FleetBoston Financial Corp. and Osram Sylvania Inc. have two things in common: Both implemented customer relationship management software, and both say that adjustments to their respective business models were as important to the success of their CRM projects as the software itself.
Fleet deployed CRM software from Siebel Systems Inc. in its wholesale banking division. In the process, the firm revamped the way it sells its services, said Dean Athanasia, Fleet’s executive vice president of strategic marketing. Athanasia delivered a keynote address at a recent CRM exposition in Boston put on by Digital Consulting Institute (DCI).
Pre-Siebel, Fleet’s cross-selling efforts were inconsistent and its revenue was dependent largely on interest gained through the bank’s core lending activity. Part of the problem was a lack of customer information – sales associates didn’t know enough about a customer’s relationship with Fleet to know which additional sales opportunities would be best to pursue, Athanasia said.
“We estimated when we started that about 90 per cent of the information we keep on customers was useful to make a sale, and we were actually using less than 10 per cent to 15 per cent of that information,” Athanasia said.
With Siebel’s eFinance suite – the financial services version of Siebel’s flagship CRM suite – Fleet was able to provide its sales force with a consolidated view of customer information, including product usage, revenue, profitability and market analysis, along with tools for executing deal pricing and approval processes.
Armed with better data and tools to more quickly close deals, the sales team has managed to increase cross-sell revenue from US$870 million in 2000 to a projected $1.15 billion in 2002. The number of products sold per customer also is up from an average of 4.6 products in the second quarter of 2001 to 5.7 in the first quarter of 2002. In particular, sales of non-credit products, such as leasing and investment services, have reduced Fleet’s dependency on credit revenue derived from loan interest.
Athanasia credits a lot of Fleet’s CRM success to its training program. Training isn’t a one-shot deal, he said. Fleet continues to offer sessions aimed at increasing the depth of its employees’ CRM usage.
Revamping business models also played a role in the CRM implementation at Osram Sylvania, which changed its pricing models and redefined certain processes in conjunction with the project, said Mehrdad Laghaeian, CIO at the lighting manufacturer.
Many of Osram Sylvania’s pricing procedures had been around for generations and were kept up simply because there wasn’t a pressing need to make them over, Laghaeian said at the DCI show. “For this particular project, we had to go through that pain” to maximize software and hardware efficiencies, he said.
An SAP AG shop, Osram Sylvania runs the software vendor’s supply chain management and e-procurement software and was one of its early CRM pilot testers in late 1999. Since October 2000, Osram Sylvania has reduced quote confirmation time by 90 per cent, improved transaction accuracy by 50 per cent, and realized a 15 per cent productivity gain in sales, service and financial activities for targeted businesses, Laghaeian said.
Fleet and Osram Sylvania are bright spots among CRM pioneers that have seen their share of failures. Research firm Gartner Inc. has found that roughly 50 per cent of all CRM projects will fail to meet the customer’s expectations. Further, the firm says that through 2005, more than 70 per cent of failed CRM initiatives will be caused by people, processes and politics, rather than poor implementation of the technology.
