Six companies that set out to get measurable results, then met or surpassed their expectations.
For the rest of the September 2004 issue of CRM magazine please click here
ENTERPRISE SUITE CRM
Mascot International is outfitting its customers with an appreciation for speed.
The midsize Danish company designs, manufactures, and distributes uniforms and other workwear. It is Europe's fourth-largest workwear manufacturer, with customers in Austria, Denmark, Germany, Iceland, Sweden, Switzerland, and the United Kingdom.
A British customer recently called his Mascot sales director to express gratitude for a swift order delivery. "He said that when he places an order in the morning, he has the goods in his hands two days later," says Mascot International co-owner and CEO Michael Grosbol. "That's faster than our competitor can deliver his order, and our competitor is located 50 miles down the road from our customer."
Grosbol credits this and similar customer compliments to his company's 2003 implementation of mySAP CRM.
Prior to the implementation Mascot's most pressing challenges reflected the typical concerns of a clothing manufacturer: inventory imbalances, inefficient uses of labor, and the spotty accuracy of sales and revenue forecasts. According to Grosbol, his company occasionally mismanaged customer relationships due to communication breakdowns among sales representatives, sales assistants, and marketing assistants. In some cases sales assistants answering customer inquiries were uninformed about important pricing discussions between sales reps and customers. Customer support and marketing groups often received updates to client accounts a month after the customer made the changes.
"That no longer occurs," Grosbol says. "If any of our customer-facing positions discusses anything with the customer, it is entered into the system."
Now when a customer tells a sales assistant the price a sales rep quoted, the sales assistant can confirm that quote with a few keystrokes, instead of putting the customer on hold and then tracking down the salesperson to confirm the price.
Mascot's mySAP CRM implementation represented a move to automated sales processes through e-commerce capabilities that integrated with Mascot's existing back-office SAP systems. Prior to mySAP CRM sales reps manually entered and tracked orders. Now Mascot's customers enter their own order details directly online, and are able to track order shipments in real time without having to speak with a representative. Orders are processed faster and with greater accuracy, says Grosbol, who credits SAP's support team with helping his organization get the CRM systems up to speed quickly and efficiently.
According to Grosbol, the CRM implementation enabled Mascot to turn the Internet into a profitable sales and interaction channel throughout the company's retail distributor network. By automating its sales transaction processes Mascot has accelerated the time-to-sale, and has reduced order-entry errors by 40 percent. Five order-entry positions have been reassigned, and cost-of-service has decreased, on average, by 12 full-time-equivalent hours per day.
The CRM improvements have also generated top-line benefits. Since the implementation Mascot has increased year-to-year sales revenue growth by 7.5 percent, without hiring additional salespeople.
increased year-over-year revenue growth by 7.5 percent;
achieved annual revenue growth of more than 20 percent, without hiring additional internal sales employees;
cut the cost of service, on average, by 12 full-time-equivalent hours per day;
reallocated 2 percent of the workforce to more strategic roles;
reduced order-entry errors by 40 percent.
MIDMARKET SUITE CRM
World-class customers expect to receive world-class support, regardless of the size of the vendor delivering the service. Netegrity, whose security software protects top global companies' massive IT investments, has parlayed that expectation into a competitive advantage, thanks in large part to information that fuels its support of these Fortune 500 firms.
"To do that we really need a complete picture of everything our customers do with us," says Thomas Thimot, vice president of worldwide sales and services. If a customer or prospect joins a Web cast staged by the inside sales team, Thimot says his sales, support, and service forces need to know. The same holds true when a customer or prospect attends a marketing event, takes a direct sales call, has an issue with the software, pays an invoice, or downloads a white paper.
"Our ability to manage the total customer life cycle of our top customers and take advantage of that data is our idea of utopia," Thimot says. "We've really been able to achieve it, primarily because of the use of Onyx and the way we've implemented it and integrated into our other support financial systems."
Netegrity has used Onyx for sales and marketing since 2001. Last year Netegrity installed an integrated contact center solution from Onyx and Interactive Intelligence. Before that implementation Netegrity customers would call in for support, enter their account number, and "end up in the same place, regardless of which product they owned or service level they subscribed to," says Netegrity CIO Brad Nelson.
Today customers are automatically routed to the appropriate assistance based on the product they own, their service-level agreement, and their unique needs. The system also automatically routes customers who have not purchased a maintenance package to a salesperson.
