Bayer Crop Science Siebel Casestudy

Oracle Customer Case Study

Bayer CropScience Addresses Individual Customer Needs across the Globe

Copyright © 2006 Oracle. All rights reserved. Printed in the U.S.A. Published June 2006

Bayer Crop Science Monheim, Germany www.bayercropscience.com

Industry: Chemicals

Annual Revenue: More than US$1 billion

Employees: 19,400

Oracle Products & Services: Siebel Pharma Oracle Partner: Deloitte Consulting Monheim, Germany www.deloitte.com

“A campaign response rate of almost 50% is remarkable in any market situation….Siebel Pharma played a major role in helping us achieve these impressive results.”—Udo Klein, CRM Manager, Bayer CropScience To maintain market leadership in the fiercely competitive global crop protection market, Bayer CropScience needed to cultivate relationships with all key market participants. Traditionally, the company’s trade channel contacts had formed the backbone of the business; however, Bayer CropScience saw the need to broaden the focus of its activities to encompass all relevant stakeholders in the market. Some of the important questions that needed to be answered were: Which farmers were using the company’s crop protection products? On which crops? In what quantities? Who were the powerful communities that influenced farmers in their choice of crop protection products? It was difficult to tell. Using Oracle's Siebel Pharma, Bayer CropScience has created a customer relationwship management (CRM) solution that enables individual country subsidiaries to form a single, unified view of the company’s entire audience—the channel, farmers, agricultural advisors, food suppliers, and food processors. This CRM solution, together with the business strategies that surround it, have increased organizational flexibility, improved sales effectiveness, focused marketing campaigns, and ultimately increased customer satisfaction.

Bayer CropScience AG is headquartered in Monheim, Germany, and has extensive experience in the global crop protection market. The company is the result of the acquisition by Bayer AG of Aventis CropScience. Bayer CropScience holds leading market positions in its core business areas and has now created two new divisions: BioScience and Environmental Science. The company is a wholly owned subsidiary of Bayer AG, a leading German healthcare, material science, and crop science company, which recorded sales in 2003 of 27.6 billion euros and has 115,000 employees.

http://www.bayercropscience.com/


Key Benefits: Doubled sales against forecast in Cordoba Region, Argentina

Created more than 35% marketing campaign response rate in UK

Achieved 47% response rate for targeted mailing/telephone campaign in Germany

Boosted campaign response rate in Germany from previous norm of 5% to more than 12%

Enhanced customer satisfaction

Improved sales forecasting accuracy

During its life cycle, a crop will encounter many enemies, including pests, weeds, and fungi that can ultimately destroy the harvest. Bayer CropScience is committed to helping farmers combat these threats by supplying leading-quality crop protection products and services that are in balance with the environment and enable a sustainable approach to agriculture. In recent years, the company has encountered its own threatening challenge: fierce, global competition. In almost every one of the geographic markets in which the company operates, it faces powerful competition from both other international research-based companies and an increasing number of so-called “generic producers” entering the market with similar products. At the same time, the crop protection market is becoming much more complex: Farmers need guidance to understand the multitude of different solutions available to them, and they want products that focus on specific problems, while leaving beneficial fauna and flora unharmed.

To combat these global threats and to increase its competitive position, Bayer CropScience needed to understand more about the different market participants, from the channel through the end consumer. Although its reliance on a channel distribution model led to well documented, transaction-only relationships with distributors and retailers, it needed to improve its contacts with the other stakeholders, such as farmers and growers in each country that comprised its end user community. Another area that needed to be strengthened was the company’s relationships with the increasingly powerful influencers who were shaping the market, including agricultural advisors, food processors, government departments, contractors, NGOs, and the media. The result was that Bayer CropScience saw the need to respond more quickly to customer requirements and create compelling, tailored products and services and information.

Tailoring Products to Customer Needs

“The trade channel remains our key partner for growth, but we saw the need to support their actions through direct, continuous, and consistent customer and influencer information,” says Udo Klein, CRM Manager, Bayer CropScience. “We needed to replace the many unlinked systems used by the field sales and marketing teams to manage customer relationships within Bayer CropScience with a single, unified system. By creating a



“The ample sales, service, and campaign management functionality of Siebel Pharma enables Bayer CropScience to maximize sales effectiveness, optimize processes, plan marketing activities, and manage marketing campaigns.”


Udo Klein CRM Manager Bayer CropScience

companywide, shared view of all the participants in the customer mix, Bayer CropScience would improve its market knowledge through stringent market analysis and the early recognition of market trends. The company would segment target markets, distinguish customer groups, and tailor products to customer needs. And it would be in a position to coordinate sales, technical, and marketing actions and events. In summary, Bayer CropScience would be in a position to ‘treat different customers differently.’”

