The 2005 CRM Elite, Part 2

"Sometimes the biggest liars sell computer software. They don't use it, but they sell it." Harsh words, but ones that describe how Randy Adler, president of Kansas City Audio-Video, felt after running into problems with the IT consultant for his previous CRM package. Kansas City Audio-Video, or KCAV, has been providing products and services to businesses, schools, houses of worship, and government agencies since 1953, when its Midwest business dealt mostly in overhead projectors and dictation equipment. Since that humble beginning, KCAV has grown into a wholesaler and retailer selling multimedia presentation and A/V resources to its original core clientele nationwide. As far back as 2001, when Adler was the company's systems manager, the company was struggling with its initial CRM purchase, SBT ACCPAC, which was customized through a value added reseller (VAR). "We bought a product that the VAR didn't understand, and completely failed to maintain," Adler recalls. "The VAR was about three years behind versions relative to the manufacturer, so I was never on the current version of the program--I had to change the code to the most current version myself, and there were always bugs." Adler eventually upgraded KCAV's computers to run newer, more powerful Windows versions of the software that would support the company's expanding operations.

This didn't do the job. "I made a $40,000 mistake when I went to the Windows package." The bad reseller experience influenced Adler when searching for a new solution. "I made up my mind that I'd never work through a reseller, or anybody who didn't write their own code. If you don't understand the product, you're not going to make it work for me," Adler says. With this in mind, he proceeded to evaluate 24 different software packages for KCAV, looking for the best combination of e-commerce, accounting, and management tools for a business with hundreds of suppliers and thousands of SKUs. In the first third of 2004 Adler had narrowed down the field to three contenders: Microsoft Great Plains, Navision (part of Microsoft Business Solutions), and iCode Everest Standard Edition. All three would suit his business needs, so it came down to cost. "The support fees were going to bury us if we went with Navision or Great Plains," Adler says. "Everest was on par with Great Plains, but it would cost a whole lot less to run and support. It also looked easier to use, which was another benefit." Once KCAV had selected Everest as its new CRM system, it was up to iCode to make the installation happen. Shivon Dosky, iCode's director of professional services, remembers the situation he had to send his installer into. "Our client had really been sold a bill of goods that was never delivered," he says, "so obviously we faced a lot of distrust and lack of enthusiasm."

To counter this hostile atmosphere, Dosky sent Diana Hess, customer support, training, and services manager, to manage the installation. "Diana's extraordinary with customers. She's been with us the longest, she's always very calm, and great at building trust." Hess took Adler and his staff through a comprehensive business process review, outlining how iCode was there to do more than just install software. "We made them realize we're not just another vendor," Dosky says. "We show the client what we're going to do for them and how it will help them do the job." Six weeks after KCAV selected iCode, the firm was up and running on the new software, with eight users trained and ready to go. This is a smaller number than KCAV used to support: "The fundamental reason for building up our computer resources was to grow the business without growing the staff," Adler says. "It allowed us to do more business with fewer people. We were able to cut five people from customer service, as well as one from the accounting department. I've recouped the cost of Everest, and our accountant gives Everest an A plus."

The business has indeed grown, but personnel have been added back to meet increased needs. Everest is now supporting 15 to 20 KCAV workers at any one time. Ease of training is one of the benefits realized. "The ability to bring in a new employee and get him or her up and running on the software is much easier with Everest than with the other products I evaluated," Adler says. According to Dosky, KCAV's purchasing group also gained real insight into sales and inventory. But he thinks the real win was in e-commerce. "Everest gave them the power to conduct sales on the floor, on the phone, and on the Web, without losing track of inventory flow." Everest reduces inventory costs by letting sales agents create drop-ship orders so vendors ship items straight to the customers. KCAV has $2,500 in average daily transactions, much of it through credit cards, so any problem with processing will gum up the company's step-by-step order verification process. Everest allows KCAV to distribute the workload when resolving inconsistencies in orders. "Spreading that authority over more people helps us save up to three weeks," Adler says. Staff efficiency and productivity has improved. "[Everest] allows us to share information across our whole business," Adler says. "If a customer is buying a product at a certain price, everybody can see that." The system also eliminates rekeying of data, and processes daily changes much faster. "My old software program took 45 minutes to reconcile data at the end of each day," Adler says.

