CRM in the Bottle: The Pepsi Way

Dears,

This article is interesting and it is based on our experience working with some of the Distribution partners of The Pepsi Bottling Group. They say it proudly "We Sell Soda." The Pepsi Bottling Group (PBG) is the world's largest manufacturer, seller, and distributor of Pepsi-Cola beverages — some of the world's most recognized consumer brands. Now let see how they transformed their Salesforce into a Super CRM Roadies.

PBG's Salesforce needs quite a bit of information about each of their accounts in order to sell soda effectively, minimize out-of-stock items, and control back-room inventory. They were taking their information into stores in large notebooks. A new application using a mobile Handheld provides the Salesforce with the information needed to sell effectively: route management, real-time demand forecasting, inventory management, and per-store information on promotions and authorized products.

The Pepsi Bottling Group's mission statement says it all: "We Sell Soda." The need to plow through big binders full of demand forecasts, promotions, and per-store authorized product lists was restricting PBG's sales reps' ability to use the limited time they have at each store to close sales. A new "Smart Selling" application delivered on the handheld gives each rep all the tools and information needed to sell effectively.

When Pepsi sales reps go into a store today, they have only a few minutes of the store manager's time in order to make a sale. Every day Pepsi in a every territory send 6,000 salespeople out to make a difference both for their business and for the businesses of the retail customers. If they don't provide them with the best tools to have at their disposal, salesperson will not be able to take advantage of the 20 million interactions that They have every year.PBG sells about 1.5 billion cases of soda a year to about 650,000 customers in the United States and about a million customers worldwide. PBG's Salesforce has to contend with a proliferation of SKUs, a complex pricing scheme, customer development agreements, periodic promotions, and lists of authorized products that can vary from store to store, even within a chain.

"They have a number of customer development agreements," said a senior manager of IT. These annual agreements cover marketing activity, shelf space, and equipment placements. They want to measure compliance with those agreements and close the gap where there are voids. "Another major issue is that the number of SKUs they're supporting is just proliferating, each with its own price point and various promotions built around them. That's a great deal of information for our front-line selling performers to manage. Our sales reps needed an efficient system to quickly track information on individual SKUs and promotions in order to maximize their selling capability."

PBG, US has rolled out Symbol PDT 8000 Pocket PCs to its Salesforce and built a next-generation application for the sales reps. The Pocket PCs tie into the back office using 802.11b wireless connectivity. The mobile handheld application was developed using one of the Midmarket CRM technology.

The Mobile Handheld application combines communication, route management, real-time demand forecasting, sales optimization, and personal performance optimization. The application tries to capture every sales growth opportunity by giving the representative priorities, targeting the most relevant sales opportunities by customer, ensuring compliance with customer development agreements, closing product distribution opportunities, and creating incremental demand on every sales call. In addition, it tries to match order quantity to demand by modeling replenishment demand with historical data. The application does regressions of shipment, price, display, advertising, seasonality, and other factors. It then uses probability simulation to estimate demand.

The application leverages the customer rep's presence in the store to enhance the initial forecast and factor in incremental growth. This in-store feedback allows the application to take into account the true demand factor conditions — the retail price, the kind of display used, and so on — and also to allow for inventory on hand and delivery schedules.

The sales application is really designed to help selling in two different ways. First, it provides sales reps with information about a customer and identifies opportunities that they can sell against in the account. The second is to provide sales reps with their monthly priorities. Combined, these two elements provide pepsi sales reps with the overall guidance and account-specific information needed to drive revenue at every opportunity. Since PBG has so many sales reps, it was critical to make the application easy to learn and use.

The Pepsi Bottling Group has 6,000 sales reps and most do not stay in the same position for very long,".. The application is developed to be very intuitive, so a new user could pick up the device, hit the street, and be productive. The interface itself draws them into the application, shows them where to go, what to look at, and what to do next."



The impact of this application will come from several specific areas:



o Intelligent selling prompts on "highly relevant" offers will lead to increased up-selling and cross-selling.

o Increased sales through reduced out-of-stocks as a result of better demand forecasting. This is a major industry wide issue valued at $7 billion by the Grocery Management Association in a study that showed that industry out-of-stocks average 7 percent.

o Demand forecasting also improves the sales reps' productivity by reducing the time reps spend jotting notes, calculating, and thinking about order quantities.

o Better authorized product management will reduce costs by reducing invoice disputes. They have a filter in the application that prevents the rep from selling an account a product that they're not authorized to buy.

o Closer management of trade promotion performance agreements will drive increased compliance and lead to increased consumer demand. Items such as displays, reduced retail pricing, and other "Retail Execution" performance elements are negotiated at headquarters but must be executed by reps in the field. Our application reminds them of the current agreements for each account.

o Faster and more effective introduction and selling of new products will drive sales by putting innovation on shelves in closer coordination with marketing efforts.

o Integrated bar code scanning will reduce the time reps spend on low-value work, such as inventory management, and increase their time for higher value selling activities.

o Integrated rich media selling aids will drive increases in close rates on offers by increasing consistent delivery of the marketing message at targeted and relevant opportunities.


* Digital delivery of these selling aids will reduce printing and distribution costs, while at the same time ensuring that selling aids are available when needed at the precise moment of truth - and not lost or left in the truck

CROUCHING CUSTOMER and HIDDEN INSIGHT

Dears,

CROUCHING CUSTOMER and HIDDEN INSIGHT

Data, Data everywhere, but never the time to think. That's the state of most companies' knowledge of their customers today, as transaction systems capture unimaginable volumes of data about customer activity, but create real challenges for managers hoping to glean insight into how to win more customers and better serve existing ones. Despite having a wealth of transaction data, few organizations have developed capabilities to aggregate, analyze, and use customer data to generate real business value. Though the business world is witnessing an explosion of interest and investment in CRM software and other analytic technologies, many fail to exploit those technologies effectively. As a result customer satisfaction ratings remain largely unchanged.


Why Care About Customer Knowledge?

