CRM: consider the bigger picture

"Response rates to customer mailings are now as high as 30 to 40 percent,” says Catriona MacKay, European head of CRM (customer relationship management) at global healthcare products manufacturer, 3M. “All data is now local to the client and we can present things personally to specific clients. The dual benefits of this is we can maximise sales opportunities locally but also achieve economies of scale with large marketing campaigns in Europe.” MacKay is talking about the firm’s multi-million pound turnover, UK OH&ES (Occupational Health & Environmental Safety) division, which has recently implemented a 200-user CRM system from consultancy firm Extraprise (using Siebel software). It’s been a long road to success. 3M began reviewing its sales and marketing strategy back in 1996. “We started a complete business process review,” explains MacKay. “We weren’t using resources as well as we could. There was waste in marketing campaigns. We mailed and hoped rather than target our customers.” OH&ES is the first site to employ CRM. MacKay: “I’m responsible for rolling out the system to another nine European sites by mid-2003...Having successfully implemented Siebel in our UK business [completed 18 months ago], we were faced with a number of challenges: How to quantify the ROI of the UK implementation; How to share lessons learned with other regions; And how to ensure a consistent approach was adopted across European sites while accommodating regional differences. We wanted to make sure that other regions could benefit from our experience without feeling they were having a UK solution imposed on them.” And this is where Extraprise came in. With its guidance over a five-week period last year, 3M first constructed a ‘transformation map’ to help it clarify the group’s European vision and strategy. “Determining the gap between the ‘as is’ state and the ‘to be’ state was crucial in order to build a migration path,” she says. Next, 3M staff built a ‘best practice roadmap’. “We took a very dilligent approach - segmenting customers, identifying opportunities and making process and culture changes before implementing the technology.” And by “making process and culture changes” MacKay means the firm’s painful, lengthy review of its business processes that started three or four years ago. “We needed to collate lots of data about our customers over this time. We looked at how effective our sales and marketing processes were, what worked best and why. The technology itself is important, but people get carried away with it and sometimes don’t consider the bigger picture.” Next, the country regions were asked to plot their progress against the best practice roadmap. “It became clear from this exercise which tools were available for reference and re-use and what the next steps were. The European Centre wanted to offer all 3M sites a common solution for pan-European CRM, so it gained buy-in by offering a full solution - a roadmap of what to do and when, software tools, templates and evidence of benefits rather than offering them just a system.” The key, says MacKay, was creating an auditable, quantifiable ROI model. “We did this by listing the benefits of a common solution for each stakeholder group combined with key metrics from the sales process. And we’re using this model to help other regions to gauge success against pre-defined metrics; to draw attention to under-performing aspects; to inform adjustment planning; and help prioritise future investment. Demonstrable ROI is a hot topic and we’re serious about using data to drive continuous improvement, so measurement is imperative. “With Siebel all the data is in one place. We can see things like ‘average value per opportunity’ by different markets. We’ve cut a third off the time it takes to familiarise sales staff with new territories. Management visibility of the sales pipeline has improved and our UK division is now able to conduct closed-loop marketing campaigns. Our mailing costs are down as we do it all in-house from the CRM system now, it’s much more targeted and response rates have climbed dramatically.” And 3M itself isn’t stopping at CRM. It intends to take things further in the near future. MacKay: “We’re currently exploring the possibility of how we can use information from the CRM system to improve our demand planning process. This in turn should help our manufacturing division because they’ll be working on a schedule that more closely matches what the customers are ordering. We want to run the whole business on as close as possible to real time information.” And that’s where CRM can really help manufacturers - it’s about getting massive operational benefits out on the shop floor where it matters, based on better, real time sales and marketing information from CRM software.