I was recently interviewed by John Golden, CEO of Huthwaite, for his Business Insight podcast series.  We talked about Social Networks and Social CRM in the context of sales effectiveness, and I spoke a little about Dealmaker Pulse, our recent offering in this area. John’s questions were insightful, and I thought that perhaps there might be something of interest to you in the discussion. Here’s a transcript of the interview (edited for brevity and clarity).

John Golden: There has been a lot of talk recently about the concepts of unlocking tribal knowledge and the notion of the Social CRM, so can you talk a little today about why they are increasingly seen as strategically important to sales organizations?

Donal Daly: Tribal knowledge is really just today’s label for information that you get from your networks, but because technology has enabled increased velocity of information gathering, the power of tribal knowledge has really grown dramatically. Online Communities is one of the fastest growing areas on the internet. There is now more information flowing through online communities than through email. It’s all part of the growth of networks.

Social CRM is a phrase that has lots of different definitions, but I think that it needs to be both a philosophy and a business strategy; but one that is supported by technology designed to inform and engage both the customer and the sales person in a collaborative conversation. Social CRM needs to be a recognition that the customer increasingly owns the conversation, and if you want to be a participant in that conversation then you need to ‘hang out’ online where your customers are so that you listen to what’s going on and engage in the conversation.

If you pull those two things together: the tribal knowledge and the CRM, then hopefully Social CRM gets implemented in a more customer centric, business centric paradigm than we have seen with CRM in the past.

JG: From a sales perspective, what challenges are they creating for traditional selling models and traditional ways of engaging with prospects and customers ?

DD: Our research would show that sales cycles are in fact getting shorter, but yet, anecdotal evidence would suggest that it’s getting harder to make a sale. Social is playing an important role here, and it’s quite simple. Buyers are inviting sales people into the conversation – or into the buying cycle – at a later stage in the cycle because they are using social networks, social media, online communities and their peer networks to evaluate options, and shortlist solutions, before the sales person even knows that a sales opportunity exists.

The whole social universe is helping to educate a much more informed buyer who is now saying ‘we don’t need to have sales people in here telling us what they do because we already know, and if we don’t already know, we can just ask one of our peers in the network’.  The net effect is that the Sales Cycle has shortened but the Buying Cycle hasn’t, so you must be part of the Recommendation Chain. You need to be there when customers are looking for solutions or looking for information. And when buyers are looking in the social network and are ‘hanging out’ in the social network somewhere, then they must find you. And that’s a reversal of the traditional sales or marketing model.

JG: Given that there are no good/proven models yet, if an organisation is looking at this and saying ‘I need’ to understand the Social CRM, I need a strategy, and then I need to build a strategy around it – how should they start to implement that strategy, or how should they even formulate that strategy in the first place ?

DD: You need to think about giving value first and expecting nothing in return. It’s the kind of thing you do in your own ‘real’ social community; you do it not because you are getting something back, but you just know it’s the right thing to do, and you will get your return.  You need to start by empathizing. Set up a Social listening station. Follow your customers and other influencers. Put your finger on the pulse of your customer’s needs: empathize, which is active listening; and then engage, which means that you are going to start contributing to those conversations.

• Be authentic.
• Become part of the Recommendation Chain.
• Invite other people to ‘play’ in your community.

That’s the ‘what’.  Then there’s the ‘how’, and integrated, smart, technology has a big role to play. These two words ‘integrated’ and ‘smart’ are both very important. Social CRM, or what I’d call Intelligent Social Networking for Sales is not about data, feeds, or activity.  It’s about ‘inference’ in context. It’s about what I call Integrated Resonance.

Social stuff doesn’t happen in isolation, no more than your sales activity should happen in isolation. Will your systems help you to act in the context of the specific deal that you are working on, but in concert with your customer’s activities in the social web? And will your systems guide those actions according to embedded intelligence of smart sales methodology or process?  Because if not, then you’re just going to be much more efficient at getting it wrong. It will just be CRM all over again.

JG: You recently launched a Social Networking solution of your own.  Can you tell me what was the driver behind Dealmaker Pulse?

