Selecting the CRM that Aligns with Your Business

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Selecting the CRM that Aligns with Your Business

  1. 1. © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. L E A D E R S H I P  P R O B L E M SO L V I N G  V A L U E C R E A T I O N Selecting the CRM that Aligns With Your Business August 8, 2011
  2. 2. Selecting the Right CRM That Aligns With Your Business May 11, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Contents I. CRM Software Spend Growing 2 II. Components of CRM 4 III. Client Case Study 8 IV. CRM Roadmap & Evolution 21 1
  3. 3. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Software Spend Growing 2 According to several industry analysts, organizations continue to spend heavily - $11 billion annually by 2010. By 2015, one-third of CRM spending will be software-as-a-service (SaaS). Industry analysts also predict by 2013, spending on social software to support sales, marketing and customer service is set to rise.
  4. 4. Selecting the Right CRM That Aligns With Your Business May 11, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Contents I. CRM Software Spend Growing 2 II. Components of CRM 4 III. Client Case Study 8 IV. CRM Roadmap & Evolution 21 3
  5. 5. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Components of CRM Marketing & Channel Effectiveness • Customer research, assessment and segmentation • Market modeling • Product development and lifecycle management • Customer equity and ROI analysis • Channel alignment and channel profitability Sales Effectiveness • Account and opportunity management • Salesforce automation • Integration with ordering and fulfillment • Order configuration 4 In creating a CRM vision, your company needs to evaluate each of the following components of CRM to determine how they add value, both to your customers and to your business. Service Effectiveness • Contact center optimization • Field fulfillment design and implementation • Billing and collections • Customer churn management Mobile • Field service and sales representatives • Blackberry, Android, iPhone, iPad enablement • Integration with back-end systems in real-time Social CRM • Customer strategy is the corporate strategy • Innovation from both internal and external sources • Integration with social networks (e.g. Twitter, Facebook) • Customer participation
  6. 6. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 5 CRM Glossary “CRM, SFA, Lead Gen, Hosted, SaaS, On-Premise”…there are lots of buzzwords in the software industry that sometimes make it hard for users to understand what they are evaluating. Deployment Method Definition Example Hosted A third party manages the application in a facility that is remote from the user location. Unica, SAP Mid-Sourcing Combines the ease of SaaS with a perpetual license model typically used by companies with security concerns. Neolane On-Premise (Perpetual) The application resides in the same location as the user organization and the organization manages updates, patches, etc. Teradata, SAP, Unica Software as a Service (SaaS) The software is delivered as a service across the internet and is fully managed by the vendor. Salesforce.com, NetSuite, RightNow Technologies, Sugar CRM Some of the systems that may have come top of mind as options for your organization are likely B2B-focused solutions. • Top of mind CRM solutions for a B2B environment include Salesforce.com, FrontRange Goldmine, Sage, Pardot, Marketo, and SugarCRM. • These tools all have strong Lead Generation and Salesforce Automation (SFA) functionality  B2B organizations typically use a sales force whereas a B2C organization relies more heavily on a marketing and call center organizations to sell products and/or services.  B2B marketing specializes in lead tracking and nurturing as a specific target moves through a sales funnel.  Channels for B2B organizations typically include tradeshows, telemarketing, email, direct mail, and web.
