Everyone’s talking about CRM. But is it just a lot of talk? Or is the way people approach CRM fundamentally changing? In fact, it is imperative to make a change in how you think about CRM. But why now?
Statistics paint a startling picture: marketing, sales and customer service executives—the ones charged with managing the customer relationship—are under incredible pressure. Marketing executives average 4 years on the job, chief customer officers average 3, and sales managers are faced with only 2 years to make a mark. Why the decline? And why so fast?We’re facing a CRM marketplace that is experiencing seismic shifts. Marketing, sales and customer service executives are under increasing scrutiny to deliver measurable results with a consumer who is constantly changing, with data that is hard to capture, and with metrics that are poorly defined. And those who can’t adapt to these new challenges are being shown the door at an increasingly rapid rate. So, what do you do when the CUSTOMER, the RELATIONSHIP and the way you MANAGE both are undergoing such dramatic change?
To start, let’s take a look at the first part of the equation: the changing customer.
WHERE customers do business is changing. Online commerce is skyrocketing, in both revenue and the sheer number of customers. The result? Operating hours and physical locations are a thing of the past. Businesses must now be available wherever and whenever customers want to interact.
WHEN customers want answers is changing. Mobile technology has accustomed individuals to convenience, scalable pricing and instant access to communication and information—and they’re taking action in a far shorter time than ever before.
HOW customers make decisions is changing. And there is more competition for your customers’ attention than ever.In 2011, customers got their information from 10.4 resources. In 2010, that number was 5.3. Almost half. With attention a scarce resource, you need to make sure you are engaging them at every opportunity. And where are more and more customers turning their attention? Social media.
Customers are quickly starting to rely on social media to help them make buying decisions—whether influenced by their peers or online reviews from total strangers. Delivering exceptional customer service now means taking these influencers, reviews and word of mouth into account and rethinking strategies. Strategies that must be more personalized. But personalization requires data, and customers are demanding greater control over, and security for, the data that companies collect from them.
So how do you address this new customer—a customer whose attention you must fight for, whose trust you must win and whose expectations you must work harder to meet?
You have to rethink the relationship. To get CRM right, you have to understand the customer and how he or she is changing. But next, you have to understand the relationship. What are the new considerations?
Today’s customers are geographically, culturally and linguistically diverse. They have more options when it comes to products and price. And they demand greater customization. Business leaders are listening: in fact, 88% of business leaders – and an astounding 95% of those heading the most successful organizations – said getting closer to their customers was the top priority for realizing their strategy over the next five years.But getting closer isn’t easy. As one consumer products CMO from Singapore puts it, “The perfect solution is to serve each consumer individually. The problem? There are 7 billion of them.” A problem, indeed. Because customizing a product to 7 billion consumers first and foremost needs data—a lot of it.
And as any business leader knows, there’s no shortage of data. In fact, we’re drowning in data. But, as one Swiss CMO says, “What we lack are true insights.” What are you doing to bridge the gap between data and insights?
Insights come from capturing the right kind of data. Unfortunately, most companies capture only data from transactions. They often overlook areas that could help them deepen their client relationships.
But for those companies that do use data to foster relationships, the impact on their bottom line is dramatic. IBM’s recent CMO study found that organizations that consistently outperform the competition also invested more effort in capturing and using data to foster customer relationships.
We’ve seen that businesses have the opportunity to collect far more data on their customers than before. And we’ve learned that customers are wielding more influence. The result is, the customer relationship must be increasingly personal and customized and must deliver immediate results. Harnessing the data that fosters relationships—and not just transactions—will be increasingly critical to success.How can business leaders go from managing transactions to managing relationships?
To get personal with your customers, you have to get to know them. You have to have the right data. But 23% of organizational data is actually incomplete, out of date or inaccurate.
Start by gathering the right data—data beyond transactions. Next, ensure that data is accurate, up to date and—most importantly—actionable. Only then can better decisions be made.
Next, you’ll need the right tools to get the most from that data, and 2/3 of marketers say they are already planning to use tools to better manage their data. Many are reconsidering their CRM systems altogether, adding analytics tools to help them make better decisions. And marketing automation tools to make those decisions faster—in real time.
