Risks in managing CRM Projects : Effective Sales management by Call Centers
Best practices in Call Center & CRM risks Management
Risks of CRM: CRM is a business strategy that include Technology + Application + Process + People + Org. changes to optimize profit, revenue, shareholder value & customer satisfaction. CRM can be implemented for sales, marketing, & customer service function of organization. Risk manager’s main task is to Preventing Bad outcome, by mitigating potential risks for implementing CRM or by helping intended outcome happen by addressing/implementing control, which ensures success. This document covers steps to be followed as a seasoned IT auditor with expertise in risk management.
CRMs currently are used in market: (e.g.: Siebel, Clarify, Peoplesoft, Oracle, Broad vision)
Sales force automation
Call center consolidation
Customer service re-engineering
Marketing Automation.
Management of knowledge is the fundamental element of CRM strategy. It
Creates knowledge about customer
Expands & make interaction with customer more balanced.
Prepares & analyze knowledge that has been collected
Shares the knowledge across organization & customer
Uses the accumulated knowledge to create value for both parties.
Some risks are acceptable, while for mitigating other risks controls can be placed.
Hazard & uncertainty risk
· Downside risk (-ve Risk), which are NOT anticipated.
· Abused privileges: If sales person process credit, he may give unauthorized discount, for customers just to obtain a sale.
· External Security breach through Web: hacking attempts
· Fraud & theft of credit card/ confidential account info:
· Out of balance condition as customer accounts are NOT reconciled on regular basis / transactions are not interfaced properly.
· Inaccurate data /corrupt data/ incorrect spelled name, address etc.
· Non compliance with laws & regulations, data privacy via lotion against privacy policy
· Service interruption due to lack of resiliency /redundancy in communication of IT network.
· Information from other back-office systems like prices/products available is NOT populating
· Call center Abuse because of personal call attempts by employs.
· Loopholes because of any errors will be exploited faster through CRM & email.
· CRM Project cost overrun
Opportunity risk
· Upside risk (+ve), if good things will NOT happen & less benefits/opportunity.
· Declined customer satisfaction, service level
· Misdirected marketing campaign, lowering market ROI
· Eroding customer loyalty, decreasing market share
· Replacing high margin items with commodity based items in sales mix
· Low conversion rate on opportunity
· Ineffective/ inefficient sales, marketing, customer service process.
· Inability to effective up-sale, cross-sale products, services.
· Lost revenue due to inability to anticipate customer needs (product NOT available)
Cost of Control & benefit
· Average total revenue per customer
· Average total margin per customer
· Average number of transactions per customer
· Average cost per transaction
· Average cost of control per transaction
· Total cost of non-transaction specific controls
· Average cost of servicing a customer account
Added cost because of CRM system
· In CRM, data capture & analysis requirement increases. Each piece of data has a capture cost, control cost to maintain accuracy. Auditor needs to ensure balance control over individual transaction & overall control is reporting & reconciliation.
Structured risk management approach
· The balanced & cost effective implementation of system, manual controls as add-on value.
· Explicit, measurable control points, to assess compliance, control objective.
· Potential control risk identified early in implementation, addressed as part of design.
· Implementation on time, on budget, according to specification, achievement of benefits promised
· COBiT will provide good practice across domain & process framework, presents activities in manageable logical structure.
· Audit & management guidelines, composed of maturity model. help determining stages & expectation level of control, compare against industry standard, Critical success factor(CSF), to identified most imp. Actions for achieving control over IT process, (KGI) key goal indicator to define target level perf; (KPI) key performance indicator, to ensure control process meeting objective.
Role of Risk Management
Provide project with risk management policies, framework, methodology
Evaluate the key risks & develops key control objectives for mitigating risks
Increases risk management awareness by working with project team members
Implement structure risk management approach & methodology
Establish standards, protocols for identifying, assessing, managing CRM risks
Coordinate with other resources to identify key risks, then analyze, track & address risks based on pre-established criteria
Design ongoing procedure for monitoring, managing CRM risks
Report to steering committee on risk management
Serve as primary advocate for risk management at strategic & operational level of project.
Works with project leads to design & implement control
Performs post implementation review of major CRM projects/ releases.
Test the effectiveness of control, to ensure that it has been implemented properly & identify any control weakness.
Perform pre-implementation review of major CRM projects
Provide assurance that policy & strategy for Risk Management is effective.
Solicits input from project team manager, steering committee to determine risk tolerance.
Continue to evaluate CRM process, applications, technology, recommend enhance to support control environment.
Coordinate with project lead, operating organizations to design & implement action plan for achieving control objective.
Project management & benefit realization:
Risks in CRM Project sponsorship:
What is the role of program office, when comes to risk management of the solution?
Is the invitation for CRM Project company-wide, supported by upper management? Top management directives, project sponsorship?
Stakeholder for CRM system typically is cross variety of function. -Sales, marketing, customer services, finance, who will use it to improve customer profitability & credit info, Operation supply chain management, who will use data to facililitate logistics & demand forecasting.
Classify Involvement of Organizational units, stakeholder community costs of which groups?
Risks in CRM business case:
CRM initiative start with vision or strategy phase including business case.
Strategy è Business case è Budget Expectation è ROI expectation/ hurdles rate
Risks in CRM Strategy
IT project & objective aligned with CRM objective.
CRM initiative helps to breakup project with quick wins at an acceptable level of risks to organization, acceptable tolerance level for change. What’s anticipated time for project?
