Comparing CRM Consultants

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To Value Added Resellers

***tier3square.shtml***Comparing Customer Relationship Management (CRM) consultants to value added resellers may seem like a nasty thing for someone to do. I agree.  But consider this: there are many value added resellers out there who know nothing but selling software and implementing software. Yes, many are very good at these things, which is very good for them. But we all need to keep one simple fact in mind....

CRM mean Customer Relationship Management and NOT Customer Relationship Management Software

Something that I have experienced over and over again in my career (and life) is that when I'm deeply immersed in a process (of business or life) I tend to stop thinking at a high level and can only see the details in front of me.  This is often referred to as not seeing the forest through the trees. We sometimes reach the point where we know that something is wrong with the details, but we can't break away long enough to see the problem more objectively, and even possibly its breadth!

So, comparing CRM consultants to value added resellers can be likened to someone who steps in and helps you see the big picture versus someone who immerses themselves in the details with you ... and reinforces your place there (can anyone say requirements gathering?).  I have no problem with details if they are driven by a high level need and plan.

How do you tell the difference?

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The difference is dramatic. But the best way to explain this to you is by telling a completely fabricated story. In this story, I will give you multiple choice questions in which you try to identify the question that would be asked by a CRM consultant vs. a Value Added Reseller. It really shouldn't be too difficult.

But before I start I should give you some background on me. I don't spend my time helping companies with the details of understanding their customers better and how to use that knowledge to develop a comprehensive CRM Strategy. I work with marketing and strategy firms that are very good at this; if the need exists with my client. I then work with my client to develop a solid tactical plan that takes advantage of key technology that is currently available. I also keep in mind that people play a role in this as well.

That may sound like I'm not very different from a value added reseller, but I assure you that it is. I don't sell software based on a set of cool features and convince the company that these features will magically turn their company around. It's a huge difference!

Another important difference is the time spent with a client looking for problems in their tactical organization that could be costing them megabucks. I like to solve big problems for my clients even if they aren't readily apparent (see forest and trees).  It could be as simple as observations while taking a facility tour......

A totally made up Story

A CRM consultant was taking a tour of an international stinky truck manufacturing facility somewhere in the good ole US of A. While he and the CTO were walking around the grounds, the CRM consultant noticed that the side of a nearby mountain appeared to be a large parking lot. It seemed like a strange place for one so he asked what it was. 

He was told that this was a parking lot full of stinky trucks. They were engineering mistakes that couldn't be sold; so they just sat there. There was currently 3 years of improperly constructed custom stinky trucks sitting on that mountainside.

The CRM consultant became very curious and asked one of the following questions:

1. Do you need some software to track these mistakes in more detail?

2. How much are those mistakes costing you each year?

If you chose the second question, you are well on your way to identifying a real CRM consultant. The answer he was given was $5 million per year in these mistakes. Wow! That' a big problem.

The CRM consultant was actually onsite to do some training after an implementation of CRM software (starting to sound like a VAR). Unfortunately, the client hadn't been forthcoming, or the consultant hadn't asked enough questions early on, to find out about this problem. While the company was absorbing the cost of these mistakes, the time it took to deliver their custom product was longer than industry expectations. I'm sure there was an indicator somewhere that should have lead the CRM consultant to this problem earlier. (Maybe he could have asked "How does your industry measure performance, and how do you stack up against the industry?... just a thought).

Remember, he is walking around with the CTO. This is the relationship he has chosen to embrace. Sure, high level guy. Wrong discipline! I don't think there is any question he could have asked the CTO that would have exposed this problem earlier in the process. Well, maybe a good CTO would have had an idea.

Now that the CRM consultant has asked the correct question, he needs to realize that continuing this discussion within the IT sphere will likely result in nothing.

"Sorry, we don't have a budget for any more software this year".

Let's fast forward a few days. The CRM consultant already knows what the problem is and how to fix it. It's simple. The sales people are mis-configuring their quotes of a highly engineered custom product, and there is no process, or tool, in place to catch these before they reach production. The end result is that they go through production and then quality assurance. Too late!