We’ve just seen how the new approach to managing the customer relationship means managing your data and doing so with better tools—but managing your budget is of equal importance. Unfortunately, the CRM systems of the ’90s were one-size-fits-all, which means integration and customization are extensive and expensive—making it even harder to adapt quickly to the change that the marketplace demands. Today’s CRM solutions are modular, scalable and user-friendly—built on open architectures. That means you can quickly adapt and grow, all without wasting time, resources and budget.
And it’s not just CRM that’s adapting to the times. People are changing, too. In fact, sales, customer service and marketing leaders are increasingly learning new skills to better manage and use the tools at their disposal. They are becoming proficient in social media, customer analytics and mobile apps, and they are building up their knowledge and use of CRM to keep up. And integrating these skills all together creates a powerful new way to manage the customer relationship.
We’ve taken a look at how the customer has changed. How the relationship we need to build with the customer has changed. And how the tools and skills needed to manage both have changed as well. So, what’s next for CRM? How do we bring it all together?
Marketing, sales and customer service leaders need to focus on three new principles to get CRM right:Customer: Deliver measurable results against constantly moving targets.Relationship: Gather relationship-building data, not just transactional data. Management: Customize your CRM to your workforce and business needs.So how do you achieve these?
Cloud-based CRM gives you the flexibility to scale your system quickly to meet new marketplace demands. Open CRM means enabling your teams to access CRM remotely via their mobile devices. CRM systems should consider the mobile and social behaviors of your customers—how can you reconsider what data you capture in order to incorporate insights from these behaviors?
Data lives across your business. And 85% of it is unstructured. In other words, it’s not categorized. And it’s not working together to form a full picture of your customer. But it can.
That’s what Westmont College did. Westmont needed to increase donations, which, as most of us know, are a big part of every college. But how do you increase donations when you don’t have a clear picture of who your donors are or how to make the most of every opportunity? Westmont needed to improve productivity and integrate donor campaign information with its CRM solution and Datatel software.
So they looked at a tool that would integrate data into a centralized, easy-to-use and easy-to-manage console. This gave them a single view of their donors, their operations and their opportunities. The results were dramatic.
The college’s IT team helped support 59 fundraising events over 9 months.They achieved their $70 million objective.Westmont improved the quality and accuracy of its information.
As Joel Banez, the Director of College Software, relates: “WebSphere Cast Iron Cloud Integration has allowed us to achieve a lot of ROI. I’m happy to report that in the 11 months since the campaign began in April, that we’re almost 50% of our way to our goal in less than one year. And I really feel that the tools we’ve chosen, the partners that we’ve worked with, our commitments to the cloud, have all made a huge difference in the effectiveness that the team currently enjoys.”
Integration is just the first step in making the most of your data. But once you have a single view of your customer, how does your team work together to deliver a consistent experience and answer your customers’ questions quickly? That’s where collaboration makes a big difference. Currently, many midsize businesses are still doing things the old-fashioned way – with traditional, nonintegrated customer management, sales tracking and marketing systems. But that will change for many within the next 1–3 years. In that time, executives will begin to see how important integrated, unified communications and collaboration solutions can be to delivering a better customer experience and faster answers to customers’ questions.
Certainly, gaining a single view of your customer data and enabling your team to work together to solve problems are two critical steps towards improving sales, marketing and customer service. But as we’ve seen earlier, getting from data to insights isn’t always so simple. That’s why 90% of companies are turning to analytics to bridge the gap. And of those who haven’t applied analytics yet, 50% plan to do so in the next 24 months. Those are your competitors. Those are your peers. For a midsize company to compete in a changing marketplace, analytics isn’t just a nice-to-have tool. Analytics has become essential to success.
That’s the lesson FootSmart learned. FootSmart wasn’t getting the conversion and sales impact from their on-site search tool results. And they wanted to delve in to find out why.
So, using an IBM analytics tool, FootSmart uncovered some key insights—actionable insights—that they learned from, acted upon and turned into tangible results.
Impressive results, indeed. FootSmart saw an 82% improvement in search conversion over 6 months. An over 90% increase in cross-sell item sales. A 19% increase in average order value when cross-sell items were purchased. And 65% of their sales are now generated online.
