According to a recent IDC study, only 14 percent of managers say they are confident that the reports developed in their organizations deliver relevant information to the right people at the right time. To bridge this gap, and to enable better decision making on all customer-facing levels of the organization, companies must be able to transform insight into action and model their business processes across the enterprise. This enterprise-wide approach is essential to erasing the disconnect between analytics and transactional, operational processes, enabling companies to overcome critical CRM challenges
CRM projects are often considered failures because they are implemented as an isolated, front-office tool. While CRM systems can analyze customer value by using broad metrics such as revenue generated, frequency of purchases, or even length of time required to resolve a telephone query, they fail to provide the much talked-about 360-degree view of the customer. Customers evaluated on these CRM factors may be judged superior, despite the fact that data elsewhere within the company not accessed by the CRM system would demonstrate the exact opposite: that this prime customer frequently sends back products, constantly complains, and, by ordering low-profit products on short notice, causes the company a lot of work for little return.
Many CRM projects do not really improve decision making. While automating many processes, the new CRM technology adds no efficiency or insight to improve decision making within business processes inherent to sales, marketing, and service functions – a key value driver and benchmark of success for end-user adoption. Many projects also prove too cumbersome to enable the system to be adapted quickly to meet ever-changing business conditions. The maintenance effort for the many touch points between operational CRM applications, back-office systems, and a plethora of different BI tools causes managers to question the long-term sustainability of this type of approach. As a result, many CRM and BI projects suffer from relatively high total cost of ownership. Intelligent businesses must circumvent these pitfalls, bridging the analytical gap by turning CRM analytics capabilities into powerful enablers for growth, customer satisfaction, and improved efficiency. To ensure insightful customer relationship management, successful CRM projects live by three crucial success factors:
Link frontend to backend
To achieve a 360-degree view of their customers, CRM project teams have to consider their organization’s entire value chain. CRM needs to be much more than a toolset for sales force automation, campaign management, or call center organization. A leading energy provider, for example, linked mySAP CRM front-office data with consumption data from an energy supply system to make narrowly targeted offers to specific customer groups. The company analyzed energy consumption of its customer base to create homogeneous load profiles and answer the fundamental question: What type of customer uses what amount of electricity, and when? The results of the analysis were imported into mySAP CRM. Sales staff, wielding the integrated campaign management function, compared the load profiles with customer data to determine target groups and send out offers. The campaign was a success. The company was able to retain the majority of the customers who had been in danger of defecting, but only because it smartly connected data from both the front and back office.
Integrate Analytics into CRM processes
BI technology must be designed into operational CRM processes in order for companies to implement a fact-based, decision-making culture in marketing, sales, and service departments. A leading publishing company implemented mySAP CRM, SAP for Media, mySAP ERP, mySAP Supply Chain Management (mySAP SCM), and SAP Business Information Warehouse (SAP BW) – all integrated thanks to the SAP NetWeaver platform – to create an “intelligent” CRM solution. The company discovered that integrated CRM has helped them to convert their existing customer base into a vital enabler of their ability to grow. The integration between these components enabled the publisher to create a direct-marketing business model that looks like this:Marketing managers use SAP BW to analyze customer behavior by reviewing data from previous purchases, and to execute more targeted campaigns using mySAP CRM, resulting in more inquiries by customers to the company’s call center.
Call center agents are able to see a customer’s credit standing, prior sales history, and other important data that enables them, for example, to recommend a related product that would be of interest to the customer, increasing sales generated per call. Supply chain partners receive orders automatically, thanks to integration with the call center, improving reliability of order entry and product shipping. All transactions are automatically updated by the SAP logistics execution software, which confirms product availability and shipping, and records the transaction within the customer’s account in the billing system. This data is now accessible to marketing personnel for subsequent analysis and future fine-tuning of the promotion.
Segment Builder defines target groups
With SAP Analytics, end users can leverage embedded analytics to optimize or enhance their day-to-day business processes. For example, a marketer tried to determine a target group for the next major campaign. With a segmentation tool offered within mySAP CRM – the Segment Builder – the marketer can intelligently build the most profitable target group for a given campaign. Here, SAP goes beyond a simple, manual tool where the marketer selects different criteria by hand – for example, narrowing the target group to those over age 30, living in California and Oregon. The marketer now leverages analytical capabilities inside the Segment Builder – based on customer behavior, response rates, and data from past campaigns – to further refine the target group and achieve more profitable results. With these analytics, customers could run a simulation to determine the profit they would derive for this marketing campaign, based on that chosen target group. They could also modify the customer demographics and determine the expected profit based on this new target group.
With this type of embedded analytics, CRM Analytics is no longer a toolset for highly specialized business analysts, but an ingredient that can drive a company’s mission-critical marketing processes end to end – from target group selection through fulfillment. Business users need only enter two or three bits of information (product costs, for example), and the embedded analytics take care of the rest, providing tangible, relevant insight to the end user while hiding the data analysis and technical complexity behind the scenes.
By limiting the number of different CRM tools and related platforms, companies avoid the pain points of custom integrations and interfaces. mySAP CRM, for example, integrates seamlessly with SAP BI. Sales, marketing, and service staff can use the BI methods and functions to analyze all relevant front-office and back-office data, even that from non-SAP systems. With multiple data repositories resulting in an incomplete view of their customer base, and with an inability to effectively track sales leads, a leading developer of digital video, audio, and 3-D production systems wanted to collapse their heterogeneous systems into one integrated environment. To streamline their technology infrastructure and reduce the complexity of servicing existing and new customers, the company integrated mySAP CRM and SAP BW to leverage their existing investment in SAP technology and consolidate their business applications into one integrated user interface.
As a result, the company enjoyed more accurate visibility into their customer data, allowing better targeting of their customers. How much better? Achieving a 68 percent internal rate of return on their mySAP CRM and SAP BW investment, the company’s more targeted campaigns resulted in over 450,000 additional customer interactions in one year, resulting in more than 1.85 million US Dollars in revenue. By implementing a combined enterprise platform for business applications and business intelligence, companies of all sizes can reduce costs while implementing a solution that scales to grow with the organization. The future of intelligent CRM will be driven by the more and more complete fusion of operational CRM and the underlying IT infrastructure. SAP Analytics will establish a new framework for intelligent, composite applications that will enable a new level of business agility – as needed by tomorrow’s smart businesses.
More information on CRM Analytics
Source: SAP Insider