Implementation strategy, (Vanilla implementation: Organization change management is imp, v/s Modification strategy: program change control & IT complexity is the larger issue.) Risk varies depending on strategy used.
CRM project strong blueprint phases or definition of end state is needed as well as strong project management issues to ensure proper coordination between phases.
Risks in Project Management:
How is the project organized?
Will the formal project management methodology being used?
How will the project budget & timeliness, progress be monitored?
Risks in Project Objective:
Are IT projects / it’s objectives aligned with CRM business project/ IT Governance?
Risks in Quality Management:
The need for independent project quality assurance reviews? How is the quality management built into implementation project?
Risks in Project Scope:
What business functions are in scope (order placement, order status, service contracts, warranty, credit)
What work streams are included?
Major technology: CRM package, reporting package, e-commerce, customer data & data warehousing
How is the customer function handled today?
Scope of channels (Customer contact channel, sales channel)
What locations are in scope (Call centers, store)
What is the volume of customer, customer contacts, and issues, service requests that must be handled.
What are current systems & applications supporting the business/each system basic function?
What customer research data can be leveraged to understand customer service expectation?
Are there plans to leverage backend order management system? If so, backend order management system replacement a part of CRM initiative?
What components of CRM will be critical, to implement 1’st phase: Call center, Case management, and content management, campaign management
Is the project scope relevant to organizational strategic plan?
To what extent workflow, business process management technology will be used to support/interact CRM system.
How will introduction of CRM change the customer offer? Will it introduce the channel for business new ways like new pricing, discount structure.
Integration of CRM with existing ERP (HR, Purchasing, Logistics, Finance), support location, cultural aspects of cross border CRMs.
Risks in Requirement Definition:
Interview/participants in workshop would be necessary to gather requirement and input.
Risks in Change management:
CRM initiative will impact entire organization as it moves to customer centric. How will change management be addressed?
Degree by which business process is redesigned as a part of solution
Control & manage software changes?
Future support management/helpdesk support
Training of users & manner in which solution deployed for students.
How software additional changes, removal of h/w from system be managed & controlled
Risks in Business Process Controls & frauds:
How will data integrity be ensured (confidentiality, accuracy, completeness)
What will be the fraud detection / prevention procedures?
How does management control & monitor business?
Risks in Operational resilience:
Will business continuity plan restore customer service channel?
Is redundancy being built into solution to ensure system availability?
Avoiding System outage, service disruption by high availability.
Stress testing by ensuring if expected number of transactions can be handled by system with predefined service level.
Risks in Security:
How CRM solution can be secured end-to-end. (Back-office to internet)
Type of portal management solution implemented to secure web site?
Organization capability to withstand of –ve publicity, after event of security breach.
Will the update access be limited on need-to-have basis?
How will incompatible duties be segregated between business processes?
How will role & responsibility be defined within business process?
Are technology are employed properly & secured.
What is the security of customer information transmitted over public network?
Risks in Privacy Management:
How will compliance with data protection, privacy regulation be assured?
Are customers concerned with how information was obtained, how their private info is used? How proprietary customer data is protected against privacy law?
Risks in Data management & integration:
Are data master records, customer accounts will be properly cleaned prior to data conversion?
Is the existence of duplicate customer records prevented?
Are sufficient controls built into interface?
What controls exist for keeping website accurate? What controls exist to keep website current? The data presented should present current policy, procedure, pricing.
Risks in Telephony & Telecommunication:
Phone abuses in call-centers? Adequate procedures to prevent future fraud, abuse? Overspending for telecom services? CRM initiatives are focused mainly on managing customer interaction, maximizing lifetime value for customer relationship. Risk management value proportion should be framed to distinguish value that can be added by preventing unwanted things from inhibiting org. CRM objectives.
Risk area
Issues
Sample of Risk management activity
Project management & benefit realization
Ineffective program & project management
Not realizing the benefits defined in business case.
Cost overrun
Missed deadlines
Risk factors
Ineffective ERP assessment
· Strategic alignment
Portfolio management
Project support office
Project quality, assurance, review
Best practices project management
Maturity measurement
Tool based on COBiT, can also be used for measuring quality of business process
Business process controls & fraud
-Ve impact on data from organizational changes
Lack of approval, oversight, monitoring responsibility.
Issues with data accuracy, integrity, completeness
Compromised data confidentiality
Invalid data
Irregular transactions process
Inaccurate data output
Lack of error detection & rejection
Cumbersome /ineffective procedure
Irregular workflow & routing
Incomplete fraud detection & prevention
Inaccurate decision
Lack of personalization of procedures & services.
· Risk assessment
Control Objective
Design & implementation of controls
Development of roles & responsibility
Workflow & reporting.
Operational resilience
Lack of 24*7 availability
System & service outages & disruptions
Inability to recover system in timely manner
Inadequate system backup
Inadequate capacity to meet demand for processing peak load.
· Crisis management
· Brand protection
· Business resumption planning
· DR planning
· Business Continuity plan
· Business restart & recovery plan
· Capacity planning & management.
Security
· Compromised data confidentiality (HIPPA)
· Unauthorized access
· Lack of segregation of duties
· Undefined roles & responsibility
· Hacking
· Lack of encryption
· Denial of service attack
· Lack of user authentication
· Weak links in security
· Rapid technological changes
· Ineffective system policing
· Security policies not observed & practiced.