The new approach to CRM is integrated. It integrates analytics to get more from your data; it integrates data from different sources so you can get a single view of the customer; and it enables your teams to work more collaboratively to quickly solve your customers’ issues and deliver a consistent brand experience. It can be on the cloud or in-house. It can be scalable and it can work with mobile. But taking an integrated approach to CRM isn’t just the right thing to do—it’s the smart thing to do. Because your budget depends on it. When you invest in a more integrated approach, not only are your business results stronger, but your ROI is higher. 6 times higher, to be exact. So what does a truly integrated approach that gets this kind of ROI look like? It has to deliver a full view of the customer. It has to enable you to be proactive, not just reactive. It has to integrate your many sources of data. It’s best when you can work through a single point of contact instead of across multiple vendors with multiple solutions. It involves an ecosystem working together—not a one-size-fits-all application. It is enabled for collaboration between teams and it takes into consideration the mobile needs of your customers and sales teams.
Doing all this can seem overwhelming. And you are already juggling multiple responsibilities and wearing many hats. But you don’t have to tackle your CRM alone. Research shows that business leaders are looking to outside partners for help. Particularly when it comes to improving their sales management, customer and data analytics, and relationship marketing.
No matter who you choose to work with, one thing is clear: there is a change imperative when it comes to CRM. Increase your ROI, deliver a better customer experience, improve your service—and so much more. When you integrate your applications. When you enable social collaboration among your teams. And when you use analytics to get more from your data—you’ll have a smarter approach to CRM.Make sure your business keeps up with the changing customer.Thank you.
1. The tenure of marketing, sales and customerservice executives is shorter than ever.• Less than 4 years for marketing executives• Less than 3 years for Chief Customer Officers• Less than 2 years for sales managers SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
2. THE GROWTH OF ONLINE COMMERCEBy 2013, e-commerce is expectedto grow to $963B. In 2011, 178.5 million people shopped online By 2015, an estimated 201.1 million people will be shopping online SOURCE: ―A smarter approach to CRM: an IBM perspective,‖ IBM in collaboration with Frost & Sullivan. Oct 2011.
3. MOBILE TECHNOLOGY USAGE of consumers use smartphones while shopping in-store. of consumers like instant access to information and mobile offers. 1 in 4 American households are wireless only ½ of households with 18–34-year-olds are wireless only SOURCE: The Mobile Movement Study, Google/Ipsos OTX MediaCT, Apr 2011. ―A smarter approach to CRM: an IBM perspective,‖ IBM in collaboration with Frost & Sullivan. Oct 2011.
4. SOCIAL MEDIACustomers got their informationfrom an average of 10.4 resources in 2011. SOURCE: Google/Shopper Sciences, Zero Moment of Truth Automotive Study, US. Apr 2011.
5. SOCIAL MEDIA37 million Americans use social mediabefore buying. SOURCE: ―A smarter approach to CRM: an IBM perspective,‖ IBM in collaboration with Frost & Sullivan. Oct 2011.
6. THE CUSTOMER MINDSET
7. THE DEMAND FOR PERSONALIZATION88% of business leaders know they need to get closerto the customer. The perfect solution is to serve each consumer individually. The problem? There are 7 billion of them. – Consumer products CMO, Singapore SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
8. THE DATA EXPLOSIONEvery 2 days, we create as much information as wedid from the dawn of civilization to 2003. We’re drowning in data. What we lack are true insights. – Life sciences CMO, Switzerland SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
9. MANAGE THE TRANSACTION,NOT THE RELATIONSHIPMany companies are gathering only transactionalinformation.Not relationship-building data. SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
10. THE BENEFITS OF INVESTING INTHE RELATIONSHIPCompanies that use data to fosterrelationships outperform those who don’t. SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
11. THE RIGHT DATA23% of organizational data is incomplete,out of date or just wrong. SOURCE: ―A smarter approach to CRM: an IBM perspective,‖ IBM in collaboration with Frost & Sullivan. Oct 2011.
12. THE RIGHT DATATo make the right decisions,companies need data that is both: Accurate Actionable
13. THE RIGHT TOOLSOver 2/3 know they need to invest inmanaging big data. We need to replace our CRM system and are actively looking at a new system that will address our future plans—including social media, ROI analytics and the global company strategy. – Professional services CMO, Germany SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
14. THE BOTTOM LINETraditional CRM solutions can havean ROI as long as 3–5 years. The complexity of integrating a new system with other systems too often destroys the ROI of the new system. – Food, beverage and tobacco executive, United Kingdom SOURCE: ―A smarter approach to CRM: an IBM perspective,‖ IBM in collaboration with Frost & Sullivan. Oct 2011.