DD: Dealmaker knows a lot about sales opportunities.  Because of the embedded intelligence it can immediately recognize critical events in a sale.  We thought that if Dealmaker could talk to us then it would tell us that such a critical event was happening.  So, we adopted the Twitter paradigm, and provided our customers with the capability to follow sales opportunities, accounts and users, as well as integrate their feeds from Twitter and LinkedIn.

It’s back to what I called ‘intelligent social networking for sales’, with instant objective deal alerts. It’s really just keeping your ‘finger on the pulse’ of critical sales events and customer sentiment, all within your Dealmaker environment.

Back to some of my earlier points: the social media technology today allows us to follow topics and people and if we are looking at our vision of what the social network looks like, you do need to follow topics and people, but do it in the context of your sales opportunities, your major accounts. You want to take total control of the information so that you can best serve the customer in the context of what they are doing, not just today, but in the last 3 minutes. So if you can do that and do it while at the same time Pulse is telling you about your deals .. then I think we’re on to something that will really add value for our customers.

We need to provide our sales people with systems that intelligently respond to what they are doing in the context of their deal. We have asked them for too long to be data entry clerks and so we need to combine the value that is in CRMs but do it in a way that is informed by intelligence of methodology, intelligence of analysis, do it in a way that really solves that reward to effort equation for the sales people and that goes across social media, and goes across deal coaching, and goes across sales forecasting, and I think that the bar will continue to be raised and I hope it is raised by our customers to increase the return on effort for every sales person out there.

The podcast is available from Huthwaite’s Business Insight podcast series.

I recently conducted a survey on LinkedIn to determine what sellers view as their biggest problem at the moment.  The result is pretty definitive.  It’s all about the pipeline baby!

So, I’ve revisited a post I did about a year ago which was called The 10 Truths of Pipeline Management. I’ve updated it to reflect the impact of Social Networks, and now there are 13 rules!

At the end of this post – after the 13 rules – I include a graphic of the Dealmaker Pipeline Snapshot, that we use here at The TAS Group, and with many of our customers, to effectively manage the sales pipeline.

1. Maintaining a strong sales pipeline, with enough qualified opportunities at each phase in the pipeline, is the only way to avoid the quarter-end crunch.
2. Pipeline Velocity is a lot more important that Pipeline Volume.
3. Your pipeline is a better predictor of the medium and long-term health of your business than your sales forecast – and they are two very different indicators.
4. Having too many stages in the pipeline is counter-productive. Six is the optimum number of stages in the pipeline.
5. It is futile to determine the value of a pipeline by multiplying the value of each opportunity by the probability of it closing. You rarely get a % of a deal.
6. You can’t depend solely on marketing to fill the funnel. You must generate your own leads. If you don’t look constantly for new opportunities, you lose control over your destiny.
7. A healthy pipeline will have the right blend of deals, in terms of size. If you want to fill a barrel with rocks and maximize the usage of the capacity of the barrel, you have to fill the gaps between the rocks with stones or pebbles. It’s the same with your pipeline.
8. Pipeline stages have no inherent value in terms of deal progression. It’s only the customer related actions tied to each stage that gives meaning to the progression of deals through the pipeline. Clear deliverables (based on evidence of customer actions) must be linked to each stage.
9. You need an algorithmic measure for each stage of the pipeline to determine whether you have enough opportunities at each stage. Consider the time to close, the probability of closure, and the target revenue to calculate the value you need.
10. Deals that are inactive (have not been worked on for more than 60 days) should be cleared out of the sales funnel and sent back to marketing. Otherwise you’re given a false sense of the value of your sales pipeline.
11. Customers (or prospects) are entering the sales cycle further down the funnel now as they are using Social Networks to research solutions before they invite sales people into the conversation.
12. Unless you’ve established yourself as part of the ‘recommendation chain’ many of these opportunities will never enter your funnel, they will be closed by someone else before you even know about it.
13. Networking has always been the best way to fill the funnel – now with Social Networks you can use OPM (other People’s Money) to generate buyers – not just opportunities.