· Risk assessment
· Security strategy
· Security policies
· End-to end security design implementation/ testing
· Portal security / portal management
· Security penetration testing
· Security diagnostics
· Design of roles & responsibility
· Security implementation & testing
Privacy management
· Compromised personal data protection
· Lack of compliance with privacy regulations
· Lack of adherence to European Union (EU), data protection directive
· Compromised ethics
· Impaired data confidentiality
· Lack of employee surveillance
· Data privacy violation
Privacy policies & standards
Tran border data flow assessment
Impact assessment
Child privacy
Procedures & controls surrounding CRM program
Data quality
Collection of personal data
Consent
Rights of access to personal data
Right to object
Confidentiality & security
Notification
Transfer of personal data to third party countries.
Data management, e-business app. integration
Contaminated data
Data protection & discrepancies
Redundancy
Missing of duplicate data
Data accuracy & integrity
Meta data (undefined data meaning, intend & coding structure)
Inconsistent data
Incomplete data
Lack of cohesiveness
Complexity
Lack of timeliness
Volatility (data becoming outdated)
Periodicity (data collected & aggregated along different/ incompatible period)
Inaccessible & unavailable data
Scale (information stored in different units of measurement)
Lack of breadth (amt. Of info captured is limited)
Lack of depth (little trend or historical info collected)
Lack of certification (trustworthiness of info is unknown)
Data quality assessment
Data criticality assessment
Risk assessment
Data cleansing, protection, conversion
Interface control assessment, design & implementation
· Content management
Telephony & telecommunication
Carrier invoice overpayment
Toll fraud & telephone abuse
Sub-optimal use of telecom technology
Confusion regarding impact of deregulation, telecom act
Inadequate fault tolerance measures
Considerable corporate growth / reduction
Lack of cost reduction measures
Increase in number of telecom related customer complaints
Incomplete knowledge of telecom spending
Heavy business reliance upon voice/data communication technology
Lack of capacity plan/ perf monitoring
Lack of compliance upon state mandated no call lists
Telecom & call center diagnostics
Voice communication & security diagnostics
PBX security & administrative review.
Network architecture diagnostics
Telephony/ call center testing
Point of failure analysis
CRM improves corporate culture, it’s more customer oriented. Another way to determine if initiative is successful is to independently monitor key performance indicator (KPI).
CRM Success in quantitative view:
Marketing:
Response rate to marketing promotion
Sales leads generated by promotion
Conversion rate of responses
Effectiveness & cost of channel
Product offerings
Sales by product offering
Market shares
Product positioning
ROI on marketing expenditures
Sales:
Customer turnover (rate of new customers to departing customer)
Customer acquisition cost
Average order frequency & size
Revenue per repetitive ratio
Sales profit per customer/ per contract / deal
Win rate
Number of completed sales calls per representative
Number of sales call within selling cycle
Customer services:
Average speed of answer
% Of abandoned calls
Frequency of all trunks busy
First contact resolution
No. Of training days per customer service employee.
Average cost per customer service employee:
Accuracy & completeness of answer. (Benchmarking report for call centers, Merchants group)
Managing CRM risks: The best way to mitigate risks can be determined.
Control Awareness Session
Helps in understanding structured approach & methodology for addressing CRM control
Understand key CRM risks, determine risk tolerance, Develop high level action plan to address key CRM risks
Control awareness session may consist of 1-2 session with key executive, sponsor, and project team members, users to help them aware of CRM risks. Sample agenda may include
Intro è CRM risk descripts. è Optional addressed control è Control methodology, approach, framework è current/proposed CRM applications/processes/techno è current status of CRM/ changes for current upcoming year è Facilitated CRM walkthrough to identify key risks è Development of control objectives/action items to address CRM è risk management involvement.
Identification of control objectives & key risks
Identification of key risks & control objectives should be considered during implementation Scope includes:
Conduct detailed business process walk through, analysis of business/technical area, Identify risk impacting CRM, develop detail control objective to address each risk & protection action plans for achieving control objectives.
Risk reduces by keeping control applied throughout the project.
Pre-implementation assessment
Assessment for controls & key risks can be provided. This review assess controls during
Analysis, Design, Construction, Implementation phases to ensure they are built into CRM; Risk areas include risk assessment performed initially to determine higher risk areas. Evaluate effectiveness, efficiency of control environment to identify control issues; this could impair CRM transaction data.
Post implementation assessment
After CRM implementation, post implementation assessment can be performed.
Evaluate control effectiveness shortly after CRM implementation; to ensure control was properly implemented, end users are following intended control procedures. Control issue arise due to gap of design & implementation team intended to use & how employees are using the system. It is important to access existence & effectiveness of control
Post implementation review; assess integrity of transaction, compliance by end users of control procedure.
Controls consulting
Proactive control is to provide control advice to management.
Provide control consultant during duration of project.
Ensure that controls for CRM are properly designed & implemented. Consider, making changes within organization, to system processes, technologies.
Work as a part of implementation team. design, develop, construct, test, implement controls of project to ensure security, trust, privacy, control, resilience.
Periodic audits
Audit should include:
An annual risk assessment
Understanding of changing business, economic condition
Changes to policy, procedures, org. structure.
Compromised control notification.
Lack of understanding of control, as area has never been examined.