According to Nelson, Netegrity's previous, homegrown customer-support system simply didn't cut it with the global companies Netegrity counts as customers. "They don't care how big you are," he says, "you better be as good as they are when it comes to providing support and service."
Netegrity meets the high expectations of its customers while notching other benefits. The company now handles 45 percent more cases than it did a year ago, without having added staff. Nelson also reports annual savings of $1.5 million due to higher employee productivity, and $300,000 due to having eliminated support for duplicate systems in different business units (the company's support agents are based in Israel, Malaysia, and the United States).
Customer satisfaction has increased measurably, the case backlog has decreased by 40 percent, and the average time to resolve a case dropped by 35 percent.
Thimot also reports that the CRM improvements have sharpened his forecasting abilities and strengthened his sales professionals' negotiating hands. "One of the big validations that someone is going to pull the trigger is when they download 20 pieces of collateral from your Web site," he says. "This information helps us as we enter procurement dialogues with our customers.... That creates value for Netegrity. I view our Onyx implementation as a huge revenue driver."
realized $1.5 million in annual employee productivity gains;
saved $300,000 annually from eliminating support for duplicated systems;
supported a 45 percent increase in case volume, without having to increase staff;
decreased the customer service case backlog 40 percent;
slashed 35 percent from the average time to resolve a case;
increased customer satisfaction 18 percent.
SMB SUITE CRM
Golden Key International Honour Society
The Golden Key International Honour Society's leadership team believes CRM represents a smarter way to work with its partners and members.
The academic honor society's members are undergraduate (juniors and seniors) and graduate students who represent the top 15 percent of their college and university academic classes in Australia, Canada, Malaysia, New Zealand, South Africa, and the United States. Partners, which include Boeing, Ford, General Mills, IBM Canada, and other top global corporations, help fund the nearly $500,000 in scholarships and award programs Golden Key gives to its student members each year.
The motivation for the CRM initiative stemmed from a top-level drive to change the nonprofit organization's funding model. Golden Key's leadership wanted to rely less on student membership fees and more on business partnerships and alliances to support its activities.
"We knew that technology was not going to be a silver bullet, and that the effort would require equal parts people, process, and technology," says Golden Key CIO David Anbari. "We looked at the technology as a platform to support those areas. As we searched the marketplace we weren't interested in a simple sales force automation tool, although that was an area we needed to improve. We also needed to track prospects once they became customers."
After reviewing a variety of solution types and brands Golden Key selected a hosted system from Aplicor, based on its subscription pricing, online delivery, and outsourced system administration. The July 2003 implementation was completed in one month. Forty-five days after the launch Anbari verified a nearly 100 percent user adoption.
Golden Key uses Aplicor to track all business partner interactions, fuel the marketing programs it develops with its partners, and continually monitor the value of the service mix it provides to partners.
The nonprofit organization established three different levels of membership for its business partners based on their donations. Those levels correlate to three different groups of benefits. Before the Aplicor implementation, according to Anbari, it was difficult to identify logical breakpoints between the donation tiers. It was also difficult to determine which business partners were the most valuable and which partners might actually have been costing Golden Key more than their donations.
That is no longer the case, and Anbari stresses that the change required people and process improvements, as well as new technology. For example, to create consistent communication Golden Key revamped its marketing collateral, which previously suffered from a lack of continuity.
Two central benefits of the CRM strategy have been better access to more information about partners' needs and more effective communications surrounding partner-recruitment efforts with the organization's 330 membership chapters. Additionally, a review Golden Key conducted of its CRM capabilities nine months after the go-live date identified several specific benefits around sales (including a 31 percent increase in the number of partnerships and a
41 percent increase in overall partnership revenues), employee productivity (a 17 percent increase), and training efficiency (new staff members are trained 33 percent faster).
"From our perspective the technology was the linchpin," Anbari says. "The fact that Aplicor is a hosted solution made it economical, scaleable, and extremely easily deployable for us. When one hears about the short time required to get it up and running, I think the conclusion is that it can't be powerful CRM. We've found the opposite to be true. It's incredibly powerful CRM that is incredibly easy to deploy."