  7. 7. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Hosted versus Premise-Based CRM 6 Area Hosted On-Premise Contract Negotiation Control Disaster Recovery Ease of Customization Implementation/ Deployment Infrastructure Requirements Initial Price – Software Integration Investment over Time IT Support Required Reliance on Internet Security Usability Vendor Reliance Pro Con Key When considering your purchase of CRM, the way you want to deploy the solution – hosted versus premise – makes a big difference in terms of price, control and security. Your decision hinges greatly on your strategy. Below is a table that shows the pros and cons of a Hosted CRM solution versus a Premise-Based CRM solution. 1. Hosted CRM may be a better option given a short-term horizon (3-5 years) 2. Integration may be tough with a hosted system. Need to clearly understand current architecture 3. Run a Pilot  Have the vendors simulate an actual campaign and report you require  Most hosted providers offer a 30-day free trial 4. Scrutinize the contract especially if you pursue a hosted option Tips for Vendor Selection & Contract Negotiation
  8. 8. Selecting the Right CRM That Aligns With Your Business May 11, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Contents I. CRM Software Spend Growing 2 II. Components of CRM 4 III. Client Case Study 8 IV. CRM Roadmap & Evolution 21 7
  9. 9. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. The Moment 8 • Our client, a provider of international theme park specializing in destination travel & entertainment, recognized their CRM needs are basic; but, also recognized the need for a solution that allows for growth. • The client has only a few select data sources leveraged for direct marketing today but would like to leverage a broader set of enterprise data down the future. • The client employs fairly basic campaign strategies on a limited basis today. However in the mid to long term future The client expects to expand the usage and increase the complexity of the campaign strategies. • Private Equity owners encouraged the client to negotiate their CRM contract to drive down costs. As a result the CRM solution provider required the CRM licenses be repurchased. • Costs estimated at approximately $400K (one time) plus $100K annually. • The client wants a CRM delivery approach that ensures lowest capital outlay and operating costs, while enabling the company to improve their CRM needs. • The client is leaning towards Software-as-a-Service (SaaS)/Hosted CRM delivery model but would like education on the CRM solution provider landscape (i.e. “Why don‟t we purchase Salesforce.com?”) ComplicationsSituation Key Questions to be Answered: Based On Our Requirements, Which CRM Solution Provider Will Be a Best Fit for Us? The move toward CRM is usually spurred by one final event or realization. In other words, this “moment” is called “The Straw That Broke the Camel’s Back.”
  10. 10. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Current State CRM Architecture 9 Guest Database 3,100M 150 Campaigns E-mail Opt-In 550M 140 Campaigns Payments Account Notifications Electronic Store Account Notifications Reservations Leverage 15MM “Marketable” Records to Drive Profits
  11. 11. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Current State CRM Architecture 10 • Guest Information Only • Demographics only (no transactions) • 10MM members • 30% purchased online • 1% Renewal Uplift = $1.5MM3 Direct Marketing CRM Database GID Lifestyle Call Center Reserv- ations Merch- andise Front Gate Not In Scope But Represents an Opportunity • Limited, very manual reporting • Campaigns are by park • Not correlated to any transactional data available across enterprise In 2009… • 151 Campaigns • 4.7MM Pieces • $1.3MM in postage • $0.60-$0.70 / piece Direct Marketing Campaigns Web E- Commerce 400K members 20K Guest E-mail Marketing Campaigns • Process handled entirely by E-mail Marketing CRM • Adequate reporting available – limited use being made for analysis • Campaigns are by location and across company • Not correlated to any transactional data available across enterprise • No response data fed back to enterprise • Primarily e-newsletters with no customization, personalization or targeting • Leveraged only for merchandise & dining • Not integrated • Not linked to business strategy Dining E-mail CRM
  12. 12. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 11 Direct & E-Mail Marketing Usage Use of Current Direct Marketing CRM Solution Use of Current E-Mail Marketing CRM Solution Feature Use Deliver a single view of the customer (passport) 2 Improve customer acquisition rates 4 Accelerate organic growth 1 Speed time to market (campaign roll-out) 3 Increase customer retention and loyalty rates 2 Improve cross-selling and up-selling 1 Increase average revenue per customer 1 Boost contact/call center effectiveness Unknown Increase sales effectiveness 1 Streamline the quote-to-order process 0 Feature Use Email Marketing 2 Survey Unknown Landing Pages Unknown Data/List Management 1 Transaction Messages 1 Integration 1 Reporting and Analytics 2 Multichannel Delivery 0