Risk management projects:
Type of organization
Type of project
Regional Bank
Control strategy workshop: Conduct CRM control strategy workshop to help CRM project team members understand structured approach & methodology of CRM controls
Workshop helps in
Understand CRM & IT’S RISK
Understand CRM control methodology, approach, framework
Conduct a facilitated CRM walkthrough to identify key risks surrounding CRM solutions
Determine organization risk tolerance, develop key control objective
Develop action plan to address CRM key control objective.
Financial Service provider
Security & control design: Launch a program to build comprehensive financial service offering internet & call center Ensure compliance with security, control, regulatory, privacy statement
Project team can:
Design & configure application security
Design & configure business process control
Design & implement internet/ technical infrastructure security, database security & control;
Advice on ensuring 24/7 availability
Ensure regulatory compliance with financial service authority (FSA)& DATA PROTECTION ACT.
Global financial service organization
Data cleansing/ data management
Cleanse static counter party data; counter party parenting, hierarchies, credit ratings, exposure limits & exposure info from trading sources.
Partition data into active/dormant accounts according to recent activities.
Scrub names
Rationalize duplicate names in the resulting data warehouse, the source systems
Cleanse, rationalize parenting hierarchies, rating info, exposure limit data.
Reengineer upstream process with additional controls to provide for ongoing data quality.
Security & operational resilience:
Online banking transaction risks like limited exposure to technology, service management requirements, security issues.
Supplied integration solutions combine expertise in tech security, operational resilience, implementation risks
Advised on security design & conduct penetration tests to ensure resilience against attack.
Design new management function to support online. Operation, stress monitoring to minimize risk of service disruption.
Fortune 100 manufacturing company
Business process controls & fraud:
Prioritize risks & their impact on critical success factor during visioning phase
Helped the client combine sales organization to gain single view of customer.
Helped client create targeted marketing campaigns & remove duplicate promotions
Data conversion, interfaces, content management:
Helped client to integrate back-office, manufacturing system so sales personnel had accurate data in one location.
Electronics/ entertainment company
Business process controls & fraud:
Authentication process/procedure for e-tail store
Helped client implement payment process improvement
Helped client implement best practice process
Helped client reduce anticipated fraud from 10% to 3% in online sales.
Application security:
Design implement call center’s roles, responsibility
Privacy Management:
Design compliance testing for Children’s online privacy protection (COPPA)
Multinational packaging company
Business process controls & frauds:
Assist client in design of CRM with risk based approach
CRM application specific control + manual controls to mitigate identified risks.
Telecommunication company
Privacy management (EU data protection directive)
Identify trans-border data flow & related risk factor to access compliance with EU requirements
With international expansion, international transport of company & employee data securely across internet will be one of the risks
Choose correct CRM product, which fits with your need:
Web interface
Matured product with support for long term
Software code escrow agreement facility
Best breed & pre-integration with back-office capability.
Evaluate financial condition of vender, which will show survival capability in competition
Determine level of support vender provides, system docs, local representation, support contracts.
Vender/
Processes
Siebel
Oracle
SAP
Peoplesoft
Epiphany
Nortel
Onyx
Interact
Marketing Process management
Campaign management
Trade Promotion management
Analytics/ data mining
Personalization
Content management
Sales force automation
Guided selling
Product configuration
Order management
Contact center application
Web communication & email
Interaction management
Web self service
CRM product functionality by Industry
Chemical/ petroleum/ oil-gas
Consumer products
Life science
Automotive
Industrial products
High tech electronics
Distribution/ transportation
Utilities
Retail
Retail banking
Commercial banking
Note : Red = best
Siebel: Manages Customers, partners, and employee’s relationship on global basis. Software incorporates best practices of customer, partners, and employee relationship on global basis.
Concern: Integration problem with ERP, Cost of ownership & customer data warehousing.
Sales suite: sales, Mobile sales, sales compensation
Marketing suite: Marketing, E-marketing, e-Events, marketing analytics,
Service suite: call center, services, telesales, field service, web service, E-service, email response, E-collaborations, Professional service automation, Mobile service.
Interactive selling suite: E-advisor, e-sales, e-configurator, e-pricer, e-auction
Partner relationship management suite: E-channel
Employee relationship management suite: ERM
Analytics suite: Siebel analytics
Mid-market suite: E-customer, E-auction, E-channel E-finance, E-insurance
Industry application: (wireless, communication, media, oil& gas, medical products, chemicals, retails, travel & hospitability, Financial services-institutional, retail, insurance, healthcare), communications (wire line), energy (utility), life science (pharmacy, clinical), consumer (goods, apparels, footwear), industrial (high tech, automotive), and public sector.
Oracle Corporation: Oracle E-business suite ver 11i is fully integrated & internet enabled set of ERP, supply chain, CRM software application for the enterprise, This integrated suite provides integrated enterprise information so companies can manage entire business cycle (Initial contact through customer è planning è production è delivery è post sales service & support). Oracle CRM application automate, improve business process association with managing customer service relationship in areas of sales, marketing, customer services, call centers. Integrated with Oracle ERP, CRM allow enterprises coordinate global sales forecasting, lead generation. Suite includes:
Oracle marketing products: Marketing online, Advance marketing, Trade management, marketing intelligence
Oracle sales product: Telesales, mobile sales, Sales online, Partner online, Interactive compensation, Collections, sales intelligence, I-Store
Oracle service products: Tele-service, I-support, Quality online, Service online, Depot repair, Spares management, Mobile field service, Advance scheduler, Service intelligence, Customer intelligence.
Oracle contract products: Contract for Sales, Services, Rights, Projects, Contracts, Customer online.
