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Information technology applied to sales, marketing, and customer service is powering stronger customer relationships.
How would your company like to turn half of its qualified leads into sales averaging $45,000 each? That's exactly what's happening through a combination of good process-management and customer-relationship-management software deployed at Compaq Computer Corp.'s Littleton, Mass., call center -- the company focal point for qualification of leads from all marketing programs. When a lead proves encouraging, the center builds a package of information drawn from customer-service, Dun & Bradstreet, and its own customer-interaction records and delivers a qualified lead into the sales channel. Resellers enter the Compaq Partner Network (CPN), a secure Web site, to extract their leads and post updates on active leads. The direct Compaq sales force receives leads via e-mail. Once the lead is active, its progress through the sales process is managed by a suite of sales-force automation solutions that also help management forecast volumes and product mix. Those same customer data appear in marketing-automation programs, allowing creation of highly targeted follow-up campaigns. In fact, 200 qualified leads per week are fed to the channel -- the close rate is 50% -- and new revenue from the program totaled $234 million in 1998. "Our qualified leads are a lot more than just a name, address, and product listing," says Howard Berg, Compaq's vice president of customer-relationship management. "They present a well-rounded view of the customer. With this new system, now when the sales function interacts with the customer, he feels like he has some equity and relationship with Compaq, and that's the 'R' in customer-relationship management." This integration of sales, marketing, and customer-service applications operating off a common database is but one reflection of the new breed of customer-relationship-management (CRM) technologies designed to take these relationships through their life cycle. These technologies are available from companies such as Aurum Software Inc., Vantive Corp., Clarify Inc., and Siebel Systems Inc. (the Compaq application) to name only a few. They offer easier-to-use Web interfaces, more robust functionality, and simpler integration with back-office systems such as enterprise resource planning (ERP) and accounts payable. AMR Research Inc., a market-analysis firm in Boston specializing in enterprise applications, predicts CRM software licensing revenues alone will grow from $760 million in 1997 to $7.5 billion in 2002, a 58% compounded annual growth rate. Clearly it's a hot market. Getting The Hang Of It The proof of the pudding is that end users are deploying CRM solutions faster, more effectively, and at less cost. A study by Insight Technology Group (ITG), a CRM consulting firm in Boulder, Colo., that every year evaluates 200 to 300 CRM projects, found:
Total implementation cost of sales-force automation dropped for the first time, to $10,385 per salesperson in 1998 compared with $13,039 in 1997.
While 76% of projects came in late in 1997 -- an average of seven months late -- those numbers were cut to 41% and four months in 1998. Percentage of over-budget projects dropped as well.
"In the early '90s CRM initiatives were all proprietary projects or started with packaged software that required total customization," says Jim Dickie, a partner at ITG. "Today, because of the robustness of the packaged applications, companies can get something up and running quickly with minimal changes to off-the-shelf software and then, because of extensible architecture, tweak it to meet specific organizational needs over the next six to 12 months." The Force Be With You Sales-force-automation (SFA) applications are designed to shorten selling cycles, increase customer face-to-face time, and guide the sales process. These solutions provide functionalities for sales management (sales forecasting) and for sales personnel in call planning and execution (contact managers), and to power the selling process on the call itself. For example, Dow Chemical Co., Midland, Mich., wants more pric-ing power in the hands of salespeople and is evaluating on-call price-modeling applications. With these solutions, salespeople build total-value packages on the spot, juggling pricing, terms, and volume for performance-plastics products. Likewise, Compaq's field sales personnel are using quote generators to create special pricing for complex systems while in front of the customer. Because most sales are finally consummated by resellers, approval is required. Even so, quoting time has been reduced from five days to one. Compaq sales personnel also use another SFA functionality called marketing encyclopedia, a virtual storehouse that includes "information on where we have competed with Dell and what we did about it to be successful," says Rick Risinger, Compaq manager of field operations-North America, Houston. Product-configuration functionality is finding a home in the hands of Pitney Bowes Inc. salespeople as a result of a May to October 1998 trial. It helped complex-system sales to jump 45%, complex-system order cancellations to drop by 15%, and order-processing time to decrease 45%. Previously, when incompatible units of postage/mailing systems were incorrectly grouped together, the results included an inability to install units at the customer location, double shipments, poor customer relationships, and order cancellations. The configurator, based on technology from Trilogy Software Inc., Austin, creates a perfectly validated order of components that will work together. Deployed to 800 reps in November 1998, the multimillion-dollar project has an anticipated ROI of 37%. The next step is to have the configurators actually drive back-office manufacturing processes. "This is not about just a nice tool for a sales rep to have -- this is an enterprise competitive-advantage initiative," says Russ Wilson, vice president-business operations and supplies marketing at Pitney Bowes, Stamford, Conn. "Now we have a lower cost structure, faster response, a degree of accuracy that is perfect every time, and greater customer satisfaction." Team Effort While new SFA functionality boosts the effectiveness of individual reps, broadly deployed SFA applications also promote