“A downturn isa terrible thingto waste.”This quote, from a Home Depot vendor,reinforces the premise of investing forgrowth when times turn tough.i Yet theconventional wisdom is that in the face ofan economic downturn, consolidation isthe name of the game. Spend less on IT.Work with fewer hardware and softwarevendors. And only invest in thosetechnologies that enable your organizationto meet its most basic operationalrequirements—in other words, reduce theIT budget to the minimum amountneeded to support building and deliveringyour product or service. Unfortunately, in

relation to customer relationshipmanagement this behavior could be both ashort- and long-term detriment to yourbusiness success. In fact, an article in TheMcKinsey Quarterly cites the risk ofmaking wholesale reductions in ITspending. “Simplistic cuts, applied acrossthe board, may endanger critical businesspriorities from sales support to customerservice.”ii McKinsey has also found thatinvestments in “technology-enabledbusiness processes” deliver far moreimpact than reducing costs.

Also, keep in mind that in an ever-increasing competitive environment thewindow between product conception andinnovation on one hand, andcommoditization on the other hand, isgetting ever smaller. This increases theneed to differentiate around the customer

Maximizing CRM EffectivenessDuring Lean Times

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experience to distinguish your organizationfrom the competition. And, of course, thatexperience can transcend every touchpoint on your company’s front lineincluding your sales, marketing, andservice teams; your programs, campaignsand promotions in these areas; and yourWeb service channels and storefronts.

This brings to light one fundamentalquestion: When the economy turnsaround, as it will, how will yourorganization be poised to take advantageof the next expansion? Read on to learnsix areas your organization can focus on toimprove business results. Whether it’sthrough increasing sales effectiveness,better managing the sales pipeline,building loyalty, improving marketingresults, or reducing customer service costs,CRM can provide a vital boost to yourcompany’s top and bottom line in anadverse economic environment.

1) INCREASE SALES EFFECTIVENESSWhile they’re the key to driving revenue,salespeople are arguably the most expensiveresource in your organization’s front lineoperations. Therefore, increasing theireffectiveness and efficiency is critical. Yetaccording to the Alexander Group, fieldsales representatives only spend 22 percentof their time selling. And time—time spentprospecting, building proposals based onknowledge of the prospect’s requirements,and selling—is their most preciouscommodity as well. Companies like Oracleare leveraging Web 2.0 technology tocreate a new generation of sales toolsspecifically designed to increase sales userproductivity. One of these applicationsanalyzes purchase patterns of existingcustomers by mining information across

the enterprise and public domain, and thenidentifying what products and services tosell for white-space and greenfieldopportunities. Given that salespeople spend20 percent of their time prospecting forqualified leads,iii making this investment oftime more productive is critical.

Another way to increase sales effectivenessand consistency is to reduce the gapbetween an organization’s best and worstperformers by instilling the practices of the top performers across the organization.Consider investing in applications thatcontain specialized sales workflow support.This feature can be configured to guidesales professionals down the most effectivepath to closing business at every point inthe sales process. At any sales stage, theapplication presents the most relevantinformation, can enforce collection ofcritical opportunity information, or evenautomatically create tasks for any of themembers of the opportunity team.Embedding a company’s best practices intothe application drives higher close rates aswell as shortens sales cycles and thelearning curve for new sales professionals.

2) IMPROVE FORECASTING ACCURACYEven during the best of times, investorscan punish companies that fail to meetfinancial targets. When the economy isuncertain, those penalties are even moresevere. Forecasting gives sales managersheadaches. Individual representativesoften misstate their potential sales.Historical analysis alone is insufficient asa guide to the future. The most reliableforecasting process incorporates threedifferent perspectives in a discipline called“triangulated forecasting.”

This approach integrates field assessments,real-time pipeline assessment, and historicaltrend analysis to compare snapshots ofopportunities and forecasts over time.By correlating historical facts withpredictions from the field, sales managerscan reality-check their assumptions andset more achievable quotas. And bycomparing what has changed in theforecast week over week, organizationscan focus on trouble spots, get to thepoint quickly, and filter out blue-skyprojections. For example, an “issue” couldend up being a sales rep in a giventerritory who sits on deals for too long ata particular stage of the sales cycle. Or itcould be a suboptimal product mix in aregion given local preferences.