  13. 13. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Selection Approach 12 Assessment Conduct Research Vendor Evaluation Organizational Readiness 1 1b. Organizational Structure 1c. Financials 1d. Resources (Internal/External) 1e. Change Management 1a. Strategy 1f. Risk Management Refine & Integrate Select CRM Vendor 3 4 Requirements Business Technical 2 A Few Points to Consider 1. Develop baseline of current state and future needs 2. Consider everything from usability to privacy 3. Thoroughly understand your current infrastructure to best identify a solution provider that will integrate properly
  14. 14. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Requirements 13 Rating Legend Response Explanation SUP Supported as delivered “out of the box” MOD Supported via modifications (screens, GUI etc) 3rd Supported as a third party solution CST Supported via customization FUT Supported as a future release NS Not Supported Priority Rate 1 to 3 where 3 is a must have Mandatory Mark „Yes‟ only for “must-have” factors Hierarchy Criterion 1 Marketing Automation 2 Analytics & Reporting 3 Customer Service & Support 4 Technical Requirements 5 Privacy & Security 6 Data Management 7 Workflow 8 Processing & Performance Sample Criterion It’s Important For You to Determine Your Business & Technical Requirements; a Methodology for Evaluating Each CRM Solution Provider Objectively to Make a Fact-Based Decision for Your Pending Investment
  15. 15. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 14 Expected Benefits – <insert $ amount here> More Revenue from CRM Better conversion from inquiry to revenue i.e. park attendance, park spend Better lead generation i.e. customer acquisition through lower cost marketing channels compared with mass marketing spend Increased „order size‟ – encourage visitors to spend more money in the parks Projected Investment – <insert $ amount here> The Investment is heavy upfront but tapers over time CRM system costs Hardware/infrastructure costs Internal costs to get the system up and running Time for 3rd parties (consultants, Systems Integrators, etc.) invested earned - invested Return On Investment The <insert $amount here> ROI projection is meaningless without a strong business case behind it CRM Business Case
  16. 16. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Vendor Selection Implications 15 There are several issues that were uncovered as we went through this exercise Data Governance • Desired civil use of customer data • Data not integrated across all databases • Lack of unique customer data identifier resulted in unmatched customer records System Ownership & Accountability • Previous CRM instance did not have an internal champion • The use of CRM was sporadic across the company Reporting & Analysis • Lacked evidence for tying financial together with CRM/Precision Marketing • People clamored for the more reporting but had no intent of using the information Implementation Planning • Formal change management protocols were not established
  17. 17. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Vendor Demonstration – Sample Campaign Renewal 16 March April May Treatment A Treatment B 5 14-17 22-24 25 29-31 1 - 15 16 - 30 5 13-15 15 20 29-31 Data Pull: All of April₁ Mailing House Email Process all April mail Drop Treatment A Treatment A In-Home Drop Treatment B In-Home Blast Treatment A 1 Lists are pulled from 2 different MS.SQL100 Databases; records are matched on a specific field that exists in both databases; additional suppression and date range criteria are also applied to generate the lists 2 Lists are re-pulled as close possible to the date of the mailing to suppress those members who renewed during the first wave of communication Treatment B In-Home Blast Treatment B Data Pull₂: Non-Renewals April 1-15 Mailing House Email Blast Treatment A Non- Renewals Data Pull: Non-Renewals April 16-30 Mailing House Email Blast Treatment B Non- Renewals Process & Drop Treatment A Process & Drop Treatment B Treatment A In-Home Treatment B In-Home Direct mail, prior to expiration Email, prior to expiration Direct mail, post- expiration Email, post-expiration Color Key The renewal campaign was targeted at members whose memberships expired in the month of April. The renewal campaign was broken into two phases – A) the month prior to expiration; and B) the month post expiration (for those who did not renew). The renewal campaign involved a direct mail and email to members in each phase.
