June 2

Customer Relationship Management Systems for Small Business

In this episode, we discuss Customer Relationship Management Systems for Small Business with Brad Tornberg. Brad is a CRM expert and Master Duct Tape Marketing Consultant. Brad is the owner of E3 Consulting and also of Market Simplicity. Brad is well versed in several CRM and ERP solutions with over 30 years of experience with businesses and organizations of all sizes.



Ken Tucker:                        Good morning. Ken Tucker here with Changescape Web. I’m the host of Move The Needle Marketing Podcast. Today I’m really excited to be here with a friend and colleague, Master Duct Tape Marketing Consultant, Brad Tornberg. Brad, it’s great to have you here today.

Brad Tornberg:                  Nice to be here, Ken.

Ken Tucker:                        Just wanted to tell you a little bit about Brad. I think he’s got a very impressive career. He’s the owner of E3 Consulting and Market Simplicity. He’s the author of Business Fitness Revolution, a book that came out and was published a couple years ago. He has 30 years of experience in the business software space with CRM and ERP systems, with both large and small businesses, and medium businesses, as well. CRM is customer relationship management. ERP is enterprise resource planning systems.

Today, what we’re going to really focus on, is talking about CRM or customer relationship management. With that, I’d like to go ahead and get into the questions. You ready?

Brad Tornberg:                  Great.

Ken Tucker:                        I think there’s a lot of confusion about what may or may not constitute as CRM out there in the marketplace. Given that, I think it’s what … The first question I guess I really have is: How does a business choose a CRM?

Brad Tornberg:                  It’s a good question, Ken. Typically, what I see out there is a lot of companies follow the shiny object syndrome. They read about some great, new tool that’s out there, that’s going to help them close and convert sales. They go out and they run and they buy it without any thought. They go to implement it and of course, they have a very high degree of failure. What has to happen first is, you need to kind of understand why do you need CRM? Are you using it … because CRM has so many different pieces to it.

It’s how do you plan on using CRM, and for what reason do you need to have it? Some people will use it as a way of just maintaining contacts. Other people look at it for the tools that are contained within it, like workflow, so that they can move people along within their sales cycle, or their marketing cycle. It’s a great way. Most of the CRMs systems that’re out now have a service component or a project management component to it.

It gives you the ability to look at the full lifecycle of a relationship. That’s what customer CRM is, customer relationship management. It really depends on what are the areas that you’re trying to kind of gain under control. Where are there areas for improvement in your business? More importantly, how can we implement this is a way that our people will use it, and embrace it?

Ken Tucker:                        I mean, that’s a little bit about the different types of CRMs. Can you give me an example or maybe talk about the landscape of some of the CRMs that’re out there, and maybe whether they’re applicable to small, medium, or large businesses?

Brad Tornberg:                  Sure a lot of times when I have workshops, I kind of show it as two levels of CRM. There are the basic contact management solutions like the Insightly and the Act and the Zoho, which have basic contact management and may have additional pieces with it, like the ability to manage tasks and activities, the ability to escalate things, and do stuff like that. They are considered to be in the family, a lot of them, of contact management.

Whereas you start to move into some of these larger scale systems like Microsoft CRM and Salesforce, which really are applications suites. They’re designed to be front ends that kind of sit on top of your accounting data, as a way of kind of aggregating all that data up so that you have a single, 360 degree view of the customer.

Then there’s those that cost more, which are considered to be CRM platforms. CRM is part of it, but yet they may have lead-generation, inbound marketing, social media, the ability to incorporate landing pages and websites. Those are the platform tools like the HubSpots and the Marketos and things like that. There’s very different scale and size, as well as price.

Ken Tucker:                        One of the ones that I found really to be intriguing, especially for a small business because it’s pretty affordable and it … I’m not a CRM expert, but it seemed like it had a unique position in the marketplace, at least early on. That was Nimble. Because it’s what they consider to be a social CRM, so it did a … It created a social inbox that pulled in all of your status updates from … and notifications and messages from LinkedIn and Facebook, and as well as your e-mail systems.

Brad Tornberg:                  Social-

Ken Tucker:                        Is it common for CRMs now?

