How Social CRM is changing the sales landscape

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1 Guide to CRM 2.0 How Social CRM is changing the sales landscape Sabine Kirchem Dusan Saric ec4u expert consulting ag

2 Contents 1 Introduction What is Web 2.0? About Sales 2.0 and CRM Critical factors Web 2.0 tools: areas of application CRM 2.0: More businesses awaiting the next generation Social CRM Initiative - Oracle Conclusion

3 1 Introduction Slowly but surely businesses are implementing new techniques to sell products and services. In sales these techniques are often referred to as CRM 2.0 or Sales 2.0. It is a simple but appropriate term for this business practice, in particular since many of the Sales 2.0 applications and techniques originate from the Web 2.0 movement. It is difficult to provide a dedicated definition of the terms Web 2.0, Sales 2.0 and CRM 2.0 because these movements are relatively new. Furthermore, these movements are constantly developing from the bottom-up and it is difficult to differentiate them from one another. It is hard to say where Web 1.0 ends and where Web 2.0 begins. The same holds true for Sales 2.0 and CRM What is Web 2.0? Firstly, Web 2.0 is a movement that is favored by step-by-step technology innovations and the growth of the internet. We must be clear that the internet has dramatically changed our daily habits and will continue to do so. The internet influences the way we search for information, how we shop, how we communicate with friends and colleages, and how we cultivate our contacts. The internet finds its way into a wide range of areas in our everyday lives. Collaboration is one of the main pillars of this movement. Web 2.0 enables people to share information and work together in a way that has never been seen before. It provides a platform to express our thoughts, ideas, critisism, hopes and dreams and share these with others very quickly and much easier than ever before. Today, we have access to an interconnected network of knowledge. In a world without the internet it would never have been possible for us as indivduals to access such a network of knowledge and what is more, we are becoming part of it, or we already are. Businesses are now interested in utilizing this potential in their sales and marketing initiatives. Experience with Web 2.0 has shown that they can truly benefit from collaboration in blogs, usergroups and communities. Microsoft, for example, has demonstrated through the Windows 7 operating system that highly acclaimed results can be achieved by combining Web 2.0 with product development: Better understand customer needs Improve marketing of products and services Sell products and services more easily Build customer relationships and strengthen existing customer relationships in the long term 3 About Sales 2.0 and CRM 2.0 Basically, CRM 2.0 adopts the findings from Sales 2.0 to speed up the sales processes in CRM. The Sales 2.0 movement, on the other hand, is based on Web 2.0 concepts and technologies. To learn more about CRM 2.0 and its origins, we have consulted various sources: 1) Comparative study on CRM 2.0, ec4u expert consulting AG, 2008 and ) We sought feedback from specialists in businesses and asked them how they use the new collaboration technologies to increase revenue and therefore improve their marketing efforts. 3

4 3) Additionally, we have included public information available from Oracle (ec4u partner) to acquire an accurate picture of their numerous and innovative sales tools, the socalled Oracle Social CRM Applications. Oracle develops these tools to strengthen its salesforce and to increase their effectiveness through the elimination of repetitive tasks, e.g. data entry, since these tasks have a negative impact on the efficiency of the first generation tools. Here are our findings: Sales 2.0 is a bottom-up movement as opposed to the top-down movements that are the order of the day in the business world. As well as Web 2.0, many of the tools, techniques and technologies came about purely by chance or from experiments: many small and increasingly large businesses are taking a look at online applications in terms of client interaction, testing and customizing them to satisfy their business requirements. Yet Sales 2.0 remains in the initial stages of its development. Users and businesses are experimenting with tools, such as blogs, wikis, Twitter and mashups. They are just beginning to explore how to create added value for their marketing and sales activities by using these tools. Vendors such as Oracle integrate these tools with their offerings enabling their clients to become more productive already today. The full integration of these tools in customer management processes is referred to as CRM 2.0. CRM 2.0 enhances CRM by utilizing the insights gained from the Sales 2.0 and Web 2.0 tools. In essence, it affects customer management and sales processes. CRM 2.0 helps sales representatives to better identify leads, turn them into opportunities and, again, turn these opportunities into successful business transactions. The functions of the Sales 2.0 tools are part of the CRM system. 4 Critical factors As the first generation of the Sales 2.0 tools is based on Web 2.0, we must have a look at the key factors of Web 2.0 and understand them. Web 2.0 is a buzzword that is used for a number of interactive and collaborative elements of the internet, especially of the World Wide Web. 1 This is according to Wikipedia one of the best examples of the enormous power to be unleashed by online collaboration. The definition further explains that these concepts have led to user-generated content in social networking sites, wikis, blogs and what is known as social tagging. 2 And to round things off, the so-called mashups represent another Web 2.0 concept. Mashups combine content from different sources to create a new and more effective application. This content can take many different forms: text, graphics, audio, video and animation. The beauty about the Sales 2.0 movement is that businesses are using the best Web 2.0 tools to satisfy a multitude of business requirements. Businesses enhance classic networking by using Sales 2.0 tools through new internal and external measures. Internally, there are primarily these so-called closed groups, e.g. product developers and sales partners, who share their experience and knowledge behind firewalls in a protected environment. However, businesses also use the Sales 2.0 tools externally. They seek contact with existing customers, prospects and join public discussions. 1 Source: date of access Online collaboration that allows users to create, organize and comment on content 4