  18. 18. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Vendor Short List Identification Approach 17 KEY TENETS SOUGHT IN VENDOR SOLUTIONS 1. Solution has multichannel capabilities specifically direct mail and email 2. Solution is easy to use and best of breed 3. Solution is agile, flexible, scalable and expandable to adapt to client‟s evolving direct marketing needs 4. The vendor has a proven track record in B2C campaign management 5. The solution provides data security We employed a structured approach to identify a short list of recommended campaign management vendors and understanding of the functional and technical requirements, along with our knowledge of the multi-channel marketing application space. Confirm business and technical requirements • Internal document review • Interviewed key Consumer Marketing Stakeholders Conduct empirical research • Reviewed Gartner‟s Magic Quadrant o for Multichannel Campaign Management 2010 against business & technical requirements • Conducted external interviews with Direct-to- Consumer (DTC) marketing practitioners and thought leaders * Engage Vendors • Developed an initial list of 13 possible campaign management solutions • Shared high level business requirements • Disqualified vendors who were not a fit • Held vendor demonstrations to confirm campaign management capability & feasibility against requirements Short List of Potential Campaign Management Vendors
  19. 19. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 18 CRM Vendor Demonstration The initial list was limited to a smaller group of vendors of whom we found to be a potential fit for our client‟s CRM requirements based on empirical research and user feedback. A demonstration was conducted for each of these vendors and evaluated accordingly against our client‟s main criteria. CRM Solution Provider Pricing Deployment Method Aprimo* • N/A Premise & Hosted CDC Software • Determined by # of users Premise & Hosted Microsoft Dynamics CRM • Free trial for first 30 days • Full Client Access - $995 for up to 40 users Premise & Hosted Neolane # of active participants in a campaign Premise, Hosted, & Hybrid (Mid- Sourcing) Responsys • N/A Hosted Only OnContact Software • Premise - $995/named user; Maintenance - $225/named user + $1,495/concurrent user; Maintenance - $300/concurrent user • Hosted - $59.95/user/month; first 30 days is free; no annual contract Premise & Hosted Oracle Siebel • Starting at $70/user/month; Free trial for first 30 days Premise & Hosted Pardot • Group edition is $500/month; Professional edition is $1,000/month Enterprise edition is $1500/month. Unlimited users and no contract for Group, Professional or Enterprise editions Hosted SAP • Premise - $150K + 22% maintenance + $3K/year • Hosted - $150/user/month + hosting costs Premise & Hosted SAS • N/A Premise & Hosted Teredata* • N/A Premise & Hosted Unica • N/A Premise & Hosted
  20. 20. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 19 CRM Vendor Demonstration – Evaluation Factors The initial list was limited to a smaller group of vendors of whom we found to be a potential fit for our client‟s CRM requirements based on empirical research and user feedback. A demonstration was conducted for each of these vendors and evaluated accordingly against our client‟s main criteria. THE OUTCOME • 3 vendors made it to the short list – Aprimo, SAP, and Unica • 4 solutions fell off the list – MS Dynamics, Neolane, SAS, and Teradata • All of the CRM systems would be worth exploring however our client‟s plan to address the customer data management issues, analytics, and budget were critical factors.
  21. 21. Selecting the Right CRM That Aligns With Your Business May 11, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Contents I. CRM Software Spend Growing 2 II. Components of CRM 4 III. Client Case Study 8 IV. CRM Roadmap & Evolution 21 20
  22. 22. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Roadmap & Evolution 21 As you CRM efforts progress from a tactical approach to one more disciplined there will likely be a sharper focus on the business results and an increased requirement to act with agility to respond to the marketplace. Maturity Date 2012 Maturity Date 2013-2015 Maturity Date 2015 & Beyond Executive Participation • Owner & Sponsorship • Integrated • Active Management Attention • Monthly to weekly • Weekly to daily • Continuous Strategy • Transactional direct marketing • Integrated multichannel marketing • Social marketing & CRM Enabler • Marketing plan approved; budget set • Data management plan in place • Cross-functional Steering Committee • Data hygiene and master data management structure • Rigorous and disciplined marketing approach. Marriage between marketing as an “art” as well as a “science” • Customer-centric & CRM culture established and accepted Potential Key Indicators • CRM tool selected and implemented • Campaign ROI and response rates • Centralized customer data warehouse • Advanced campaign analytics and ROI • Marketing spend as a % of cost of sales CRM Roadmap & Evolution
  23. 23. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Risk Identification 22 The following example serves to illustrate the use of a risk management approach to identify risks associated with the CRM initiative. Inaccurate Data Development timeframes may be dramatically extended Campaign developers may not trust the tool Customers may lose confidence in The client Development of resources tied up longer than initially planned Development costs will be higher than planned Reduced ROI Campaign Managers will resist tool adoption The investment may need to be written off Customer churn; associated loss of cost per attendee Cause Risk Effect Begin by identifying the main cause of risks. In this example, inaccurate is identified as a key cause leading to 3 risks. From this, The client should think about what’s the impact of the risk, i.e. the effect.
