The Hip Bone Is Connected To The Thigh Bone, The Thigh Bone….

No, I’ve not decided to convert this blog into a lesson on Anatomy, I actually want to talk about systems.  But I don’t mean systems–technology, I mean systems–the way thing work, how things interrelate, specifically in acquiring and retaining customers.

The way we acquire and retain customers is a complex inter-relationship of different activities and processes.  These processes occur within our organizations, for example through sales and marketing, with our customers–their buying processes, and in the surrounding community–our competition, opinion leaders, and others.  All these “subsystems” are connected together, they depend on each other, respond to each other.  Likewise, these systems don’t work well in isolation or without the other systems.  For example, a selling process is meaningless unless aligned with a customer engaged in a buying process.

The complexity of these systems and their relationships cause us to break them down, focusing on subsystems and components.  We start to specialize in these subsystems, for example, marketing may focus on demand and lead generation.  We in sales focus on our selling processes.  It’s a natural and probably the only way to manage the complexity and begin to design, develop, execute and manage our customer acquisition and retention processes.

Designers and engineers try to manage the complexity of the interrelationships between subsystems by trying to define clean interfaces–defined inputs and outputs.  The theory being as long as we keep the inputs and outputs the same, we can change anything within the subsystem and not have an impact on the overall system performance.  We try to do that as we define our marketing and selling processes — it’s perfectly reasonable and puts some manageability to what we do. 

Designers and engineers design subsystems, trying to keep clean interfaces, optimizing the overall system.  Here’s where some of the challenge comes in.  First, as much as we try, it’s very difficult to keep clean interfaces — even in designing “products.”  For example, when we develop mechanical assemblies, we design within certain tolerances.  As we try to fit those parts together, each subsystem that worked on its own–used the expected inputs and delivered the expected outputs, now the system as a whole doesn’t achieve it’s objective.  In the case of mechanical assemblies, this problem is called “tolerance stack-up.”  Each part meets its tolerance requirements, but when I try to fit them all together, they don’t fit.

We see the same thing in out processes for acquiring and retaining customers.  Marketing may define a perfect lead nurturing and qualification process, it may fit the “specs” perfectly; but when it is “assembled” with the sales lead/qualifiation process, it blows up and doesn’t work.  Something is lost in the interfaces, something is lost in the interrelationship of these processes.

The problem gets more complex — at least with sales and marketing.  Designers and engineers know that all the subsystems must come together and work as a whole.  They understand that missing major subsystems means the thing doesn’t work.  A car without a braking system doesn’t works very effectively as a car.

We seem to forget the need for “clean interfaces” and the view of the “whole,” looking at our customer acquisition and retention processes–sales and marketing.  CSO Insight’s 2010 Sales Performance Optimization Study provides some interesting clues about these issues.  We design our sales prospecting strategies around achieving certain goals and objectives, yet we cut marketing budgets for lead generation.  We base our quotas around certain sales performance levels, but we cut training budgets so we don’t develop the skills of sales people to perform at the expected levels.

Now let me add another level of complexity.  In sales and marketing, the interfaces are never clean.  Moreover, they are constantly changing.  Using my car analogy, it’s kind of like installing a new braking system while driving at top speed on a curvy mountain road–covered with ice.  It’s not a trivial problem to solve.  One of the ways we start managing this is simple, we start talking to each other.  The days of marketing and selling “silo’s” are over.  We have to have to coordinate our programs, processes, goals, investments.  We need to start collaborating.  We need “interlock” what we do with the other functions in our organization.  (As a side note, Andrew Rudin is looking at this same issue from a slightly different perspective, “Fools Gold:  Searching For The Most Important Step Will Ruin Your Sales Process.”  Take the time to read it, it reall compliments some of the points I am making.)

I’ll stop here — but there’s more, so far I’ve been focused on our marketing and selling subsystems.  Now imagine adding the customer buying and community subsystems into the mix.  I’ll talk about these in the next blog post.  I’ll leave you sitting at the edges of your seats for now.

There are a couple of things that I’d like to conclude with:

• We do have to break down these processes, developing high performance subsystems.  There is so much that can be gained by optimizing these subsystems and processes.  All the work that is being done to improve marketing effectiveness and processes is critical to our organizations.  Likewise, all the work that we do in improving sales processes, performance and effectiveness is critical.
• While we are “solving” those problems, we must be cognizant that what we do with these subsystems may not work when you look at the system as a whole.  Ultimately, we have to look at how all the pieces – parts fit together.  Does the “whole” work together to achieve the results we want?  Are we making changes to one subsystem that adversely impact another subsystem? 
• As sales and marketing professionals, we need to be thinking in “systems” terms.  We need to think how subsystems fit into the overall system and how we interlock on programs, processes, goals and objectives.

What do you think?

Stay tuned, the real challenge is still ahead!