"Know your customer" is one of the most widely used maxims in business. Yet many companies devote little thought to improving their own understanding of their customers. Often companies have been discouraged by previous efforts, such as failed data warehousing projects or unsuccessful attempts to persuade sales personnel to document customer interests. Many companies that do seek to improve their customer understanding take limited measures, such as conducting a study of customer profitability or implementing a new CRM software product to improve sales force effectiveness. Too often these efforts provide improved efficiencies, but yield little in the way of improved customer insight.

A recent research study suggests that the best companies in an industry derive as much as 6% of additional operating margin in certain industries, simply by having a better understanding of their customers. An organization whose people have better customer knowledge can develop a deeper insight into their customers. These insights, if properly nurtured and applied, enable employees to improve their customer relationships in every interaction with the customer. It is this increased "customer equity" that leads to improved margins.

The following are the most common ways organizations use their customer insight to create value:

o Segment and prioritize the customer base to maximize resource allocation – Famous Casion analyzes customer data to determine which customers are most likely to respond to offers to visit particular casinos. As its base of customer data has grown, more of its marketing bets are paying off.

o Create more effective marketing messages - Frito-Lay was involved in a study that compared a retailer's total return on investment for direct store-delivered brands (like Fritos) versus "warehoused" brands. Having this knowledge about its customer's performance allowed Frito-Lay's salespeople to make a stronger pitch for increased shelf space.

o Innovate and improve existing products/services - Hewlett-Packard's laser printer, Laser Jet V, was not designed to be portable (portability is not a factor in its purchase). Handles were added because observing customers showed that 30% are in the habit of moving their printers. Because many of those who transport printers are women, the handles were designed to be large enough to avoid breaking long fingernails.

o Engender customer loyalty - British Airways analyzed customer data to discover instances where an executive customer had flown one-way on British Airways, but used another carrier on the return. It sent these valued customers a special mailing, headed "now we see you - now we don't," and offered a special incentive to use their services both ways.

o Enhance the array of products/services - Travelocity, the Web-based travel agency, offers customers who buy airplane tickets to 10 large United States cities a "destination guide" with useful information about their destinations.

o Improve success in cross-selling - Amazon.com steers its repeat book-buyers to other types of products based on interests they have displayed in past purchases.

Customer Insight Leaders

In the research of 22 leading companies, they identified the multi-pronged approaches that allowed these companies to develop superior customer understanding. They noted that all were tackling the challenges simultaneously on many fronts, combining approaches to managing transaction-derived and human-based knowledge. While specific tactics differed in many respects, the leaders excelled in three areas - strategic focus, knowledge creation, and organization integration.

Strategic Focus

A company's market position and corporate strategy must be defined and understood before pursuing a knowledge creation initiative. Then, the company can choose its spots. While it would be nice to be thoroughly knowledgeable about every customer, the reality of resource constraints dictates that there be an emphasis on some highly valuable subset. Leading companies focus their resources on the most valuable customer segments. Microsoft, for example, shifted its emphasis a few years ago to understand the needs of CIOs, as it anticipated a future where vastly more revenues would come from corporate than from individual software purchases. A similar shift occurred at Procter & Gamble when it altered its focus in the 1980s to become more knowledgeable about Wal-Mart and other increasingly powerful trade customers. Until then, its efforts were largely focused on end-consumer research.

Knowledge Creation

Leading companies align their knowledge management initiatives with their business strategy. Prior to the information gathering process, these companies define and focus their customer knowledge objectives based on their business strategies and customer relationship objectives. For example, clearly defining its objectives first, FedEx successfully undertook an initiative to increase the company's share of the small shipper market. Since this depended on being able to serve these customers cost effectively, a related goal was to encourage small shippers to drop their packages off rather than have FedEx trucks pick them up. The clarity of these objectives made it much easier to understand what knowledge had to be gained and shared about small shippers.

These leading companies also use transaction-driven and human-based information to build a complete customer picture, fostering customer loyalty. Transaction-driven data can be obtained through systems and data warehouses/marts that include information from past purchases, ZIP codes or income data. This data can be used to improve direct marketing and products cross-selling, and in identifying unprofitable customers.

Detailed databases can be helpful, but the best companies recognized that much more sophisticated human-based knowledge - gathered through personal interactions with the customer - must be managed as well. This is especially true in situations where the past is not a particularly relevant guide to the future. Take the example of a company selling largely fashion goods - past transactions probably are not the best indicator of what will sell to whom this season.

Procter & Gamble, long considered one of the world's best marketers, exemplifies an organization that employs transaction-driven and human-based approaches to gaining consumer and retailer knowledge. Going a step further than the concept of focus groups, Procter & Gamble constructs highly detailed "mental maps" of consumers' thinking about products, such as detergents, which are based on extended, wide-ranging discussions with typical consumers. Procter & Gamble marketing people walk the floors of stores with shoppers, noting what they say and do not say, and observing what they do. With thorough mapping, a great deal of insight can be extrapolated from the thinking of a few consumers. At the same time, Procter & Gamble has been a heavy user of statistical data from point-of-sale transactions. Now Procter & Gamble has begun to focus on managing explicit knowledge about key retailer chains as customers, and encourages members of customer teams to capture and share key information about retailers with other members serving the same customer.



Organization Integration



The companies that are best at managing customer knowledge also recognize that customer knowledge initiatives do not exist in a vacuum. Rather, their success is dependent on the broader context of roles and responsibilities, the culture of the workplace and organization structure.

It is imperative that the organizational structure enforces the strategic objective of customer understanding and therefore, must be conducive to generating and managing customer knowledge. Many companies, such as Hewlett-Packard, have undertaken reorganizations to become more customer focused. The company's laser printer business, for example, prides itself on technological excellence. Over time, Hewlett-Packard managers realized that commoditization would cause it to lose market share if it relied exclusively on technical leadership. Like many great product companies, Hewlett-Packard was organized by product segments, such as "mid-size laser printers." Management began a major cultural shift to focus instead on the full customer experience - which included customer support, buying, upgrading, selling, service, toner purchase and maintenance. Getting Hewlett-Packard's development engineers to think more broadly about their products is one benefit of this approach. For example, surveys suggested that customer satisfaction could be increased if the "low toner" message was changed to indicate how many pages were left before the toner runs out. To do this would require adding sensors to predict how many more pages could be produced. Before the new focus on customers and customer knowledge, development engineers would not have understood how adding this feature contributed to market leadership. Reorganizing around customers seems a double-edged sword. If a company is organized around types of customers, each type will receive significant attention, and approaches will be developed for managing knowledge about that type of customer. However, this segmented organization may mean that generalized solutions for customer knowledge will not be developed and that useful approaches may not be shared easily across different customer types.



