When To Use Crm?

Decreased Cost of Sales

CRM can reduce the cost of sales by increasing sales force productivity, enhancing partner-channel productivity, decreasing quotation-proposal generation time, and improving order-configuration accuracy. A communications company provides a detailed example of the way in which Siebel CRM technology can reduce the cost of sales.

Excess capacity in the telecommunications industry had driven prices down over the past few years, making it extremely difficult for communications providers to maintain profitability. The company sought to differentiate itself through a concerted effort to beat industry-standard intervals for service delivery. To accomplish this, the company had to significantly shorten its order intervals and focus on meeting the customer's requested due date. However, its existing legacy system had limited growth capabilities, poor integration with other systems, and inadequate data integrity. This led to increasing business costs due to the substantial effort and human resources required to meet its customers' dates.

To address these problems, the company replaced its legacy system with a Siebel CRM solution that significantly streamlined the order entry and validation process, allowing the company to meet customer-requested due dates faster and with fewer people. As a result of decreased order entry time, it reduced headcount in its dedicated order entry staff from 22 to 10 people, saving nearly US$500,000. Additionally, because the order entry process was much simpler, project managers could enter orders while talking to customers-increasing order accuracy and leading to higher customer satisfaction.

The company also cites the following improvements from its CRM solution:

• A reduction in average order entry time for direct access lines from 8 hours to 45 minutes .
• A 50 to 80 percent reduction in overall order entry time .
• Cost savings of US$10,000 each month through a reduction in time spent on account maintenance, security, and queries, and by eliminating paper files.

Decreased Cost to Retain and Serve Customers

CRM can lower the cost to retain and serve customers by deflecting simple customer service issues to the Web and streamlining the process of serving customers through other channels.

Revenue Enhancement Benefits

Because CRM strategies allow organizations to monitor, measure, and track every customer interaction, organizations can determine the precise results of those interactions and therefore calculate the return on every marketing, sales, and service effort. Indeed, with CRM capabilities, organizations can determine the profitability of each customer or account and thereby adjust their allocation of resources to each customer based on that customer's profitability. By extending this capability across all communication and distribution channels, an organization can optimize its business model. That is, it can reach the right customers and prospects through the right channels at the right time with the right product or service. These capabilities lead to improvements in key areas, including increased close rates, increased revenue per sale, and improved customer retention.

Increased Close Rates

By deploying robust CRM systems and processes, customer-facing personnel have easy access to all relevant account, contact, lead, activity, and product information they need to serve customers. Moreover, CRM technology ensures that information is provided wherever and whenever it is needed, leading to meaningful improvements in close rates.

Financial consultants at a company, for example, use the company's Siebel CRM system to view information about investors, such as income and investment preferences, and then target their investment pitches accordingly. Explains the company's Assistant Vice President of Sales Force Automation:

We are able to be so much more personal in our interactions now, With essential customer information right in front of them, our representatives are able to develop customized investment strategies and deliver them-along with every appropriate piece of marketing collateral-directly to the customer, right from their desks. This system has enabled us to improve our lead conversion ratio-that is, the percentage of leads that become new accounts-from 40 percent to 60 percent.

Increased Revenue per Sale

CRM can help organizations increase average revenue per sale by facilitating cross-selling and up-selling. For example, a company has developed a program called Personal Planning Service, powered by Siebel CRM technology, which allows the company to create personalized vacation itineraries for guests at select resorts well in advance of arrival. When a customer makes a reservation for one of the company's select resorts, the company starts building an itinerary based on the customer's requests and stored preferences. When the customer arrives at the hotel three weeks later, tee times have already been scheduled, dinner reservations arranged, and recreation itineraries created. The company has found that guests who participate in the program show noticeably higher guest satisfaction scores and spend an average of US$100 more per day on services beyond the room rate. They are also more likely to generate repeat business because they had a satisfying experience.