John Tyreman: 0:19

Hello, business development professionals. Welcome to another episode of breaking biz dev. I'm John Tyerman. And as always, I'm joined by my trusty co host Mark Wainwright.

Mark Wainwright: 0:30

John. This is a subject near and dear to my heart. To my heart, or maybe not.

John Tyreman: 0:37

Yeah. Yeah. We are beating up customer relationship management platforms. This podcast is totally focused on why CRM suck at relationship management. And I'm excited to dig in because it's a counterintuitive topic. You think these tools are designed to help you with relationship management, but that might not be the case for professional services firms. So I'm excited to dig in.

Mark Wainwright: 1:02

This is endlessly frustrating. I have used all different types of CRM systems for the last 15 years, maybe more, maybe less, and I am again and again, I am presented with this little glimmer of hope with new systems and my hopes are dashed almost immediately when I, when I've come across all of these sort of Issues and problems that some of which we'll, we'll dig into today. So, yeah, I, let's try to make this as upbeat as possible, but I'll tell you what, John, boy, CRM systems, they're a problem.

John Tyreman: 1:40

Well, I guess let's take a walk down history lane. Right. How did customer relationship management platforms, CRMs, how did they begin?

Mark Wainwright: 1:47

Right. So I'm, I, I'm possibly dating myself here. I am likely dating myself here, but, this whole customer relationship management thing started way back with the Rolodex. And the Rolodex was this little, Flip book of business cards that you had stapled, to this, circular mechanism on your desk and you just turn to it with one one hand on your Rolodex, the other hand on your telephone and you'd be flipping through making calls because that's how you that's how you connected with current and and prospective customers and clients, right? It was totally analog. The information was right there in front of you. You took little notes on the business cards. It was Boom. It was right there. And that was around for decades, right? As were most analog tools, just like that, right? In the late eighties with the advent of technology, the platform called act, right? A C T with that little exclamation point act, right? That was the, really the first sort of digital, customer and prospect management tool, right? And it, it's killer functionality was it was a central. Database, right? The Rolodex was not Rolodex was this little thing that sat on individual desks, and act created a central database, which is core to all customer relationship management tools. These days at central central database, right? And then in the two thousands, maybe the late. 1990s, maybe in the 2000s, Salesforce came, came raging in and Salesforce said, not only are we going to do a sort of central shared database, we're going to do one on the cloud, right? And they were one of the first sort of SAS companies, software as a service companies and Salesforce. The Salesforce name and brand is ubiquitous in the world of the cloud. CRM systems and far and away. They're the category leader. There are many, many others, we don't need to spend time listing them all here, but Salesforce is the name. Hopefully that everyone is, familiar with, and it is my, it has been my experience that new CRM systems come, most of the ones that you come across, you say, just about all of them are cloud based. They're all SAS products. They all have these little, like I mentioned, these little glimmers of hope, these little tiny, brilliant ideas that some creator founder came up with and said, Oh, this is, this is going to be a tangible differentiator. In the marketplace and they come, come to market and they offer this really interesting, feature, this really interesting perspective on customer relationship management. But unfortunately, they all kind of end up in the same place, which is a whole bunch of features and, with an interface that often is really, really difficult to use and they kind of become sort of bloatware. Right. So there's just way too much going on there and they become unmanageable and nobody ends up using them. Bummer.

John Tyreman: 4:35

I've had a similar experience with Salesforce. and they do a great job of selling the dream, the vision of an aligned. Salesforce operating on a platform that standardizes your procedures and everything. It makes everything easy for you and everything's at a click of a button. ideally from your perspective, Mark, what, what role does the CRM play? Like, what does it actually do?

