Sales & Marketing ― What’s CRM got to do With it?

1. Sales & Marketing ―What’s CRM got to do With it? Lane Michel, Partner Peppers & Rogers Group lane@1to1.com

2. CRM Can Enable Greater Alignment Across all Customer Touch Points • Strategy alignment, not just technology • Guiding principles (1to1, IDIC) • New tools and techniques that bring Sales & Marketing together

3. STRATEGY ALIGNMENT,NOT JUST TECHNOLOGY

4. 40,000 customers. What if only 80 matter?

5. CRM in Four Words… Treat Different Customers Differently

6. Ask Yourself: What is your firm’s most unique, non-replicable asset? • Products? • Brand equity? • Sales staff? • Merchandise? • Stores? • Databases and contact centers? • Marketing programs? • … Or customers?

7. Customer tells you what he wants Save me time You tailor your product, service or elements associated with it FEEDBACK The more effort the customer invests, the greater their stake in making relationship work Now the customer finds it more convenient to remain loyal, rather than re-teach a competitor The “Learning Relationship”

8. Creating a Competitive Advantage • “We have only two sources of competitive advantage: • 1) the ability tolearn more about our customersfaster than the competition • 2) the ability toturn that learning into action faster than the competition.” — Jack Welch, CEO of GE, outlining his competitive strategy for the 21st Century

9. Technology & Tools Enable CRM, but… • CRM tools are only: • as smart and capable as your workforce • get results when your business processes change to harness customer insight

10. CRM can’t be installed. It must be adopted. 

11. The Four Steps of 1to1 Marketing Identifycustomers, individually and addressably Differentiate them, by value and needs Interactwith them more cost-efficiently and effectively Customizeinformation, messages, product and service offering based on learning

12. GUIDING PRINCIPLES

13. Cascading Goals: More profitable growth Greater share of customer Differentiated treatment/experience Analytics on value/needs Customer knowledge Management

14. Strategy for Building Customer Knowledge Management 360º View Achieved Over Time Intelligence Layer: Customer needs, feedback, unstructured information fields Associative Layer: Detailed transactions, complex associations, analytics, predictive values Transactional Layer: Basic transaction and association information direct and indirect Foundational Layer: Tools, technology, business rules, basic customer identification and address information to build and maintain profiles Start with Core Customer Profile

15. NEW TOOLS AND TECHNIQUES THAT BRING SALES & MARKETING TOGETHER • Customer Value and Needs Analysis • Customer Knowledge Management • 1to1 Marketing Discipline & Pilots

16. Customer Metrics

17. Insight Analysis Customer Data Response Action Required Capabilities for Marketing 10 High-Value Marketing Processes for 21st Century • Marketing operations management • Marketing visibility, accountability and value measurement • Customer and market insight generation • Customer-value-based segmentation • Portfolio and capacity-based resource allocation • Product development and introduction • Customer-needs-based trigger identification • Orchestrated customization– integrated marketing activities • Orchestrated cross-channel dialogues • Customer-value-based network management Source: Gartner Group

18. Managed Analytics Overview 2. Derive Customer 1. Gather Insight Customer Data Analysis (both internal and external) Customer Needs • Customer Defection • Contact Information • What products customer will • need next Preferences • Reporting & Decision - Look-a-like - - portfolio analysis • Purchasing Behavior • Feedback support Positive and negative triggers • Customer Interaction • Demographic and • firmographic Action 4. Evaluate 3. Suggest Proactive Response Action Increase in customer satisfaction w Align Marketing & Sales resources to customers based on • Incremental customer contribution w opportunity Increased customer interaction (e.g., w Develop customized marketing collateral based on • attendance at events) customer need Decrease in defection rate w Offer customized content on Internet based on customer • Increase in wallet share w needs Increase in customer loyalty w Design events around, and send invitations to, most • valuable customers and look-a-likes • Feed customer insights to product development

