By Oscar Berg, Future Office Evangelist
June 08, 2010 - 1:10 AM
Every now and then you come across a real-world story that can be used to build a great business case. The one I’m going to share here is about a mid-sized company in the services industry and the business case is for Enterprise 2.0.
The company is offering three different kinds of services to their customers. Consequently, they are organized in three different business areas (divisions). To deliver these services, they have facilities at a number of different locations. Each facility delivers one of their services to customers within a specific area. The divisions more or less act as different companies under the same flag, offering different services to different customer groups. This also means that each division has its own sales force and that the division’s sales force is distributed across many facilities. In practice, the sales people are tied to a specific location and service. The sales people all heave clear sales goals and bonus system based on sales volume.
Now comes the tricky part; the same customer can actually have a need for services from more than one division. A customer of one division can actually present a sales opportunity for one or both of the other two divisions. These opportunities are rarely used today, which means there is an opportunity to boost company sales by increasing cross-selling.
It is basically up to the sales people (and possibly also the people delivering the services) to identify cross-sales opportunities and to communicate these to the sales people at the relevant division. Identifying a need requires someone to visit the customer’s facility in person. For this to happen, the sales person who visits the customer must be in a “need identification mode”. Since the sales person is visiting the customer in another purpose – to sell a specific service – he (most sales persons are men) needs to make the effort to think outside of his own box. Furthermore, he must make the effort to communicate a sales lead to someone at the relevant division, which involves identifying the relevant person to communicate it to. If you look at it this way, it is quite an effort and there is a considerable risk that the effort will not give anything back in return.
The company’s own studies have shown that, in practice, it is only those sales persons who already know someone at the other divisions who relay leads to other divisions. If their informal networks do not reach into another division, they simply don't relay any leads to that division. Instead they focus their efforts entirely on their own sales. That is perfectly rational. The cost-benefit of sharing does simply not work in favor of sharing. Even though the company offers a bonus for anyone who shares leads with other divisions, this does not seem to have any effect. It is the personal relationship that counts.
The reason why it is this way spells R-E-C-I-P-R-O-C-I-T-Y - responding to a positive action with another positive action. That requires a relationship based on trust to happen. Sales people who know and trust a sales person at another division and share a lead with that person have good chances of getting sales leads back in return. Suddenly, the value of sharing becomes evident and makes the effort worth it. That return of sharing obviously is higher than the sales bonus. In addition, knowing someone at the other division also decreases the effort of sharing. The cost of sharing is lower as it is easier and faster to share the lead.
So, how come that most sales people from the different divisions don't know each other? Well, to start with they are separated from each other both by organization and geography. Once a year, the sales people within a division meets each other in person, but all sales people from all divisions never meet. They do have a great CRM system that everybody uses and likes. The CRM system makes it possible for them to be aware of any sales activities relating to their customers, including those performed by sales people from other divisions. But it does not connect sales people and make them talk, get to know each other and share leads back and forth. Like most CRM systems, it primarily focuses on planning and keeping track of sales activities, not connecting the individuals in the sales force directly with each other.
It’s clear that a company like this one can greatly benefit from enterprise collaboration powered by social software. By connecting the individuals in their sales force across organizations and geography, they have the opportunity to boost their sales and increase their profits.
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