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Table of Contents

Foreword

Introduction

Chapter 1

Shoulders of Giants

With the Relationship Value metric, Linda Sharp has found a quantitative way for sales to give feedback to executives without being second-guessed. Her CRI Framework reflects a great respect for and understanding of sales. She has truly made the sales job easier day-to-day.

Alfred Dipman, Vice President
North American Operations
Linkquest LTD


Introduction

Unrealistic expectations.
Inadequate resources.
Shortsightedness.
Lack of orchestration in the sales and marketing process.
And, no respect.

Call this frustration
—frustration with how sales and marketing was approached by most companies, and how it was regarded during much of my career.

Too many people in the field looked at sales and marketing as a cost center to be controlled rather than as an engine for growth and profit. Most potential clients wanted a silver bullet, a fix-all technique that guaranteed a result. But they didn’t want to put enough time or money or effort into building a market and relationships with customers. Typically, they had a myopic, short-term view—limited to their functional area, their project, this particular quarter. Many thought they knew how to “market,” yet how sales and marketing worked was uncertain.

Fortunately, I found clients who were either already very successful and knew how much effort it took to market a product or service, or who were willing to just let us “do it.” They followed the advice of my marketing firm, executed well, and were extremely successful. I had experienced enough successes across enough industries that I knew I really deserved to be frustrated with the current state of sales and marketing.

One of the secrets of my success was talking to customers and working closely with sales. It took enlightened clients to let that happen, and when they did, magic happened. But many clients did not want to pay for customer research, and in many companies, marketing and sales were pitted against each other. It just seemed logical to me (my math background poking up its head) that if you were trying to position a product or service so that it would appeal to a customer, you ought to talk to some prospective customers and to others who had already bought, to see why they would buy or why they did buy. And you ought to talk to people who were close to customers, namely, people in sales. But how sales and marketing operated was really not logical because they were not encouraged to talk or work together. I couldn’t understand it—when I was allowed to engage, sales became my best friend!

Another basic problem was that very few knew who did what to whom, when, or for what result in sales and marketing. That there weren’t adequate tools was just one of the obstacles to work around. That sales and marketing didn’t have a place at the management table was another obstacle. Sales and marketing couldn’t speak the language of numbers; therefore, sales and marketing got no respect.

And when numbers did begin to show up in sales and marketing as technology became available, the old cost-cutting mindset continued. The numbers were limited mostly to efficiency measures for controlling costs for the functional areas or silos. Technology paved the cow paths keeping things the way they had always been done, rather than looking at the big picture: the entire customer relationship. Technology proved not to be the hoped-for panacea. Technologists then said that the problem with managing customers was that customer data was scattered. So, in the next wave of innovation, customer data was pulled into warehouses, mined, and manipulated, and the tea leaves were read. More often than not, each functional group read their own tea leaves, based on the data in their own warehouse(s). No big picture here, either. And although there was still no silver bullet, it was better than not looking at data at all.

I was still frustrated, so much so that I decided to see if I could find that silver bullet, the magic formula to answer the question clients would ask: What would they get if they did the program my firm suggested? With the way sales and marketing was at the time, the answer was unknowable.

It was probably audacious to think that I could solve this, but I loved differential equations and “if this, then that” kind of questions. So I put my math propensity and decades of paying attention to what happened in sales and marketing to work. I beat my head against the wall for a couple of years. But I still couldn’t say with any certainty what would happen if you did anything. So much for my audaciousness!

Then it hit me. In sales and marketing, only part of what needed to be measured was being measured. Only the end state was being measured. And moreover, the measurement was from the company’s point of view, not the customer’s. There was no big picture here.

What was most important—the process—wasn’t being measured. The cause-and-effect process that develops a relationship with a customer, the give-and-take between the company’s staff and its customers, wasn’t being measured. The whole give-and-take—from the moment a person is first marketed to, until they have become a customer so important to the company’s success that they are essentially a partner—wasn’t being measured.

There wasn’t even a framework in which to collect and analyze this kind of Customer Relationship Intelligence. I don’t mean the emotional, feel-good, subjective aspects of relationships. I mean creating an objective record about what happens in order to give a context to the more qualitative aspects of the relationship.

What if I could find a way to:

  • Collect data on what interactions were happening in real-time?

  • Quantify the data by designating a value and cost to it?

  • Capture this missing data in a way that enabled real-time use by people on the frontline with customers?

  • Use the same data to enable analysis using existing tools, by thinking of each interaction as a potential transaction?

  • Tie customer relationship interactions to profit, so that sales and marketing could speak in numbers that executives would listen to?

  • Measure and manage the workers in sales and marketing and customer service to develop profitable, sustainable relationships with customers?

  • Guide people in how to do it again and again, successfully?

It turns out, I could do this. It just took me another three years to figure out how.

This book describes how—and just in time, too. After a long, long stretch of cost-cutting, executives are now interested in growth and innovation—growing the top line as well as the bottom line.

And, I’m not frustrated any more. People used to question why I was in marketing since my background was in math and science. I used to say that it made sense, because it was all about communication —that math was the language of science. Now I say math is the language of business, the language of sales and marketing, the language of Customer Relationship Intelligence.


What this book is and is not about.

This book is about Customer Relationship Intelligence. The approach described here could be used in every relationship important to the success of the enterprise, from analysts to shareholders to community activists, and then related back to the customer relationship. But the book is not about that. It is about customer relationships which are central to business, to all the other relationships, and to profit.

This book is not about how to calculate Customer Lifetime Value (CLV), although I recommend CLV. There are many good books about that already, including Managing Customers as Investments by Sunil Gupta and Donald Lehmann. Or an old favorite of mine, Strategic Database Marketing by Arthur Hughes.

This book is not about Marketing Metrics: 50+ Metrics Every Executive Should Master. That book has already been written by Paul Farris, Neil Bendle, Phillip Pfeifer, and David Reibstein, and is an excellent summation of current marketing metrics.

It is about a new metric, one missing until now, to work alongside these current marketing metrics.

This book is not about sales techniques. It is not about how to market your brand or optimize your contact center. It is about how to build bridges between these functions and all others that deal with the customer, and get everything working together in a synergistic way to develop customer relationships.

This book is not about getting rid of old ways, but it is about building on these old ways in a breakthrough new way, to measure and manage sales and marketing from a customer perspective. It is about teamwork and collaboration. It is about executing strategy. It is about retention and profit and competitive advantage.


Copyright © 2007 Linda Sharp


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