Mark Wainwright: 5:01

Right, right. after the demo, you've got this sort of, jubilant sort of vision of the future in your head and you're thinking, Oh my gosh, this is going to just, take our organization to the next level. Right. We're so excited here. Ideally. as the demo shows, right? CRM systems should, maintain company and contact information for all your perspective and your current clients, even historical clients. It should all kind of be there. It should keep our people, our business development professionals, our architects, our engineers, maybe they're doer sellers. It should keep our people in contact with important clients. customers, contacts, potential customers, leads, et cetera. It should be capturing new leads, either, Jim Smith went to a conference, got 20 business cards, right. There's a handful of viable prospective clients in there. Let's get those in the CRM system and then let's start walking them through our sort of bleed bleed generation prospect development process. let's start shepherding those, those leads and turn them into happy customers It should be reporting out important, good information. What new leads do we have? What is our sales pipeline look like? How big is it? How big does it need to be? what's happening when, what, what new opportunities are going to close when, what do we do next? what should I be focusing on now? what, what, what conversation or call do I need to make next in order to keep this particular opportunity kind of moving along, and who are my most important Contacts who are the most important people out there that I should be staying in touch with right. It should be doing all of this and right. The big picture here is that a serum system should help you sort of forecast the future, right? It should be your crystal ball that says, here's where you are with revenue. Here's where you need to be. Here's where you are, frankly, with resourcing. Here's where you need to be, right? CRM systems are not a resourcing tool, right? There's another sort of funny acronym that's ERP systems, employee resource planning systems. There's a lot of those out there, right? But a CRM system should naturally sort of fit provide information for those decisions, those resourcing decisions, and whether you need to hire more folks or maybe not, so, so your pipeline obviously is not just a, a, a revenue tool. It's also hopefully being used as sort of your vision into the future for your resources that you need. Yeah.

John Tyreman: 7:34

the feast and famine nature of professional services, put a burden on the business development organization within a professional services firm. And what I mean by that is, you can marketing or business development team can generate leads all day long. But if the firm doesn't have the capacity to be able to fulfill on the work, then those opportunities are wasted opportunities, right? And so those two really need to be in concert. What do we have in the pipeline? What resources do we have to be able to fulfill on that work? and then I think one, one thing that you mentioned about what a CRM should do that I find interesting is the, the reporting capabilities of it, and it should be your crystal ball. maybe I'm going out on a limb and please challenge me on this one, Mark. But, I think that there are a lot of bells and whistles and reporting capabilities and all these tools that firms don't really need. I think that there's a much more simple way to, to do forecasting and to report on your sales pipeline.

Mark Wainwright: 8:37

Right. Right. It's yeah, you're absolutely right. We will talk about that. a little bit here and there's one, there's one major disconnect that I will highlight and in, in just a, just a bit. And again, we are talking about all of these things in relation to, modern day professional services firms. And there's a, there's a big problem out there.

John Tyreman: 8:57

I suppose, what should companies, what should firms expect to happen once they have a new tool in place?

Mark Wainwright: 9:05

there's, some wonderful sort of things that, that get in glowing neon up in the marquee that says, Oh, this is all the big reasons. These are all the big reasons why you need to, you need to implement a CRM system, grow revenue or be more organized with more organization and more rigor, more, more, more focused, more energy, all that sort of stuff. Right. That's going to CRM systems going to help you. Help you do that. It's going to help organizations quote, manage their pipeline, even though many of the professional services firms out there are kind of small and mid sized businesses. And they don't even know what tech pipeline is. And they don't really understand sales stages and sales cycles and all that sort of stuff that are inherent components to a sort of pipeline, but they're going to get the serum system. It's just going to, it's going to happen, right? This is kind of what they're, what they're expecting. They're expecting, obviously the people will use it. Cause everyone's going to see it and know that it's a wonderful benefit for them and they're going to use it. And ultimately that, using a CRM system is going to be in some way a competitive advantage, right? It's going to help you win more, win more customers, win more clients, grow revenue, all that sort of stuff. So it's going to be a competitive advantage. It's going to help you outpace everybody in the marketplace. Hmm. We'll see. Okay. So

John Tyreman: 10:18

that's the, the, the vision that's the vision So what really happens afterwards?