Golden Key International Honour Society
increased closable pipeline volume by 60 percent and overall partnership revenue by 41 percent within nine months of implementation;
increased sales conversion rate by approximately 29 percent;
used customer insight to strengthen focus on valued services and eliminate low-value services;
grew incremental sales to existing clients by 19 percent;
improved employee productivity 17 percent, while cutting training time 33 percent.
KLM Royal Dutch Airlines
Some of the most important interactions KLM Royal Dutch Airlines has with its customers take place at 32,000 feet. The airline's most valuable passengers, frequent fliers who have attained Platinum Elite status, greatly appreciate a warm, personal greeting from their flight attendants. KLM's CRM strategy now has the range to capture and capitalize on those and other customer touch points.
The strategy, which began in 2002 and included a two-phased rollout of E.piphany Marketing during 2003, is designed to leverage every customer interaction as an opportunity to improve service, boost satisfaction and, ultimately, increase revenue.
Before each flight KLM pursers receive and review a passenger list that contains each customer's frequent-flyer status. "We simply asked our crew to use that information in a smart way," says Cristina Zanchi, director of CRM.
After the first phase central customer database went live in December 2003, the instances of on-board personal recognition interactions soared from 8 percent to 21 percent in one month. Flight attendants quickly learned that Platinum members appreciate being recognized not only by name, but also by their Platinum-level status. "That makes them feel important to our company," Zanchi says. Judging from the success of KLM's CRM efforts, customers are more responsive, as well.
This year KLM has achieved responses rates ranging from 5 percent to 12 percent in all of its marketing campaigns--well above the industry average of about 2 percent. The company's known customer base grew by roughly 20 percent, and the number of frequent-flier members' email addresses in its database increased threefold. Most important, revenue from known customers increased by 5 percent during a challenging year for the industry.
This success came through a cautious approach. Because a 1997 attempt at CRM never got off the ground at KLM, Zanchi and her team identified six tenets that guided the introduction of new technology and processes: The business side must lead the initiative, not IT; cultural change is just as important as technology; deliver what you promise; think big, start small, and deliver quickly; involve employees and provide them with regular feedback; involve customers and provide them with regular feedback.
One of the most valuable capabilities of the new CRM strategy satisfies the last two guidelines in one fell swoop. Top management now calls regularly on top customers, and the most striking insights of those brief thank-you-for-your-business exchanges flow into E.piphany's central customer database through an easy-to-use Web interface. "The main purpose of this [activity] was to get our top management closer to customers, particularly to our most valuable customers," Zanchi says. "Customers appreciate this personal touch immensely."
That connection between company and customer captures the essence of the relationships KLM's CRM strategy is designed to cultivate. By personalizing each relationship and extracting information from each customer interaction, KLM is generating more, and more accurate, customer analytics that sharpen its sales and marketing campaigns. Overall, the CRM technology and processes support KLM's strategic objective of elevating the value of customer service.
KLM Royal Dutch Airlines
expanded its customer base by 20 percent;
boosted by 300 percent the number of frequent-flyer members' email addresses in its database;
grew revenue from known customers 5 percent.
increased personal recognition of top customers during flights from 8 percent to 21 percent;
captures response rates of between 5 percent and 12 percent (industry average: 2 percent) for all marketing campaigns.
SALES FORCE AUTOMATION
Sealing Devices discovered firsthand that even today, with all the success stories on how SFA can boost results, salespeople often still need convincing. Director of Information Technology Patrick Harris says one of the biggest surprises about his company's 2003 Oracle CRM rollout was the resistance he encountered from salespeople.
"From a higher level, you think, 'New tools to help them be more successful? They're going to love it,'" says Harris, IT director of the manufacturer of O-rings, gaskets, mechanical seals, and other devices for original equipment manufacturers in aerospace, defense, electronics, and other sectors. "I think their largest fear was accountability.
They thought they would have to somehow be more accountable, or accountable in a different way than they were before."
Fortunately, Harris and his team did not underestimate the amount of training that would be needed to help the sales force understand and take advantage of the system's benefits. The CRM initiative involved salespeople early in the planning process, and the initial rollout included only the most essential features of what Harris describes as Oracle's "feature-rich" offering. Additional features were implemented only after establishing a comfort level with the initial rollout.
"People can be easily overwhelmed by technology," Harris says. "A successful CRM implementation requires time and patience. You can't just install, train, and expect everything to work flawlessly. You need to continually reevaluate your sales processes and continually tweak the CRM system to support the processes."