The Harley-Davidsons, Hewlett-Packards, and Procter & Gamble’s of the world - are making significant investments to develop transaction-data-driven analytic to develop transaction-data-driven analytic capabilities. But more importantly, they are investing in a wide variety of approaches to gain customer knowledge. In fact, the detailed interviews with the leaders in customer knowledge reveal that they give most of the credit for their success to their efforts in increasing the collection, distribution and use of human-based, as opposed to transaction-derived, knowledge. We would argue that information from both customer transactions and human customer relationships are necessary for real customer insights, but they must be turned into knowledge to be useful.



Transaction-Derived Knowledge



There is no doubt that an organization's ability to analyze and interpret transaction data can be a source of competitive advantage. Examples of some of the leading companies use of transaction-driven knowledge include the following.



Use of past-purchase or other personalized data to target and deliver promotional offers - American Express designed four different covers for its merchandise catalog, each household got the one that best reflected its past purchases (high-tech gadgets versus jewelry).

Increase customer loyalty - Marriott invested heavily in customer relationship management systems. Desk clerks now get a heads-up display of any special interests or needs a guest might have expressed when making the reservation or during past stays at other Marriott properties. Having such information available during those first few critical minutes following the customer's arrival can make all the difference to their lasting impression of the hotel's service.

Achieve a sense of relationship through personalization - Clinique.com asks users for information, such as natural hair color and tendency to sunburn, so it can recommend products likely to be right for them, and also periodically sends email offering deals on these products. To date, some half million users have registered.

Improve cross-selling - First Union, one of the largest United States based banks, implemented a massive enterprise-wide customer-centric data warehouse. First Union uses its customer data to improve the effectiveness of direct marketing efforts. The bank also analyzes customer characteristics to identify unprofitable customers, with the hope of transforming them into desirable customers. Finally, by analyzing both transaction and demographic customer data, First Union relationship managers are able to react in real time to consumer "events" (for example, a major savings withdrawal or deposit, or purchase of a house). It expects these combined capabilities will contribute $400 million in revenues annually.



Human-Based Knowledge



As useful as transaction data can be, the truth about customer knowledge is that successfully managing it requires more than data crunching. Sophisticated knowledge, particularly human insight, must be managed, together with voluminous data. The following are examples of some leading companies' uses of this type of knowledge.



Promoting a higher level of interaction between employees and customers - Fidelity Investments requires salespeople to record customer knowledge gained in sales calls, a particularly useful resource when a customer account is reassigned for whatever reason.



Tightly linking corporate identity to their customers' identity - The Jeep division of Daimler Chrysler understands they must know their customers extremely well in order to continue to introduce product improvements that are true to the brand. It hires marketing professors (with strong backgrounds in the social sciences) to observe and interpret customer behavior at rallies and discuss it with executives and marketing management - an attempt to capture subtle observations and impressions and convert them to explicit knowledge.



Improving product design - At General Electric, comments from customer calls on the division's inbound toll-free number are systematically recorded by service reps and later analyzed by product developers. To get a feel for the customer's voice and mood when giving the comments, engineers and researchers are required to listen in on customer calls at regular intervals.



The best approach to customer knowledge is a mix of transaction-driven and human-based knowledge, though even the best companies struggle with achieving the right balance and integrating different types of knowledge. Those that are most successful take a conscious, deliberate approach to transforming data into knowledge and results.



Looking for Insight in All the Wrong Places



Clearly, companies investing in customer knowledge management must focus on particular customer types and objectives, employ both transaction-derived and human-based knowledge, and manage the broader customer knowledge context. Most large companies have a good record of the business transactions they complete with customers. Many of these companies are focused heavily on analyzing transaction data and have forgotten that there is a world of customer knowledge coming directly from human interactions with customers. Companies must not be tempted by the easy availability of transaction data to mistake transactions for customers, or to gravitate into territory where the projects are least ambiguous and where knowledge-finding looks easiest.



Customers, first and foremost, are people - and building a relationship with them entails more than just tabulating their transactions.

Loving P&C
DC*

Simplementation: Few Spoons of Sugar for CRM Initiative

Dears,


In the classic Walt Disney movie Mary Poppins, the children agonize over cleaning their pig sty of a nursery. They dread reassembling spilled puzzle pieces and piling dolls and jack-in-the-boxes back in the toy bin—that is, until their clever nanny comes along and show them that by making the job a game, a former chore can seem downright pleasant. When companies decide to implement new technology—either enterprise wide or in a single department—it’s often viewed with a bit of apprehension. Implementation projects require extra support, synergy across departments, and additional time to adjust. Even small-scale projects require some form of change management. Although rolling out a new software solution requires more than a spoonful of sugar and a snap of Mary Poppins’ fingers, there are ways to make the process less painful—and to make sure the implementation will deliver value.

The average CRM project for a large business takes 14 months; according to industry research giant Gartner. Managers responsible for CRM business applications spend the majority of that time selecting, implementing, and upgrading the technology itself, including integration with or replacement of legacy applications. But no matter what technology you select, and no matter how intensely you strategize roadblocks are all too common on the implementation superhighway. Since those roadblocks often come down to human factors, I’ve collected 10 of the most common and the most costly .