team selling. At San Francisco-based PG&E Corp., an SFA solution from Aurum, Santa Clara, Calif., helps coordinate the efforts of its four separate unregulated companies, which offer a portfolio of energy-oriented products and services. Each company has its own sales force, but the value provided to the customer is in the product mix. The key role of technology, then, is to help present an informed, unified face to the customer. Via the SFA tools, sales personnel can see the activity at each account for each sales group and track implementation of new systems. Using SFA integration with financial back-office applications, salespeople can access a complete customer financial profile and current status re-garding payments, outstanding balances, or billing disputes. "We think having this knowledge speaks well for building a relationship with the customer," says PG&E vice president and CIO John Keast. "And it's just as important to consider what it's intended to avoid, and that is looking stupid in front of the customer." Implementation of technology to support customer-facing applications can meet resistance, especially from the sales force, a crew notorious for their free-wheeling, highly personal approach to selling. "Salespeople don't like to have to adopt someone else's methodology and approach," says Andrew Sheats, director of corporate strategy for database-technology purveyor Sybase Inc., Emeryville, Calif. Sybase has deployed SFA to facilitate team selling across its worldwide customer base, 35 global sales offices, and multiple technology partners. Cohesive worldwide strategies and consistent discounting are just two benefits Sybase gets from the applications from Siebel Systems, San Mateo, Calif. "It takes a concerted effort and a lot of proof points to get over the resistance to change," Sheats says. To sell the systems internally, Sybase management pointed to things such as 20 minutes to prepare a quote rather than two days; in-depth knowledge of an account and its history when visited for first time; and leveraging what's going on worldwide at global accounts. "Knowing what's happening in Tokyo on an account you're selling in Milan opens up opportunities that aren't available without that knowledge," says Sheats. "But you need to be engaged long enough with the systems for these proof points to manifest themselves." One of the most valuable tools for sales-force management is the SFA functionality called opportunity manager. This solution allows management to understand the velocity of an opportunity through its sales cycle and facilitates forecasting. Computational Systems Inc. (CSI), Knoxville, which supplies predictive maintenance equipment, worked with a consultant to establish a more solutions-oriented sales approach directed to clients' executive levels. To support the new selling methodology, CSI deployed SFA applications from Vantive, Santa Clara, Calif., that guide the salesperson through the new process, made up of a series of steps depending on the product and the nature of the opportunity. "With a button click on the system, the salesperson tells everyone that he has decided to act on a particular opportunity," says Shawn Carson, CSI director-customer support. "Then he goes through his solution-selling stages and checks off his progress through the system. A regional sales manager gets all this information from his salesmen rolled up to him, so he can see, for instance, his top 10 opportunities, and what stages they're in. He also can have a roll-up depending on the stage of the opportunity, and apply embedded algorithms that help create a forecast. So you provide excellent visibility to sales management regionally and nationally on your best opportunities and direct your energies and resources accordingly." Marketing-automation systems seek to have the same kind of automating and empowering impact on marketing that SFA has on sales. At Hewlett-Packard Co. (HP), marketing-automation technology from Rubric Inc., San Mateo, Calif., helps route leads in 13 Asian countries to appropriate resellers from a base of 4,000; mines a database of purchasers and alerts resellers for timely sale of renewable supplies; and tracks return on investment of marketing programs. For instance, money spent on a trade show in Manila can be compared with the conversion of leads from that show into revenues. "Database mining is a big part of this," says Dave Welch, Asia/Pacific commerce project manager at HP's commercial channels division, Palo Alto, Calif. "But marketing automation is coupling database activities with business rules to carry out a campaign and measure its results -- and in a way that can be done without intervention by the IT function, which is fantastic." In call-center/customer-support, the CRM-technology emphasis is on capturing knowledge rather than simply information, reusing that knowledge to increase efficiency, and allowing troubled customers to better help themselves through, for instance, access to frequently-asked questions (FAQs) via the Internet. Rockwell Automation, a $4.5 billion Milwaukee-based provider of manufacturing-control systems and motors/motor control systems, created a uniform system of support call centers in North America, Europe, and Asia for both customers and corporate users. The objective of the network and new technology implementation is more efficient, uniform disposition of troubleshooting questions. Employing support-oriented CRM applications from Clarify, San Jose, Rockwell customer-support engineers create some 1,400 new cases and update 2,500 cases daily from customer inquiries. These cases are searchable over the Web by product, error codes, and key words. Product-support centers also build FAQs for recurring questions. Going to the searchable system has increased the hit rate on existing solutions by 30% to 80%, depending on product line, with call volume boosted 20% to 60% with the same manpower. The Opportunity Today, the question is not so much how to support CRM processes -- there is functionality aplenty in the marketplace maze -- but which vendor to choose to ensure long-term upgrade and support capability. Ultimately, the intense competition among CRM software vendors can only benefit user companies with lower prices, even more robust functionality, and easier integration.
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