The Industry and Technology are Killing the Industry, not Millennials

Millennials are killingThere is a fundamental shift in consumer-driven businesses that has been emerging over the past few years, and it’s shaking up industries and businesses that once stood as giants for decades. Almost daily, an industry giant is either declaring bankruptcy, layoffs, closing locations, or reporting yet another quarter of subpar numbers. The writing is on the wall…. Yet, most industry leaders are refusing to accept reality. Instead, they choose to blame millennials for their demise… Along with these bankruptcies, layoffs, and store closings, we also see newly published articles regarding how “millennials” are completely decimating industries, businesses, and traditions that have stood the test of time. Here’s the thing: are millennials really to blame? We think not… We are believers that the industry and businesses themselves are the cause of their ow demise—not millennials, or any age group, for that matter.

Let’s elaborate on what we mean by that… The reality is that a majority of businesses are failing to recognize the changing time and focusing on “business as usual”. Looking back on twenty years ago during downtimes, “business as usual” typically meant finding areas of cutting cost to increase margins or creating a few more marketing promotions with the hopes of increasing sales just enough to ride out the lulls in the economy. Those strategies typically worked for most businesses because, looking back at those times, there were only so many places to shop, eat, or consume entertainment. Each industry essentially had a handful of businesses that monopolized their respective industries, which lead to their economic ebbs and flows with the economy. At those times, there were only so many places consumers could spend their money… Great for businesses in those days, right? Here lies the problem—most executive leaders within long-established consumer-oriented businesses are continuing to run their businesses as if it was the 1980s or 90s. However, the market has drastically changed since then. First, in the age of technology and consumer preferences, the 80s & 90s were essentially a 100 years ago. A very millennial statement, but here’s the reality: the market is truly changing at the speed of light, and even looking five years back has shown drastic changes in both technology and consumers preferences. Technology has enabled consumers to essentially have the knowledge of the internet at their fingertips, and forward-thinking businesses have capitalized on this fact enabling an “On-Demand Economy”. Technology has also enabled almost anyone to start up their own online business with the same technological capabilities of a multimillion-dollar business. Never mind the fact that a small startup with a little knowledge of how Search Engine Marketing works can easily outrank a multimillion-dollar organization in a matter of weeks by using the right Google industry keywords. Technology and increased competition are the real reasons these consumer-facing industries are struggling, not millennials… Businesses just can’t cut cost and rely on a few promotions to ride out the lulls anymore, as competition is all too eager to steal that business away. 

While corporations are looking at their calculators, small businesses & startups are focusing on

  • Creating a digital marketing strategy to essentially make the big brands completely irrelevant online.
  • Providing consumers with exactly what they need in the easiest way possible.
  • Creating flexible pricing and packages that match what consumers really want, not finding ways to charge more for the same (or lesser) service
  • Providing value for free when others want to charge for it.
  • Increasing quality, not cutting it.
  • Working on loyalty reward programs that actually provide real value and rewards

When you begin to peel back the layers of the onion, millennials almost have nothing to do with the demise of these industries and businesses at all… Failure lies solely on their shoulders. Let’s take for example Sears… Sears was once an industry giant that had stood for more than 100 years, and for a majority of the time in business, they were the gold standard in retail. In their early days, when obtaining certain items for the general population was almost impossible, they created a first-of-its-kind catalogue of thousands of items that could be delivered to your front door. Then in the 1960s when consumer need for faster access to consumable goods became more prevalent, it led to the blossoming business of malls and Sears was quick to capitalize. Looking back to the 1980s, there probably wasn’t a mall in the country without a Sears taking up some major real-estate. As Sears grew, they made investments in Craftsman tools, DieHard batteries, Kenmore appliances, and others. All of this led to Sears being a formidable industry giant, and they enjoyed that success for decades… However, in the early 90s, Sears decided to focus more on cost-cutting metrics instead of innovation. We called attention to this in another article. As an example, in January 1993, Sears announced the closing of the catalogue, eliminating 50,000 jobs as they didn’t see a market in delivering items directly to consumers’ front doors, and keeping that business running was “too expensive”. Interestingly enough, in July of 1994, Amazon was born, which ended up being a company that could deliver items directly to consumers’ front doors. Yes, really, had Sears thought about where technology was going like Amazon did, they literally could have been the Amazon of today. However, Sears’s cost-cutting didn’t stop there, and for thirty years now Sears has been focusing on cost-saving metrics across the board… Anyone that has been at a Sears in the past few years has come across stores in disrepair, sub-par inventory levels, long lines, and employees that generally don’t seem to care. It’s no surprise that Sears is now closing stores almost daily and in bankruptcy litigation.

