Customer Maintenance at all Levels

January 20, 2003 by admin

About The ROI Review

About The ROI Review

Technology may not be so well advanced that it can promise health and beauty over the Internet, but healthcare and beauty products have long been available at the click of a mouse. Digital Wellbeing Ltd., the online venture of the international pharmacy chain Boots, based in Nottingham UK, is one company offering such a service. The online shop, which the company set up in 2000, currently has around 400,000 registered customers. More than 70,000 visitors use the site week in, week out to find baby, health and beauty products. But for Digital Wellbeing, customer care has nothing to do with lotions or balms, it is all about the maintenance of customer relationships, which the company places great value on.
The story of mySAP CRM at Digital Wellbeing Ltd. Starts with the inception of the online shop itself. The e-tailer began its CRM journey with a SAP R/3 implementation, starting with a blueprint of back-office retail, financial processes, and architecture. From there, integration and configuration efforts went “incredibly smoothly,” according to Chief Operating Officer Mark Dearnley. With the back office in place, wellbeing.com set its sights on front-end functionality. The goal: launch a customer-focused, e-tailing Web site capable of interacting with customers, collecting data, then leveraging that data to acquire and retain customers.
The decision in favour of mySAP CRM was easy, agree Dearnley and Managing Director John Hornby. “Though we looked at other solution providers, we just didn’t see anything that would be more flexible, more compatible or more scalable with what we already had running in our business,” explains Hornby. In addition, the company wanted to reduce operating costs and increase the return on investment. A forecast in The ROI Review, published by consultants Peppers and Rogers Group, indicates that the assumptions were right. Based on the use of mySAP CRM, The ROI Review forecasts an Internal Rate of Return (IRR) for Digital Wellbeing of 72% on all CRM investments within two years.

Customer experience improves sales

Lessons learned from the Digital Wellbeing implementation

Lessons learned from the Digital Wellbeing implementation

The sources of these returns include an improved customer experience: Mining customer data leads to a better understanding of where to enhance features, develop the product mix, and improve site layout. “We would be astonished if the mySAP CRM package doesn’t provide us with considerable learning relating to ways we can improve the attractiveness of our offerings,” says Dearnley. In addition, the company now has a comprehensive and uniform view of the customer. This improves customer loyalty: “If we know who you are and all that you do with us, and we are responsive, that creates loyalty,” says Dearnley.
One example of more efficient dealings with customers can be seen in the Customer Interaction Center (CIC). Agents now have customer details on a single system, where previously they had to access up to three different systems. That cost time and led to inaccuracies, which in turn left money on the table. An integrated customer-data solution, on the other hand, can inject efficiency across the interaction and transaction processes. Customer relationships that are based on actionable data also increase the efficiency of the Wellbeing CIC thanks to fewer abandoned calls, an increased number of calls answered in under 40 seconds, and more efficient phone and e-mail handling times. According to The ROI Review estimates, operating improvements will enable Digital Wellbeing to achieve savings of £78,000 within two years.

Satisfied customers compile more robust shopping carts

Customers are also filling up their shopping carts more than before: By mining data captured by SAP, “we can improve our conversion rates,” says Dearnley. This means fuller shopping carts and greater success converting site visitors into buyers. As for average order size, projected improvements are as high as 12.5%, which increases the average order from around £35 today to as high as £40. Repeat business will also increase: Digital Wellbeing is tightly focused on utilizing analytic capabilities to build customer retention and capture share of customer revenue. The ROI Review estimates Wellbeing’s CRM program will increase repurchase rates by as much as 25%. The use of customer data and analytic tools therefore improves customer loyalty and increases revenue. Higher e-mail conversions and repurchase rates will bring Digital Wellbeing almost £100,000 per year, according to The ROI Review’s estimate.

Reduced marketing costs

Not least, installation of mySAP CRM will cut Digital Wellbeing’s marketing costs dramatically. Until now, the company relied on an external agency to execute its e-mail campaigns. Bringing this process in-house with mySAP CRM campaign management tools means more than £165,000 per year in contribution. The solution will also enable Digital Wellbeing to improve the overall effectiveness of e-mail campaigns since it will be armed with much more precise information relating to the needs and interests of its customers. By tracking customer purchase histories and preferences, Wellbeing anticipates market uplift in clickthrough rates for both new and existing customers.

And this is just the beginning

The ROI of CRM

The ROI of CRM

Despite these strong returns, wellbeing.com is just beginning its CRM journey. The company is rapidly refining its CRM strategies, aided by the addition of mySAP CRM-delivered capacities to an existing SAP R/3 backbone. These CRM tools represent the opportunity to further enhance what can already be described as a world-class e-tailing experience. Wellbeing is better poised to “know” its individual customers, provide an even more efficient service, deliver increasingly relevant offers, increase the average size of shopping carts and create value through loyalty. In addition to current successes, the ROI from its mySAP CRM investment, predicts John Hornby “will be very significant.”

Wolfgang Uebel

Wolfgang Uebel

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