If you hear Stephen Stills singing in your head as you read this story, don’t be surprised.
The lines There’s something happening here / What it is ain’t exactly clear from his Buffalo Springfield hit “For What It’s Worth” still apply 50 years later when you look at ProSales 100 dealers’ attitude toward customer relationship management (CRM) software. Of the 89 dealers who answered our CRM questions, 22 said they already have it and 15 others planned to install a CRM system, but 52 said they have no plans to get one.
Why? Well, to quote another Stills song:
Forty-nine reasons, all in a line
All of them good ones, all of them lies
Lies overstates the case, but the rest holds up. When you talk to consultants and dealers about CRM’s relative lack of acceptance even among the nation’s biggest LBM firms, the sense emerges that some of the official reasons paper over deeper problems. Such as: Who really runs the company?
OSRs have engaged in customer relationship management for as long as there have been Rolodexes, internal sales meetings, and water coolers to joke over. But a lack of standardization made sharing impossible or even dangerous; witness the episode of “The Office” in which Dwight Shrute ruins a sale because he doesn’t understand the crazy color-coding system that his boss used to keep notes on clients.
CRM really took off once technology started making it possible to create a database that could be updated, shared, and reviewed by a group. Today it’s standard equipment in thousands of businesses nationwide … but nowhere near as popular within LBM.
Inside LBM's Resistance
Bill Tucker, former head of the Florida Building Material Association, says he often hears one or more of five reasons why dealers say they see no need to adopt CRM:
1. For years, computer software vendors over-promised and under-delivered. Why should CRM be any different?
2. The upper management of many independents don’t use computer programs. They and their sales reps are intimidated by learning something new.
3. We’ve always done it this way, and it works. Why change?
4. It is trouble enough getting my OSRs to complete sales orders and follow up on deliveries; I’ll never get them to keep up with a CRM system.
5. I want my salespeople out with customers, not fooling around with some software program.
Tucker sees these as minor problems that let dealers avoid tackling a bigger problem. “The real value of CRM is the customer data belongs to the company and not the salesperson,” he says. “Too often, and often purposefully, the salesperson knows, believes he owns, and sequesters customer information. He or she believes, correctly, that this knowledge is transportable to another position. Companies that do not require non-competes and allow their salespeople to control customer relations are setting themselves up for problems.”
Larry Adams, former chief of the Southern Building Material Association and now manager at Robinson Builders Mart in Newton, N.C., agrees with Tucker but then goes further. “Most customer knowledge is presently in the hands and brains of our salespeople, not the company,” he says. “That is why so many dealers are scared of losing their salespeople to a competitor. CRM helps track and keep that contact and even personal customer information.
“The value of a CRM system isn’t in the product or the features it offers; it’s how it’s used,” Adams adds. “And just like anything of value, this takes time. That is where the lack of use in our industry lies. Many dealers will not take the time to research, buy, and train their employees. The reason salespeople dislike and resist CRM is that they see it only as a management tool and not a real sales tool. We fail to take the necessary time to prove to them that it is a true sales tool that will make them more productive—and ultimately more money.”
For sales consultant Rick Davis, the prospecting side of CRM is so important he believes it should be renamed Customer/Prospect Relationship Management, or C/PRM. When promoted and used properly, CRM will be welcomed by sales reps as a marketing support tool and lead generator, he says—instead of making them feel like they’re being watch by Big Brother.
That’s the approach taken by Stine Lumber of Sulphur, La., which uses a grid that tracks both the progress of a project and the types of products sold to the builder. “I believe this system changed our sales team’s philosophy on selling future categories as opposed to the current phase at hand,” says David Bushnell, Stine’s director of pro sales.
“If we wait to discuss windows and doors with a customer until after the framing pack is delivered, our competition has already sold the windows and the rough openings are established. On numerous occasions, we’ve converted a prospect to a job and sold that customer their windows, exterior doors, and exterior door hardware before they leave our office that same day.”
Stine also uses its homegrown CRM system to track prospects for up to a year before their projects start. “By doing this and keeping good notes, a relationship is built that helps prevent penetration by a competitor that just gets wind of the lead at the time it begins,” Bushnell says.
Stine’s use of CRM to monitor prospects is something that many other dealers haven’t gotten around to, but that Bushnell believes is important. ”It takes some of the cold out of the cold call,” he says.
Scott Thurber, vice president of Associated Building Supply, Auburn, Calif., views his CRM as a way to marry marketing with sales. Associated specializes in windows and doors, and it has a strong retail component, so in its case the search for prospects never ends. Associated’s CRM system captures leads automatically from the company’s websites, search engine work, emails, direct mail, and events. It also delivers the company’s promotional emails and updates the website, enabling the specialty window and door dealer to go “from creation to execution to measurement in one system,” he says.
Changing the Conversation
For all its fans, CRM system implementations often fail because management and staff lack the commitment, understanding, and often the skills to make them succeed. Gary Bowman of TW Perry in Gaithersburg, Md., says one of his company’s biggest issues at first was getting salespeople to see CRM’s direct benefit. “They saw the data entry as ‘another thing to do,’ and although they recognized some benefit from facilitating the marketing efforts of the company, they didn’t see a direct impact on sales to their customers,” Bowman says. “Their buy-in is critical.”
Staffing is another issue. “People have realized they need people to manage, and lots don’t have those people,” consultant Ruth Kellick-Grubbs says. “And we’re talking about changing behavior of the sales team. It takes a lot not just to manage effort, but to manage a culture change.”
“I have seen many teams take on the CRM implementation over many years only to see limited paybacks due to lack of commitment on the part of the sales teams to input and system management,” said Steve Lochbaum, CFO of Professional Builders Supply in Morrisville, N.C. “Given the lack of internal priority from my teams on this, I do not have CRM implementation on the project list right now.”
Over in Salt Lake City, Sunroc’s Jeremy Hafen views CRM from the perspective of someone who worked in management outside of LBM before he joined the company. “I’m not so sure in our industry if the CRM tool itself is the issue,” he says, “but instead it’s the needed shift of mindset in the industry to require their business developers and sales reps to use such a tool. I’ve noticed in our market that nobody has a history of using a CRM. Because of that, those who have been in the industry a long time have a hard time shifting their mindset to using one.”