1. Do Your Homework



They say that there’s no better way to get attention than to use the word “free.” If that’s so, then why don’t more organizations take advantage of free software trials? “You should really try before you buy,” Amazingly, a lot of companies don’t do that or competitive face-offs. Often the anticipation of rolling out a new solution leads decision-makers to begin implementing before they have extensively evaluated the product. To test the effectiveness of a proposed software initiative, some vendor takes each client through what the firm calls a “working model”—essentially a small-scale version of the actual software. From testing the products, management can get a better gauge of likely adoption and see what might need to be altered before the go-live date. The initial planning before an implementation is crucial. On a typical CRM consulting engagement, the front end is about 30 to 45 days of fully understanding what the business needs are, what the strategy is, and what you want CRM to supplement. The technology piece is relatively simple from that point.

2. People Who Need People

Time to put that conference room to use. Before even thinking about solutions, organizations must get down to basics, involve key stakeholders, and discuss pain points and objectives. Although management and chief information officers are often the ones finalizing decisions, they should involve their business counterparts—the people who will actually be using the software—from the start. Neglecting user needs will only lead to difficulties as the solution is rolled out.

Historically, there’s been an age-old rift between business staffers and the technology department. The business side complains that the tech staff isn’t speaking its language, whereas technology workers feel as though business users neglect necessary processes and are lax in following procedures. Management may long for, say, a reporting tool for visibility‚ but front-line sales and marketing workers are the ones who will have to feed into it. Without their input, management can’t know which capabilities fit the business processes. This common chasm costs a lot—in expenditures and in missed opportunities. But the chasm itself isn’t the problem. Great [technology] people enable the business solutions. CIOs are focused on technology strategy; business users are the ones who know what works in their day-to-day routines. Buy-in from both is the foundation of a successful initiative.

3. Let it Trickle

When you design the scope of a CRM implementation, you want to do as little as possible “That’s countercultural for consultants.” Throwing too many functions at a business user, he says, could lead to failure. Instead, implementation teams should develop a strategy to phase in features and functionality. Most of the clients whom I interacted initially wanted several functions implemented at once—sales, campaigns, and financial systems. However, suggested rolling out one at a time, giving users time to adopt each and to prepare for the next wave. Change management is always, always, always understated. While it’s imperative that solutions and implementations deliver results in a very timely manner, a step-by-step implementation approach is prudent. Organizations underestimate the scale and scope of the change required in implementing. One recommendation? Factor in time for contingencies. By starting small, but thinking big, users will have time to become comfortable with a solution. And if something doesn’t work, there’s wiggle room to fix it.

4. Think Outside the Box—Just Not Too Far Outside

Its complex sales force automation (SFA) solution required proposal generation for each sale—an appropriate workflow for some of the high-end sales that often reached thousands of dollars, but a hassle when salespeople also had to waste time drafting full proposals on lower-end deals involving products worth only a few hundred dollars. The spectrum of sales simply didn’t meet the solution. It’s like trying to fit an oversized couch into a tiny apartment: No matter how many times you move the couch around, it’s still just too big for the room. You could try sawing off an arm—or, in the case of software, customizing some code—but remember that the more you customize, the more you risk creating unforeseen issues. So make sure that any customization is done within your organization’s known limits. In order to leverage CRM, it’s really critical to set up systems as close to the by-design way the CRM company wanted you to do it. “The more you stray, the harder and more expensive it becomes.”

5. Don’t Be Seduced by Technology

Stay away from shiny things. In other words, cutting-edge technology with the newest bells and whistles may seem appealing at first glance. And it might be tempting to jump on the buzzword bandwagon, but businesses must consider their needs before falling prey to fancy software and services. Regardless of how new, hip, or innovative a technology may be, employees must be comfortable with it. If staff do not understand, enjoy, or find benefit in a new technology implementation, they likely will not use it effectively and there will be no measurable [return on investment].If a solution doesn’t deliver ROI, no matter how spiffy the new technology might sound, you should probably hold off.

6. Find Sponsors That Stick

We talk about encouraging customers to become evangelists for your company, but before there’s even a chance for that to occur, employees have to be evangelists first. In terms of an implementation your evangelists had better include a project sponsor—or a team of them. “It’s about having someone who can articulate the essence of what [the project is] trying to accomplish and who has the authority to make sure it’s implemented. The sponsor doesn’t have to be the CEO, just someone who’s passionate about the undertaking. Sponsorship often starts out with good intentions but all too often [they’re] lost in the process.”

7. Plan for Product Enrichment

Recognize that CRM really becomes nothing more than a Reception couch if you don’t put the add-ons to the product. If there’s even a chance your organization might grow unsatisfied with its plain-vanilla CRM solution, the implementation period is the time to start thinking about potential future additions.

8. Audit, Audit, Audit

You’ll never know how far you’ve gone if you failed to record your starting place. “You have to inspect what you expect; good CRM gives you many of the metrics to measure your progress. Agreeing on metrics and milestones before the go-live date, of course, will make auditing easier. Although it’s hard to get a great idea of the health of a solution right away, you can still monitor user logins and other basic adoption statistics.

By paying close attention from the start, it will be possible to tweak the solution as any problems arise. Users, for example, may be approaching the tool differently than intended. Best to learn these issues at the start. If you aren’t looking at how people use the system, you’ll have data-quality issues like they’re going out of style.

9. Pull the Plug When You Have To

It’s going to hurt a little—in some instances, maybe a lot—but if enough time has gone by and a solution has not worked, it might be time to call it quits. Hopefully, organizations will have laid enough groundwork to avoid this fate, but never say never. “Most projects don’t die because of starvation,” “They die because of indigestion.”If you shut a solution down that you’ve taken through an implementation process, you probably shouldn’t have made it into prime time. The more-realistic scenario we see being effective is that you roll out a process or functionality that doesn’t completely hit the mark.When efforts you expected to contribute to the overall success of an initiative begin to gum up the works there’s no harm in taking down those little sub processes and discontinuing them.

10. Mind the Generation Gap



“You’ve got to work the way they work,” “they” means both customers and employees.“Even if you’re delivering value to [an older] generation, you have to help them get over the stigma and the doubt,” For some companies, he says, it’s important to deploy change management techniques and ease fears of the scary new technology by reframing the project as mere business transformation. One social networking company didn’t need change management or traditional handholding. Its tech-savvy constituents didn’t want training manuals—they wanted to jump in and take a shot on their own.

