Microsoft CRM for Hosters Playbook

Transcription

1 Microsoft Communications Sector hosting media & entertainment telecommunications Microsoft CRM for Hosters Playbook A Best Practice Guide for Software-plus-Services CRM Solutions Microsoft. February 2010

2 What Does Success Look Like in the CRM Hosting Market? Companies of all sizes are profiting from the latest hosted customer relationship management (CRM) technology. In the current business climate, medium-sized companies can use software-plus-services to get access to enterprise-class solutions in a fraction of the time and cost of on-premise solutions. When CRM hosting was still a new concept, round-the-clock back-office support and per cent reliability were the benchmarks for success. If you combined these factors with aggressive pricing and customer care, your business took off. But the reality today is different. Successful companies know that CRM drives their businesses and hosters can tap into this demand. By increasing the value of your software-plus-services solution for example, by adding in other hosted Microsoft products you can improve customer loyalty and drive more revenue. Traditional CRM partners that in the past have concentrated on selling on-premises licences can add value with hosted services. So what ensures success in this highly competitive environment? Differentiation of services is part of the answer running highly available systems at scale and providing end-to-end customer support. The software-plus-services model has great business potential. Success can be achieved by: Increasing average revenue per user (ARPU) and transaction size think enterprise. Driving incremental revenue. CRM is a great framework to drive services and other communication and collaboration solutions CRM pulls it all together. Making best use of a customer s existing investment in IT by becoming a true and trusted adviser. Moving the customer up the value chain with online business solutions. With an aim to help you achieve your peak performance, each section of this Playbook details a distinct aspect of service delivery and provides insights supplied by highperforming Microsoft hosting partners. This Playbook is designed to help hosting partners align their services and businesses with ongoing market developments. It is for guidance only and Microsoft takes no responsibility for the advice and other guidance given in the document. You are solely responsible for any action or decision, which is taken based on the content of this Playbook. Microsoft Communications Sector 2

3 What Are CRM and xrm? CRM refers to the automation of marketing, sales, and customer service within an enterprise. Specifically, Microsoft Dynamics CRM provides the tools and capabilities needed to create and easily maintain a clear picture of customers, from first contact to post-sales support. xrm takes the Microsoft CRM programme to new levels it s not just an out-of-the-box application. It s an actual application framework to manage any business relationship and combine a true message for independent software vendors and developers to extend their offerings. CRM Defined CRM is a business strategy that focuses on making customers the centre of the business. The primary goals of CRM are to optimise business revenue and profit while reducing costs through improved interactions at each customer touch point in the sales pipeline. CRM attempts to accomplish these goals by providing greater visibility of customer information and empowering people to make better use of customer data to drive successful business outcomes. xrm Explained In xrm, x is a placeholder for anything essentially, xrm is the management of any type of relationship. It represents the concept of using a flexible and powerful framework and the applications in that environment to meet any business relationship requirements. Furthermore, it does so while taking advantage of software-plus-services. The following case studies incorporate some examples from Microsoft hosting partners and help to differentiate CRM and xrm. Hosted CRM for Freighting Business Pall-Ex was established in the U.K. in 1996 by entrepreneur and Secret Millionaire star Hilary Devey. The company has become the number one operator of a palletised hub and spoke freight network, with more than 100 depots throughout the U.K. Pall-Ex wanted better visibility and control of its business development, to streamline business processes, support its rapid expansion, and develop its data management strategy. Outsourcery, a leading U.K. independent provider of hosting and communications services, proposed a solution involving hosted Exchange Server, Microsoft Dynamics CRM, and Office SharePoint Server. Adam Spurr, Sales Director, Outsourcery, says: The solution helped Pall-Ex concentrate on its core business but there was also a saving of U.S.$48,300 per year on external IT support. Sean Sherwin-Smith, IT Director at Pall-Ex, adds: With this solution from Outsourcery, we expect to save U.S.$84,000 annually and we estimate it will help us increase profits by 30 per cent. Pall-Ex s future plans are for BlackBerry integration, Office Communications Server, and Voice over IP telephony. Hosted xrm for Managing Human Resources The United States Air Force (USAF) is using Microsoft Dynamics CRM as a major extension to its human resources (HR) system to track training, certifications, and experience of USAF personnel. HR is not traditionally an area of CRM, but the Microsoft Dynamics product can be customised easily to incorporate it. Its application for service departments such as HR draws on the ability of Microsoft Dynamics CRM to track and manage relationships with the flexibility to be reconfigured as policies, compliance, and strategies change. Best Practice Example Outsourcery held its customer information in spreadsheets with no central secure storage of documents and data. The company was wasting time phoning remote managers to understand forecasts and had little visibility and control over sales campaigns. By deploying Microsoft Dynamics CRM, Office SharePoint Server, and Office Communications Server, Outsourcery was able to switch to remote working, save every account manager 20 hours a month of reporting time, achieve total savings of U.S.$491,500, and an improvement in profits of U.S.$888,000. Spurr says: To succeed in selling hosted CRM you must get stuck in, be able to explain your own go-to-market strategy, work hard on the organisation chart, and drive your Microsoft Partner Account Manager really, really hard. Microsoft Communications Sector 3