For more info on the how Social Networks can be used to impact sales, you might want to visit this other post: 10 Steps to Intelligent Social CRM for Sales.

In 1995, I read a book called Discipline of Market Leaders by Michael Treacy and Fred Wiersema.  This publication was highly lauded, and I know I followed the hypothesis set out in the subtitle of the book – Choose your customers, Narrow your focus, Dominate your market – in each of the companies I’ve run over the past 15 years. The more specific message of this excellent book was that a company had to choose one Value Discipline, and excel at that discipline.  The choices of Product Leadership, Customer Intimacy and Operational Excellence are easy to understand, and the authors set out cogent arguments as to why one of these must take prominence; the others being relegated to less important consideration.

I don’t believe their thesis is valid any longer.

Since The TAS Group was founded (2005), I think we’ve done a pretty good job at achieving Product Leadership in the sales effectiveness market.  Our methodologies in Opportunity Management and Account Management -  rich and competitive in capability when we bought the business from Oracle in 2006 – have continuously been improved.  Our Dealmaker Intelligent Sales Performance software platform, is I believe, unique in the sustained value it delivers to our customers.  We are frequently complimented by our customers on the quality of our global network of experienced consultants who support the delivery of our sales effectiveness solutions around the world. Combining all of these (and recognizing that I’m completely biased) we could credibly claim to have a Product Leadership position. Indeed we been acknowledged as such by ES Research for each year since their ranking began. But is this enough?  I don’t think so.

Here’s the thing. For about the last 5 years, I’ve been of the opinion that Customer Intimacy, as a primary business discipline is not optional. No matter whether you’ve got the best widget or consulting service in the world, or not, providing a world-class customer experience needs to be your primary reason for being.

If you can’t afford to resource for customer delight – then you should reduce your marketing spend, and re-allocate funds accordingly.  Generating leads is a waste of money if you can’t service your customers.  In fact customer service is really the new marketing.

If, in your product development organization, you have competing product features vying for funds, you must resolve that tension by asking the question “which feature will deliver most value to my customer?” and let that be your sole arbiter for product management.

As you know, when the the volcano erupted in Iceland last month, millions of people were stranded around the world. When Michael O’Leary, the CEO of Ryanair (the low fares airline, and a model of Operational Excellence) said he was not going to compensate anyone for the inconvenience,  it wasn’t just the volcano that was fuming (sorry!). Sentiment on Twitter erupted (sorry again!) and the fall-out was explosive. (OK I will stop the puns now.) Within 24 hours there was a remarkable u-turn.

The old adage of ‘Customer is King’ is more relevant today than ever before, and one of the main reasons for that today is the rapid growth of Social Networks and the evolving development in Social CRM. Paul Greenberg (his exceptional blog is here) writes of Social CRM as a business strategy and philosophy but more particularly refers to it as ‘a company’s response to customer’s ownership of the conversation’.

If you’re to believe Axel Schultze (another wonderful resource), there is a dramatic change in the behavior of buyers, and the sale process needs to be fundamentally reconsidered – once again acknowledging that the customer has taken control – this time of the buying/selling engagement.  Axel would suggest that the old model of reference selling is broken, and that everything is determined by the customer experience, not just after a sale, but more particularly in recognition of a tectonic shift in the actions of a buyer before a sales engagement begins.

The triad of social media, economic volatility, and increasing buyer sophistication in the marketplace, have combined to  throw down the gauntlet, and bar has been raised. The discipline of market leaders is now a multi-faceted one. You need to have the best product.  To scale your business in an increasing agile environment you need to be operationally excellent. But both of these disciplines must be guided by the sustained value you deliver to your customers – before, during, and after the sale.  Product features must be prioritized in collaboration with your customers. Operational efficiencies should be designed to deliver cost savings, ease the buying process, or transfer operational benefit to your customers.

The prerequisites of survival have evolved, and the attributes of tomorrow’s market leaders are uncompromising in each of the three dimensions of Customer Intimacy, Operational Excellence, and Product Leadership – all guided by the vision of delighting your customers.

