August 21, 2000

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CRM Tools Offer Sales-Force Solutions

Leading vendors roll out products that solve problems in sales pipelines across industries

By Marion Agnew

More on sales-force automation:

sidebar: Tips For Making Sales-Force Automation Projects Successful Making The Sale Is Only The Beginning (5/15/00) InternetWeek Sales Software Goes Mobile (5/15/00)

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hree years ago, new sales representatives for Toshiba America Medical Systems, the world's leading manufacturer of ultrasound equipment, had one option for learning about their territory: rooting through a cardboard box full of paper files.

In July 1997, director of sales support Tommy Stewart set about to find a better way to manage sales for the division of $6.4 billion Toshiba America Inc. His efforts culminated in a staggered rollout, lasting from November 1999 through February 2000, of Clarify Inc.'s cus-tomer-relationship man-agement products, including its ClearSales sales-force automation tool. Today, to become familiar with a new territory, all a salesperson has to do is open a notebook computer to check the account's history and view current information.

In the past five years, sales-force tools have come to incorporate capabilities beyond basic contact management. Everyone in a company who's in contact with customers, including customer service reps and sales reps in the field or on the phone, now can see the same information about a particular customer and better coordinate their efforts. Sales managers have more up-to-date information, can forecast sales revenue more accurately, and can create reports for upper management more efficiently. Many leading CRM vendors, including Clarify, Oracle, Siebel, and Vantive are presenting sales-force automation tools as an integral part of their CRM suites, and these tools sometimes give companies benefits beyond simple productivity increases.

Toshiba America Medical Systems' sales force has a consistent sales process, which, Stewart says, makes developing compensation and strategic plans, as well as looking at sales pipelines, easier. "I can put together leading indicators of how we're doing so I can deploy resources to help the sales force," he says. "Last year, I had information after the fact."

Companies are also finding benefits of combined SFA-CRM software. AMR Research recently said, "Dead is the practice of getting software from a single source." Many companies are looking to sales-force automation tools from CRM vendors to offer multiple solutions--from looking at sales pipelines across industries and countries to more mundane but vital tasks, such as alerting sales reps to customer complaints.

As Drew Farris, former IS director at Nantucket Nectars, says, "The sales force doesn't want to go to the customer and get yelled at." A lack of integrated information about a customer can set sales reps up for problems. When a customer gives a company a piece of information--a simple name correction or a serious product problem--and the sales rep who's visiting is unaware of that change, the company loses credibility with that customer. But if sales reps can check their notebook computers for such information, they are more prepared.

An unembarrassed sales rep may seem less important than accurate sales forecasting, but JoAnn Dickson, an SFA consultant at Innovative Business Technology Inc., sees it as paramount. "To a customer, telling anyone in the company about a problem counts as telling the whole company."

Nantucket Nectars is working to ensure that its sales force, 90 of the company's 130 employees, has the information it needs to avoid problems like last year's. The Nantucket, Mass., juice maker, with annual revenue of about $70 million and 40% annual growth, had a production logjam that made it difficult to get juice to its distributors. To make matters worse, the company was losing distributors because sales reps had no information about inventory or delivery dates to help the distributors find alternatives.

"Last summer, 75% of our product had problems," says CEO Tom Scott. "This summer, May was the biggest month in the history of the company--and it went without a glitch."

Scott attributes that success to the implementation of Oracle Sales and Sales Analyzer. Nantucket Nectars chose Oracle in November and had the system up and running in March; setting up the CRM portion took only 2-1/2 months. "That time to implementation is unbeatable," Scott says. Although its primary motivation for seeking a CRM tool was to improve back-office and marketing processes, such as tracking each distributor's marketing fund, Nantucket Nectars' sales reps also are reaping significant benefits.

By logging on to the Internet and accessing NectarNet, the company's intranet, salespeople can see whether a distributor's order is ready for delivery. They also can see if there are any problems with the order. "The salesperson can call the distributor to say, 'Would you rather wait on this order or change to a different product?' And that's 1,000% better than where we were before," Farris says. "We had no 'available-to-promise' capabilities, no forecasting or order-tracking abilities," he says. "We went from badly reactive to extremely proactive."

With results like that, it's easy to see why the market for such tools is exploding. Gartner Group projects that the total CRM market for this year will be nearly $13 billion, and will rise to $40 billion in 2004. The sales-force automation portion of that total will be about $2 billion this year, and will grow to more than $4 billion in 2004.

Several vendors are sharing those dollars. Siebel Systems has about 14.5% of the total CRM market and more than 22% of the market for sales-force automation tools offered by CRM vendors, according to Aberdeen Group, based on 1999 sales. Vantive, whose suite of CRM products was purchased in March by PeopleSoft Inc., is the next-largest vendor with 6% of the total market; Clarify, now owned by Nortel Networks Corp., has about 4.8%.

But Denis Pombriant, Aberdeen Group's senior analyst for CRM, cautions that market dominance in CRM is a relative concept. "For a company to get on the radar for this report, it must have more than 1% of the market. The biggest share of the pie is still 'Other.'" This subset of companies held more than 38% of the total CRM market last year--between two and three times Siebel's share. And although Aberdeen data showed Oracle with just 2.2% of the total CRM market, that figure may be misleading: "They jumped from zero to 2.2% overnight," Pombriant says.

Sales-force automation tools from CRM vendors have been around for about five years, but customer buying habits have been changing in the past two years, says Rob DeSisto, Gartner Group's VP of CRM: "They're asking, 'Can I get a more integrated solution?'" Products such as those offered by Clarify, Oracle, Siebel, and Vantive that work across sales functions and channels let companies communicate better within a business, are in demand. "Many companies want to get as much from a vendor as possible," he says.

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Photo of Scott by David Weintraub

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