However, on the flip slide, you have Target, Best Buy, Walmart and others all seeing great success in today’s tough economy. The reason why is simple: they have all been focusing on innovation, bringing choices and convenience to the consumer. Best Buy, from the beginning, has strived to have a strong ecommerce presence, becoming one of the first big-box retail organizations to have a true website with online purchasing availability. They were also one of the primary innovators of ecommerce purchasing with in-store pickups. Target has focused on innovative payment methods, allowing consumers to skip the line and pay for items in the aisle instead. Target also recently launched a new program to use local stores as virtual ecommerce warehouses decreasing overhead while speeding up the entire delivery process to consumers. Walmart recently announced strong revenues directly related to curbside pickup… These are just a few areas of innovation that has allowed other big-box retailers to stay on top. In contrast, Sears has attempted nothing even remotely close to these innovative methods to save their business.

However, big companies are also not the only businesses thriving. In fact, only 53 companies have been on the Fortune 500 since 1955, including 17 newcomers to the list in 2018. Companies such as Uber, Yelp, Spotify, DoorDash, Zapos, Salesforce.com, Amazon, Facebook, Google were all startups less than twenty years ago. They are not alone; almost daily, a new startup comes from almost nowhere to be a new industry-leading giant… The reality of the whole situation is that millennials are not killing industries… The big-business thinking of yesteryear is.  We’re in a climate where most of the consumer industries that are in the midst of major shake-ups, such as Retail, Cable, General Medical Care, Transportation, Food, and Entertainment, are all struggling… Each are struggling with their own issues of conducting business as if it was still the 1980s or 90s while pointing fingers at millennials for their changing buying habits and lack of brand loyalty. Here is the reality—they are doing it to themselves for all the reasons listed earlier in this article, and it is up to them to recognize the writing on the wall. However, we are in favor of the small businesses and startups! 

CRM The Equivalent Of A Paperweight In Small Businesses

How to Improve CRM Usage

A few months back, we wrote on the importance of a CRM in a small business, but still, we frequently come across executive leadership that is frustrated with their staff’s inability to properly use the tool (or use it at all in some cases), making CRM the software equivalent of a paperweight in many organizations. We understand the frustration, as with most software purchases, CRM comes with significant time and financial investments along with the best intentions in mind for helping a business become more efficient. Yet, regardless of how hard management pushes, usage is essentially zero for many organizations. But, why? In this article, we’ll review some of the reasons why one of the most important tools in any business goes unused and ways to increase overall adoption.

Let’s first start with a few reasons your team might not be using the system:

Lack of Management Use – That’s right: they learned it from watching you. At times, we do see various teams making an honest effort to use the CRM tools in the way they are meant to be used. However, over time, the team has begun to notice the management team’s lack of use. The question of, “Why bother?” then comes into play. As an example, a core use of CRM is around sales pipeline management, but what is the point of keeping a CRM updated when sales leadership continues to run around asking reps for pipeline updates via email, scratch sheets, or Excel spreadsheets instead of running reports with the exact same information from the CRM? Over time, they start to realize there is no value to keeping their CRMs updated because management certainly isn’t using it. Why take the time to update a system when you’re only going to be asked to provide the exact same information via Excel or some other method?

Other Departments’ Lack of Use – We’ve previously talked about the benefits of interdepartmental use of a CRM. When a CRM is not at the core of a team’s daily job function, it becomes less important, and as a result, the usage drops. We recommend that all departments integrate capabilities for their job functions inside the CRM… This means Sales, Marketing, Support, and Finance all need to have critical job functions built into the CRM. Without this integrated functionality, your team will be relying on direct interdepartmental communication for simple client information… The end result is having, for example, customer support or finance continuously pinging the sales department for simple client information… information that should already be in a CRM. Over time, teams start to realize there is almost no point to having that information in the CRM because no one is actually using it, and again, what is the point of all that extra time and effort keeping information updated?