Brad Tornberg:                  Yeah actually most of the CRMs now have moved into this what’s called social listening space where if you have a contact, an account, or a contact and you want to follow him, what it allows you to do is to insert their social media profiles and things like that, so that as they’re starting to talk about certain things, it lets you see what they’re talking about, which helps you better target your presentation, your strategy towards them, understanding what some of their pain points are. What are some of the things that’re current in their mind?

Ken Tucker:                        Yeah, or even if they posted that they went to see the Yankees game last night and you could tell that they’re a Yankees fan before you go to a meeting with them.

Brad Tornberg:                  Right and let’s face it. Today it’s really about developing a deep relationship that’s conversational, right? We talk about that a lot and that’s that you have to be able to connect to someone on a personal level, and they have to know, like, and trust you, which is what we talk about in duct tape marketing, in order for them to further the relationship. One of the best ways to do that is to find out where their interests are and where your interests are, and be able to kind of draw that commonality between the two of you, which really gives you an advantage over your competitors who don’t have that intelligent information in front of them.

Ken Tucker:                        A term that I come across, and I have no idea what it really means, is XRM. I think it’s probably related to CRM, but can you talk about the difference between XRM and CRM and how they’re different?

Brad Tornberg:                  Absolutely. CRM, customer relationship management, the C is pretty strong. It stands for customer. What’s interesting about XRM or CRM is, it’s really a platform. What I mean by that is, most of the systems that’re out there are toolkits that allow you to make customizations to it, to pretty much fit anything you want. I’ll give you a couple of examples of how XRM’s different than CRM.

Howard Country Government in Maryland uses CRM as an XRM tool, as a way of tracking all of the children that’re in danger within their jurisdiction. What they do is, they have their names in there and then they scatter diagram them so they can see where they’re concentrated. They can provide services for them. The X in that case is constituents.

Liberty State University, Bowie State University were institutions that I worked with that used the XRM as a way of managing better student outcomes. If it was an inner-city school that had a very high turnover rate or had a very high dropout rate, and the average college education’s four years, but it was taking people at this school six years, then by having an XRM system that would take the information from the student grade systems, as well as other pieces, and aggregate that together, they could better manage the outcome of the student. The X in this case, is the student. X could be any kind … it could be vendors, customers, anything that you want to have a relationship with or that you need to track information against.

Ken Tucker:                        Apologize for the background noise. We’re here at a hotel because it’s actually one of the times that Brad and I get to connect up. I always like to try to do these live when possible.

The next thing I wanted to talk to you about was … I don’t even know if these are considered to be CRMs, but there are for contractors, for example, I know there are a lot of job scheduling systems that’re out there. They capture contact information. You actually book an appointment, you set the schedule.

One of the things that I think is really important to realize, whether that’s the kind of system that you need, or you really need a much more robust CRM solution. It made me think about the, really, probably one of the most critical things that a business needs to answer, and that is what does the system need to interface with, or integrate with? Can you talk a little bit about that?

Brad Tornberg:                  Yeah because what people don’t really understand is CRM by itself is usually not a standalone system. It’s usually integrated, or it’s the front-end piece of the information behind it.

Integrated CRM systems out there, let’s take Microsoft CRM for example. When you just think of CRM, you think of customer relationship management. It has so much more. It has a service aspect with scheduling on it for people that’re in the service business. Then it has a project management piece for people that are managing lots of tasks around projects.

What you need to understand is, is what is it that your business is looking to do? You’re managing the entire lifecycle of your customer. If you’re a service business, that lifecycle looks different than a product base. What CRM gives you though, is an underlying architecture that allows you to develop workflows that mirror your business process, your cycle of managing the customer.

The integration piece becomes important when there’s triggers or information you’re looking to gather from those subsystems. Most of the systems that are available today, especially the more robust ones, or the more expensive ones, that’s where their trigger is. Their trigger is they provide integration to back-end systems where a lot of the less expensive ones are more like out of the box, plug them in, and play.

Ken Tucker:                        Then you might have to write your own custom integrations, assuming they even expose their API, their-

Brad Tornberg:                  Excellent point. Most of the middle to upper tier CRM solutions are really toolkits in a box. They give you the ability to customize everything, screens, fields, tabs, forms, reports. Realistically, you could take an entire system and make it look custom to you.