19. Use 1to1 to keepthese customers …and growthese. Migrate these(potential value unknown) Spend no resources marketing to these Customer Value Tiers Actual Value Potential Value Costs MVCs MGCs “Migrators” BZs

20. Customer “Needs” Groups in Action • The trick is to find customers who “look like” each other in terms of their needs • Goal is to organize strategy and treatments around portfolios of customers with similar needs • Identifying needs-based groups among customers is a first step to differentiating the experiences of individual customers

21. Defining and Meeting Enhanced Needs Increases Your Relevance • Beyond demographics • Gender, age, geography, income, company size, title • Beyond attitudes • I am status conscious and want to use only the best products • My company uses technology as a competitive advantage and we are on the leading edge • Needs are unique and behavior-driven • I am an “information-junkie” and a “techie.” I want you to provide me with as much relevant information about personal electronics as you can. • I am a “frequent traveler” that spends most of my time driving from one city to the next. I have very little time – how can you save me time?

22. Basic Addressable Client Needs (B2B example) • Vertical industry • Business event or trigger • Advancement in life cycle • Stated unmet need (feedback) • Relationship growth, issue • Common customer need

23. Needs are Classified in Different Ways Common Needs Needs common to a large majority of customers Differentiating Needs Increasingly Relevant and ImpactfulInteractions Deepening Individual Customer Relationship Shared Needs Needs shared across two or more needs groups Needs shared by customers in one needs group Needs specific to one individual customer Group Needs Group Needs Individual Needs

24. …Serves as the Foundation for a Customized Interaction Strategy Mass Marketing Common Needs Shared Needs Targeted marketingmessages Shared Needs Shared Needs Shared Needs Shared Needs Customized, Templated Offerings Needs Group A Needs Group B Needs Group C Needs Group D Needs Group E IndividualizedLearning Relationships

25. 1to1 Marketing Definition • Discipline for the enterprise • Engages the right INDIVIDUAL CUSTOMER • At the right TIME • With the right MESSAGE • In the right WAY • Enabled through CRM tools • To drive more profitable revenue growth

26. Define ITSM Interaction Strategy Build a 1to1 Marketing Pilot Step 2. INSIGHT Step 3. FOCUS Step 4. PLAN Step 5. Execute Plan Step 1. ITSM Messaging Review • Review INSIGHT document with Marketing • Review INSIGHT document with Sales • Begin building 1to1 plan by determining who to focus on and what activities need to surround that interaction • Delivery of FOCUS document detailing how marketing can Focus their efforts to support Sales at the selected accounts • Review FOCUS document with Marketing • Review FOCUS document with Sales • Detail out how to best deliver what messages to achieve the focus activities for each individual • Delivery of the PLAN document which lays out what has to happen to deliver the right message at the right time in the right way • Insight interviews with Marketing and Sales • Review of all Account related external sources such as, Annual Report, Hoovers, Audio Broadcasts, etc. • Identification of all Key contacts and types of interaction • Delivery of INSIGHT document detailing all relevant and key insights from all sources • Review Current State messaging materials, contacts, vehicles • Identify gaps in marketing and sales materials and messages • Account Selection • Coordinate activities and timing with Sales • Ensure baseline measures are in place • Initiate interactions defined in PLAN • Monitor responses, feedback • Refine communications materials as needed based on feedback and responses.