Delighting your customers is not optional.

This post harks back to one I wrote last year seeking to uncover when situations are not always as they seem in a sales situation.  The title borrows from  Jimi Hendrix’s individualistic anthem “If 6 was 9″. With Hendrix epitomizing the existentialist voice of the 1960s, the lyrics refer to constant change, counterculture, and things not being what they appear. It comes to mind again as I observe the difference between those who get by, and those who constantly make breakthroughs in their careers, and consequently contribute to the companies they work for, the customers they serve, or the teams in which they participate or lead.

On the surface, sometimes it is hard to differentiate between the 6 and the 9.  Both turn up for work every day.  They may be equally capable. Experience may appear to be equal, and often their professional training is the same.  Does that mean though that they deliver the same results – Hell No!

I reprise this “If 6 was 9″ conundrum because I believe we’re entering a period of massive change, turmoil and opportunity, and the catalysts of progress will undoubtedly be the 9s in your organization.  We’re seeing tremendous confluence of technologies, industries heretofore separate – and in some cases sacrosanct – are morphing into new manifestation of new paradigms that borrow the best and throw away the rest. The Agile Imperative I referenced in a previous post has become a de-facto survival guide. The ubiquity of information, and pace of innovation in its delivery, transforms former value communicators into redundant empty vessels, their space being taken by those who, each and every day, craft new ways to create value.  Positioned differentiation is being overtaken by true value difference, and demographic shifts in age and economic profile are coloring a different landscape to the picture we’ve all been more or less comfortable with.

Questions being asked by commentators and analysts a lot more erudite than this blogger should give real cause for concern to those who believe they have things figured out.  For example, many wonder whether traditional marketing (certainly in a B2B sense) is relevant any longer.  Those in print media living by the paid ad are seeing the impact of that every day.  The rise of Software as a Service is now accepted as a real threat to elements of the traditional software business. But more and more this ubiquitous network that is the Internet, particularly in the Web Squared world, is threatening traditional service businesses.  Peer to peer advice is three times more likely to be followed than ‘interested party’ advice. Customer experience is therefore a more powerful marketing engine than marketing. Social media had been the catalyst for the creation of independent listening posts.  Broadcast doesn’t work any more. Context is everything, and context is determined by the customer – not by the vendor.  Social media, which in many ways is still barely nascent, is exhibiting a rate of change we’ve never seen before.  Myspace was the darling that was quickly overtaken by Facebook, whose crown was quickly stolen by Twitter, now being challenged as the hottest thing by FourSquare.

If you accept that any of this is true then you should be worried – unless you’re the one genius in the world who has figured the solution to this out all by yourself, or if you’re not surrounded by people who you can truly classify as 9s – not 6s masquerading as 9s. If you’re not a little bit scared; then look for around and commit to memory what you see – because you might not be seeing it for long.

Those in leadership positions in companies of all sizes have an opportunity every day to make decisions that will prove to be terminal for their company, department or business unit. New rules apply, and you need to have a great team around you to understand the evolving mixture and respond quickly.  At The TAS Group, I consider myself very fortunate to be surrounded by some truly great people.  Those that influence where we go, what improvements we make to our Dealmaker Sales Performance Automation platform, who inspire the  evolution of our sales process and methodology inspiration are those who exhibit the attributes of a true 9.

• They show up wherever they can possibly make an impact
• They are fully immersed in our business
• They care about what might impact our customers
• They research our industry, our competitors, our partners, our customers
• Their thirst for knowledge is insatiable
• They’re never afraid to say ‘I don’t know what this means, can you help?’
• They accept failure – but don’t admit defeat too early
• They like to win
• They never dismiss competitive threats, but rather look to see what we need to do to improve our differential advantage
• They are always confident, but never arrogant
• They respect all other perspectives, seeing alternative views as an opportunity to learn
• They’re never afraid to challenge anyone’s opinion, knowing their challenge will be respected in turn
• They are never afraid to say – I screwed up, and take remedial action
• They are not afraid to take risks, except where it could detrimentally affect our customers
• At their core they are passionate
• They understand the need to have a strategic long-term view, and a short-term execution focus
• They exhibit what we call ‘Rightful Impatience’, an urgency to improve and progress, earned through effort and application

As a consequence, I’m driven to self-improve to lead this team.  I’m always a little scared – but I have no fear. I owe that to the 9s.