Loving P&C
DC*

CRM in Emerging Markets – Consumer Goods Industry Focus

CRM in Emerging Markets – Consumer Goods Industry Focus

Dears,

               

CRM, when done right, drives incremental revenue, margin and a more efficient and effective sales force. For a global organization looking to win in emerging markets enabling CRM capability is more than developing and deploying new tools and processes – it is a transformation. This article outlines an approach to simplify this transformation and to deliver business benefits.

CPG manufacturers are aggressively targeting emerging markets to enable future growth. The increasing number of consumers of international brands of personal and household products in these markets represents a tremendous branding and sales opportunity. The numbers below are staggering:

·         84% of the world global population accounts for 50% of Global GDP

·         30  Million traditional shops world over

·         Potential to add 1 billion consumers for every worthy Brand.

CPG companies are capitalizing on this opportunity by increasing their presence and focusing on affordability, accessibility and awareness of their brands. For example brands like Oreo and Tide do not have a formal presence in India. CPG firms would do well by launching affordable variants of these brands in India. Distributors are a key stakeholder in the success that CPG companies can drive in these markets. In Latin America a CPG firm will need to work with a few hundred distributors; whereas in Asia Pacific a CPG firm would need to leverage 1,000-2,500 distributors to reach 1 Billion new consumers!

There are several business barriers to effective information exchange between the CPG Company, the distributor and the distributor‘s sales force. Often the technology available with the sales force is fairly primitive including paper based exchange of information. The added complexity of multiple languages and low level of sophistication due to lack of formal training within the sales force further amplify the benefits of a robust CRM platform in most developing markets.

Value Chain in Emerging Markets

Emerging markets are complex. Complexity is driven by channels, products and routes to market. In developed markets CPG firms work directly with large organized national scale retailers. In emerging markets CPG firms work primarily with distributors. The distributors employ a sales force that services High Frequency Stores (HFS) - individual mom and pop stores which carry relatively small inventory, pay cash and need very high frequency servicing. Further, market structures vary widely across emerging markets. In Brazil, Mexico, Malaysia and India — for example — modern trade and traditional trade co-exist; whereas in Ecuador, Peru or most Southern Cone countries traditional trade makes up majority of the market. The existence of traditional trade and therefore the route to market presents the following challenges:

1. Lack of control on retail execution. For example, a CPG firm does not have the ability to direct the sales force to execute specific activities. The sales force therefore—typically— pushes products that are easier to sell in that store as opposed to those driven by trade/consumer promotion.

2. Lack of visibility to retail sales. CPG firms have visibility of the receipt of their shipments to a distributor but not to what the distributor sold to a retail outlet.

3. Low level of sophistication of sales representative due to lack of formal training.

4. Need to collate data across distributors.

5. Lack of advanced technologies/tools to drive automation

In our experience, an approach that enables you to streamline and harmonize business processes while introducing innovation can increase your chances of achieving a successful outcome.

Enable

Streamline program management, technical leadership, change management, training, development, integration, and testing - everything into one program.

·         Accelerate CRM platform development with early brand/country deployment wins.

·         Ensure adoption by engaging local leadership early in the program.

·          Involve star performers from the sales team right from the start. Design the details with their input. Ensure it is their baby and not (only) yours.

·         Ensure adoption by providing ―context sensitive help

Harmonize

Focus on detail and achieve realistic global process harmonization by determining a country variant due to local business practice, culture and legal needs. For example, you will find that planning oriented processes can be harmonized across markets, while transactional processes and those that  lead to competitive advantage may need to be country specific.

Innovate

We are of the opinion that winning early in emerging markets will drive significant growth over the next decade and that CRM will accelerate achievement of that outcome. We also believe that breakthrough ideas that enable distributors to perform better and in turn create visibility for CPG firms to each retail store will create a significant competitive advantage.

Loving P&C
DC*

SaaS-ifying your CRM Application

Dears,

SaaS-ifying your CRM Application

SaaS CRM Maker Salesforce.com is clearly the poster-child for the software as a service (SaaS) industry (at least in the CRM space) and has boasted its multi-tenant architecture as the undeniable standard for hosted software delivery. However, SAP has entered the SaaS industry with its Business By Design solution and trumpeted its isolated tenancy hosted delivery model as one of the most overarching advantages when compared to Salesforce.com.


The debates between multi-tenant and isolated tenant hosted delivery platforms are nothing new, however, the topic has transcended from a quiet conversation among industry pundits to a full scale debate among SaaS buyers and influencers.

The multi-tenant hosting model claims to deliver the following advantages over isolated tenancy:

1. First and foremost - dependability and reliability. By mandating every customer operate on the same database, operating environment and software version, the hosting manufacturer is able to deliver greater standardization, operate with fewer variables and ensure a more reliable information system.

2. Material cost savings. When all customers reside within a single database, there are material economies of scale related to both software procurement costs and IT (Information Technology) administration (including provisioning, maintenance, tuning, trouble-shooting, evolution and systems management).

3. Faster life cycle evolutions. By not supporting individual client applications and multiple software versions, resources can be more tightly focused.

Not to be over-shadowed, isolated-tenancy advocates point to their hosted software architectural advantages:

1. Software versioning. Whereas multi-tenant CRM software solutions require all customers to share the same application version and all customers are upgraded in mass (whether they desire the upgrade or not), isolated tenancy CRM systems generally support multiple versions of their software (usually the current version and the last one or two versions) and permit clients to accept or defer new version releases. Isolated tenant and multiple version support often appeal to those clients who have incurred system integration or software customization and want the opportunity to evaluate the ramifications of a new version release before being forced to the new version. Isolated tenancy applications also appeal to those clients who would like to defer a new version release for a period of time (often until the first point release is issued).

2. Increased flexibility for access to information and system integration. Because isolated-tenancy CRM applications devote a dedicated and unique database to each customer installation, greater access to data with third party query tools, report writers and integration tools is permitted.