Good example of that is I just did a children’s museum. All they wanted in their CRM system was the parent’s name, the membership number, an e-mail address, and the child’s name. A normal CRM system, when you open up the contact screen has 30, or 40, or 50 fields on it. Well we were able to get rid of everything, create those three fields, and put in a lookup list, very simple, probably overkill for what they need. The point is you can customize it down to the way you need to use it and you have the scalability of reopening it up at any given point as the business needs change or the business expands.

Ken Tucker:                        Interesting. In the duct tape marketing world, one of the core concepts is the marketing hourglass. You’re talking about the marketing side of things, transitioning into the sales, and then the customer retention side of things.

Brad Tornberg:                  Lead conversion versus lead-generation, yes.

Ken Tucker:                        You talk about CRM and I think it’s important to really realize that a lot of times we get kind of locked in on working really hard to get a customer, but we forget about managing the relationship with the customer

[crosstalk 00:11:11]

after they become a customer and yeah, the lifetime value and the importance of them though, the referral power that they have, the repeat buying power that they have. Is there anything specific about a CRM solution that you want our listeners to know about, when it comes to that aspect of transitioning from leads to conversion, to customers?

Brad Tornberg:                  Yeah, I mean there’s a funnel that you have to kind of go through. Touching someone, you know what is the old marketing ad? “You got to touch someone five times before they know who you are and you can begin the relationship.” I think the thing that CRM gives you is it gives you visibility into your pipeline.

I always say this to my clients, “The only lead that’s dead is a lead that really passed away and died. Other than that, they’re dormant and they may need to be woken up and wouldn’t it be nice that once you put someone in your system, you have a predefined methodology of how to convert them into a live customer to bring them into your funnel?

The whole idea of a CRM system is to do what you think you can do but you don’t do, which is moving your customers along to get them to convert to some action, whether that action is an opt-in, whether that action is a purchase, whether that action is whatever. That’s something that the system gives you a benefit of.

The workflow, the automation capability that’s built into CRM is the reason to purchase CRM, because I like to set it and forget. If I’ve taken the time to understand how my customers convert to my clients, I can build a funnel specific to that and once people touch me one time they’re now in my funnel, they’re now in my cycle, and they’re being systematically brought forward in a mechanized fashion.

Ken Tucker:                        Well and also just stay maybe in frequent contact with existing customers and …

Brad Tornberg:                  Sure, remember if you’re in front of people too much you’re noise. If you’re not in front of them enough, you’re not relevant. You have to be in front of them with the right amount of touches and you have to provide value in that relationship by continuing to educate them on your product or on your service, bringing them down a path that eventually leads them to the, “I need this and need to purchase it.”

Ken Tucker:                        Or, “I need to stay with a customer, …

Brad Tornberg:                  Or I need to stay.

Ken Tucker:                        … and not go look for somebody else.”

Brad Tornberg:                  Correct, because remember something right? It’s a lot cheaper to maintain a relationship with a customer, get them to buy from you a second time then it is to go out and find a new one. However as sales people we’ve tend to be focused on the hunt and kill.

Ken Tucker:                        Yeah, yeah definitely. Let’s talk a little bit about the important factors relating to a successful implementation or maybe more importantly, they’re probably both important, but also why implementations tend to fail.

Brad Tornberg:                  This is a good point to bring up because the highest degree of failure in software implementation is in the CRM space. Because people look at it like it’s a silver bullet. It’s going to cure all their issues with symbols. “Once I have a CRM system set up my sales are on auto drive.”

It doesn’t work that way. The first thing I think that comes to mind with me is what makes CRM successful, is a couple of things. One, setting very realistic expectations. While a CRM system can do a lot of things, I equate it to eating an elephant. You want to do it one bite at a time. You want to eat small pieces because what you need to do is, you need to establish buy-in from the people who are using it.

The people who are using it are typically salespeople. The last thing a sales person wants to do is be bogged down in a situation where you has to enter information into a system because A, he thinks it’s big brother watching him and B, what’s the purpose of it? I know my business.