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What they need is a way to allow their sales personnel to configure a custom product without making any mistakes, or add a process of review (which would require time and knowledge). The answer is most likely a configurator, and the CRM consultant had just the product in mind.

He eventually finds himself in front of the head of the sales organization (where he should have started in the first place). How he got a meeting when this guy didn't even go to the software training class is beyond me. Persistence I guess. Remember, this is a made up story with hidden messages (and stuff) so cut me some slack, please.

The head of sales most likely has his head on the butcher block because of this problem. It's a huge problem for the company and his people are causing the problem.  So, how would a CRM consultant address the problem? Let's assume some good rapport building took place before the subject came up.

1. I understand that you have a $5 million dollar a year problem. I've thought about it and came up with a great software product to configure your quotes with 100% accuracy. It only costs $20,000. That's a great return on investment. What do you think?

2. I'm sure you're under a great deal of pressure because of this problem. I deal with this sort of problem all the time. I'm sure you already have a plan of attack, though.

Number 2 isn't really a question, but said with some dead air at the end will probably get the head of sales to ask if the CRM consultant  can fix it. So, the consultant's response would be:

1. Sure. There is this great software called a configurator that's only $20,000 and we can have it installed in a couple of days. That's a huge ROI! By the way, did I tell you what a great ROI this is?

2. Sure I can fix it, for the right investment. I mean, we want to get this right the first time, correct? I'm wondering, though, it must take longer to deliver an order with all of these mistakes. Have you been losing customers? Have you thought about how much that could be costing you?

I know you picked number two because this CRM consultant obviously wants to drag out the torture. In reality, he is simply reinforcing that he is thinking through the problem and all of it's ramifications. In this case, lost customers and lost prospects could be costing the company even more than $5 million a year!

Of course, there finally came a point where the next question was "how much will it cost". Personally, I answer that question in my quote and I promise to get it to them in 24 hours. But, someone else might blurt out a number before they've really had time to think about it.

As a consumer of consulting services, you should really stop and consider a few things before expecting to buy some magical software at a discount. 

• Did you identify the problem? I'm sure you were made aware it.
  
• Did you think to identify the problem to your CRM consultant during the requirements gathering session? No, because it's not a requirement. It's a problem.
  
• Did your CRM consultant take the initiative and use his experience to uncover a huge problem? Yes
  
• Do you have a solution to the problem? No
  
• Does your consultant have a solution? Yes
  
• Can you make a capital purchase of equipment to generate $5 million a year for just a few bucks? Nope
  
• Do you think your boss will accept a reasonable ROI to make this problem go away? I'm pretty sure he will!

So don't expect your typical quote from a real CRM consultant because, just as you've learned selling stinky trucks, it's important to get it right the first time. And that means it just might cost a little bit more. And here's why:

• A CRM consultant will want to sit down with high level individuals like CEO's, CSO's, etc. He will want to ensure that your organization has a CRM strategy based on a unified customer-centric approach to doing business. That's what CRM is after all. It's not software. So there's going to be some education and consulting happening at the highest levels.
  
• A CRM consultant will also want to know, based on your research during the strategy phase, whether there are any red flags against industry benchmarks, etc. The story I told above really had nothing to do with knowing your customer. After all, are there any customers that will wait twice as long to get a product then your competitor promises? That's just common sense stuff.
  
• You've read my CRM strategy stuff, right? All of that too.  A CRM consultant in the traditional sense may not have the same skills as a good marketing firm when it comes to collecting and using information about customers. However, they will give this a high level of importance and resist prompts to simply install software and move a few buttons around.
  

If a CRM consultant promises you that the $5 million a year problem will go away and your customer retention will improve, don't feel like you were ripped off if you didn't get all of that for $20,000 plus some implementation fees. The important thing is that you identified HUGE economic benefits, and you attacked them!

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