Lack of Proper Functionality – Great CRMs that are properly set up can allow sales and any other department to complete their daily tasks effectively and efficiently. However, out-of-the-box CRMs are inherently generic, and they take some time and effort to customize to make them useful for your business. However, increasingly, we find that when organizations deploy their CRM, they are deployed with zero customization. This results in a generic setup of the tool that doesn’t match the functions of the various teams or business which makes the tool difficult to use… On the flipside, we’ve also seen when management has over-engineered their CRM instance, creating an over-complicated beast of a software solution. This typically results in what management may think of as a “work of art” but is really an extremely complex, inefficient, and painful system to use.

Lack of Usage Visibility ¬ – This kind of goes in line with some of the above, but it needs to be called out… When you have people putting time and effort into properly managing their CRM worlds, yet it goes completely unnoticed, then why bother?

Lack of Accountability – You have two reps: one has their CRM in tip-top shape and constantly up-to-date, and another one that barely uses it and management never seems to care. What do you think is going to happen over time?

Mentioned here are just a few but critical examples of why we see a lack of CRM usage in small businesses. Again, most are truly aligned around the lack of visibility and usage from the management level down to the various departments within a business, leading to the “why bother?” mentality… However, all is not lost as there are tactics that can easily be deployed in any business to increase overall usage. Here are a few:

Complete Management Usage – It starts from the top down. Management needs to start using CRM immediately and continue to use it without exception. You’ll quickly find that once management begins pulling reports and pipeline updates straight out of their CRMs during meetings, within the first few meetings, everyone’s CRMs will be up-to-date as no one wants to be the one with missing or out-of-date information when reports are being reviewed in front of management or their peers. Furthermore, it is important to continuously use it… CRM usage needs to become a habit, and there is a bit of a routine adjustment to using it regularly. All too often, we see executive leadership get on a “CRM kick” for a month or so, only to have them go back to their Excel spreadsheets shortly after. Again, going back to the points we made above, nothing will demotivate a team more than putting in effort for nothing.

Corporate-wide Usage – CRM is not just for sales anymore as it can be integrated across every department within a small business. Make your CRM a central point of departmental information and the only way team members can complete their daily job functions. Once you have complete business-wide integration, there will be zero reason not to use it at that point.

Make it Seamless ¬ Again, a tool that is painful to use will not be used in any business… Take the time to properly customize your setup. Most CRMs are fairly easy to customize, but if you are uncomfortable with customizing yourself, there are plenty of consultants on the market that can do it for you. It is also important to ensure you are taking in feedback from your end-users and constantly working to refine the system. As mentioned previously, all too often, management believes they “know” what is best for their teams, but in reality, they are so far-removed from the process, they couldn’t be more wrong. A painful-to-use tool will not be used—period.

Increase Visibility ¬ Develop and use the reporting system built into the CRM… Most CRMs have fairly comprehensive reporting capabilities out of the box and, with slight customization, can be a very powerful tool for the business and something to ensure that your team is keeping their CRMs up-to-date. Some businesses go as far to have automated reports sent out at preset times (hourly, daily, or monthly). Regardless of the frequency, it is important to remember “what gets measured, gets done”. Furthermore, we highly suggest using your reporting in meetings as well. Have a sales pipeline meeting? Pull up the pipeline in real-time during the meeting. Again, no sales rep wants to be in a pipeline meeting where their pipeline is either out-of-date or missing information… This can be done for essentially every department.

Tie in Compensation – Fairly simple… Sales, do you want to get your commission? No deal gets paid commission unless it is properly tracked within the CRM… This can be done for other departments as well. Things such as lead counts, collections, customer service calls stats and other metrics can all be tracked and tied together with compensation. Quite honestly, this is one of the easiest ways to getting a team to use a CRM as no one wants to miss out on their commission or bonus. However, let’s not forget that you want to ensure you’ve made the proper steps to making the CRM a useful tool in the first place. Let’s remember the old saying “junk in, junk out”, as you do not want your employees wasting time inputting information into the CRM just for the sake of compensation and nothing else.

CRMs are incredibly powerful tools for any small business. When properly implemented and used across all departments, they can drastically increase the efficiency of any team or organization. Efficiency can lead to increased cost savings and revenue while keeping your organization running like a well-oil machine.