Mark Wainwright: 10:25

Well, you're the, the, I would say here's, okay, here's what really happens, right? The, the CRM system gets flipped on, or you've been through your training sessions and all that other stuff. And the reality is, is that on day one, very few people use it. Right. And, and, and. There's two reasons for that. One is people are slow to adopt it. People are kind of in their, in their usual mechanisms of doing their work throughout their day. They use their, their, their technology tools and CRM systems aren't necessarily one of them. So they don't really use it. And they don't also use it because firms often under invest in these, these types of situations. They don't buy enough seats. Right. So they, yeah, they have a handful of folks who are sort of the CRM sort of data proxy folks where, Oh, you need to go talk to these three individuals and sort of get the download from them on what's going on with their new business opportunities, what new leads they have and get you just enter that stuff into the CRM system. So it's, it's, it's not owned by the people that are actually, it's not owned and used by the people who are actually kind of involved in these, these selling situations. So too few people. Use it, right? And a lot of times this leads to poor data entry, poor data capture means that information is complete or out of date. and as soon as we all know this, as soon as information gets out of date and some sort of a shared database, people start ignoring it. They're like, Oh, why? It's just, it's not. It's not even relevant. You can't trust it anymore. Yeah, right. You can't trust it. So, and those handful of people in the organization who are actually using it, they're only using a very small, small part of it, right? These are really powerful, comprehensive tools for better or for worse. A lot of people don't want to use them for, just like, like a database, right? A lot of business development professionals that I know simply use CRM systems as a database, which is they're just loading in customer data. recent, recent project data, that sort of stuff, which on one hand can be helpful, but you don't need a full blown, very expensive serum system just to have a simple shared database, right? That's, that's not what you need. Some of the other things that, that just, just inevitably happen, the, the managers of the organization start, they see the reporting function. They're like, Oh yeah, great. I get to, yeah, this is, I get to create this hammer that I can go chase after people with and, and have them start, generating revenue and. chasing down leads and all that sort of stuff. So managers use it in the wrong way, right? They start using it as a, as a way to, to, almost spy on people's, sales activities or lack thereof. Right. And, and everyone who's involved in finding a way to new work is like, Oh, great. More fuel on the fire that we're not generating.

John Tyreman: 13:16

Well, and then this, the salespeople hide behind the platform too, is what I've seen is, well, I don't have training on the platform. I need more training on how to use the platform. you're coming at me with these reports. I need more training. And so then it becomes this, okay, we need to dump more time and resources into training these, our sales force and how to use the CRM.

Mark Wainwright: 13:38

Yeah. And, and, and ultimately we get back to the big picture idea of why you need it. you brought this thing into your organization in the first place, customer relationship management. Ultimately, it doesn't actually help people maintain relationships with other people.

John Tyreman: 13:56

well, I think we've done a great job of beating up a CRM, right? So like, why, like, what can professional services firms do differently?

Mark Wainwright: 14:06

one point I want to make about professional services and we'll bring this home to the professional services audience that's listening here is that why, why, and I mentioned this before, why is this a particular problem with professional services firms? Thank you. It is a problem because CRM systems are a SaaS product, a software as a service product, right? Made by, created by Salesforce and Microsoft Dynamics and all these other different CRM systems, right? Guess what CRM systems really excel at? CRM systems that are SAS products excel at selling SAS products. Salesforce is really ideally built to sell Salesforce, right? It is not built to sell professional services. There are radically different approaches to selling complex, high dollar, long sales cycle professional services than compared to software products. when you're selling SAS products, you're selling seats, you're selling a high volume, low dollar, hopefully, short sales cycle kind of product and professional services is exactly opposite of that. So it takes a lot of pushing and pulling and tweaking and editing and to get a. product that was designed to sell SAS products to be built and serve your professional services firm as well. So that's the big, that's the big catch here. Okay.