The reality of it is if the salesman can see the value in the tool, because the first thing I hear is, “I get a hundred emails a day and I can’t track all those emails. It would be really nice for me not to have to look for them.” The first thing I do is, I try to get them into what’s their experience? If they’re working in Microsoft Outlook then more than likely, I’m going to push them into a tool like Microsoft CRM because the user experience doesn’t change. They’re using Outlook as an everyday tool. I’m teaching them that, “Now that you use Outlook, all you’ve got to do is click one button and guess what? Now that’s also up in CR, and the email’s attached to it, as well as the entire stream.

Well that’s something they like, so you give them a little taste of it. They begin to buy into it and then you begin to expand that functionality over a period of time. The problem is, is companies mandate that their salespeople have to use it. They jam it down their throat and then what happens is you get this natural resentment and two things occur.

One, the salesman gets to a point where he stumbles and says, “Nobody ever asked for my opinion on this.” Well if you want to stop that noise, you have to involve them in from the very beginning of the process, in the design of it, so that when they do that you say, “Wait a minute. You were involved in the design. You were the one that was asked this question, so this is the decision that we made together.”

The problem a lot of time happens is senior executives make that decision they need CRM. They don’t involve the people who are using the tool on a day-to-day basis. I always say this, “When the generals are in a boardroom and they make a battle plan and they forget to tell the privates, at the end of the day you have a lot of dead soldiers.” It’s about that consistency of the messaging and having everyone marching on the same page and understanding what it is. The biggest cause of failure is lack of buy-in and the best thing a company can do is involve the users in the process.

Ken Tucker:                        You know I think back a couple years ago I ran for office and I actually used a CRM that’s designed for political campaigns, which I didn’t ever really think about it in those terms until just now. One of the things that was really beneficial for me is as a candidate. I was going and knocking on a lot of doors. On my phone I had an app that I could pull up the voter information. I could see the conversations that I had or somebody from my campaign staff had had.

The thing I loved about it was that it had a voice recording feature so that I could go in, I could knock on a door, I could spend my entire focus talking with that constituent, or potential constituent. Then as I was walking to the next door I just recorded my notes instead of having to stop and type. It made data entry super easy. Is that a common feature of CRM platforms?

Brad Tornberg:                  You know what, it’s not a common feature, but it is a feature just like the ability to attach all kinds of documents. If you look at CRM as an information repository, it buys you a lot of good things. One obviously, you have legal record of everything that happened which is important in some cases.

Ken Tucker:                        Especially for a lot of industries.

Brad Tornberg:                  Especially for a lot of Industries. Also what people don’t realize is if a CRM system is fed correctly it becomes a knowledge base that other people can tap into. Now onboarding salespeople, you have a defined process. Their ability to go to market is much quicker and their ability to be productive is much quicker. If your scripts start to go into CRM or how come you won an opportunity versus why did you lose an opportunity, competitive intelligence, all of those things come into play in a good CRM system. You can see why I won it, why I lost it, what I need to do to change it, and you begin to refine your own selling cycle and your own selling process.

Ken Tucker:                        Yeah and if there are multiple people from your organization that are involved in communicating during the sales process with your client, it’s got to be invaluable, because you’re probably going to have the technical guy at some point have to hop on a call to explain some things. If the salesperson documented that information up front, the technical person can use status prep, or vice versa. If there are technical things that the technical team needs to let the sales team know before they go on a call-

Brad Tornberg:                  Well, that’s interesting because anybody who’s doing any form of team selling that’s not using CRM is doomed to fail. To me, especially in engineering firms and in technology firms, the salesman needs to have a view as to what’s going on in the account. The salesman also needs to know what technical information is remaining for me to collect so that I can complete the cycle for sales? Having one of the nice things about some of these systems that are out there, is they essentially have these predefined processes that you can build out your own or customize, that take you through what’s called guided selling so that you’re not missing anything.

You ever get to the end of a sale and realize that someone forgot to ask a critical question, which either blows the sale or forces you to go all the way back to the beginning to collect that information?

Ken Tucker:                        Yeah.