Oracle interaction center product: Advance inbound/ outbound, Email center, Interaction center intelligence, Scripting, survey, Telesales, Tele-service.
Oracle e-commerce product: I-store, marketing online, I-payment, Quoting, I-support, and configurator.
Oracle business intelligence Application: Intelligence in CRM & ERP, balance scorecard, Performance analyzer, Sales & financial analyzer, Supply chain analyzer, Activity based management.
Peoplesoft: CRM application provides seamless web based integration among customers, financials, and supply chain, employee management system, and communications. All tools required integrating both field service & helping desk operation. Product includes:
CRM core product
CRM field services
CRM help desk
CRM interaction management
CRM Marketing
CRM portal pack
CRM Sales
CRM Support
CRM Telemarketing
CTI integration
Mobile sales for WAP phones.
Related suites: Accelerated CRM, CRM analytics, and Portal solutions-single, role-based gateway)
Amdocs Clarify CRM: This customer centric CRM integrate all customer facing applications to deliver single unified (Clarify e-front-office + Amdocs CRM) provides unified view of all customer interactions, single database customer information from systems & contact channels. This solution enables one call resolution to customers request, provides data analysis to understand customer behavior. Unique Clarify CRM solution focuses on customer billing, customer intelligence, Strong call center/ technical support/ field service/ Incremental migration to web architecture/ life cycle support. Used specifically for Telecom like NORTEL.
Service & support: Clear support, Clear contract, Clear Call centers, Clear Quality, Clear logistics field operation, Clear logistics Depot repairs, Clear Logistics spares manager, Clear Help desk, Account manager, Script manager, Task manager, Wireless field, Service logistics, CRM navigator, Customer higherarchies, E-care.
Sales & marketing: Clear Call center, Clear sales, Clear-sales commission, Clear-sales configurator, E-order, E-response Manager, E-support, Process manager, Script manager, Account manager, CRM navigator, Campaign management
Business intelligence & customer analytics: Analytics application, Return of relationship application, Clear report, Business insight, Business views, Campaign management, Churn management.
SAP CRM: mySAP.com is collaborative e-business software supporting platform, open, flexible, supporting database applications, o.s, hard wares. This includes ERP customer base, strong order management, fulfillment, maturing integration strategy, contracts & B2B partner functionality in depth.
Weakness: Usability, call center performance, sales force Automation usability & scalability, marketing automation.
Internet sales: B2B Internet sales, Mobile Internet sales, B2C Internet sales.
Field sales: Customer visits with order entry, Opportunities, campaigns
Interaction center: Lead & opportunity qualification, Telesales inbound, Outbound, Information helpdesk, Service, Complain processing
Customer services: Complaint processing, Internet customer sales-service (ICSS), service Confirmation, Service contract for customer-installed base, Returns.
Field service & dispatch: Service processes, service confirmation
Marketing: Customer segmentation, Marketing planning, Campaign management, Product proposals, Lead management, Personalized mailing. Other vender products like,
Chordiant: Sales, service solution
Kana / broad base: Marketing/ customer service solution
Blue martini: Customer analysis, marketing solution.
Sales logic: Sales, marketing, support, e-commerce solution
CRM allows business to be a customer centric. It must have strong workflow & business process management capability to allow a large number of users to work together & share tasks towards common goal of serving customer. Hence CRM can have risks like:
· Integration of several technologies with CRM
· Interfaces among legacy system, ERP & CRM
· Difficulties Coordinating data & interoperetability, data model flexibility
· Reporting tool to monitor & control
· Technical skills development & retaining skilled people
Controls to mitigate risks:
Structured need analysis for product
Robust vender selection process
Structured project management approach
Skilled implementation team
Through risk mitigation strategy
Customers/END USER expectation from CRM:
Seamless interaction with all business processes
Total control & immediate assistance
Personal assistance yet privacy
Simplicity yet greater fulfillment
Sales process: Sales is an exchange of goods or service for amount of service or equivalent. Selling is the art & science of gathering & using info about customer to drive sales, build customer loyalty, increase customer value Key aspects:
Identify sales strategy
Identify sales opportunity
Qualifying opportunity
Pursuing opportunity
Submitting proposals
Negotiating terms & closing sales
Processing sales orders (regular, via internet, Tele/telephone sales)
Delivering goods to proper location at right time
Handling customer sales request (overages/shortages, pricing, scheduling)
Identify Sales strategy:
To identify strategic markets containing desirable customers, developing customer identification process. These processes rely heavily on marketing input & knowledge.
Well-defined & communicated sales strategy
Enforced strategy with strong sales leadership & sales culture.
Executive sponsorer as backing to sales plans that support business mission.
Reflect current market & encompass entire organization,
Provide accepted, integrated approach to customer service.
Identifying & qualifying opportunity
This is a filtering process, determining those potential customers who will most likely generate profit
Opportunity is made of potential revenue generating events, like customer inquiries, accounts, contacts, proposal requests, correspondence, accounts, contacts. These sources generate information about sales opportunity, which can be conceived by management effectively, if they get correlated report from all sales persons in details. CRM facilitate the same effectively. It provides opportunity, history, milestone, key decision makers, the quote, proposal, presentation, and all to-dos at single location, tracking the source of each lead, competitors involved, product of interest & key decision issues.
Methods of soliciting opportunities are different. Excel sheets or PDA data will NOT be that effective unless inter-linked. to all department databases. This may increase overhead, for more administrative process by overtyping data again. CRM reduce burden by providing formal means of recording & consolidating opportunity data.