John Tyreman: 15:42

So if, if most CRMs like Salesforce and HubSpot and there's a number of other ones, if they're designed to more, more effectively sell software products, What should a CRM look like for professional services firms? Right. Right. It

Mark Wainwright: 15:59

most, most CRM systems are built, like I said, for SAS, organizations selling software, these software seats. And they're also designed for people who are full time Salespeople, right? And most professional services firms do not have a full time sales team, right? And we've talked about this a bit in the past. Right. They have right. Doer seller models. They have other folks that are doing various other things, right? So CRM systems really need to understand and respect the fact that most individuals in professional services firms are CRM system all the time. So they have to provide email reminders, Connectors, integrations to the tools that people use all the time, Outlook, Gmail, whatever other types of, of technology platforms that people spend their, their most of their day in these CRM systems really need to respect that. and have a nice tight connection. There are a lot of connectors out there that help you push data into the CRM system, but there aren't a lot of systems that then take that data and push it back out and get it in front of you. Most, most systems are expecting that you're going to go into the CRM system to retrieve and edit and process information and data. There's not a lot of systems that take that data that's in the CRM Push it back out and get it in front of you with reports, with reminders, things like that. So the CRM companies want you to be in the CRM all the time, but that's not how most professional services professionals, kind of operate, right? It's just not, just not what they do. Second, it should be super easy to use, right? You should be able to push data in and pull data out and make changes really, really. Easily. And there are some things that are making that a little bit easier. Unsurprisingly, AI is starting to to help sort of recognize when important information and data arises, maybe in your inbox and then, recommend edits and changes and things like that. So that's starting to happen, but it needs to be lightning fast. People, we need to just Push some information in there super, super easily without it taking too many time, like literally too many button clicks, right? Or too many mouse clicks or, whatever, right? Just, just minimize that. Ideally, since these individuals, and again, we're talking about maybe the doer seller model, or heck even, our lovely business development friends out there. People are busy with all different types of things. Right. So ideally your CRM system is being very direct and kind of tactical about, tasks, to do items, etc. Call, Sue Johnson on Tuesday for him to set up a meeting next week, right? We need that type of direct, specific information CRM system. So that, again, we're spending as little time as possible. it shouldn't be used by firm leaders to make people feel bad. Right. It must be a useful tool. Individuals need to recognize that a CRM system is going to help them sell better, sell faster, market better, market, in a more targeted, more, more, effective fashion, that sort of thing. So these systems need to, need to help people and they can't be used by the senior team members as a, like a hammer,

John Tyreman: 19:24

Yeah. It's funny because, salespeople, sales leaders. Sales leaders are typically in their leadership position because they've had success at sales. And so in most salespeople, I'm not saying all, I'm saying most have what I would call a heightened sense of competitiveness, right? And, the way that I've seen that play out in the management of sales teams. Is that like leaderboards, right? You've got a report that you pull out from Salesforce that shows how much business has been closed by each individual salesperson. Right. And I think that, this, it sounds like that is what you're advising against teams do, because that could lead to, Kind of singling people out or making people feel bad or putting too much pressure on people.