The Small Business Sales Quota Dilemma

Same Old QuotasEarlier today, I read “Why are Half of All Sales Reps Still Missing Quota in a Booming US Economy?” and found the article itself, and the comments within LinkedIn around the article, a little disturbing. Almost all the points were towards the reps themselves and not the businesses… Let’s face it: if any business is having more than 50% of their reps miss their sales quota, something is very wrong! No business should ever have 50% or more of their reps missing numbers, and if they are, that is a failure on the business’s part—period.

As many businesses gear up for their yearly planning sessions, now is the time to really look in the mirror before developing new quotas and truly understand the business itself. Again, if 50% or more of your sales team missed their quotas last year and are going to miss this year, you truly need to ask “why?” Is it talent, training, something else within their business, or were their quotas improperly set to begin with? As leadership, it is critical to look beyond your own thoughts of what a revenue target “should be” and bring into consideration other items such as the industry, economy, and job market. Setting the stage, it is safe to say that most leadership believe that the reason reps miss their number comes down to the rep’s ability to hit their personal quotas and not that targets were improperly set to begin with. This is a scenario we play out year over year… As a result, leadership’s plan for hitting the next year’s revenue target simply comes down to either cutting staff and bringing in new talent or increasing headcount. Regardless of the strategy, is it really viable? Well, like we said earlier, it’s a strategy that plays out year over year in small businesses, with the same unfortunate results. This is almost the definition of insanity, yet the cycle always continues.

A majority of reps missing their quotas is not a talent issue. Plain and simple: there is a fault in the business that leads to the miss. Again, starting backwards, most business leadership create a revenue target number based on what they think is a viable revenue target. Some literally make up a revenue number based on what “they believe” is a proper revenue target for the business to hit, and others slap a percentage increase over last year’s numbers and then essentially break up quotas based on a number they created… Very few truly take a look in the mirror to reflect on last year’s performance, industry, economy, and other items before coming up with a realistic revenue target. Regardless of the method, here are a few things that should be considered before coming up with a revenue target.

Current Situation – It starts with understanding the current team and the “why?” around performance. Again, we believe that if 50% or more of your reps are not hitting there number, there is something fundamentally broken within the business. Now is the time to reflect and try to understand the reason. You should ask yourself: Is it truly a talent thing? Did your sales management hire the right quality reps? Is the proper training in place? Is there a brand perception problem? Is there a broken process? The key is to identify areas of improvement for the year ahead, but to also recognize that changes do not happen overnight… Meaning, when creating a revenue target, the ramp up time for these changes need to be taken into consideration.

Talent Acquisition – Talent is a big one. Going back to some of the comments we saw around this article shared on LinkedIn, most pointed to talent or lack of talent for the reason reps are missing their numbers. Honestly, this could be the case, but that means that changes must be made around the way your organization does talent acquisition moving forward. However, you also have to recognize the current job market as well… We are in a time where there are more open positions than unemployed looking for jobs. This essentially translates into the hard fact that finding good talent is difficult to do. This means that if part of your plan going into the New Year is to either trim current reps and replace them with newer “A” talent, or simply increase head count, it is going to take time… Again, something that needs to be taken into consideration.

Current Economy – It is astounding that even the biggest companies out there do not really take the economy into consideration. As an example, in the economic downturn of 2009, most businesses quite frankly ignored the signs of a down economy and stuck to their guns for revenue targets. As a result, they missed—and some missed by large margins. This was a disaster for the stock market, as investors were quick to pull their investments from these organizations. And the rest is history. Not that something like 2009 could have been completely avoided, but the companies that truly looked at the economy and made proper adjustments did do much better from a numbers standpoint at the end of the day.

Current Industry ­– Again, it truly amazes us when businesses refuse to look at their current industry’s performance. A perfect example is the cable industry… Consumers are cutting the cord at alarming rates, and businesses such as Comcast are all but completely ignoring the fact and continuing to raise rates year over year. Time will tell the true fate of the cable industry, but it’s not a good outlook. Sometimes there are external pressures that come into play with specific industries, and unfortunately, too many businesses ignore the signs which, at times, can devastate them completely. Could this be the root cause of a decline in numbers? If so, simply increasing quotas or finding new talent is not going to fix the issue.