Real opportunity supporting organization objectives.
Biddable / non-biddable, winnable/capability for opportunity.
CRM applications offer
Customer account management, maintenance tools,
Allow organization to maintain central data.
Making info available to all sales partner for customer visibility
Sales data is merged & more accurate.
Overhead cost to maintain data are reduced.
Customer can perform self-service activities.
Disadvantages:
Increases risk of insecure/incorrect data
Privacy violation & chances of fraud.
Identify most viable opportunity by MySAP.COM CRM: Decide with sales team, which questions should be answered TO IDENTIFY POTENTIAL SALES VOLUME; answering right question can identify risk proactively. CRM calculates probability of winning. ( e.g.: mySAP.com CRM).
Pursue qualified opportunity & submit proposal:
Once opportunities are identified, they must be qualified, pursued.
a> Communication within organization: Central customer data update facility, Parties are informed of customer’s overall value, status & movement, Customer oriented account planning & team structure. This facilitate identifying potential customer from –ve customer.
b> Determining pricing & promotion strategy: Data gathered from market, customer demand & competitor’s pricing helps to get customized pricing; More data provides better product, services & respective customized pricing. Telecom service where e-CRM application meet the needs of organization, online product prices, conversion rates can be consistent in entire organization only by CRM like e-pricer; which provides ease in maintaining price management, increase price agility by pricing model.
c> Submitting proposal: Once customer’s needs are assessed & solution has been identified, a proposal is made, including key product, pricing info, communicate scope, terms, conditions, and timing of proposal. Effective proposals may, obtain sales, also lead to additional opportunity, increase revenue, and improve relationship with customer. CRM integrate customer data across business units, products & back office operation. Along with automated & integrated solution it is essential to have sales force has clear responsibility, motivated, trained, challenged, rewarded. This will reflect in compelling, consistent proposal like cover letter, proposal body, price quotation, sales tool, literature, answers to RFP, presentation in PPT, or from predefined templates.
Negotiating Terms & Closing sales: Negotiate terms without losing organizational/ customer objectives, finalize sales with profit. To have mutual understanding, sales person uses effective CRM. For complex goods & greater spending, apart from price, quality of customer service, online delivery, continuity/availability of service, product quality, speed of response are the determining factor. Hence sales can be closed loop process, CRM understand, predict customers need, objectives, limitations.
Processing sales order: If result of process is invoice or product, which does NOT correspond to original agreement, customer relationship get broken, which results loss due to bad reputation, cost of marketing efforts. CRM provides integration with back office functionality identifies clearly issues like partial shipment, order status, account receivable. Companies can use e-order to effectively organize & deliver complete service info. Prioritized by SLA.
Processing Internet sales: Internet sales provide b2b; b2c models i.e. Business-selling goods to other business or customer-purchasing product from business by Internet. Electronic market reduces regional, time barrier. Channel provides faster time to market for goods/services. (e.g.: ‘Infinitum’ product provides publish info on web, maintain web-catalogue, accept order, process payment, allow organization to track, how website being used, monitor buying trends, improve customer service, target existing/potential customer to increase sales.
Processing Tele sales: Telesales encompass representative who receives customer call, can have all info on screen like purchase history, credit issues, outstanding orders, pricing-decision making info, inventory data. Call centers get daily reminder for promotions, a list of who to call, follow up reminders, new customer profile entry & updates, event registration/collateral fulfils.
Delivering goods to proper location/ right time: Customer must receive desired good in fine condition at desired location at right time. CRM facilitate integration with supply chain system.
Handling customer question: Post sales processes + questions at helpdesk + customer inquiry.
Sales Risks
Strategic Direction è Organization èStrategy Deployment èOperations
Strategic Direction
A>Ext. Environment
1> Mission version
2> Business objectives
3> Strategies
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B> Organization
1> Sales Organization structure
2> Leadership
3> Sales culture
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Strategy deployment
Sales management
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Operations:
1> Sales process è 2> IT è 3> People è 4> Sales infrastructure
Sales performance
To address risk in sales process, operational risk + financial risk needs to be considered.
Strategic risks:
Organization determines its overall business direction called as strategy. Wrong strategy can be counter-productive & ineffective processes get employed within organization.
Sales organizational structure risk: If sales organizational structure & reporting relationship is NOT defined, results in channel conflict. Sharing of customer information is related to all sections of sales, Non–organizational structure results in resource misallocation & wastage of time in non-valued administrative tasks.
Leadership Risks: Leadership sets, communicate direction, shapes organizational standard, mobilize organization to take action. Without strong effective leadership, sales personal may not be clear on vision, mission, strategies & value.
Sales culture: This includes norms, values, beliefs, and team environment, past history of org. culture. These factors must be addressed for successful CRM.
Sales management Risks: Management processes like planned accounts, resource allocation, managed performance, monitor profitability, communication & policies supports sales, such as clearing sales deduction, measuring sales, incentives & new communication policies. CRM success also depends on account planning. Improper management will affect on budgets of Sales.
Sales process Risks: Processes are the core operation to run business. Ineffective processes results, sales order may not be processed timely manner, and result is a loss.
6. Information Technology Risks: IT helps to accomplish sales by MIS, Sales automation, communication & technical system. Without this time, efforts & resources will be wasted.