  24. 24. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Risk Prioritization 23 Next pull the identified causes, risks, and effects into a matrix and determine the impact and the probability of occurrence for each one . This will provide The client with the information it will need to prioritize risks and determine which ones need a mitigation plan. # Cause Risk Effect Probability Impact 1 Inaccurate data Timeframes extended Resources tied up longer than planned Very high High 2 Inaccurate data Timeframes extended Development costs are higher than planned Very high High 3 Inaccurate data Timeframes extended Reduced ROI High Medium 4 Inaccurate data Developers may not trust the tool Reduced ROI Medium Medium 5 Inaccurate data Developers may not trust the tool Campaign managers resist tool adoption Medium Very low 6 Inaccurate data Developers may not trust the tool May need to write off the investment Medium High 7 Inaccurate data No customer confidence in The client Reduced ROI Low Medium 8 Inaccurate data No customer confidence in The client Customer churn; lower cost per attendee Low High By completing this matrix, The client will have the information necessary to prioritize identified risks.
  25. 25. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Risk Mitigation 24 Following the example, the table below illustrates possible mitigation strategies The client could adopt to address high priority risks. Risk Possible Mitigation Strategy Extended development timeframes Focus on a limited number of simple campaigns initially to reduce risk of other schedule and resource impacts. Incorporate sufficient time and resources into the development schedule to cleanse and correct the data as required. Ensure the right business and technical resources are in place to minimize other impediments to completion. Campaign developers mistrust the tool Early and repeated communication to the consumer marketing highlighting that data quality may need to be improved. Working with consumer marketing users to establish clear benchmarks for data quality that are reasonable and achievable. Ensuring that the development plan includes an effective “user acceptance” test plan with associated test scripts and acceptance criteria. Customer churn; lower cost per attendee Strict standards of acceptance and a complete and proven methodology for technical and business testing of the data quality is required With the prioritization determined, next The client can develop mitigation strategies for those risks deemed to have the greatest influence on the organization and likelihood of occurrence.
  26. 26. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. SO WHAT HAPPENED?! 25
  27. 27. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. CRM Vendor Selection Implications 26 The result of the exercise lead to addressing data governance issues first Data Governance • Desired civil use of customer data • Data not integrated across all databases • Lack of unique customer data identifier resulted in unmatched customer records System Ownership & Accountability • Previous CRM instance did not have an internal champion • The use of CRM was sporadic across the company Reporting & Analysis • Lacked evidence for tying financial together with CRM/Precision Marketing • People clamored for the more reporting but had no intent of using the information Implementation Planning • Formal change management protocols were not established
  28. 28. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. Let‟s Keep In Touch 27 Art Hall Director Alvarez & Marsal Business Consulting Monarch Tower 3426 Peachtree Road Suite 1500 Atlanta, Georgia 30326 Phone: (404) 759-9158 Email: ahall@alvarezandmarsal.com Twitter: @ahall3649 and @AskCRMA
  29. 29. Selecting the Right CRM That Aligns With Your Business August 8, 2011 © Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 28 www.alvarezandmarsal.com

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