The best way to achieve triangulatedforecasting is by integrating historicalinformation from a data warehouse intothe analysis. World-class CRM systemsbuild data warehousing directly into theanalytic process by providing analyticscapabilities embedded into the applicationthat work hand-in-hand with “live” data.The ability to perform historical andcomparative trend analysis and match it to current information enables salesmanagers to anticipate changes quickly.This capability is delivered in a real-timedashboard that displays key analytical datagraphically and can be customized to meet an individual sales manager’s needs.For example, a manager can view currentand historical results of her accounts and can overlay that with reports by salesrep, geography, industry, and otherrelevant data.

3) ENGENDER CUSTOMER LOYALTYIt is far less expensive to retain and growexisting customers than it is to acquirenew ones. Therefore, leveragingtechnologies that help organizationsincrease the effectiveness of their loyaltyprograms is a key way to increasecustomer affinity and share of wallet, andimprove overall profitability.Unfortunately, at many companies loyaltyprogram effectiveness is hindered byfragmented data, “siloed” point solutions,

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When the economy turns around, as it will,

how will your organization be poised to take

advantage of the next expansion?

and inflexible and costly legacy systems.This makes it difficult to gain an accurateview of key customers and their behaviors,bring differentiated incentives and rewardsto market quickly, and ensure a superiormember experience. Leveraging acomprehensive packaged loyaltyapplication that is pre-integrated withyour CRM system addresses these issues.

Such an application should include a widerange of functionality optimized for yourindustry and customer requirements.Features could include, but not be limitedto, managing member enrollment andcommunications, guiding personalizedloyalty promotions, and incorporatingpartner awards as well as managingpartner transactions. Furthermore, loyaltysystems should provide rich analyticcapabilities that deliver extensiveinformation on each member includingtier status and value, transaction history,loyalty assets, and eligible and enrolledpromotions. Again, this informationshould be presented alongside sales andservice transactions as well as marketingpreferences, which are located in theCRM system. And loyalty programmembers themselves should be able togain seamless access to their loyaltyinformation—such as points andrewards—through the channel they desire,be it online, over the phone, in person, orthrough a kiosk. In an ideal scenario,loyalty systems underlie a strategicbusiness initiative that both drives revenue by maximizing brand value andenables organizations to gain criticalcustomer insight.

4) DRIVE IMPACTFUL MARKETINGRESULTSMarketing is often thought of as being moreart than science, but it doesn’t have to bethat way. Sophisticated analytics now makeit possible to track response to marketingcampaigns down to the individualcustomer. This can potentially revolutionizea company’s approach to marketing.

A good sales process builds a 360-degreeview of the customer, beginning with the

first touch. Marketing automation toolsembedded in leading CRM systems canhelp businesses match campaigns andeven individual messages and dialogues tothe characteristics of the prospect.Effective marketing is no longer a matterof “throwing mud against the wall” to seewhat sticks. Messages and offers can becustomized to address specific issueswithin an industry, a company, or even anindividual prospect. Then, results can betracked to yield immediate insight onwhich tactics work best.

All of this is integrated into the saleslifecycle, so that lead qualification scriptsare tuned to the messages and offers thatpique the prospect’s interest. Warm leadsare funneled to the sales reps who are bestequipped to handle them. Responses caneven be incorporated into the prioritiesassigned to those leads, so that an engagedprospect is assigned a higher place in thequeue than a casual one. Real-timetracking is an essential element of thisprocess. Sales managers know that time isof the essence when responding to aprospect’s interest. Marketers and salesmanagers should both have currentstatistics on active programs as well asanalytical tools to delve into pastcampaigns. When integrated with leadtracking, marketing analytics can yieldpowerful ROI analysis for use inbudgeting and campaign planning.

5) INCREASE CUSTOMER SERVICEFLEXIBILITY WHILE REDUCING COSTSIn both lean and expanding economies,companies must seek ways of reducing the cost of providing service to theircustomers. Online customer-facingapplications provide compelling benefits

in this regard. According to ForresterResearch, while average call center costsare $5.50 per call, the average cost perWeb self-service transaction is just $0.10.iv

Furthermore, in an increasingly networkedworld, many customers prefer self-servicechannels because of the speed-to-resolution they provide. Accordingly,organizations are mandating thattechnology purchases for customer-facingapplications focus on improving the onlinecustomer experience. In fact, a separateForrester report found that 86 percent ofconsumer businesses cite this element astheir top technology theme.v

Organizations should extend the footprintof their CRM deployment to the Webwith a single transparent multichannelsolution for delivering superior customerservice. With enhanced site management,registration and user management,account management, and knowledgemanagement features, companies gain theability to rapidly deploy and maintain astandards-based application for deliveringhigh levels of customer service. Such asystem should also be integrated withother service channels and enablecustomers to seamlessly transition amongchannels—for example from the Web toan online chat session to a phoneconversation with a customer servicerepresentative—in the context of theirproduct or service issues.