Pricing – We cringe at this strategy. Some businesses believe that in order to make up the gap in revenue loss, they should simply increase the price for their products and services. There is a right way and a wrong way to do price increases… We do believe that, at times, you do need to increase prices; if Coke was still going for a nickel, they would have gone out of business a long time ago… but there needs to be a strategy to the increase. Also, you need to understand how your market will respond. Going back to the example of Comcast, their market simply is not responding well to their annual price increases, and they are losing customers in record numbers.

At the end of the day, every business wants to see increasing numbers year over year, and no business wants to set a target lower than the year before. However, the way your business sets its yearly revenue targets has more of an effect on the business than you may think. First is the overall attitude of a business, as a business that is winning acts much different vs. when they are losing; a winning attitude is just as contagious as a losing one. This brings us back to the fact that if you are having a majority of your team missing their numbers, you can guarantee the morale of the team is low—negativity breeds negativity. Then there are the financial repercussions, as when you have a losing team, you have employee turnover. Well, those lost reps need replacing, training, and ramp up time…all things that cost money and take attention away from things that could be moving the business in a forward direction. So again, if more than 50% of your reps are missing their numbers, take a deep look in the mirror and find out why. Then, put the ego aside and set proper expectations for the business… A winning team will outperform a losing team 100% of the time and will put less strain on the business as a whole.

 

How To Make CRM Play A More Important Role In Your Small Business

How To Make CRM Play A More Important Role In Your Small BusinessMost CRM systems these days such as: Salesfore.com, Zoho, SugarCRM, Infusionsoft, and HubSpot are highly customizable, yet, even at their bases, they have enough capability to have significant impact on your business and efficiencies within it. In spite of this, you wouldn’t believe how many small businesses still run their firms with a piece of paper or Excel spreadsheet! What is even more unbelievable is that most small businesses have some type of CRM within their organization, but it sits to the side like some leftover desktop computer from the 90’s collecting dust. When used properly, CRMs can be one of the most useful and time saving tools within your business. In this article, we will cover how a CRM can be used to optimize your small business, and we’ll cover one of the most challenging topics when it comes to CRM in any organization—usage.

While CRM implies a tool for the sales team, when properly implemented, a CRM can be used as a single point of reference throughout the organization. However, at its base, a CRM is only as effective as how it’s being used and the data quality inputted. When it comes to CRMs, the expression that I like to refer to the most is “garbage in, garbage out,” and a CRM is pretty much useless without the various teams using it properly. Before we get into the mechanics and usefulness of a CRM, we need to first talk about usage.

When it comes to CRM implementation, especially when first being implemented into an organization, usage is typically the biggest hurdle. Most people see it as an additional step to their already busy and packed daily schedules as they are not aware of the downstream effects of a system like a CRM. The first step to usage is to implement a system that measures the team utilizing the reporting capabilities of the system and keeping the mindset of “what gets measured, gets done”. This means that essentially every team connected to the CRM needs to have some type of measurement: sales – pipeline and connections, marketing – lead counts, customer service – call resolution count, etc.

However, it doesn’t stop there; management needs to adapt a policy of then tracking these metrics on a consistent basis and using them for corporate reporting & meetings (not Excel Spreadsheets). Too many times, we see leadership defaulting to Excel spreadsheets, emails, or a piece of paper for tracking details, and this will frustrate employees. The question of why take the time to input information into a system that is not even being used by management always gets asked. Furthermore, another fix to ensure usage of a CRM is to directly tie compensation to stats and usage. As an example, no sales rep should ever receive commission if an opportunity is not in the system and doesn’t have proper documentation. Similarly, if your Customer Service team has a call resolution quota attached to their bonus, this information should be pulled via the CRM and not by other methods like Excel. At the end of the day, to ensure proper CRM usage throughout the organization, it truly does need a top down approach reflecting on the actions of management in what gets measured, gets done. As a tip, we have a habit of pulling up our CRM reporting in meetings and forcing the team to talk to their stats based on the reporting in the system.

As mentioned earlier, CRM is not just for sales. A properly implemented CRM can be incorporated throughout an organization making it a single point of reference for the organizations and improving efficiencies across the board. Remember, at its base, CRM is not meant for “oversight”, it’s just a byproduct of proper usage. Below we’ll review some of the departments and use cases for proper CRM implementation.