I love my sports, I’m sure a lot of you do, and I keep myself up to date across a number of sports, and follow a couple of teams closely.  I’m what you might call your typical sports fan.  A great working definition of a sports fan is someone who, when their team are playing and they can’t attend or watch the event because of another commitment, becomes distracted and nervous during the game, wondering how the game will play out and what the result will be.  They are made more anxious by the fact they can’t cheer their team on in person or from the comfort of their television or laptop.

You can make the same argument for Sales 2.0 and our use of B2B social networking resources.  There are two types of sales 2.0 professionals.  The first type is the genuine fan.  They use the web and web 2.0 tools as an integral part of their job, constantly researching, monitoring and contributing to the progress of their key accounts and the opportunities they’re pursuing.  In a recent blog post, Guy Kawasaki shared with his audience how he tweets, and it was no surprise that he has Twitter open and is in front of it during his entire working day.  He must also, though he doesn’t go into this detail in his post, manage his time well so that he can still produce what he needs to during his day, while still communicating with and receiving communications from his community.  When they’re not in front of their laptop, Type A’s are in motion, perhaps going to a meeting or conference, but still with smart phone in hand, keeping abreast of anything that might have a bearing on their sales success.  They’re probably high achievers within their sales organization, and if they have chosen well, their own Sales 2.0 orientation is matched by their organization’s strategic approach to social networking tools as the principal way to get found.  (If they’re not high achievers, I would guess they’re using the tools too much for personal or social reasons and damaging their selling productivity.)

This is the type that gets anxious, distracted and nervous when for some reason – on a plane, at a function, out of coverage, broken device etc – they can’t be online and stay current with their business.  They wonder what vital snippets of information they could be missing to help them progress their opportunities, or deepen their relationships.  Their finely tuned real-time information relay systems let them down and suddenly they’ve got no digital pulse, no heartbeat.

Then there is the second type.  They pay lip service to the new technologies.  They still work the traditional way, but do a little sales 2.0 here and there, when they’ve time, without truly understanding how the mechanism works, and wondering why they can’t see the benefit, or the return on their invested time.  When they need to find something out, or get something done, web 2.0 tools are not their first recourse.  They – or their company – perhaps view web 2.0 and sales 2.0 as a bolt on, something that isn’t really mainstream yet, something that doesn’t directly impact their top line.  It’s just the latest shiny metal toy, a fad that will prove to be yet another time-suck for them.  This is the type that built a web presence 10 or 15 years ago, and wondered why customers-with-orders didn’t come to them in obedient droves.  Or perhaps they’re just part of the late majority, people who are not technophobes, but tend to be later than most to get an mp3 player, a flat screen HD-ready television, or a digital reader.  What they have is serving them just fine at the moment.

This is the type that doesn’t miss a beat when they’re off the grid.  When they’re away from work, they’re away from the digital stimuli that remind them of work.  Time to disappear for a while, some hard-earned ‘me time’.  They might forget to log into their social media resources for a few days, but, no harm, they can catch up on the last few messages and they’ve probably not missed anything important.  As long as they stay focused on what has worked for them so far, they’ll be fine.  It’s all about focus, right?  Minimize the distractions and stay close to the traditional avenues that money flows through, that’ll work, always has.

So am I saying there that the most successful sales people are naturally technology-inquisitive and early adopters?  That your adaptability to change governs how successfully you can sell?  Possibly, and possibly not.

What do you think?  Are you a genuine sales 2.0 fan, or are you just paying lip service to it, making token gestures from time to time?  And can you be a successful luddite in a web 2.0-savvy organization, or a social media genius in a backward business?  I’d love to read your views.