3. No limits customization. Unlike multi-tenant applications which include constraints which cannot be violated due to the shared database approach, isolated tenancy applications offer a 'no limits' software customization which generally implies both more flexible and lower cost customization.



Current Trends

• Hosed CRM and ERP (Enterprise Resource Planning) buyers show increased awareness in the multi-tenant versus isolated tenancy trade off. Majority of the Customers indicated that the tenancy model is or was included in their software selection evaluation.

• The smaller the customer, the more likely they gave less importance to this issue.

• The larger the client, the more likely they preferred or even demanded isolated tenancy. As one Fortune 500 respondent commented, "I find it audacious and presumptuous that a CRM company is going to tell me that I'm sharing a database with thousands of other companies as well as tell me that they are upgrading my system without my advance notice, input or approval. Do they not recognize that a system upgrade may wreck havoc with other related systems?"

• Security conscience organizations such as health care, financial services and federal government seemed to show strong preference for isolated tenancy, however each of the SaaS CRM Tenant model has its own advantage Single Tenancy could be model to look for to scale to new heights in the next few years.

Challenges in moving Desktop Warmers to the Cloud Comrades

While the idea of a cloud is appealing, there are challenges in moving an existing product to the cloud. Here are the challenges in moving to a cloud based business model:

• Customers are not going to switch unless the cost saving is exceptional. Minor savings are not good enough.

• Deployment has to be exceptionally fast

• High performance is an expectation. Customers somehow expect that the cloud has unlimited resources. So, if they’re paying for a cloud app, they expect that they can get whatever performance they demand. Hence, auto-scaling is a minimum requirement.

• Linear scaling is an expectation. But this is much easier said than done. Parallelization of tasks is a big pain. Must do lots of in-memory execution. Lots of caching. All of this is difficult.

• Latency must be low. Google, Facebook respond in a fraction of a second. So, users expect you will to.

• If you’re using Linux (i.e. the LAMP stack), then, for achieving some of thees things, you’ll need to use Memcache, Hadoop.

• You must code for failure. Failures are common in the cloud (at those scales). And you’re system needs to be designed to seamlessly recover from this.

• Is customer lock-in good or bad? General consensus in cloud computing market is that data lock-in is bad. Hence you need to design for data portability.

• Pricing: Deciding the price of your cloud based offering is really difficult.

o Cost of the service per customer is difficult to judge (shared memory used, support cost, CPU consumed, bandwidth consumed)

o Customers expect pay-as-you-go. This needs a full-fledged effort to build an appropriate accounting and billing system, and it needs to be grafted into your application

o To support pay-as-you-go effectively, you need to design different flavors of the service (platinum, gold, silver). It is possible that this might not be easy to do with your product.

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DC*

Saving your CRM Program with Successful Technology Enablement Process (STEP)

Dears,

There’s been a lot of bad media propaganda about customer relationship management (CRM) technology over the years. While a lot has been made about CRM failures, the reality is that only a very small proportion of implementations actually fail in the sense that the system doesn’t go live. Remember Artificial Intelligence (AI), one of the biggest buzz - words of the 80’s? How about Computer Aided Software Engineering (CASE)? These technologies rarely got implemented even though companies spent hundreds of thousands of dollars attempting to do so. At the time, industry analysts had us all believing that these technologies were as important as the coming of the Messiah, yet all that remains of them are distant memories.

There may be several causes for the high failure rate in enterprise type implementations, but two primary reasons seem to surface to the top with small to mid-size companies. First, implementation of a comprehensive CRM solution often requires a fundamental change in the policies and procedures of how a company sells and supports its customers. Changing to a customer-centric business model, meaning always placing the customer first can be very difficult to implement. Employees have a tendency to cling to old policies and focus on better ways to manage their business rather than creating a better customer experience. This type of change requires strong commitment from senior management and must permeate throughout the organization. You can’t just speak it, document it in your brochures or place it on the back of your mission statement. You must execute it with passion. Without this commitment, even the simplest of CRM solutions will fail.

Where CRM has commonly failed is in its ability to positively impact the bottom line. As a thirteen year veteran of the CRM industry I’d estimate that 80% of CRM systems seriously under-perform their potential, with the majority generating very marginal, and in many cases negative value for their owners. Most systems are limited in scope, and usage tends to be occasional and unstructured. So how did we get into this state? Two reasons I suspect:

Firstly, CRM vendors are, in general, first and foremost motivated and equipped to sell software, as opposed to deliver benefits. They may truly believe their software delivers value, but there is a big gap between raw technology and an implemented system that generates operational benefit. In particular vendors have failed to appreciate the importance of analyzing and encompassing their clients’ business processes, and have struggled with user adoption. Secondly, for those systems that do bridge the gap, many have failed to remain relevant over time. This is often because there has been insufficient maintenance of the system, or the business and changed and the system hasn’t adapted.

While businesses may be able to overlook the fact that their CRM technology isn’t delivering on its promise in the good times, the tougher economic environment means that these systems are letting them down just when they need them most. The need to attract and retain customers has never been more pressing. The good news is that it’s often relatively easy to turn a CRM system round, and with the investment already made, this can often be achieved without significant additional expenditure.

Incidentally, if you aren’t sure whether your CRM system is performing or not, one quick check is to review the reports generated by the software. If you can’t find any useful, comprehensive, or accurate data about the running of your business you can safely assume your system isn’t doing a lot for you.

Back to Basics

There are massive benefits to using CRM technology to control your key customer facing processes. Not only does it facilitate a host of operational efficiencies, but utilising the notion that you can’t manage what you can’t measure, one of the key benefits is being able to continue to improve over time. Your CRM system may not be doing much to help you today, but getting things back on track might prove the difference between prospering and failing in difficult times.