4 Understanding the Market Landscape Research by global market intelligence agency Gartner shows that customer interest in adopting the software-plus-services model for CRM and related business management software is increasing rapidly. Microsoft is continuing to transition its applications to the software-plusservices model. It is this market that continues to sparkle. Why Should You Care? CRM is hot with key analysts. Gartner estimates that revenue from software-plus-services reached U.S.$7.5 billion in per cent up on It is forecast to reach more than U.S.$14 billion by Sharon Mertz, Research Director at Gartner, says: The adoption of software-plus-services continues to grow within the enterprise application markets. The composition of the worldwide software-plusservices landscape is evolving as vendors continue to extend regionally, and offer more verticalspecific solutions as part of their service portfolio or through partners. Accenture estimates that 30 per cent of its CRM business will be delivered on-demand by Microsoft predicts that within 36 months 100 per cent of the CRM business will start with an online customer experience. Hosted CRM helps hosters drive their complete portfolio, by creating the environment for an easier sell. Services can include business , document management, mobile solutions, and unified communications solutions. Worldwide Software Revenue for Software-plus-Services Delivery Within the Enterprise Application Software Markets (U.S.$ Millions) Content, communications and collaboration (CCC) 2,143 2,573 Office suites Digital content creation (DCC) Customer relationship management (CRM) 1,872 2,281 Enterprise resource planning (ERP) 1,176 1,239 Supply chain management (SCM) Other application software Total enterprise software 6,388 7,521 Source: Gartner (November 2009) What s in It for You? Average revenue per user and profit platform. Successful hosters can achieve up to 63 per cent contribution before cost of sales, 53 per cent margin contribution, and 37 per cent net margin per subscriber. CRM with moderate customisation yields U.S.$ per seat a month; CRM with vertical customisation and back-office integration yields U.S.$ per seat a month, and CRM with customisation and integration to back-office systems yields U.S.$ per seat a month. Succeed by moving customers up the value chain. You can drive additional revenue by improving the range of your hosting business. For example, by moving customers from commodity messaging and Web hosting to full application hosting, advanced document management, and unified communications services. Become a trusted adviser. Microsoft Dynamics CRM is a business solution rather than a set of tools. You can become a trusted adviser to your customer by gaining a close understanding of its business in advance of making any sale or by working through an appropriate partner. What Does Success Look Like? Hosting revenue at Outsourcery, which specialises in Microsoft Dynamics, was U.S.$322,000 in This increased to U.S.$4.2 million in 2009, and is forecast to reach U.S.$8.9 million in Spurr says: The most significant event that drove this increase was the introduction of Microsoft Dynamics CRM into our product portfolio in the last quarter of Outsourcery was then able to take a new product set to its 25,000 customers. We are now a different company with hosted CRM. Microsoft Dynamics is our lead product. A solution stack sell is the norm instead of just a single solution. Adam Spurr, Sales Director, Outsourcery Microsoft Communications Sector 4

