Sales Technology

Nikolaos Panagopoulos

• Publisher: Business Expert Press
• Year: 2010
• Print ISBN: 9781606491164
• eBook ISBN: 9781606491171
• Topic: Business
• Subtopic: Management
• Index: Business

Contemporary sales organizations are spending billions of dollars or euros on sales technologies with the objective of streamlining the sales process, enhancing sales force productivity, and improving customer relationships. A variety of sales technologies exist such as customer relationship management (CRM) software, mobile sales force automation (SFA) applications, contact management software, and territory planning applications, to name just a few. In spite of the amount being invested in such technologies, however, few firms can claim to be enjoying performance improvements. In fact, the majority of companies are struggling to gain salesperson buy-ins and are failing to realize the intended return on investment (ROI). In addition, the introduction of such technological applications may cause stress to the sales force or disturb customer relationships. Against this backdrop, this textbook is concerned with how executives can effectively manage a complex and costly sales technology initiative in order to get the most out of it. In particular, the textbook begins by providing the reader with a detailed discussion on the various technologies that are being used by sales organizations. It then provides an exhaustive review of the factors that might lead to effective sales technology implementation and presents a managerially relevant conceptual framework, which illuminates the mediating pathways from using the system to salesperson productivity. Moreover, the textbook offers a wide array of key performance indicators (KPIs) that can be readily employed in order to monitor the progress and success of the implementation effort. Next, it offers a comprehensive method that executives can use to calculate the return on sales technology investment (ROSTI) in order to substantiate the business case for the technology. Finally, the textbook provides executives with a detailed three-stage process of sales technology implementation and discusses what essential work should be conducted in each stage.

Chapter 1

Sales Technologies

Their Definition, History, and Uses

Chapter Overview

The aim of this chapter is to introduce readers to the various notions and concepts related to sales technologies. In particular, the chapter starts with defining sales technology, sales force automation (SFA), and customer relationship management (CRM), and delineates the similarities and differences between these concepts. Likewise, it examines CRM from both a technological and a strategic perspective. This is done in order to set out the boundaries of the topics examined in this book. Next, the chapter proceeds by giving a historical presentation of how sales technologies have evolved, from early applications to modern Internet-based solutions. This is followed by an effort to set out the various types of sales technologies, based on their usage by different constituencies and the type of the selling context they are involved in. The chapter concludes with a brief reference to the world market of sales technologies.

Defining Sales Technology

Rapid changes occurring in the field of information and communication technologies are changing the way society, in general, and business organizations, in specific, organize themselves. These changes have magnified the availability of information in such a way that managers can have immediate access to almost any piece of information needed in order to make better decisions. As such, it is not surprising that several authors have long been contemplating that the ability of accessing, managing, and exploiting information represents an asset of critical importance for the success of the modern firm¹ and for the development of competitive advantage.² The importance of information for contemporary organizations is largely driven by the intensified competition in many markets around the world, as well as by increases in customer demands for faster and better service through the provision of customized solutions.

Generally speaking, technology can be defined as “the process of managing the uncertainty and risk surrounding the transactions necessary to convert inputs into output.”³ This rather broad definition refers to any technology (process or administrative technology) employed by organizations in order to manage business processes, such as supply chain, financial management, and production. Given the focus of this book, however, two broad types of technology—namely, information systems (IS) and information technology (IT)—are of special interest to us. Though no clear distinction between the two types of technology is made in the literature, IS usually refers to the software applications and databases, whereas IT refers to a broad spectrum of devices, hardware, and media used by organizations in order to link IS with employees and organizational processes.⁴

Though satisfying diverse customer needs and demands should be a firmwide priority, the sales function of business-to-business organizations plays a prominent role in this process. This is so because the sales function is closer to customers than any other business function, and thus can significantly affect the process of providing services, goods, and solutions. As such, many authors have expressed the sentiment that the use of information and communication technologies can positively contribute to the sales function’s effort of satisfying customer needs.⁵ Given the critical role of sales for developing intimate and profitable relationships with customers, as well as its impact on net revenues, it is of little wonder that firms have found themselves rushing to invest in sales technologies. Indeed, according to recent reports, the estimated worldwide investment for purchasing CRM software is around $9–11 billion.⁶

Taking a broader view, sales technology can be defined as any information and communication technology employed by the sales organization to conduct its essential activities.⁷ However, despite their wide application in modern organizations, sales technologies can mean different things to different constituents. The most commonly encountered confusion regards the identification of sales technology with such concepts as CRM and SFA. Therefore, the purpose of this section is to elaborate on the various terms, which are frequently used interchangeably, and present their differences and similarities. To facilitate comparison among the various terms, Table 1.1 lists a representative set of definitions presented in the literature that can be used to illustrate the different perspectives adopted to study SFA, CRM, and sales technologies.

Table 1.1. A Variety of Perspectives on the Domains of SFA, CRM, and Sales Technologies

Sales force automation (SFA)

“SFA systems consist of centralized database systems that can be accessed through a modem by remote laptop computers using special SFA software (which is often company specific).”^8

“SFA involves converting manual sales activities to electronic processes through the use of various combinations of hardware and software applications.”^9

“Adding technology in the form of cellular phones, faxes, portable computers, databases, the Internet, and electronic data interchange (EDI) systems to the sales process.”^10

“Sales force automation (SFA) refers to the use of computer hardware, software, and telecommunications devices by salespeople in their selling and/or administrative activities … the SFA system integrates its various activities and applications to support one overriding goal: enhancement of the collection, assimilation, analysis, and distribution of information to improve productivity of the sales force, while enhancing customer relationships.”^11

“Technology for SFA involves a variety of hardware and software capabilities and can support cost reduction or emphasize gains in customer relationship management.”^12