If you look back at some of the most successful products in the past decade, you will find that hey were point solutions, providing narrowly focused capabilities such as contact management, product &pricing management and opportunity management. They were easy to implement, easy to use and provided immediate value to the user. This resulted in strong user acceptance. I began to ask myself why CRM solutions could not be implemented the same way, as point solutions. Who mandated that companies must tackle the implementation of marketing campaign management, sales management and customer support functionality all at once? Why does back office integration have to be completed at the same time? Add to this the changes in policies and procedures required to transform to a customer-centric business model and it’s no wonder that we are seeing so many failures in the CRM space. We are simply asking people to do too much all at once. It’s time we get back to basics and this resulted in the creation of  my own simple methodology S.T.E.P, the Successful Technology Enablement Process.

S.T.E.P. takes a modular approach to your CRM initiative using a best practice guide to insure the successful implementation of one department at a time. S.T.E.P. recommends that you begin with the sales organization, automating the sales process first, and then move on to marketing, campaign management or the customer support functions. S.T.E.P. allows you to start small and break down the implementation process into pieces that are attainable, based on the customer’s requirements and resource availability. S.T.E.P. allows management’s commitment and involvement in each phase of the implementation. Management will help to facilitate workplace productivity, discuss the reasons for moving to a customer-centric business model and assist in maintaining complete control over the project. This is critical as the implementation begins to spread through the different departments.

S.T.E.P. Consists of Five Phases:

Step I Needs Analysis

During this phase of the implementation we document the strategic and tactical objectives of the department. We determine the process, workflow and functional requirements and identify areas where information needs to be tracked, shared and integrated.

Step II Project Planning

A formal departmental implementation plan will be created, and finalized during this phase. A system administrator will be selected to coordinate with members of the department as well the system integrator or consultant(s) managing the implementation.

Step III Installation & Implementation

Installation of the software, workflow policies and procedures will be implemented during this phase. System configuration, privileges, preferences and security will be determined.

Step IV Testing & Quality Assurance

An operational prototype of the departmental application is up and running at this time. Operational issues are identified and resolved, and basic modifications are made.

Step V Deployment & Training

The application is now completely operational. There are no additional installation activities. Training begins for departmental management and end users. Ongoing support is provided by the system administrator with telephone assistance from the system integrator or solution provider. Once the first department is operational, we will follow similar steps again for the next department. The specific details of each phase of the S.T.E.P. program, tasks and time frames are worked out with each customer. Using the S.T.E.P. approach, a typical installation of the sales system for a team of 10 to 20 sales representatives only takes 3 to 5 days.

The implementation of any CRM solution takes time and proper planning. The S.T.E.P. program is unique, providing customers with the ability to focus on specific components of CRM and insure their successful implementation before moving ahead and automating additional areas. Clearly, the real value of CRM comes from the integration and sharing of customer information while insuring that the solution works in concert with the rest of the organization. You can realize significant value and maximize return on your investment if you take it one S.T.E.P at a time.

Loving P&C
DC*

SaaS OnDemand CRM, 6 umpteen Factors

Dears,

You have analyzed your organization’s business needs and determined that an OnDemand CRM solution will best meet your requirements. And you’re not alone. Industry observers expect the market for on demand CRM to grow by more than 30 percent per year. But how do you determine which on demand CRM solution is right for you?

Here are six important factors to consider.

1.      ANALYTICS

CRM without comprehensive yet easy to- use analysis and reporting capabilities is akin to a car without a dashboard. Particularly in today’s challenging business environment where gaining actionable information resulting from sales, marketing and service interactions is a ‘must have,’ your CRM solution should include both real-time and historical analytics capabilities. Real-time analytics provides a current snapshot of critical business metrics such as your sales pipeline, while historical analytics uncovers trends as well as anomalies over time. CRM analytics should include both a wide range of pre-built dashboards as well as the ability to easily build customized reports that meet your company’s unique requirements.

2.      ENGAGEMENT

According to Forrester Research, approximately 75% of us now use social tools and technologies to collaborate, whether we create content, critique it, or observe it . This process of engagement has begun permeating the enterprise. But does your prospective CRM vendor support features that foster instant messaging-like collaboration right within CRM? Do they support RSS feeds and gadgets both inside and outside their application for information mash ups as well as easy information access – features that enable sales people to be as informed as possible about their prospects and customers in near real time? Do they offer complementary applications that increase the effectiveness of sales users in critical functions like sales prospecting?

3.      INDUSTRY-SPECIFIC CAPABILITIES

The cost of customizing plain-vanilla solutions is far higher than leveraging prebuilt features optimized for your industry that come with a CRM solution. By leveraging industry-specific, out-of-the-box business processes, data models, object models, and business logic, organizations can gain faster time to value at a lower total cost of ownership. Why build a custom solution at higher cost when you can buy an existing offering that includes most of the requirements a financial services firm or life sciences company, for example, is seeking from an on-demand CRM solution?

4.      INTEGRATION

Companies invest in best-of-breed front and back office applications to streamline critical business processes for a particular function. But if these offerings operate in their own silos, your organization may experience productivity issues, data quality problems, and reduced business

effectiveness. Does your CRM vendor provide standards-based integration capabilities that bridge your applications? Does it provide these offerings as a single vendor solution, ensuring one point of

control? In order for your salespeople to easily and efficiently conduct seamless business processes, such as building and attaching a quote to an order, comprehensive integration features are critical.

5.      INFRASTRUCTURE

A key reason you want on demand CRM in the first place is to outsource infrastructure issues. But like any purchase, you need to consider what’s under the hood, so to speak, and understand exactly what you’re purchasing. For example, if you speak with your IT department they may tell you they

want the peace of mind of having all instances of your company’s on demand CRM application located on a dedicated hardware stack rather than co-located on servers with data from other companies. This ‘single tenancy’ option also provides your organization with the flexibility of being able to determine when planned maintenance and upgrades occur in order to ensure your business isn’t disrupted during critical times. Another item you should consider: Is the hosting service provided directly by the CRM vendor itself or do they outsource it to another company? The

bottom line: not all hosted data centers are the same, or offer similar levels of service and flexibility.

