After Closing the Deal, Opening Doors

By Baselinemag  |  Posted 2005-11-08 Print this article Print

Sure, everyone wants to grow the top line—and customer relationship management software can make sales teams work more efficiently.

Sure, everyone wants to grow the top line—and customer relationship management software can make sales teams work more efficiently.

But companies are also using these systems to harvest customer feedback, and they're using that information to improve their products and services.

For Hanger Orthopedic Group, a maker of prosthetic limbs and other medical devices, Salesforce.com's customer relationship management system allowed its team of 60 sales representatives to make an average of 100 additional sales calls per year—a 10% increase—to doctors and other health-care providers, says Martin Payne, Hanger's vice president of business development and client relations. He believes the tool also contributed to the company's 3.8% increase in 2004 sales, to $568.7 million, from the year prior.

How? Mainly because the application automatically shows reps the prospects they're supposed to call on, reserves meetings on an electronic calendar, and prompts the reps to follow up, if necessary. "It makes our sales guys stickier," Payne says. "They can now see when customers have ordered a product and call them up and say: 'Thank you very much.' They're now focused on customers instead of e-mailing spreadsheets all over the place."

Another advantage: Hanger now can see which salespeople are most effective, and find out what help they can provide less-productive reps. Plus, with a central customer relationship management system, the company—not individual salespeople—holds all of the customer data. That way, if someone leaves the company, those contacts don't vanish.

And customer relationship management tools can turn up trouble spots. For IHOP, a bad batch of cinnamon-swirl French toast can turn off a customer forever. But until a few years ago, the restaurant chain—known for its pancakes and other breakfast fare—didn't have any formal way of tracking complaints.

Two years ago, IHOP set up a toll-free number and e-mail address for customers to report problems they had at any of its 1,200 franchises in the U.S. and Canada. Agents log each report, and then contact the individual restaurant with the feedback; they then follow up to make sure the complaint has been resolved with the customer.

Every month, IHOP records 5,000 customer contacts. Since launching the system, based on Oracle's Customer Data Hub, the company has driven down the time to resolve complaints from 10 days to three.

"The goal is to maintain brand consistency, and make sure none of our guests goes away feeling they had a bad experience," says Patrick Piccininno, vice president of information technology for the Glendale, Calif.-based company.

Next for IHOP: analyzing customer feedback to drive improvements in operations. For example, Piccininno's team found that the company's recent limited-time offers—this fall's promotion is the French Toast Festival, featuring three different varieties—had mixed reviews. Some people hated them. Why weren't the specials doing better? The wide variations in reported quality showed that IHOP needed a better way of ensuring consistent preparation across all of its restaurants. As a result, the company has increased training for limited-time-offer menu items from four weeks to six, and has provided more detailed instructions in training videos.

The overall goal is to get a quantifiable picture of customer behavior and adjust the business accordingly. "We may think things are going well because sales are up," Piccininno says. "But instead of using gut feel and conjecture, we want to find out what is actually driving customers to us."

Broadly speaking, customer relationship management software manages any interaction with customers (or prospective ones)—including sales and support—and analyzes an organization's ability to meet customer needs. However it's defined, Oracle is laying claim to being the top supplier in the category, between its acquisition of erstwhile competitor PeopleSoft and its pending bid for CRM champ Siebel Systems. Meanwhile, hosted offerings, led by six-year-old Salesforce.com, are becoming popular alternatives to large software deployments.

Customer relationship management got a terrible rap in the late 1990s for failing to live up to its promise—it was seen as a costly, complex undertaking that provided dubious returns. But that's because many didn't realize the nature of the beast, according to Gary Matula, CIO of Molex, a manufacturer of electrical connectors in Lisle, Ill.

"CRM is like any other major I.T. project," he says. "You have to do the right due diligence and have the right vision in place. It's I.T. 101."

One common hurdle: Getting salespeople and other employees to buy into the project. Wanda Dembeck, vice president of global initiatives at R.L. Polk & Co., an automotive marketing information services firm, advises rolling out a customer relationship management project in stages. For example, Polk started with sales forecasts, then moved on to contact management, which requires salespeople to log the status of deals and track follow-up calls.

But at some point, Dembeck says, employees must be forced to use the system. "You can dangle carrots all day, but sometimes you need a hammer," she says, adding: "The managers who didn't want to use the CRM application aren't here anymore, frankly. We didn't want sales that happened under the table."

Ideally, customer relationship management software will give companies a much clearer picture of what's happening in their sales groups.

At loan broker Allied Home Mortgage Capital, sales managers needed a central way to dole out and monitor 3 million leads per year to 4,000 employees at 650 branches. Using the customer relationship management tools provided by Entellium, a hosted application provider, Allied Home Mortgage can now track the effectiveness of each branch location.

"We get to see who is making the phone calls, and who isn't," says David Langston, the company's CIO. "If Branch 1 is converting 2% of their leads but Branch 2 is converting 0.2%, we can start to find out why."


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