7. People Risks: Sales person should be provided with training, skills & motivation to achieve business objectives, as company image & customer relationship is totally dependant on sales customer’s interaction.
8. Sales infrastructure Risks: Physical layout of sales infrastructure includes transaction management, accounting, and HR administration. Without this profit may not exists.
Sales performance Risks: KPI, drive performance improvement, sales person with incentive as motivation can indicate sales performance. CRM & sales goals depend on sales performance also.
Sales productivity Risks: Sales productivity drivers & corresponding productivity tools are important & sometimes overlooked, Hence it is preferable to integrate old add- on tools with CRM
Sales productivity = Profit generated by selling activities
Cost associated by selling efforts
CRM will be successful only if it is the ONLY source of all information for sales throughout organization & no duplicate tools being used for day-to-day sales process. Sales personnel may keep info as secret as potential for job guaranty, there must be strong enforcement from management to enter data in CRM.
Risks in identifying opportunity: Sales personal may focus on inappropriate market segment, accounts that are not profitable. Failure to identify opportunity in timely manner is the risk. When product demand is hot, sales must pursue for it, otherwise competition will step in. Incorrect classification/qualification of risks: Inaccurate/ duplicate data entry of customers, will waste efforts & may result loss.
All these risks results in operational risks like revenue loss.
Sales strategy control:
· Strategy include formal business plan, defining corporate mission, objectives, strategies
Developed with input from all area of organization,
Vision, mission, strategies clearly communicated & understood
Strategic plan reflects market trends, changing customer requirements, competitive strategic direction, and current customer profitability
Plan with high degree of relevance to sales, sufficient direction to drive detailed plan, sales operation decision, and direction for channel strategy.
Product/ service strategies are flexible, tailored for specific customers requirements.
Established balanced among business volumes, service level & pricing
Integrated approach to customer contact, customer service.
Economic analysis to value each customer, driven investment decision
Targeted customer base group against offers, customers’ needs, value & alignment.
Long term customer relationship
Sales organization structure serves purpose of dividing & arranging activities so organization can benefit from specialization of labor.
Leadership: Sales leadership helps salesperson to remember goals, purposes of organization. Sales leader communicate with subordinates, upper management; ensure that atmosphere of open communication is continuous.
Sales culture: Behavior of people in the sales force, performance can be regulated by policies, procedures. Aptitude for selling is developed by training programs, reward against sales, compensation/ incentives plans.
Sales manager is common contact between organization, sales personnel & customer. He places controls like
Sales planning – Set up objectives, determine what needs to-be done by whom, when, with what resources.
Sales forecasting – Prediction of future sales, Accurate forecasting to improve organization profits, interact with management in sales forecasting
Sales budgeting – Financial sales step to predict income, expenses, shows the way resources selling efforts should be allocated to achieve forecast level of sales.
Policy setting: Rules on behavior of company sales person. This helps to guide, stimulate performance.
Compensation plans: Approach to reward/ motivates sales person by straight salary, straight commission, or combination of both. Non-financial rewards & benefits like coupon.
Training: This is to enhance success of existing sales person skills by productivity, improve morals, reduce turnover, and improve customer relationship.
Input variables: variables controlled by sales person like quality of calls made, no. of days worked, no. of calls per day
Output variables: No. of orders secured by each sales person, avg. size of order, no. of accounts maintained, no. of new accounts as a product of input.
Sales management input & output variable:
Close loop.@ / è Corporate Input {product, sales strategy, Price, promotion, Place}
è Sales manager controllable {No. of sales person, staffing, Training, procedures, tools, information, motivation, compensation, monitoring, feedback}
è Sales person input variable {Number of calls, quality of calls with content, communication, services, allocation of efforts}
è Salesperson input variables {Sales volume, sales mix, sales cost}
è Sales person performance è {Contribution to profit, return of asset managed, sales cost ratio}
è Corporate performance {ROI, Growth, net profit, Market shares} èclose loop.@ /
Sales Processes: Processes should be stable, repeatable, flexible to adapt to changing environment
IT: Technology helps organization to accomplish work successfully, Technology include MIS, sales force automation, administrative technology, communication, technical systems. Eg. CRM
People: field sales manager, top sales executive, and personnel dept. play active role in hiring new sales people. They can be used for covering territory & need for travel. Training people to reduce sales cycle from opportunity search è purchase, reflecting buyer behavior in training program, correct pricing, targeting, change management, group decision, complex decision-making process, negotiation, and differentiation, hence improve productivity. Sales people should be knowledgeable to deal with hybrid sales processes like representative, Distributors, agents/ dealers
Sales infrastructure: Revenue producing sales activities from strong sales infrastructure.
Sales performance: Performance monitored by Customer’s & product demand details like who, what, when, how often.
Controls to identify, Qualify opportunity: Well-controlled sales environment is critical to ensure success of the sales in organization. Process to analyze market segment & identify most profitable customer account. To analyze; marketing dept. formulate, qualify & calculate opportunity.
Monitor time outstanding, monitor missed sales due to late identification, tracking of lost sales & reason, open opportunities that are not qualified. An integrated CRM helps to identify all interactions of individual customers. Input validation in CRM & appropriate assignment to skilled personnel is the key factors in success of CRM.
Processes
Risks
Controls
Pursue qualified opportunity / submitting proposal
· Failure to understand customer requirement.
· Failure to identify realistic & correct desire of customer.
· Above risks results CRM failure as CRM objective is to track customers all touch-point interactions & move customers up in value chain. If opportunity is lost, CRM gets failed.