5 Getting Started for Hosters With a hosted solution, you access Microsoft Dynamics CRM 4.0 over the Internet. The CRM software is stored in the hosting company s secure data centre and there is no upfront equipment cost or capital outlay for the customer. Keeping the system maintained, safely backed up, and secure is the responsibility of the hosting firm. Customers can then focus on what they do best running their own businesses. Resources Business overview and solution documentation: Planning and deployment guidance technical guidance on how service providers can deploy hosted Microsoft Dynamics CRM 4.0: Cross and up-sell campaign materials designed to help you cross-sell existing customer base with hosted CRM and help partners deploy a professional hosted CRM landing page: Winning recipe Five clicks to close guidance the five steps you need to ensure you close customer contracts (see graphic on page eight). CRM click through demo helps you to demo hosted CRM to your customers. Contact your local hosting or Microsoft Dynamics team to obtain this. Hosters often start their software-plus-services offerings with Microsoft Dynamics CRM, to get comfortable with the model. Our aim is to arm you with the tools and knowledge you need to sell this includes marketing collateral, target setting, and sales education. In getting started, it s important for partners to set up their own trial Web site and connect with CRM partners. Become a Microsoft partner and get Microsoft to train your sales and technical staff. Get a Microsoft Business Solutions competency, or partner for it. Learn more about Microsoft Dynamics CRM. List yourself on the hosted CRM partner page. Enter yourself in the Microsoft Partner Solution Profiler. Making It Easy for Customers to Work with You Making it easy for customers to work with you is the first step in any business relationship. And hosted CRM is no exception. If you provide reliable, accessible support, you can repeatedly reinforce the client s trust in your company. There are six principles behind successful customer service with the software-plusservices model making it easy, remaining flexible, localising wherever possible, developing a consistent sales model, personalising your service, and offering a complete solution. Traditional on-premises Microsoft Dynamics products involved Microsoft servers and tools with partner solutions built around them, but in the new on-demand hosted model, the key to success is rapid time to value. The hoster requires solution sales expertise, a clear understanding of end-clients business needs, and the capacity to take ownership of the sales. Successful hosters such as Outsourcery in the U.K. and Exare in Denmark drive the sales lead but then deliver the project through a partner. Spurr says: We find and win the opportunity then typically partner with a systems integrator. This means the customer gets best-of-breed hosting and delivery while Outsourcery ensures that it has access to the depth of expertise needed from across the partner ecosystem. On-demand CRM is predicted to expand by 24 per cent through the 2010 financial year, but it is also a volume business that needs partnerships to ensure customer satisfaction. Rasmus Foged, Director, Exare, says: As a service provider you must decide how to complete the CRM solution with professional services delivered by you, with a traditional Microsoft Dynamics CRM partner, or combined. This makes control and understanding of the sales and delivery processes your key assets. Selling Microsoft Dynamics CRM is not an infrastructure sales approach. Foged says: The hoster s sales force needs to understand business-related terms, become a trusted adviser and have a well-defined sales process in place. For many hosters, this implies new skills in selling within the business itself. Microsoft Communications Sector 5

6 Microsoft Dynamics CRM is a flexible solution that has to be configured and fitted to customers needs. Often this involves several hours of consultancy work. Foged says: This makes it very attractive for the hoster to partner with a traditional Microsoft Dynamics CRM partner to complete the value chain of what the customer buys. We ensure that the customer is happy and agrees to the on-demand offering and a following project, and then ship that lead to an implementation partner for professional services. This implies that we still have to understand the customer s pain points to complete the sales process. The customer benefits from two advisers for the price of one. Consider whether you need to re-invent your company as a business solution provider. Evaluate whether you need to join forces with a business solution provider. Examine your customer base for cross-selling and up-selling opportunities, to identify the correct verticals, predict client needs, and define purchase personas. Find the partner that matches the vertical you are targeting. Always clearly understand who is selling to whom. Think Like a Buyer Think like a buyer by going beyond the traditional round-the-clock Web and support formats. Consider innovative delivery channels and understand your price point and operating margins. Ensure customers receive support as conveniently as possible. Adopt more interactive support channels, such as instant messaging, to make it easier for users to approach you and get a rapid response. Establish a support model suitable for your market with tiered support at different price points if you serve a mixture of enterprise, medium and small-sized companies. Offer just one high-level support service for all if the majority of customers are small and medium-sized enterprises (SMEs) with more than 25 seats. Partner with a call centre if you cannot afford a help desk. State clearly in advance what service levels users can expect and keep them informed if things go wrong. Sales Process for Hosters Hosted service providers often run the risk of becoming faceless companies hiding behind their Web sites. But successful partners understand that customers prefer dealing with people rather than systems. To develop a long-term relationship based on trust, they focus on personal interaction with the customer throughout the engagement. Continue to Build Value CRM and hosted CRM help partners to move their businesses up the value chain by working with upper mid-market customers. Hosted CRM helps your clients spend more time getting to know their own customers. And a hosted CRM solution built on Microsoft Dynamics helps your clients centralise customer information and correspondence efficiently, identify business prospects, and capture workflows. Five Pillars for Demand Creation Outsourcery has five pillars for demand creation, all underpinned by marketing, Web, and PR activity. New Business Targeted direct mail Mass e-shots Web site landing pages Online banner advertisements Customers Segmentation who are we targeting? Verticals Suppliers Hardware, software, office supplies Events Business breakfasts, customer forums, webinars, Live Meeting demos Telemarketing Internal self generation External telemarketing Microsoft Communications Sector 6