"With Everest, I am out the door in less than three minutes at the end of the day. It's beautiful." Business has continued to pick up for KCAV, and in March 2005 the company completed an upgrade to Everest E-Commerce Advanced. The new product uses a DQL database, which has resulted in better stability for the KCAV installation. Adler says, simply, "No bugs." Recalling the situation under which iCode undertook the first KCAV implementation, Dosky says, "The second installation was much smoother." --M.L.

Analytics Fubon Financial Holding Company
Real Results

Fubon Financial Holding Company received this year's CRM Elite award in Business Analytics for achieving an estimated 850 percent overall return on investment from implementing the Teradata enterprise data warehouse, data consolidation, and CRM solutions. Fubon operates in an extremely competitive Taiwanese financial market, where improving marketing effectiveness and efficiency is critical. The company was the aggregation of business units spanning many product lines, so it needed to leverage its customer base to maximize cross-sell opportunities and manage customers across divisions. The overall goal was to become more customer-focused. "Like most markets, customers expect a lot and our competition is tough," says C.F. Lin, Fubon's CRM project leader. "Being able to stay ahead of our competitors and provide a superior level of service is paramount to achieving a leading position in the Taiwanese market."

The company wanted to move from product-based marketing to needs-based marketing, a shift Teradata worked with Fubon to accomplish. An assessment of current activities was made, then Teradata provided recommendations of more efficient processes, along with 15 employee workshops, according to Craig Morrison, CRM consulting practice team leader for the Asia Pacific Teradata division of NCR. "We built 10 to 15 campaigns within the first month of operation [and] within weeks [were] measuring results," he says. "That was a big step for Fubon and it was a steady step because we were there with them." Employees involved in the new processes were retrained to have the appropriate skill sets to fulfill new job functions, and executives spent time communicating with staff members to explain why the new event-based marketing direction was necessary.

As a result of those efforts, the company has evolved from creating a small number of mass marketing campaigns with low response rates to a high volume of event-driven campaigns with a small target audience but substantially higher response rates--sometimes as high as 60 percent. Fubon identified more than 400 events, each based on customer needs, to target the right customers at the right time through the right channel, and launched 22 campaigns from May 2004 to January 2005. It attributes more than $1.8 billion to the 15 campaigns currently running. "The ROI from our very first campaigns was impressive," Lin says. "While we were used to [conversion] rates of 1 to 5 percent, our first batch of campaigns were a phenomenal success. We achieved an average of 18 percent success, with some campaigns achieving as high as 30 to 60 percent responses." Success was measured primarily by an account opening. Fubon increased the number of Platinum cardholders by more than 40 percent and usage of the cards increased by 25 percent. The company also discovered that 2 percent of its customers contribute more than 90 percent of the bank's overall profit. With that knowledge, Fubon uses its database marketing programs to more effectively reach those valuable clients.

Overall, according to Lin, the company has seen a 20 percent improvement in telemarketing conversion rates, 30 percent improvements in assets-under-management and three to five times more profitable leads. Customer-facing staff can receive information on the same day the campaign is launched. Marketers can analyze and develop campaigns on daily detailed data and management can see daily updates on the organization's key performance indicators. "Our system scans the database each night to identify customers who signal their need for attention. We can then contact them within 24 hours and service their need," Lin says. "Not only are we more successful, [but] our customers feel the difference in treatment. They actually appreciate us contacting them, rather than having to complain about junk mail or annoying phone calls. We meet them when they have a need."

Despite these successes the company has much room to improve, according to Lin. Fubon wants to use the CRM environment to do a better job tracking the progression of leads through each step of the campaigns, identifying the levels of campaign compliance, response, and success at each step or channel. "This makes it very easy for management to identify the strong and weak points and focus efforts to fix the issues at the right place."

Additionally, the individual business units need to focus on continued campaign development and implementation of the campaigns already identified. "We are continually looking at ways to help our customers. We know there are many more opportunities to act on. Basically, if it makes sense to act on 20 events-based marketing campaigns that help our customers at the time they have a need, it makes sense to act on 200, possibly even 2,000," Lin says. "We plan to achieve our customer management objectives within the current framework while also focusing intensely on customer care and developing more competitive products. We still have a long way to go." --A.D.

End of Part 2. Click here to read Part 3.