6.      CHOICE

What if at some point your organization requires functionality that is best managed through an on-premise CRM solution? For example, a comprehensive loyalty, marketing resource management or e-commerce application may exceed the boundaries of any on demand CRM system. Does your vendor provide on premise CRM, as well as capabilities for seamlessly integrating both on demand and on premise CRM instances? While on-demand CRM may solve your current requirements, your business could require more flexibility and choice from your CRM vendor in the months and years ahead.

Loving P&C

DC* 

Empowering Consumer Goods Industry with Direct Retail Distribution (DRD) CRM

Dears,

Consumer Goods Technology developments have the potential to redefine ‘business as usual’. In the right hands, powerful mobile devices, connected to high-speed networks, can drive innovative approaches to direct retail distribution (DRD) that were not previously possible. If you’re a Consumer Products company considering new systems for your DRD operations; looking for ways to better integrate your field sales, delivery and merchandising operations; or wanting to increase competitive advantage through higher levels of in-field service and productivity – this article will make little difference to you as well.

DRD drives multiple benefits through the power of in-field synergy: a fresh, cohesive approach that builds brand presence by providing capabilities to: a) expand the traditional role of DRD drivers; and b) to coordinate the efforts of complementary groups of field workers. DRD transcends the barriers imposed by rigid roles that have traditionally isolated the tasks of drivers, sales reps and merchandisers. Not only can drivers now do more in store, they can alert supervisors and central headquarters, as well as sales representatives and merchandisers in their regions, to any field situation they observe that requires prompt attention. Schedules can be reprioritized in real-time based on a constant flow of in-store information.

Quick, coordinated responses unite field workers in their ability to achieve key business objectives and win at the shelf. No longer isolated individuals; they are interconnected teammates lifting their brands. All members of the team can think and act as in-store brand advocates; each has a keener sense of the fierce competition around their brands (from traditional foes and private label alike). They know the roles their brands play in categories and their need to align with shifts in customer needs – store by store – and in local consumer demand. They work more purposefully and positively to protect their brand sales, profits and market position. And in this new paradigm, everyone who touches a store on behalf of a brand is capturing data that can help Consumer Products companies make better strategic and tactical decisions. This is a giant leap for brand-kind.

WHAT MORE COULD BE DONE IN THE FIELD?

Here’s a quick sampler:

·         Field workers use store printers to issue purchase incentives and coupons on the spot to offset a Competitor’s two-for-one promotion.

·         Field staff access Retail Application help stay in consistent compliance, and immediately reschedules labor priorities if needed.

·         Product recall alerts beam to all DRD handhelds to remove affected items from store shelves, and real-time reports back from the field verify the action. (Rapid recalls can differentiate brands; nearly half of consumers have changed shopping patterns due to food safety concerns – and they don’t equate higher prices or brand names with safer food.

·         Store-by-store memory of past performance, promotions and display preferences are instilled; this enhances productivity and brand presence, and makes field staff turnover a moot point.

·         Field workers take photos of a competitor’s new packaging or promotion and transmit immediately to HQ.

·         During periodic reviews with retailers, account teams can document that their field force spent, say, 20,000 hours servicing the chain’s stores; can detail achievements (e.g. no voids in end caps, minimal out of stocks); and document category performance lift as a direct outcome of these efforts.

DRD not only allows companies to blend the activities performed by deliver drivers, it also allows the driver’s role to be integrated into an end-to-end field operations process. By utilizing mobile technologies and applications that interact across field managers, sales reps, in-store merchandisers and DRD drivers, companies can respond more quickly to brand performance issues in the field. These may be related to out-of-stocks, new product launches, in-store promotions and point-of-sale display, share of shelf or competitor activity. Co-coordinating field team members to address these issues in a timely manner (that can have a positive remedial impact on revenue and brand performance) is a significant challenge that can be addressed through DRD, as illustrated in the scenario in the picture.

What to seek in a next-generation handheld

Several motives drive the decision of CPG manufacturers to replace older technology. First, the costs to continue to support end-of-life hardware and software become unwise or prohibitive. Second, increasing demands on CPG field teams to perform create the need for more powerful, advanced devices with new capabilities—and ruggedized units with larger screens, higher resolutions, faster speeds and longer battery life are available at comparable costs. Third, today’s more robust technologies enable DRD drivers to get more involved, to expediently complete and report on a broader range of tasks.

The fast pace of technology advances keeps CPG seeking more robust solutions for their DRD teams. Devices with capabilities on this checklist will equip brands with the information power and industrial engineering their teams need in the field:

·         well-supported sales and merchandising functions, such as compliance, distribution and share-of-shelf checks, competitor price checks, shelf resets, consumer intercept surveys, delivery and invoices

·         web-based integration with CRM ( Oracle Siebel CG CRM /Oracle Field Sales ) to ensure invoice prices are 100% accurate based on back-end systems

·         pre-sales functions

·         DRD solutions on a ruggedized PDA/Smartphone

·         choice of a tablet or laptop, which is sales and merchandising focused

·         choice of a cell phone for simpler field condition audits

·         the ability to barcode scan the outside of case cartons

·         modern, scalable architecture that could fill needs for the next decade

·         rapid deployment

Paradigm Shift

It is axiomatic to say that the world inhabited by Consumer Products companies is one of constant change. Anyone who has lived through the past few years would be hard pressed to argue otherwise. In modern trade markets, the seismic changes that have reshaped the competitive landscape have also created opportunities for companies to reshape their operations to service customers more efficiently and more productively. Direct retail distribution, long regarded as a logistics function at the end of a highly optimized supply chain, is one such area of opportunity. New thinking about the role of the delivery driver as an agent of in-store brand presence – and of DRD as an integral part of the consumer demand chain – can be a powerful lever for competitive advantage. This kind of thinking is no longer just wishful. The availability of powerful handheld devices, high-speed mobile networks and innovative applications provide the tools that can drive Game-changing initiatives for forward-thinking companies. With traditional DRD solutions nearing the end of their shelf life, and with a growing expectation from retailers that there is more value these systems can deliver, Consumer Products companies are in the position to drive a welcome change.

Loving P&C
DC*