Selecting the CRM that Aligns with Your Business
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Transcript of Selecting the CRM that Aligns with Your Business
© 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
Selecting the Right CRM That Aligns With Your BusinessMay 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
2
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Software Spend Growing
3
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.
Selecting the Right CRM That Aligns With Your BusinessMay 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
4
Selecting the Right CRM That Aligns With Your BusinessAugust 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
5
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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.6
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.
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
Hosted versus Premise-Based CRM
7
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
Selecting the Right CRM That Aligns With Your BusinessMay 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
8
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
The Moment
9
• 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.”
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
Current State CRM Architecture
10
Guest Database
3,100M
150 Campaigns
E-mail Opt-In
550M
140 Campaigns
Payments
AccountNotifications
Electronic Store
AccountNotifications
Reservations
Leverage 15MM “Marketable” Records to Drive Profits
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
Current State CRM Architecture
11
• Guest Information Only• Demographics only (no
transactions)• 10MM members• 30% purchased online• 1% Renewal Uplift = $1.5MM3
Direct MarketingCRM Database
GID
Lifestyle
CallCenter
Reserv-ations
Merch-andise
FrontGate
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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
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Direct & E-Mail Marketing Usage
Use of Current Direct Marketing CRM SolutionUse of Current E-Mail Marketing CRM Solution
Feature Use
Deliver a single view of the customer (passport) 2Improve customer acquisition rates 4Accelerate organic growth 1Speed time to market (campaign roll-out) 3Increase customer retention and loyalty rates 2Improve cross-selling and up-selling 1Increase average revenue per customer 1Boost contact/call center effectiveness Unknown
Increase sales effectiveness 1Streamline the quote-to-order process 0
Feature Use
Email Marketing 2Survey Unknown
Landing Pages Unknown
Data/List Management 1Transaction Messages 1Integration 1Reporting and Analytics 2Multichannel Delivery 0
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Selection Approach
13
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
SelectCRM
Vendor
3 4
Requirements
Business Technical
2
A Few Points to Consider1. Develop baseline of current state and future needs2. Consider everything from usability to privacy3. Thoroughly understand your current infrastructure to best identify a
solution provider that will integrate properly
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Requirements
14
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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
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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 - investedReturn On Investment
The <insert $amount here> ROI projection is meaningless without a strong business case behind itThe <insert $amount here> ROI projection is meaningless without a strong business case behind it
CRM Business Case
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
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CRM Vendor Selection Implications
16
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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Vendor Demonstration – Sample Campaign Renewal
17
March April MayTreatment 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 April₁Mailing House
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 BIn-Home
Blast Treatment B
Data Pull₂: Non-Renewals
April 1-15Mailing House
Blast Treatment A
Non-Renewals
Data Pull: Non-Renewals
April 16-30Mailing House
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.
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
Vendor Short List Identification Approach
18
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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
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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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.20
CRM Vendor Demonstration – Evaluation FactorsThe 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.
Selecting the Right CRM That Aligns With Your BusinessMay 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
21
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Roadmap & Evolution
22
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 Date2012
Maturity Date2013-2015
Maturity Date2015 & 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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Risk Identification
23
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.
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Risk Prioritization
24
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.
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Risk Mitigation
25
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.
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
SO WHAT HAPPENED?!
26
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
CRM Vendor Selection Implications
27
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
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
Let’s Keep In Touch
28
Art HallDirectorAlvarez & Marsal Business ConsultingMonarch Tower3426 Peachtree Road Suite 1500Atlanta, Georgia 30326Phone: (404) 759-9158Email: [email protected]: @ahall3649 and @AskCRMA
Selecting the Right CRM That Aligns With Your BusinessAugust 8, 2011
© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.29
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