27. SF TEMPLATING & PLAYBOOKS

28. Sales Playbook Description • Used by sales in preparation for customer discussions • Provides clearer view of customer experience in the context of understanding addressable needs groups in the market • Delivers scripts and “golden questions” to uncover customer needs in context of your ability to meet those needs • Packages relevant marketing treatments that include optimized product & service offerings for grouping of customer needs

29. Addressable Needs are Grouped in Different Ways to Make you More Relevant to Customer Common Needs Needs common to a large majority of customers Differentiating Needs Needs shared across needs groups Needs shared by customers are grouped Needs specific to one individual customer Shared Needs Increasingly Relevant and Impactful Interactions Deepening Individual Customer Relationship Group Needs Group Needs • Business event or trigger • Advancement in life cycle • Stated unmet need (feedback) • Relationship growth, issue • Common customer need Individual Needs

30. Define addressable Needs Groups by segment Delivering the Sales Playbook Segment & vertical plan Customer needs research Product / Service Offering Sample account plans Develop Golden Questions & Scripts to fit customers to defined Needs Groups Align product/service offer to meet customer defined need Package marketing collateral for selected needs groups Produce Sales Playbook

31. 0 / 10 What can a 1to1 approach to CRM do for my sales & marketing teams? • Better position my company with our customers • Replace 1-to-many marketing efforts • Drive additional sales • Enable greater alignment between Sales and Marketing • Doesn't require any more customer information than we have today Cross-Tab Label

32. Case Study: Bentley Systems Illustration of using customer needs group to create templated offerings for Sales Force Effectiveness

33. Bentley Systems Inc. Background • U.S. leading provider of software for “enterprise engineering modeling” • Annual revenues of $175 million • 300,000 professional users • Software manages architecture from design all the way through a structure’s life cycle • Software shares info, automates paper trail • Core product is MicroStation • CAD program runs on PC Shanghai World Financial Center

34. One of Bentley’s Business Challenges • High market share (second in industry, saturated market) • Infrequent sales spikes Historical client sales Revenue Time • But not only did this product focus make year-to-year growth projections uncertain ... it created numerous pitfalls • Competitors could imitate MicroStation, eroding margins • If market slows, Bentley must either cut margins or costs • If market grows, competitors may create better product • Independent resellers create unstable sales environment

35. Bentley’s Business Solution –Leverage What They Know About Their Customers • Broaden product line to meet more client needs over time • Focus on end-user needs instead of market development • Host industry user conferences • Defined and meet enhanced needs through better information and data gathering, “Drip Irrigation” through “Golden Questions” • New products and services to increase revenue from each client Create sources of revenue by meeting more of each client’s needs Revenue Time

36. Sales Playbook Supported Aligning Sales & Marketing for Customer Growth • Effectively shifted focus from market share development to customer share development • Integrated marketing in front of and behind sales and channel partners • Balance between corporate and sales-level customer relationships • Marketing delivers value to the customer-facing sales force by helping identify needs and interactions with most valuable customers • Benefits are three-fold: • A culture of trust and support that further enables the whole company to develop deep customer relationships • More effective prioritization of sales efforts • Improved efficiency and relevance of marketing efforts • Result: Alignment of sales and marketing efforts resulted in doubling of revenue and significant decrease in costs

37. Architects focus on design aesthetics, price, comfort... Architectural-engineeringfirms build hospitals, factories... Engineers put a pipeline in the desert or a bridge across a river... Templating the “Sales” Process Bentley initially devised 11 “account use scenarios” Needs Group 7 Needs Group 1 Needs Group 2 Needs Group 8 Needs Group 3 Needs Group 9 Needs Group 4 Needs Group 10 Needs Group 5 Needs Group 11 Needs Group 6

38. Using the Templates… • Account scenarios derived from grouping of needs without looking at past transactions • Bentley mapped 85 products and related services to the 11 account scenarios • Descriptions of environment, customer needs and objectives of the customers within the scenario • Account Manager and Marketing team quickly assembled details on all appropriate product and service “modules” mapped into templates • When a customer or prospect profiles into a scenario, sales and marketing respond together with the matching template

39. Bentley’s Results • Bentley’s new revenue model • By moving MVCs to direct sales using sales templates and aligning Marketing behind Sales • Bentley in FY 2001 achieved growth of 66% to $290M standing out among software vendors in a poor post 9/11 sales environment

40. ..for additional information Lane Michel Partner Peppers & Rogers Group lane@1to1.com