So which CRM system did Bayer CropScience choose to understand how many of its Spanish farming customers grow oranges? The number of farms in Chile with more than 500 hectares? Or the number of British farmers growing organic potatoes? The answer: Siebel Pharma. According to Klein, this prepackaged, industry-tailored CRM system was chosen because it was the most advanced, the most proven, and the most easy-to-use of all the systems the company evaluated. The decision was also influenced by the fact that the parent company, Bayer AG, had also standardized on Siebel CRM applications. “The ample sales, service, and campaign management functionality of Siebel Pharma enables Bayer CropScience to maximize sales effectiveness, optimize processes, plan marketing activities, and manage marketing campaigns,” says Klein.

Increased Sales Effectiveness

Currently subsidiaries in 12 countries in which Bayer CropScience operates are gradually replacing their existing marketing and sales systems with Siebel Pharma. Using this unified approach to customer information, the sales teams in each country are now able to plan their sales activities with significantly greater accuracy and effectiveness. Klein explains: “Each of our country organizations operates in distinct and different markets. For this reason, we created a tool box of different functionalities that can be chosen by the implement-ting countries according to their needs.” In addition to the detailed profile of each customer this approach provides, sales teams know the potential for each farmer, the crop yields, the Bayer CropScience products their customers are either using or have expressed an interest in, the status of any outstanding complaints, and whether or not a Bayer advisor has recently visited the customer. If they are visiting an official advisor, they also know


the number of farms the individual is providing advisory services to. If required, sales teams are able to capture and process sales orders and complaints—although customers can also place orders directly with Bayer CropScience over the telephone, and these are synchronized with all other sales information.

According to Klein, this detailed, up-to-the-minute view of customer and market information is increasing not only sales effectiveness and management reporting, but also customer satisfaction. “Our sales teams will be in a position to offer farmers advance warning of disease or pest infestations based on the types of crops they grow and according to their local conditions. If they are facing problems and don’t expect to achieve their yield forecasts, we actively participate with them to introduce crop protection solutions aimed at increasing harvest—while maintaining a balanced and sustainable approach to the environment. Alternatively, if the Bayer sales representative is meeting a crop protection retailer, the representative will be able to share information on sales potentials with the retailer based on localized market information. By viewing the potential of each customer, the representative and retailer can collaborate to optimize sales.”

Marketing Campaign Contributes to Double Sales

Compelling evidence of the success of this global CRM strategy lies in recent marketing campaigns. Time after time, throughout the world, Bayer CropScience has used Siebel Pharma to identify the most valuable customers, target these customers based on their needs, and implement highly effective closed-loop marketing campaigns. In Argentina, Bayer CropScience used Siebel Pharma to manage a marketing campaign aimed at increasing sales of fungicide products in two target regions, Cordoba and South East Buenos Aires. The software identified the relevant potato growers in these regions and enabled the company to understand and communicate the critical issues the farmers were facing. A sequence of five mailings to 500 target customers was launched in January 2003. Due to climatic reasons, the campaign did not have much influence in the SE Buenos Aires region. In Cordoba, though, the sales more than doubled in comparison to the forecast.

In the UK, Siebel Pharma was used to execute an outbound, five-stage direct mail campaign promoting a cereal fungicide to a target group of 10,500 cereal farmers. Between February and



April 2002, the response rate was more than 35%. Besides providing the company with valuable customer data, the marketing campaign response information from Siebel Pharma is helping Bayer CropScience to further segment this market, based on product preferences, varieties, and yield expectations. There is corresponding success in Germany as well. Here, Bayer CropScience undertook a three-stage direct mail and follow-up telephone/fax marketing campaign to promote the launch of a new herbicide formulation. Prior to the adoption of Siebel Pharma, a 5% response rate was considered satisfactory for comparable campaigns. The enhanced targeting provided by Siebel led to the campaign response rate reaching 12%.

During March and April 2002, Bayer CropScience undertook another sales promotion campaign in Germany aimed at increasing its market share in wheat crop protection. Siebel Pharma was used to manage a three –stage campaign comprising nonpersonalized direct mail and a follow-up telephone campaign accompanied by a second, personalized mailer. The response rate for the initial direct mail was 8%., and the follow-up telephone calls resulted in a response rate of 47%. "A campaign response rate of almost 50% is remarkable in any market situation," says Klein, "but even more so in today's economic conditions. Siebel Pharma played a major role in helping us achieve these impressive results."

Controlled CRM Strategy, Locally Controlled

The adoption of a centrally initiated but locally owned CRM rollout has enabled Bayer CropScience to quickly establish strong buy-in from each country that is introducing the system. The company is operating a common global CRM strategy, with standard core processes. Using the toolbox approach, each country is able to fine-tune the system according to its local needs. Close partnerships with the integration partners Deloitte Consulting and Siebel Expert Services are also helping to accelerate the global rollout. “During our user workshops, we use the marketing campaign results as tangible proof of the power of the system,” Klein concludes. “Our staff quickly realizes that Oracle's Siebel Pharma is a good catalyst for understanding customer needs and treating each customer as an individual.”


Bayer CropScience provides millions of farmers worldwide with safe, reliable

crop protection solutions.

Bayer Crop Science Siebel Casestudy

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