“Laptop computer-based systems that connect via modem to a central server allowing for communication between all parties throughout the country.”^13

“Sales force automation (SFA) occurs when firms computerize routine tasks or adopt technological tools to improve the efficiency or precision of sales force activities.”^14

Customer relationship management (CRM)

“[A] process that addresses all aspects of identifying customers, creating customer knowledge, building customer relationships, and shaping their perceptions of the organization and its products.”^15

“We define the CRM process at the customer-facing level as a systematic process to manage customer relationship initiation, maintenance, and termination across all customer contact points to maximize the value of the relationship portfolio.”^16

“An ongoing process that involves the development and leveraging of market intelligence for the purpose of building and maintaining a profit-maximizing portfolio of customer relationships.”^17

Customer relationship management (CRM)

“CRM is a strategic approach that is concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments. CRM unites the potential of relationship marketing strategies and IT to create profitable, long-term relationships with customers and other key stakeholders. CRM provides enhanced opportunities to use data and information to both understand customers and cocreate value with them. This requires a cross-functional integration of processes, people, operations, and marketing capabilities that is enabled through information, technology, and applications.”^18

“CRM relates to strategy, the management of the dual creation of value, the intelligent use of data and technology, the acquisition of customer knowledge and the diffusion of this knowledge to the appropriate stakeholders, the development of appropriate (long-term) relationships with specific customers and/or customer groups, and the integration of processes across the many areas of the firm and across the network of firms that collaborate to generate customer value.”^19

Sales technology

“Sales technology refers to ITs that can facilitate or enable the performance of sales tasks.”^20

A careful observation of Table 1.1 reveals that no general agreement exists regarding these terms. SFA, for instance, has been defined in a variety of ways. One common theme underlying all definitions, however, is that SFA comprises a multitude of different IT and IS, which aim to increase sales force efficiency and productivity by either (a) automating some salesperson’s activities and thereby increasing face-to-face selling time or (b) providing faster access to timely information.²¹ According to SFA proponents, an increase in productivity is the outcome of freeing salespeople from administrative tasks, thus allowing them to spend more time in the field interacting with customers.²² Accordingly, the basic characteristic of SFA is that it is intended to support routine (or repetitive) sales processes.²³

Similar to the definitional problems related to SFA, it is also very difficult to come to an agreement as to what the conceptual boundaries of CRM are. Indeed, definitions vary widely across different stakeholder groups (e.g., vendors, consultants, and adopting firms), with each group giving its own definition.²⁴ In addition, there is no consensus among scholars on what should be an accepted conceptualization of CRM.²⁵ Notwithstanding this difficulty, in this book, we adopt Buttle’s²⁶ CRM conceptualization, which has been set forth in the sales literature by Tanner and his colleagues.²⁷ According to Buttle’s conceptualization, CRM comprises three different aspects: (a) strategic CRM, (b) analytical CRM, and (c) operational CRM.

Strategic CRM refers to the “managerial decision-making processes involved with defining and building a customer-oriented business strategy, business processes and culture, and requisite supporting technology models.”²⁸ Analytical CRM refers to “the firm-level processes involved in analyzing customer and market-level information in order to provide the intelligence and insights that guide the firm’s strategic marketing, CRM, service, and go-to-market choices.”²⁹ Finally, operational CRM refers to “the specification of suitable and replicable business processes … designed to implement the firm’s desired customer relationship model in terms of customer access, customer interaction, sales and channel choices, and customer learning at the one-on-one level.”³⁰

Based on this conceptualization, as well as the definitions presented in Table 1.1, three conclusions can be drawn. First, it is apparent that CRM technologies constitute just one aspect of CRM, which reflects a philosophy, a strategy, or an organizational process.³¹ Though an important part of CRM, CRM technology itself is not identified with the enterprise-wide strategy and processes for managing customers at the strategic or analytical levels but rather is a subcomponent of CRM at the operational level.³² As such, CRM technology is employed to help organizations realize intended CRM strategies and processes, which are designed at the strategic level and which aim at effectively and efficiently managing profitable customer relationships.³³

Second, in contrast to SFA technologies, which facilitate routine activities, CRM technologies are targeted at helping salespeople develop customer knowledge and sales strategies that will facilitate the profitable management of customer relationships.³⁴ In other words, SFA is more operational and supports routine functions of a salesperson’s job tasks, whereas CRM technology is more strategic by nature and aids in the development of selling and relationship strategies.³⁵

Third, given the cross-functional and multichannel nature of CRM, CRM technology does not represent one thing. Rather, it encompasses a broad spectrum of technologies and applications that cover the entire gamut of customer-facing (or front-office) functions of a firm: marketing, service, and sales.³⁶ Echoing this sentiment, Srivastava, Shervani, and Fahey³⁷ argue that the development and execution of sales programs is only one subprocess in the overall CRM process of the organization. Put another way, CRM technology concerns a broader, enterprise-wide perspective of IS-IT, employed to automate and support all customer-facing aspects of a business.³⁸ For instance, marketing-based CRM technologies perform functions such as campaign, loyalty, segmentation, and list management; whereas service-based ...

Table of contents

• Title Page
• Copyright Page
• Table of Contents
• Preface: Structure of the Book
• Acknowledgments
• Chapter 1: Sales Technologies: Their Definition, History, and Uses
• Chapter 2: The Sales Technology Implementation Process
• Chapter 3: Antecedents to Effective Implementation
• Chapter 4: Performance Implications of Sales Technology
• Chapter 5: Measuring the Impact of Sales Technologies
• Chapter 6: Implementation in Practice: A Road Map to Success
• Notes
• References