5 5 Web 2.0 tools: areas of application Since any user can make changes to wiki contents, it is reasonable to use wikis for internal purposes only. Wikis enable employees to share information in a more or less protected environment. In contrast, blogs are more suitable for use outside the business. Businesses and bloggers can use blogs to stem the arbitrary publishing of content and ensure that employees comply with certain restrictions. At the same time, employees can still collaborate through interaction in the form of posts, open or moderate comments and ratings. Blogs Web 2.0 tools Blog is the short form for "weblog (combination of World Wide Web and log ), it is something like an Internet diary. The publisher (blogger) writes about their life and comments on specific topics. Depending on depth and content it may be similar to an online forum or newspaper. Example: Wikis Wikis allow users not only to read content but also to directly change it online in most cases. Wikis enable different authors to work together on texts, allowing them to share their sum of experiences. Example: Forums/Boards In online forums users can share thoughts, opinions and experiences. The content of the discussion forums is archived. Example: (more than 6 millions visitors per month) How to use them in a CRM context - Place below the line messages, i.e. the activities of a business are commented on or explained in the business blog - Enhance influence through or in other blogs through commenting or guest-posting in other blogs - Can be used as a retention tool by offering detailed product and services information - Businesses and customers can collaborate when setting up a wiki - Actively participate in or direct discussions - Open the company s own boards to make them accessible to customers to allow them to share experiences of the company or its products - Integrate the forum content in the company feedback process Chats Chats are real-time discussions via the internet or online messenger systems. Example: GoogleChats or AOL Messenger - Immediately communicate or interact with customers or prospects - Decisions or opinions can be collected spontaneously Video and Photo Portals Video portals are websites allowing any user to upload and view videos. Example: or - Many internet users prefer originality and authenticity to expensive advertising messages. Therefore, businesses can publish multimedia content without spending a lot of 5

6 money on its production Social Networks and Communities Online communities mean groups of people who meet on internet platforms to communicate with each other and exchange information through tools such as , chat, instant messengers and forums. Example: - Social networks are increasingly used as a platform to initiate business relationships - By analyzing users in a network, it is possible, for example, to draw conclusions about their role in their company. This information could be used for initiating or developing business relationships, provided that users do not disagree and compliance with data protection is ensured RSS and Subscription Services RSS services work just like news tickers. They offer the reader feeds of headlines and teaser texts related to certain topics the user has selected and a link to the original site. Example: RSS service of PC Pro - By using subscription services in a CRM context, customers or prospects can be kept up-to-date about services, products, news etc. Table 1: Web 2.0 tools: areas of application in a CRM context 6

7 6 CRM 2.0: More businesses awaiting the next generation A comparative survey conducted by ec4u expert consulting AG revealed that more than 70% of the CRM managers interviewed are in favor of CRM solutions that should, above all, be particularly equipped with online, mobile and networking facilities. These Web 2.0 tools were much less requested among those asked back in In view of changing business requirements, nearly every fourth enterprise can foresee switching to systems that offer features similar to CRM 2.0 within the next two years. Figure 1: Functions of the next generation (CRM 2.0), source: ec4u expert consulting AG, 2009 However, this means that businesses have become more demanding than a year ago. 77% (73% in 2008) of the respondants have requested that the solutions should allow for better integration with mobile systems such as laptops, PDAs or BlackBerrys. Also at the top of the wish list is better integration of CRM with the online world. Direct access via RSS feeds, igoogle, newsletter etc. to valuable sales information on customers, industries and sales regions are features requested by 71% (68% in 2008) of the companies. Social networking is becoming even more important. Regarding the CRM applications of the next generation, 72% of the respondants expect support when using business communities such as LinkedIn. This represents a 9% increase compared to the previous year. 7

8 Figure 2: Role of current CRM systems, source: ec4u expert consulting AG, 2009 Even when it comes to direct sales support, CRM 2.0 is expected to offer a lot more than the solutions available today. For example, 72% of sales managers are of the opinion that the system should be able to create forecasts automatically. Similarly, two thirds expect the system to make targeted lead suggestions. Additionally, one in two expect features to support user-specific lead management. The CRM managers interviewed also have the following on their wish list: more comprehensive data access, function that enables sales representatives to run small-scale campaigns independently, as well as a system that is easier to use. 8

9 Figure 3: Migration potential of a CRM 2.0 solution, source: ec4u expert consulting AG, 2009 The information and communication channels of sales processes have become more varied, that is why CRM users expectations are high and are getting more demanding", says Kerstin Diefenbach, Leader Strategy & Business Consulting at ec4u, as she assesses the results. However, she considers it a normal evolution process which should inevitably be reflected in the next generation of CRM solutions. The most charming thing about these solutions will be that they will increase the sales representatives productivity and efficiency due to a better integration of the solutions with the web and the focus on relationship-oriented sales processes. Three out of five businesses are already interested in these CRM solutions, even though only 50% of the businesses are seriously considering implementing the solutions by CRM 2.0 is the next step in CRM The next step in CRM is to provide the sales team with the targeted information it requires. Faster and better-informed decisions will give companies a significant competitive edge. Kerstin Diefenbach, Leader Strategy & Business Consulting at ec4u 9