Sales

The sales department is clearly the best use case for a CRM; however, to ensure you are getting the most out of the system, do not limit usage to just sales opportunities or contacts. Sales should be using their CRM as the sole system of record and ensuring that they are transcribing all conversations, connections, and actions in the system. This will allow sales to ensure that they have a working knowledge of all their activities within each account—and most important of all, a proper pipeline. With so many conversations happening within a sales person’s day, it is fairly easy to forget conversations that happen earlier in the morning or throughout the week. With proper usage, they can use a CRM as that system of record, which allows them to keep tabs on past conversations and actions needed. Furthermore, as other departments interact with these same accounts, the sales notes become equally important to understanding the history of an account.

Marketing

Marketing has changed over the years from being completely independent from sales, tending now to being fully integrated with sales, and in some cases, having the same leadership teams. Years ago, Sales had their CRM, and Marketing had their Marketing Automation Platform where they were two completely separate systems. However, as an example with Salesforce’s purchase of Pardot, marketing capabilities are now being built directly into CRMs. Especially with small businesses, this means that there is no need to purchase expensive marketing automation software anymore. This integration also allows sales to have a complete view of prospect and account activities leading to more efficient sales cycles.

Customer Service / Tech Support

Most organizations look to deploy separate systems for these departments, which might work for larger enterprise type organizations, but in small businesses, it is a key mistake. Small Businesses should look to take advantage of their existing CRM which may already have these capabilities out of the box. As an example, Saleforce.com has “Cases”, a complete section built out of the box for Customer Service or Tech Support. A few key advantages of using your CRM for these teams starts at simplicity, where there is no need to duplicate information across multiple systems. Not having to purchase a separate system keeps software and software management costs down as well. However, another advantage is that these teams now have access to critical sales notes to understand more about the history of an account. This leads to faster and higher quality closed calls ratios, as well as an overall better customer experience. Also, as sales is interacting with these notes, it gives them the ability to see call history which also leads to better customer experience from a sales perspective.

Product Development

Most likely, one of the most overlooked departments from a CRM perspective is Product Development. However, companies like HubSpot have fully integrated their product teams into their CRM. Why? It’s simple: within their CRM, they actively track each and every customer’s usage and apply a score to that usage. This score can then measure how active or inactive each client is; this allows for sales and support teams to take actionable steps within each account to improve customer experience as it relates to their software. The overall effect is more customer usage and happier customers. There is also another byproduct; this view gives HubSpot’s entire product team access to usage data allowing them to pivot and make changes within the software. Although this information can be pulled from the software itself, the benefit of having it tied to the CRM is that they can have visibility into the specific accounts and history, giving them a more holistic view.

Finance

Finance is another overlooked department for CRM usage. Typically, like Customer Services and Support, organizations will deploy additional financial software. However, within a Small Business, it is not necessary. Although most out-of-the-box CRMs are not built for the financial department, small customization or plugins can offer solutions. For example, FinancialForce will give most financial teams the full capabilities needed in order to do their jobs. Again, this leads to a single system of record and decreased software cost.

Executive & Leadership

Executives are hit and miss when it comes to CRM usage, however, most are unfortunately a miss. Typically, you’ll find CEOs and Leadership running around at the end of the quarter with a piece of paper or some type of Excel spreadsheet looking for “real time” updates from their teams on opportunities to close or other stats. However, with a properly motivated team, a CRM can be updated in real time along with reporting functionality displaying real time updates directly to the CRM. Some areas included, but not limited to, are total pipeline, pipeline age, average close time, average deal size, average collections outstanding, call resolution times, etc. Many executives believe there is a need for an expensive EPM system in order to obtain cross-organizational insight, however with a properly set up CRM, a Small Business can get all this information and more in one spot.

Again, it is staggering the amount of businesses that do not have a CRM, and the ones that do barely scratch the surface of functionality. With a small amount of customization, a CRM can become an extremely powerful tool to optimize the performance of a business and get everyone on the same page. Most importantly, remember that “what gets measured, gets done”; your CRM should not be a set-and-forget system. Finally, management, once your system is set up, drop the Excel spreadsheets!