Brad Tornberg:                  Well, what you want to be able to do is move it in one direction and that’s forward. Having these processes that don’t let you get to the next step unless you completed this step, in other words it’s required versus optional. That’s a pretty cool feature for you to have because what it does is it essentially check your work to make sure that you’re doing everything you need to be. Now some people find out to be rigid but that’s the reason why a lot of these steps are designed to be optional steps. You don’t necessarily have to do them. You may be able to short-circuit the sale, but isn’t it nice to be able to see that maybe this is something that should be in my mind when I’m talking to my prospect or my customer?

Ken Tucker:                        Yeah. That’s awesome. Well we’re running close to time. I like to try to keep these at about 20 to 30 minutes, so really I guess the last question I have and I think we may have touched upon it just a little bit. I think it’s super important for people to think about, and that is what are the opportunities that businesses miss if they’re not using a CRM? We just talked about one scenario, but could you elaborate a little bit more on some other things?

Brad Tornberg:                  Well from a pure analytics point of view, understanding your customer base and what their purchasing habits are and how long it takes them to make decisions, and what triggers incite them to move, and seeing what they have in common with other people who meet your customer profile. I think it’s crucial to success, because the more that you can focus in on that ideal customer of yours, demographic wise and opportunity wise, then the better chance or the higher rate of closing you’re going to have.

To me, the whole purpose of having a CRM is to have a higher close rate because you have better intelligence and you’re also, your timing is much better. The opportunities to be able to re market to existing clients, the opportunities to ask for referrals, to build out your own network from the people who you’re working with, the ability to reach back out into your universe, whether it’s to gain intelligence about, “Hey, what are my customers like?” There’s more than one dimension to CRM and a lot of people look at it as a very one dimensional object that’s there to do nothing but just hold names and addresses and it’s so much more than that.

Ken Tucker:                        Yeah, and another thing to is probably to keep … If you have a pretty aggressive sales stuff maybe they might step all over each other, calling on the same customer. If you have two different people calling on the same customer, that doesn’t make your organization look the best.

Brad Tornberg:                  Well and the other thing that you bring up with that, is the ability to look at your salesman and to be able to measure them consistently. Because a lot of times you get … you can have two guys in the same opportunity and one guy’ll say, “Oh, that’s a deal boss. We’re going to close that. It’s 90% done.” Then the other guy says, “Well wait a minute, we don’t even have the decision maker in the room.” It’s 20% or 10% done.

What happens is, it allows you to define if it meets this criteria its 10%. If it meets this criteria it’s 50%, or 80%. What ends up happening is, your pipeline is a more accurate pipeline because if you take the revenue of that deal times the percentage of where it is in that deal, it gives you what’s called expected revenue. If you add that up for all your opportunities, you get a pretty good idea of what that expected revenue should be over a period of time. It’s a great way to plan and forecast and look at your business, and also to kind of if you need to, “Hey you know what? We don’t have that much in our pipeline. We need to get that up more.” Then you can focus on areas to generate more leads. It allows you to be much more agile in terms of where your weaknesses might be at any given period of time.

Because the last thing you ever want to get to is you have a great sales quarter and then you come into the next quarter and you have nothing. That to me is having that visibility into all of that, I think it’s the most crucial thing that you get with it.

Ken Tucker:                        Excellent. Yeah Brad I really appreciate your insights.

Brad Tornberg:                  Oh thanks for having me today.

Ken Tucker:                        You know you and I, we get together pretty frequently, and we could talk about this for a long, long time. I’m sure I’m going to have you back on. I know a topic that is kind of near and dear to both of us, that I know you know an awful lot about, is marketing automation. That’s going to be one of the next things that I want to have you … actually have my podcast focus on.

Brad Tornberg:                  Looking forward to it. Thank you for your time.

Ken Tucker:                        Yeah great, thanks, excellent. Really appreciate it Brad. Thanks everybody for joining the Move The Needle Marketing podcast. What I really try to do is I really try to focus on topics that are related to marketing for small and medium-sized businesses. I do like to incorporate technology and business related information as appropriate.

You can reach Brad also at brad @ marketsimplicity.com, and I will put a link to his website, which is also marketsimplicity.com, in the notes of this podcast. Really appreciate it Brad. Thanks very much and you guys have a great day.


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