10 7 Social CRM Initiative - Oracle One of the companies that uses Web 2.0 technologies and concepts to improve its products is Oracle. So far, sales representatives have felt that CRM is wasting their time rather than helping them because time-consuming data maintenance has kept them from spending the necessary time on winning new clients. Oracle assumes that by enhancing the applications the focus will shift from reporting to selling. Oracle has developed these application enhancements with three goals in mind: to ensure a more intuitive user interface to improve the mapping of common sales activities to take more advantage of collaborative sales networks Traditional CRM offerings will continue to play an important role when optimizing and automating sales activities. However, Oracle Social CRM Applications are designed for use by sales representatives and not just by sales managers and executives. These applications are aimed at achieving immediate results, and, at the same time, saving on time-consuming data entry. This is made possible through easy-to-use tools that can be combined with one another. Data from different systems is processed and presented visually so that it can facilitate decisions based on complex relationships and processes whilst taking advantage of the entire knowledge potential in a business and its networks. Figure 4: Oracle CRM on Demand, source: Oracle,

11 Oracle Sales Prospector The first product, Oracle Sales Prospector, stands out due to its visual processing capabilities. External and internal data sources can be combined to identify the most promising sales opportunities and identify the product and services to be offered. The tool s suggestions are based on sophisticated analyses that help to identify purchasing patterns using historical data. The tool not only suggests potential sales to the sales representative, but also calculates the profit, the probability of making a sale and the time it would take. Figure 5: Oracle Sales Prospector, source: Oracle,

12 Oracle Sales Campaigns Oracle Sales Campaigns enables sales representatives to create, share and measure the response to (HTML) campaigns. The idea behind it is to select the best existing campaign material that a business has and to maintain a library through ongoing collaboration on the material, which will ensure optimal results for the entire team. Figure 6: Oracle Sales Campaigns, source: Oracle, 2009 The users are guided to the most successful campaigns. Criteria: Effectiveness & success in specific scenarios Customization & success relating to a specific industry The tool is also designed to avoid a lot of redundant work that an individual user has to do when running a campaign. 12

13 Oracle Sales Library Oracle Sales Library provides a platform for sales material with integrated Web 2.0 functions such as tagging 3 and rating 4, so that sales representatives can use the most promising material. The tool is designed to enable a sales representative to quickly and easily access single transparencies or complete presentations to use them for their own appointments. Figure 7: Oracle Sales Library, source: Oracle, 2009 Today, a sales representative can determine at their own discretion whether to choose one of the existing transparencies or create their own. The knowledge gained and the results of their work can be made available to others just by writing a number of s. Early Bird: Oracle Enterprises are well advised to utilize the trends in the Web 2.0 movement through applications for the sales team. Oracle has set the pace and the CRM market will follow. David D. Laux, board spokesman, ec4u 3 Online collaboration that allows users to create, organize and comment on content 4 Content ratings using scales 13

14 Further innovations Oracle has also developed the Mobile Sales Assistant that enables sales representatives to access to important client information whilst on the move. Furthermore, a number of widgets are available to access useful and relevant client or sales information even outside the CRM application. These programs are available either on local computers, mobile phones or company websites. All applications are based on the standardized Fusion Middleware platform that enables integration with other business applications and ensures scalability and security. 8 Conclusion Whilst many sales and marketing professionals are still not using social media applications such as LinkedIn, Facebook, MySpace, Twitter or Xing, these applications are gaining increasing importance in business. Businesses are realizing that collaboration tools and Sales 2.0 have huge potential. Sales and marketing professionals understand that these tools help them to improve the marketing and sales of their products and services. The ec4u expert consulting AG study has revealed that 64% of the users expect Web 2.0 applications in CRM systems and 70% of those asked expect the system to be capable of producing forecasts. After all, CRM should help increase sales efficiency in short, sell more. ec4u expert: Dr Martin Stadelmann, Managing Director, ec4u Switzerland Businesses understand that wikis make their employees more productive, and that blogs can make a strong contribution to external marketing activities. Vendors such as Oracle understand that the integration of Sales 2.0 tools and concepts will further increase the efficiency of sales and marketing teams. The Next Steps If you are a sales and marketing professional, but are not yet acquainted with the new social media services such as Facebook, Xing, LinkedIn or Twitter, then you should consider experimenting with these services. You will see how quickly you can become acquainted with Web 2.0 concepts and services. In the next step, it is important that you think about how you could use these tools and concepts for the sales and marketing processes in your business. How can you use Sales 2.0 applications to identify new clients and better address your target groups? And can they help you generate more leads and come to a deal more quickly? Please talk to one of our ec4u experts in CRM 2.0, Web 2.0 or Sales 2.0. Get in touch with us via 14

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