OPINION

Reading the Signals: 5 CRM Lessons From Moneyball

With less than a month to go before pitchers and catchers report to baseball springtraining, I’m increasingly thinking of the national pastime — and specifically, aboutMoneyball, the Michael Lewis book adapted into film two years ago.

For those unfamiliar with the story, it’s the tale of how Oakland Athletics GeneralManager Billy Beane used data — not the old-fashioned opinions of scouts — to builda 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 notglamorous stats but can lead to wins.

What does any of this have to do with CRM and selling? Well, there are severallessons to take away from Beane — lessons that are both instructional andcautionary. 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 — notguys who hit home runs or stole bases or simply collected hits. For baseball, this isa key indicator. Out of the tremendous amount of data generated by baseball, it’s thebest 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 canhe contribute as often as a player who walks a lot and gets a reasonable number ofhits? Who’s going to cost you more — the slugger or the slap hitter with a goodeye?

By not becoming enamored of the flashy stats, Beane has been able to gain insightthat’s helped his club. In CRM, there’s an even more enormous amount of datacollected than in baseball. The challenge is to realize when the usual statistics arenot as effective as others. Discovering these hidden data points gives you a genuinecompetitive 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 towhat the movie Moneyball asserted, was built primarily around a core of youngplayers discovered by scouts using the methods the film proceeded to mock. MiguelTejada, Eric Chavez, Ramon Hernandez, Mark Ellis, Eric Byrnes, Tim Hudson, MarkMulder 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. From2007 to 2011, the club had a tepid 381-428 record. This corresponds to the periodwhen the Moneyball statistical analysis was applied to college and even highschool players entering professional baseball (a period before many athletes learnthe 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 betweenperceived understanding and results. Unless there’s an appreciation of what hasworked traditionally — and more importantly a process to use the data to enhancewhat is already working — understanding may not lead to results. Make sure thehuman 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-ownerLew Wolffe is notoriously cheap (and not particularly adept at nurturing customerrelationships with the Oakland community, as his ongoing and vocal desire to movethe team would attest). However, his approach is at least in sync with Beane’s — andthus 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 seniormanagement clearly point toward an improvement in CRM strategy, often it’s hardto 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 hardto convince many execs to model the CRM behaviors they’d like to see from theiremployees.

4. Don’t be afraid of personalities.

One hazard of the A’s approach has been that it tends to send players on their wayto other teams just as fans get to know them. Worse yet, players with charisma arealmost targeted as trade-bait: Eric Byrnes, Nick Swisher and Bobby Kielty wereprime examples of exciting, hustling players who were sent packing at the height oftheir Oakland popularity.

The converse was true for managers: low-key selectionsArt Howe, Ken Macha and Bob Geren did little to rock the boat but didn’t do muchto 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 tohave to manage them. While some behavior is intolerable, most sales people canbe themselves without harming your business. If you’re running the show, yourprime objective is to run the show — it’s not to be perceived as the winner of the bigpersonality contest. Let your characters get the attention they want if they’re gettingthe 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. Since1997, when Beane took over as GM, the club has gone to the playoffs six times andmade 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 presidentof sales and said, “we were among the final eight four times, and in the final fouronce, but we didn’t win any of ’em,” you would not expect the response, “prettygood, considering what you had to work with!”

In fact, your VP would very likely askyou to tear apart your methodology and find out where you’re failing. Billy Beane’sreceived a pass on this, but most sales people would not be so fortunate.

CRM Buyer columnist Chris Bucholtz blogs about CRM at the CRM Outsiders. He has been a technology journalist for 17 years and has immersed himself in the world of CRM since 2006. When he's not wearing his business and technology geek hat, he's wearing his airplane geek hat; he's written three books on World War II aviation.

2 Comments

  • Thanks for the entertaining read, Christopher!

    When utilizing social CRM, the lessons you learned from Moneyball can certainly apply. Targeting and micro-targeting specific data pertaining to your clients, has become a critical point with the compiled information relayed from your social CRM. The next point is the never forget that a CRM stands for customer RELATIONSHIP management, and you are absolutely right when stating that leaning too much on the data can lead to a disconnect between the client and the business. Even so adoption must be a top-level priority for social CRM integration, because this will delegate the multiple functions of social CRM, to all of a business’ departments and therefore will deter data stagnation. As a member of the GreenRope support staff, adoption is a critical recommendation that is always expressed. Furthermore, this will take pressure off of the sales staff and allow the whole business to participate, while simultaneously forming a personal relationship with each individual client.

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