Reading the Signals: 5 CRM Lessons From Moneyball
What's the connection between baseball and CRM? In a word, data. As Moneyball author Michael Lewis has illustrated, analysis of data can contribute toward building a winning team. Likewise, it can help build sales success. However, there's more than one way to crunch the numbers, and taking the most effective approach toward analyzing data makes all the difference.
01/17/13 5:00 AM PT
With less than a month to go before pitchers and catchers report to baseball spring training, I'm increasingly thinking of the national pastime -- and specifically, about Moneyball, the Michael Lewis book adapted into film two years ago.
For those unfamiliar with the story, it's the tale of how Oakland Athletics General Manager Billy Beane used data -- not the old-fashioned opinions of scouts -- to build a team that challenged for the American League pennant on a budget.
Beane is often hailed for his ability to find undervalued talent by relying on data -- specifically, on statistics like on-base percentages and walks, things that are not glamorous stats but can lead to wins.
What does any of this have to do with CRM and selling? Well, there are several lessons to take away from Beane -- lessons that are both instructional and cautionary. We'll have a whole season to learn new ones, but the following are a good start.
1. Look for the right things in the data...
Beane learned to search for players who reached base more often than others -- not guys who hit home runs or stole bases or simply collected hits. For baseball, this is a key indicator. Out of the tremendous amount of data generated by baseball, it's the best way to understand which players participate best as part of a team offense.
A slugger can hit homers, but can he be a contributor to multi-run innings, and can he contribute as often as a player who walks a lot and gets a reasonable number of hits? Who's going to cost you more -- the slugger or the slap hitter with a good eye?
By not becoming enamored of the flashy stats, Beane has been able to gain insight that's helped his club. In CRM, there's an even more enormous amount of data collected than in baseball. The challenge is to realize when the usual statistics are not as effective as others. Discovering these hidden data points gives you a genuine competitive advantage.
2. ...but don't fall in love with data at the expense of all else.
The A's have had teams of overachievers. But the A's success in 2002, contrary to what the movie Moneyball asserted, was built primarily around a core of young players discovered by scouts using the methods the film proceeded to mock. Miguel Tejada, Eric Chavez, Ramon Hernandez, Mark Ellis, Eric Byrnes, Tim Hudson, Mark Mulder and Barry Zito all came up through the A's farm system.
When these core players departed after 2006, the team did not fare as well. From 2007 to 2011, the club had a tepid 381-428 record. This corresponds to the period when the Moneyball statistical analysis was applied to college and even high school players entering professional baseball (a period before many athletes learn the nuances of working a walk or waiting for the right pitch to hit).
In CRM, leaning too heavily on the data often results in a similar disconnect between perceived understanding and results. Unless there's an appreciation of what has worked traditionally -- and more importantly a process to use the data to enhance what is already working -- understanding may not lead to results. Make sure the human element has its place in your customer efforts. You sell to people, not to data.
3. Executive buy-in is critical if change is to succeed.
Beane's bargain-basement approach was accepted in Oakland, where co-owner Lew Wolffe is notoriously cheap (and not particularly adept at nurturing customer relationships with the Oakland community, as his ongoing and vocal desire to move the team would attest). However, his approach is at least in sync with Beane's -- and thus Beane's new stat-base approach was met with no resistance from management, if not total acceptance. In other words, management bought in to Beane's approach.
Lack of executive buy-in is a killer for CRM. Even when the objectives of senior management clearly point toward an improvement in CRM strategy, often it's hard to obtain full backing from the same managers for budget for CRM implementations, causing some to stall out at an early stage. Even if budget is available, it's still hard to convince many execs to model the CRM behaviors they'd like to see from their employees.
4. Don't be afraid of personalities.
One hazard of the A's approach has been that it tends to send players on their way to other teams just as fans get to know them. Worse yet, players with charisma are almost targeted as trade-bait: Eric Byrnes, Nick Swisher and Bobby Kielty were prime examples of exciting, hustling players who were sent packing at the height of their Oakland popularity.
The converse was true for managers: low-key selections Art Howe, Ken Macha and Bob Geren did little to rock the boat but didn't do much to propel it, either -- but they didn't complain and were compliant to management. When they did push back, they were let go.
In a sales organization, you're going to have big personalities -- and you're going to have to manage them. While some behavior is intolerable, most sales people can be themselves without harming your business. If you're running the show, your prime objective is to run the show -- it's not to be perceived as the winner of the big personality contest. Let your characters get the attention they want if they're getting the results your business needs.
5. The goal of baseball -- and selling -- is winning.
The A's are always said to do well, considering what they have to work with. Since 1997, when Beane took over as GM, the club has gone to the playoffs six times and made it as far as the league championship series once. That's six times in 15 years -- and many say that's pretty good, considering what they're working with.
Ultimately, like sports, business is about winning. If you went to your vice president of sales and said, "we were among the final eight four times, and in the final four once, but we didn't win any of 'em," you would not expect the response, "pretty good, considering what you had to work with!"
In fact, your VP would very likely ask you to tear apart your methodology and find out where you're failing. Billy Beane's received a pass on this, but most sales people would not be so fortunate.