That patience paid off, and it also inspired a second revelation. "Given the initial reluctance our salespeople expressed, we're now surprised by how willingly they use and take advantage of the system," Harris says.
That use has helped Sealing Devices address the four challenges the CRM initiative was designed to attack: a flattening and declining revenue stream from top customers; infringements on Sealing Devices' customer base by competitors; a lack of growth outside the company's traditional customer base; and insufficient support to drive growth. Given the increasingly competitive market, the company's management team aimed to stimulate revenue growth without expanding its workforce.
Harris credits the new CRM processes and technology with having enabled the sales force to focus on pursuing legitimate leads, and on closing business rather than grappling with administrative tasks. Sealing Devices has increased its total sales opportunities by 40 percent since implementing the Oracle system. During that same period the company also has boosted its close rate on sales opportunities from 76 percent to 87 percent. Revenue-to-date during the first full year of CRM capabilities has increased more than 7 percent, compared with several years of relatively flat revenue growth.
Harris also credits the CRM initiative with helping the company instill a consistent customer service response across all sales channels and improve communications between sales channels. Customers no longer receive different answers to questions from inside and outside sales representatives, Harris reports. "Now," he says, "there is no way our sales team would operate without it. Our vice president of sales actually refers to the system's analysis and reporting capabilities as his weapons."
increased business opportunities by 40 percent;
boosted closing rate on business opportunities from 76 percent to 87 percent;
posted a 7 percent increase in year-to-date revenue since CRM rollout;
standardized customer service and sales support across all sales channels.
Marketing at AAA Mid-Atlantic no longer stalls due to low response rates, high mailing costs, or shallow customer insight. More sophisticated analytical capabilities, courtesy of SAS Institute, have been the driving force behind the improvement.
The AAA franchise, which serves American Automobile Association members in Delaware, Maryland, Washington, and parts of New Jersey, Pennsylvania, and Virginia, has been enhancing its analytics for the past two years. That work struck gold last November, when AAA rolled out an SAS upgrade.
Through 2002 and the first half of 2003, AAA Mid-Atlantic's typical marketing campaigns posted an average response rate of roughly 1.16 percent. But a marketing campaign to motivate customers in the Baltimore metropolitan area to apply for an AAA Visa card achieved an overall response rate of 1.78 percent and a 2.21 percent response rate among existing AAA members. That figure set a record as the all-time highest response rate for any AAA club.
"We used SAS to come up with a model of our current base of cardholders," says Bill Peters, director, customer relationship management, at AAA Mid-Atlantic. "We thought that we could at least plumb our own data to identify some of the characteristics of members who have the Visa card."
Peters says that process now sounds routine, but its success has been extraordinary, and rich with additional benefits. The SAS models take less time to create and are more accurate than AAA Mid-Atlantic's previous approach, which required four to five consultants four to five weeks to produce. Now one to two employees produce models in one week.
The switch also has reduced costs and led to more successful marketing campaigns. In the past two years the club has reduced the costs of sustaining membership in its insurance program by 92 percent. The number of active policies that once required 1.2 million pieces of mail to sustain now requires 40,000 pieces of mail.
The club identified about 3.5 percent of its membership that does not represent a good match for several product offerings. Rather than hit those members with marketing pitches, the organization now redirects that money, effort, and time to activities that are more likely to bear fruit.
"We're investing marketing dollars much more effectively," Peters says. "You can really start to cultivate your member relationships with much greater sophistication. Before, we just didn't know who they were."
The club is eager to parlay that knowledge and initial success through other SAS-fueled modeling and marketing activities. "Now I tell everybody, 'Look at the people who have the product, model them, get their core characteristics, and then go after the other group,'" Peters says. "I say it so many times that I wonder if there is something more that I'm missing...but it tends to work every time we do it. We've spent a lot of time developing a segmentation strategy. What we're seeing is really going to be driving the bus for most of our marketing dollars in 2004."
raised marketing campaign response rates by more than 50 percent--and by as much as 92 percent among existing members;
slashed mailing costs for its annual membership drive by 92 percent, while achieving membership target;
reduced time required to produce marketing models by more than 75 percent;
greatly reduced the cost and resources necessary to produce models.
Eric Krell is a freelance journalist based in Austin, TX