· Failure to monitor & analyze sales pipeline, for prospective customers, results LOSS.
· Inaccurate & unauthorized info in quotation, proposals may result loss.
CRM system should populate current product info, as per understanding of customer requirement, training courses for sales personnel, automation in CRM to identify cross-sell, up-sell opportunity as per history, monitoring tools, opportunities for outstanding sales, cross selling success knowledge base, closer of inactive sales opportunity daily, workflow & business process management software to monitor process flow, to identify process failure, any backlogs, authorization & access control.
Negotiating terms & closing sales
Failure to answer customers question completely or respond to their objections could result in loss.
When fewer personal sales channels being used, extended negotiation without agreement results in loss.
Missing all contractual info. In agreement, can expose organization to monitorial & legal risks.
The use of sales methodology as guidance,
Review of reports on sales value, expected margins to identify unusual margins (due to pricing/unit for measure errors, or sales with no profit)
Review of reports showing bulk discount, with total value above min. limit.
Design & configuration of controls within CRM to perform field validation control; ensure all data necessary to close sales have been input during each stage.
Standard contractual terms, conditions in simple language can help to reduce negotiation time & mitigate financial & legal risk due to missing clauses.
Processing sales orders
Major risk in this process is, processing unauthorized orders, free-of-charge orders. CRM maximizes & enhance value off customer relationship by proper preventive & monitoring controls. Processing of duplicate, inaccurate, incomplete sales order process. Pricing change risks & incorrect charges against deal-finalized amt. may result loss. Rebates, volume discount misuse are another risk. Privacy of customers’ data, is another risk.
Most critical data entry, Needs more automation, hence computer control procedures can assist in controlling process. Control on transaction& processes can mitigate risk, This includes automated interfaces triggered by workflow, trailer records on interfaces for control totals, quotation/proposals correlation with sales order for consistency, Reports of open, outstanding orders can ensure timely processing of sales. CRM with telephony system can ensure correct sales person communicates with customer. Computer controlled procedures for customer credit check, modification of price & discount can be monitored by review based-approval control or workflow based electronic approval control.
Internet sales order processing
Failure of customer’s data privacy
Failure of web site compliance with internet transaction standard, convenient for customer’s use, with latest good security & speed, encryption of sensitive data like credit card info, Failure of high availability, out-of date web content, mismatching with retail info are some of the risks.
Risk in personalization: customer generally prefer personalized site with product to customer.
Risk in presentation: should be designed to communicate easily & visuals conveying content & purpose of site.
Privacy: Access control on customer personalized CRMs with order history & favorites links, other credit card no & details.
Security: Internet security is high profile, high-risk aspect of online trade. Password control, session control, authentication control, encryption control, logout facilities, enhances security.
Capacity & performance: Customer’s web experience impact significantly. Maximum traffic handling capacity, performance-monitoring control regulates attacks like DDOS.
Fraud: developed control procedures to minimize occurrence of fraud, verification of credit card details with card holders financial institution, notification of order confirmation.
Processing telesales
Without formalized telesales strategy, efforts may turn unproductive.
Lack of training of sales person
Unidentified call goals result loss
Inconsistency in current customer & perspective customer.
Telesales tracking
Untrained, inexperienced telesales personnel, customer is not fully addressed/ identified. Product & solution does not fit customer’s need. Telesales person does not have access to critical customer information.
Telesales strategy to identify selling activity (qualifying opportunity, setting appointment, gathering info, closing sales) Management monitoring by CRM, investing time, effort for training telesales personnel, Training including sales literature, common questions/ objections, call scripts, CRM knowledge. Developing listening skills, Building rapport, understanding product, services & how to fit customers buying motives, (financial benefit, security, convenience, acceptance)
CRM software controls: CRM configuration should maximize time of telesales personnel, prevent multiple personnel to contact same prospects by record-lockout, monitoring call worksheets of telesales person’s activity, scripting capabilities to customize for customer interaction, key data field population before any sales order, pre-established order & credit limits, discount & deduction control through CRM like tolerance limit/authority of individual to give discount to specific %.
Delivering goods to proper location at right time
Customer will not be satisfied if goods are not delivered in proper location, right time.
Sales order get lost, rejected, interfaced incorrectly, or corrupted, not picked, packed, loaded correctly, shipment is not verified & handled correctly by courier, goods will not be delivered. Backorders/ incomplete orders may not be processed, resulting lost sales, customer dissatisfaction. Misstated inventory, cost of goods sold, failure to invoice customer result financial loss.
Order validation at order handling unit, goods delivery completion & respective inventory updates, report on delayed backorders. Delivery checks like data requirement, blocking payment defaulters & communicating with CRM to respective salesman, Shipment loading, handling procedures, deliver documentation, KPI like Order accuracy, % pick accuracy, number of emergency orders
Handling customer question at sales
Post-sales support (questions & problems, overage/shortage, pricing, scheduling) retains customer for future business prospects. Risks in this are
Unacknowledged customer requests, requests are categorized inconsistency, Inappropriate priotization of inquiry,
Self service facility for customers as satisfying control, routing inquiry to correct sales-person, acknowledge & confirmation of customers request, Monitoring on outstanding service request & response time, Customer Satisfaction survey including feedback on system accessibility, frontline professionalisium, satisfaction & complaint resolution by redirecting to concern personnel.
posted by GOP @ 6:44 AM
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