CRM use within their team
If you want to maximize CRM adoption in your organization, don’t just focus on the end-users. Target some of your efforts on their managers. Let managers know that this is an important part of their jobs. Set them specific targets, measure results, and hold the managers accountable for ensuring their team consistently and effectively uses the CRM system.
If you do this, you will be amazed at the results you get.