Mark Wainwright: 20:14

Right. It's a, it's a, it's a fair point. I do think sort of the competitiveness and the gamification of, of, of things are, are helpful, but I mean, you can have, four or five individuals in an organization who have some responsibility for revenue generation, but they're in, very different areas of the organization. They're, they're, they're working with different types of clients. maybe they have, 10, 50, 000 contracts versus one other individual has one 500, 000 contract, right? It's just, they're all over the place. There's no, there's no similarity. when it comes to, being able to compare those individuals and their sales performance, just because one individual is closing, more opportunities, but the dollar amounts lower, how do you, how do you sort through all of that? So it's really, really hard. And in it, in it, most systems don't account for that high degree of variability when it comes to professional services and, sales cycles are really long. I would say without exception, the organizations that I work with have sales cycles that are at least 100, 120 days, from the creation of a maybe to a contract. And it just takes a long time. I mean, heck contracting in some organizations takes six months. So, that's really, that's really hard. And CRM systems don't even like, they didn't even think that way. CRM systems don't even process that huge long variability. They can deal with it, but that's just not how they're built because they're, they're focused on who's. I mean, a lot of times you're, you're, here's an example, right? And sometimes your CRM system out of the box will start spitting out reports about sales activity. it'll give you five different, five different charts on a dashboard that relate to sales performance for the previous week. Right. And there's a ton of, right. There's a ton of professional services rooms where it's like, look, we're chasing million dollar deals here. What happened last week doesn't make a darn bit of difference. So it's like the whole timescale is

John Tyreman: 22:05

off.

Mark Wainwright: 22:06

Well, it

John Tyreman: 22:07

underlines your point about how these products are built for SAS companies and not necessarily for professional services firms.

Mark Wainwright: 22:13

Yeah.

John Tyreman: 22:13

what's the fix here? Like what, what a professional services firms, let's say that they ditch their CRM, like what takes its place?

Mark Wainwright: 22:20

Yeah. So the, the, well, from a, from a data and, and, information standpoint, obviously the horizons all need to stretch out, right? You need to be looking at things quarterly or annually, you need to be looking at trend lines and, and where you are, relative to those, to those trend lines, you need to be, you need to have really good visibility on early opportunities so that people can stay focused on them and pay attention to them, over this really, really long period. Sales cycle. You need these little reminders that are pinging you, with some regularity that says, Hey, Bob, do not, disregard this, 125, 000 opportunity you've got in the pipeline here because you're focused on something else or you're, you're working on a project right now and you're neck deep in, in the final stages of that project. don't forget about this one. Keep tending to it. Right. So, but to your, to, to your point and I'll, there's, there's, there's an interesting group of sort of apps going on right now that, that I can, I can mention, but there's, there's one little, one little kind of addition I like to add here is that I think the vast majority of firms out there can get away with managing their new business opportunities with something as simple as a spreadsheet. And I know none of the SAS companies, none of the CRM companies want me to say that, but you really can because. if you're a small organization, but your average contract value is, 000 or so. And, you only need to close a handful of those a year in order to kind of keep things running. You don't need a big, massive system that, has all these features that you don't use. What you do need to do though, is you need to have someone who owns that information, a central individual who owns that information. And also you need to have a, a group of sort of revenue generation individuals in the firm who are constantly paying attention to it, right? Hey, it's Monday. Go in and look at your opportunities on that spreadsheet. Make sure they're up to date. Make sure you're clear on what's what's going to happen next. Make sure that that closed date that you have there is accurate. we don't want things in our pipeline that have a closed date. That's a month overdue. we want a realistic kind of closed date on these opportunities. So we want to know when they're contracting when we can start expecting that revenue and when we can start Getting on the work, right? So we can, kind of have visibility on the future, the future kind of revenue and resources we need, right? So on that, on that subject of other types of tools that actually might do this customer relationship management thing a little bit better is this whole sort of grouping of apps that I stumbled across a few years ago. And the acronym is PRM. personal relationship management. And I came across these apps probably during sort of the 2020 sort of, COVID years when everybody was, working from their, their basements or wherever else. and that people started to recognize the fact that they're just losing touch with folks. And I think the genesis of, of a lot of these apps. aren't, or the genesis of these apps, wasn't professional in nature, but it was personal in nature. I think people were just losing track of people, right? Cause they weren't coming across them either intentionally or, or sort of serendipitously. It just, they were losing, losing track of folks. So there's a ton of apps that sprang up. there's one called garden. There's a couple other ones out there that I have used. I've got on my phone. A lot of them are mobile based, but then this, this whole sort of, professionalization of these tools started to emerge. And there's a couple, there's one called levitate. There's one that I've recommended folks use recently called clay. And these are tools that are completely and totally focused on relationships. And the cool thing about them is that they, they, they either ought to either in an automated fashion or an intentional fashion, they, they help you create and maintain a list of your professional contacts and you can set. again, either automatically or you can be intentional or deliberate about setting a cadence in which you're interacting with those folks. And it gives you these little nice reminders and it scans your inbox or your calendar to kind of under, understand that, Oh, you've emailed with that person or you've had a meeting with that person. Great. so it kind of resets that. Resets that reminder in that, if you want to make sure you're connecting with someone every six months, it will have a persistent reminder that says, Hey, Two months overdue. You should be connecting with Bob. Oh, system sees that you had a email exchange or a meeting with Bob. Great. Resets the reminder. So it starts the starts the timer again over at six months. So that whole concept of personal relationship management really said, Look, serum systems are way too big. They're way too bloated. They've got all this junk in them. They do their job if they're used properly, but they've kind of lost focus and lost track of this whole relationship management thing, which is funny because it's in the name. So this PRM, this personal relationship management, sort of concept has started to come up. I