7 Reaching New Business Segments Hosted CRM helps partners reach new business segments. Because hosted CRM is a business application with great collaboration capabilities, the leads/sales automatically move the business towards higher value transactions. Hosted CRM helps your customers spend more time getting to know their own clients. A hosted CRM solution built on Microsoft Dynamics helps to centralise customer information and correspondence efficiently, identify business prospects, and make use of workflows. Foged says: At Exare, we make use of several channels of leads online as well as offline. But instead of installing a normal end-to-end sales process, we offer prospective customers a range of different options to convince them of the quality of service and help them understand the value of the solution. These options include: Bi-weekly webinars to focus on either sales and marketing, or service management. One-to-one webcasts where Exare identifies between one and four areas of interest for the customer and shows instantly how it is done. Whiteglove a concept of helping the customer get its own data into the solution to make it more natural and valuable. Foged adds: The sales process is vital it s important that it doesn t exceed 14 days from the initial lead to closing the sale, and that the hoster is in control at all times. Offline lead generation is based on telesales, and direct marketing to turn offline leads into active online leads. We use the online sales platform because offline use isn t an option for hosted services. This also segments the leads. Offline leads that will not go online are often resistant to buying a hosted service. The tools we use in sales include best practice guidance, on-demand videos, instant messaging, and newsletters. Ensure that you have a sales model in place and are in full control of your business. Use a sales rather than technology-driven approach. Talk to your customers about their pain points, how to increase revenue and reduce costs. Land/Expand Exare Group in Denmark expects to double its installed base in hosted Microsoft Dynamics CRM in Its growth strategy is also concerned with encouraging customers to expand their range of in-house hosted services. Foged says: Customers are realising that despite the current economic climate, investing in software-plus-services helps to drive sales. There is scope to create a cocktail of hosted business tools with hosted Exchange, hosted SharePoint, and remote backup and disaster recovery services. In other words, you can land the customer quickly using Microsoft Dynamics CRM. It then becomes easy to attach other hosted services and expand the CRM solution by adding new departments. Or you can create additional xrm scenarios. Best Practice Example Prior to 2006, Exare Group focused its business on the technical side of hosting, building a reputation for round-the-clock service and reliability. But the company decided that concentrating on fulfilment of CRM hosting rather than developing its potential was an incomplete business model. Foged says: By becoming a hosted service provider, we re now selling the service rather than the technology the core of CRM is business not technology. To succeed in a highly competitive market, against the background of economic slowdown, it pays to become a highly focused sales-driven organisation. Microsoft Communications Sector 7

8 Add Flexibility to Sales Processes The flexibility of the hosted CRM model is a key driver for customers who decide to outsource IT services. In a maturing market, flexibility cannot be limited to the monthly pricing model alone. A hosting service provider with ambitions to remain in the market in the long-term needs to extend flexibility to all aspects of the software delivery process while keeping control of the invoicing process. Five Clicks to Close Your Goal The five clicks to close approach to selling software-plus-services demonstrates how to achieve success in the shortest time possible. It shows how to progress from a clear Web offer, to one click provisioning with name and address, and one hour for the potential customer to receive log on and password details. After that, follow up from a sales executive should be within 24 hours, with no more than one month to close the deal. Multiple Pricing Options The most commonly used pricing models for hosted software-plus-services are pay-per-user and payper-month. Although these standard subscription methods help customers accurately predict the cost of using a technology and reduce risks, you need to match pricing to the way an organisation conducts its business. Adjust pricing to customers funding models. A local authority with a fixed annual budget may prefer an annual payment model, but a manufacturer with variable profits is likely to find monthly payments based on usage and transaction levels more cost effective. Give businesses the opportunity to switch to a different pricing model at any time, not just at the end of the month or end of the contract. Adaptable Contracts Customise solutions that allow customers to access hosted CRM according to their business needs and budget rather than to the constraints imposed by the hosting contract. Allow customers to increase or decrease the number of subscribers at any time so businesses can easily cope with changing staff levels. Adapt contract length to a customer s critical projects requiring more hosted applications or higher support levels for a short time. Focus on the contract language so that terms can be flexible enough for changes but not flexible as to how they may be interpreted. Microsoft Communications Sector 8