15. THE RIGHT SKILLS MIXSales, customer service and marketing leaders arerelying on new skills and technology. Many of them are keeping up. Are you? SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
16. The New CRM INTEGRATED CRM
17. Step 1: MOBILE, MODULAR, OPEN CRMMoving CRM to the cloud offers cost savings,scalability and flexibility. Keep up with customers’ mobile and social behaviors Access your own CRM capabilities through mobile
18. Step 2: A SINGLE VIEW OF YOUR DATAUp to 85% of data is unstructured. A smarter approachto CRM can bring it together. Get a real-time 360-degree view of your data SOURCE: ―A smarter approach to CRM: an IBM perspective,‖ IBM in collaboration with Frost & Sullivan. Oct 2011.
19. CASE STUDY – WESTMONT COLLEGEThe need:Donations are a big part of every college.To meet its objectives, Westmont needed to improveproductivity and integrate donor campaign informationwith its CRM solution and Datatel software. SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
20. CASE STUDY – WESTMONT COLLEGEThe solution:After seeing it in action, Westmont adopted the IBMWebSphere® Cast Iron® Cloud Integration portfoliosolution because it: Allows users to be self-sufficient Has an easy-to-use interface Utilizes a centralized management console SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
21. CASE STUDY – WESTMONT COLLEGEThe results: The college’s IT team helped support 59 fundraising events over 9 months They achieved their $70 million objective Westmont improved the quality and accuracy of its information SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
22. CASE STUDY – WESTMONT COLLEGEThe happy customer: WebSphere Cast Iron Cloud Integration has allowed us to achieve a lot of ROI. I’m happy to report that in the 11 months since the campaign began in April, that we’re almost 50% of our way to our goal in less than one year. And I really feel that the tools we’ve chosen, the partners that we’ve worked with, our commitments to the cloud, have all made a huge difference in the effectiveness that the team currently enjoys. – Joel Banez, Director of College Software, Westmont College SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
23. Step 3: COLLABORATION TOOLSNearly 70% of midsize companyexecutives will have integratedunified communications andcollaboration solutions within12–36 months. SOURCE: ―A smarter approach to CRM: an IBM perspective,‖ IBM in collaboration with Frost & Sullivan. Oct 2011.
24. Step 4: ANALYTICS-DRIVEN INSIGHTAnalytics has a 90% adoption rate.And 50% of those who haven’t adoptedplan to do so within the next 24 months. SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
25. CASE STUDY – FootSmartThe need:FootSmart wasn’t getting the conversion and salesimpact from their on-site search tool results. SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
26. CASE STUDY – FootSmartThe solution:An analytics tool developed by IBM helped FootSmartturn actionable insights into tangible results. SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
27. CASE STUDY – FootSmartThe results: 82% improvement in search conversion over 6 months Over 90% increase in cross-sell item sales 19% increase in average order value when cross-sell items were purchased 65% of sales are now generated online SOURCE: From Stretched to Strengthened: Insights from the IBM Global CMO Study. Oct 2011.
28. THE INTEGRATED APPROACHA Smarter Approach to CRM offers anROI of nearly 6 to 1 per dollar invested. Traditional CRM Smarter Approach to CRM Partial view of the customer Full view of customer Reactive Proactive Disconnected data Integrated data Multiple vendors Single point of contact Stand-alone CRM application CRM suite/ecosystem Pre-social Enabled for social In-house solutions Flexible solution: available in-house, cloud or hybrid SOURCE: Harris, Roy. ―A Study in Returns: CRM Software ROI Wins Praise; for Analytics It Wins Raves.‖ ComputerWorld, 12 Mar, 2011. http://news.idg.no/cw/art.cfm?id=0F5E0A05-9AB8-E65A-AC811F6BD421C35E
29. EXTERNAL PARTNERSHIPSBUILD INTERNAL CAPABILITIESTurn to outside vendors to improve your capabilities.The largest growth is already being seen in salesmanagement, customer and data analytics, andrelationship marketing.
30. A SMARTER APPROACH TO CRM CANBRING IT ALL TOGETHER. Make sure your business keeps up with the changing customer. Get the full story at ibm.com/midmarket/us/en/crm.htm