John Tyreman: 27:37

think some of my biggest takeaways from this conversation, Mark, have been just the fact that firms can achieve the same goals or can achieve the same outcomes with significantly less investment. I know the price tag of Salesforce and it is just, it's astronomical. Compared to some of these other solutions that are out there in the marketplace. Sure. It has automations and connectors and all that, all those things. But, I think that there is a more economical solution. And I think that there are other tools that are designed more for professional services that could be much more helpful. Yeah.

Mark Wainwright: 28:21

And, and, I have had the luxury of using all these different types of tools, finding the, the, the, the aspects of the elements of these tools that are most useful, integrating them, them into pretty simple Spreadsheets for firms that I, that I work with and also understanding the, the, the big shortcomings of a lot of CRM systems to the point where, I'm gone and sort of, made this a goal of mine to find these really, really great personal relationship management tools that can really help people just stay in touch with people. So, I have, I've worked, like I CRM systems for a really long time and I've touched tons of them. And, really, most of them have lost track of this whole sort of relationship thing. And I think there's some new, interesting small tools that can, can really help. Curious. What CRM tool do you use? Yeah, right. Well, I use, I use a tool called Nimble. And one of the, one of the reasons that I use Nimble is because it does have this killer feature. This, Keep in touch, stay in touch feature as I kind of refer to it. I'm using my air quotes here. That, that concept, is found throughout all these personal relationship management tools, but Nimble has that. And, it's, it's very useful. I have a, I have a, a pretty healthy list of people that I wish to stay in regular contact with. And Nimble has that kind of built in and people are thinking these other tools that are way more expensive, way more sophisticated, way more feature rich have to have that. And I'm telling you, they don't, right? Like Salesforce and Dynamics. They don't have it. They do not have this specific, this specific sort of keep in touch sort of functionality. And I have no idea why.

John Tyreman: 30:23

Well, the way that you describe it is something that could be customized or programmed into into those platforms. but yeah, to, to your point, I don't think they make it easy because part of their wholesale process is selling implementation services through their, their network of partners too. Yeah.

Mark Wainwright: 30:39

Yeah. And, and they, Salesforce is, is Salesforce has created this mass universe of, of, of plugins and add ons and everything else. And, it's a, it's a, it's a big beast, but some of the little simple things, it just seems like they just overlook them.

John Tyreman: 30:56

Well, this has been a fantastic conversation, Mark. I think our listeners should have a lot of good takeaways from this. Hopefully many are questioning, their own CRM tool, and maybe they're thinking about how they can go about customer relationship management, or perhaps they're entertaining the idea of kind of shifting their mindset to this personal relationship management, point of view. I love and hate talking about CRM systems, John. Well, well, let's, let's beat up another concept on our next episode. We will do so. Until then. Until then.