Historically, sales management applications have been a boondoggle. Expensive to deploy and little used by their intended audience of sales managers and sales representatives, these tools largely failed to prove a return on investment. But a new breed of sales-force automation, campaign management and call center applications promise real contributions to the bottom line.
But even these improved software products will probably see little demand in coming months, as companies concentrate on basic security and infrastructure issues in the wake of last month’s terrorist attacks, experts say.
Today about $6 billion is spent on customer relationship management software, of which sales management applications are a subset, according to Gartner Group Inc., Stamford, Conn. Gartner projects the CRM sector will grow to about $12 billion by 2004. Specific sales management application industry breakdowns are not available because analysts today view them as part of CRM.
Sales management apps
In years past, companies spent millions on sales management applications, only to be foiled by unwilling humans, said Ed Moran, director-technology and communications group at Deloitte & Touche L.L.P., New York. He said a basic problem was that these systems relied on the sales representative to input information in order to build up a warehouse of data that could be analyzed by managers using complementary software tools.
"If the salesperson does not feel a sales management application makes sense, it will be doomed to failure," Moran said. "You must be sensitive to the fact that in any system, the salesperson is most important to the process. You need to demonstrate early on to the sales force that your system will help them bring results."
The latest sales management applications provide salespeople with real value, Moran added.
The vast majority of sales management applications today are part of CRM implementations. The 800-pound gorilla in the field is Siebel Systems Inc., San Mateo, Calif., which has been developing and acquiring sales management applications in order to provide end-to-end solutions for such clients as Compaq Computer Corp., American Power Conversion, Nippon Boehring Ingelheim Co. Ltd. and Toshiba America Information Systems.
Siebel also embodies the tough sledding software companies have faced in recent weeks. The sales management application vendor’s stock was off more than 14%, and hit a 52-week low in the first days of Wall Street trading after the terrorist attacks on Sept. 11.
Others working to compete in sales marketing management include Oracle Corp., E.piphany Inc., PeopleSoft Inc., Kana Software Inc., WebTone Technologies Inc. and Vignette Corp.
Time and money
Also weighing against the use of these products is their expense—a Fortune 1000 company will pay about $6 million for CRM—and the minimum of six months they take to deploy.
Sales management applications are tricky because they often reinvent the wheel. Most companies have created sales management processes that are either people-based or contained in silos of information. For example, a direct marketing application might operate without regard to a sales-force incentive system.
According to Best Practices L.L.C., Chapel Hill, N.C., which specializes in the pharmaceutical industry, a company could spend as much as $50,000 to evaluate its sales-force automation and other sales management applications.
"Sales used to be telephone to telephone, then it jumped to direct mail, e-mail, e-mail mass mail and now electronic commerce," said Jan Blanchette, associate at Best Practices. "Integrating those five processes and having them work together is the biggest challenge of all."
Customer touch points
Current thinking holds that sales management applications should live within an overall system that controls every customer touch point, provides real-time insight into budget expenditures, tracks sales and compares them with sales forecasts, and aligns marketing strategies into a cohesive structure.
Moving from an old-fashioned business process to a sales-force application often requires that sales executives come forward with information stored in their Rolodexes, on At-A-Glance day planners or in desktop computer files, experts say.
Selling the system
That means consultants and other training experts have to come in and sell the system. The key to success is to implement a single application or two that makes a sales force more productive immediately—such as a sales-forecasting application or a direct campaign—and show them the benefits as you go along, Moran said.
One example would be a sales logic application, Blanchette said. This category of software uses databases and database filters to allow companies to identify dissatisfied customers and get that information to sales representatives quickly.
Companies that have tried sales logic applications have often won immediate buy-in from sales representatives because it makes them better at their job, Blanchette said.
The term sales logic is also a brand name. Internet Commerce Corp.’s SalesLogix product applications have proven strong for clients that have implemented them, Blanchette said.
Peter Baruk, director-strategic business development for The Pillsbury Co., Minneapolis, tapped a system from Proscape Technologies Inc., Fort Washington, Pa., to make more than 200 field salespeople more effective. The company pulls data from 13 separate sources to provide salespeople with up-to-date trade, promotional and category management information, Baruk said. Return on investment is measured by Pillsbury’s 5% growth over and above its competitors, Baruk said.
"We developed a consistent process for sales data and made it available to every one in sales," he said. "The goal is to allow our sales force to spend more time selling instead of trying to assemble data."
Automotive company Eagle Equipment Inc., Norton, Mass., sees effective sales management as controlling leads for its auto body lifts. It needed software and services to target marketing materials at auto body shop managers, hard-core automobile enthusiasts and new- and used-car dealerships.
Eagle is using iMarket, Waltham, Mass., to create and manage contact lists based on job classifications. From 2.4 million mailers sent to job classifications, Eagle well exceeded its sales goal, said Marc Delcheccolo, marketing manager for Eagle.
"Our biggest challenge in sales marketing management was targeting catalogs to the right companies, as well as the right individuals at those companies," Delcheccolo said.