But self-service doesn’t end with supportcapabilities. In today’s world of two-income households with limited free time,consumers increasingly prefer onlineshopping. And for companies,e-commerce represents the most cost-effective channel to sell their goods andservices, but only if they can draw upon a

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In both lean and expanding economies,

companies must seek ways of reducing the cost

of providing service to their customers.

scalable and high-performance platformthat manages e-commerce transactionswithin the context of their overall CRMinteractions. Such a system must managemultichannel interactions consistently andefficiently. And, in addition to providingthe rich informational and ease-of-usecapabilities that customers have come toexpect when shopping online, thesesystems should deliver real-timedecisioning capabilities. Real-timedecisioning suggests highly usefulcomplementary products or services tocustomers at the point of theirinteractions, while providing organizationswith the benefit of an automated cross-selling solution. For example, a customerwho purchased a new smartphone onlineis likely an ideal candidate for anunlimited data plan, a leather carryingcase, and a car charger.

6) WEIGH YOUR BEST (DEPLOYMENT)OPTIONSThere is no question that on-demandCRM is a highly compelling deploymentoption for organizations of all types andsizes. For sales teams in particular, on-demand CRM is a fast-to-deploy andeasy-to-use solution that fosterscollaboration. It also provides an entryinto CRM at a low initial cost that can beapplied as an operational—versus acapital—expense. No organization shouldevaluate new CRM solutions withoutassessing deployment options. However,be wary of those vendors that cite on-demand CRM as being the “only”

solution, particularly in a lean economy.Instead, your business needs as well asyour IT organization’s requirementsshould dictate the deployment decision.And for mid-sized and larger companies,using a combination of deploymentmodels with tight data integration toensure a consistent customer view maymake the most sense. For example, anorganization with a large centralizedmarketing operation as well as severalgeographically dispersed sales teams couldbenefit from an on-premises marketingand loyalty application that scales to meettheir most demanding requirements, andan on-demand solution that is easy forsalespeople to use and requires minimalIT support. While it’s an over-usedphrase, “one size does not fit all.”

CONCLUSIONTo quote Abraham Lincoln, “And this,too, shall pass….” The economy willrebound. When it does, will yourcompetitors who decided to invest duringa downturn leap ahead of you? For thosecompanies focused on differentiating theirbusinesses around the customer experience,now is an ideal time to concentrate onthose critical few customer relationshipmanagement initiatives that will helpfurther drive sales and marketingeffectiveness, increase customer affinity,and reduce costs. Focusing on thesepractices and behaviors now will not onlyhelp your organization steer through thisrecession, but will also prepare you to seizeopportunities in the next expansion.

ABOUT ORACLEOracle Corporation (NASDAQ: ORCL) isthe world’s leader in CRM with 5,000 CRMcustomers, 4.6 million CRM users, and 125million self-service users. Our customersrely on Oracle customer relationshipmanagement, business intelligence, andcustomer data integration solutions todeliver dramatic improvements inidentifying, acquiring, retaining, andserving their customers. These solutionsare the product of more than $2 billion indirect and partner investment and reflectover 11 years of CRM industry leadership.Oracle's CRM products include Siebel,Siebel CRM On Demand, OracleE-Business Suite, PeopleSoft, and OracleContact Center Anywhere. With anunmatched range of products, industryexpertise, and deployment options, Oracle is the right choice for CRM. To learn more visit Oracle.com/CRM orCRMOnDemand.com.

i “Home Depot Chief Renovates,” Ann

Zimmerman, The Wall Street Journal, June 5, 2008.ii “Managing IT in a downturn: Beyond cost

cutting,” James Kaplan and Johnson Sikes, The

McKinsey Quarterly, September 2008.iii Barry Trailer and Jim Dickie, “Understanding

What Your Sales Manager Is Up Against,” Harvard

Business Review, July-August 2006.iv “Need To Cut Costs? Improve The Web Site

Experience,” Megan Burns, Forrester Research,

December 1, 2008.v “Marketing Technology Adoption 2007,” Elana

Anderson, Forrester Research, April 26, 2007.

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Produced by:CRM Media