9 Service Engagement Solution providers can often underestimate the amount of work and attention to detail needed to customise a hosted CRM service for a specific market. Areas requiring special attention are data storage, support, and branding. Hosted CRM providers need to understand fully the scope of serving multiple markets and use a local partner s experience to anticipate challenges and make the correct judgments. Localise, Localise, Localise Winning customers depends in large part on how your brand is perceived by the chief executive officer or chief financial officer of a potential client. Are you a faceless multinational hosting company or a firm specialising in discrete markets, with an innate understanding of how to support each market differently? You can become a well-known local brand even if you are not physically located in the customer s country. Partner with local resellers and offer them white labelled or co-branded support services. Invest in creating a second language version of your Web site. Spend time attending Microsoft partner events in different countries. Support for the Local Customer For hosted CRM providers operating in multiple countries, providing local language support is a key differentiator. Customers feel more confident when they work with a company that can communicate with them easily. Microsoft Dynamics CRM Accelerators are a range of add-on solutions developed for Microsoft Dynamics CRM customers and partners. Each Accelerator is free it shows how the platform can be configured and extended beyond its marketing, sales, and service functions. Microsoft Dynamics CRM Accelerators offer customers and partners faster means of deploying business-boosting functionality, lowering costs, and increasing business benefits. Consider outsourcing services to a specialist support centre that can provide local language support. Data Storage While hosted CRM solutions offer customers anytime, anywhere access to critical business applications, users often worry about losing control over key business data. Hosted CRM providers, therefore, must provide customers with the comfort factor of secure data backup and storage. Design business solutions that follow the customer s data security policies and ensure they meet country-specific data protection rules. Collaborate with a local data centre that is familiar with local regulations. Evaluate techniques to compress, encrypt, and transfer data directly to the customer s server through a secure virtual private network connection on a daily basis. Best Practice Example The hosted CRM segment presents major business opportunities in 2010, according to Adam Spurr, Sales Director at Outsourcery. The company began its relationship with Microsoft at an event in the north west of England in 2008 and launched its hosted CRM product after just four months. Spurr says: Many companies are still using CRM software such as Goldmine, personal productivity tools, or even worse spreadsheets. The key to our success in hosted CRM is to have talented and credible people, technical ability, and the skills to show customers a demonstrable return on investment. My advice to other hosters is to put forward a simple message that customers can understand. Microsoft Communications Sector 9

10 Flexible Service Level Agreements A key aspect of the hosting services contract, the service level agreement (SLA), is the yardstick of the quality of service your customer expects. Introduce flexibility into SLAs and vary service levels to consistently adapt to the changing needs of a customer organisation as it evolves over time. Classify SLAs in line with the industry verticals you serve. For example, offer immediate response and recovery for a logistics company that receives work orders by messaging and cannot afford any downtime during the working day. Alternatively, propose 24-hour recovery for SMEs that access their messages only in the morning. Add SLA terms and conditions to account for different business scenarios. Allow variations to SLAs as the customer adopts new business processes or technologies. Customised Configuration and Support In some cases, hosted CRM providers rely on their partners to customise and configure hosted applications for users. It is important to ensure that partners are flexible and understand the customer s business as well as meet the service standards you would expect from your own company. Trial partners on technical customisations try before you buy. Offer custom backup and data restore if needed by customers. Make provisioning of applications easy for your partners. Microsoft Communications Sector 10

11 Making Your Solutions Complete Gaining the customer s trust involves managing every interaction with the business with the same level of attention to detail. As customers IT requirements become increasingly complex, service providers have more opportunities to deliver integrated solutions and ensure long-lasting customer loyalty. It is essential for account managers to act as trusted advisers to customers and help them access a complete solution. Integrated Solutions Outsourcery believes that all SMEs should be able to enjoy the sophisticated IT and communications that big companies have enjoyed for years. Its success is based on delivering business value by paying equal attention to six steps in building a customer relationship. Sales Director Adam Spurr lists them as: Find, win, grow, manage, mobilise, and communicate. The company bases its approach on offering integrated solutions. If a firm is planning an acquisition, it will require additional user licences for its hosted applications, but may also need a new hosted finance solution to manage the expansion of its business. Train account managers to up sell by anticipating users needs. Conduct regular reviews of customers IT infrastructures to establish technology roadmaps specific to their businesses. Establish a formal system to track the customer life cycle to identify opportunities beyond just hosted CRM for example, desktop upgrade and server backup. Generate helpful content to update businesses about your offerings at each stage of the sales life cycle as well as customer life cycle. Target Vertical Markets Success in hosted CRM results from understanding the impact your solution will have on the customer s business return on investment, reduced costs, and fewer pain points. No hoster can satisfy every segment of the market. The best strategy is to differentiate services and specialise in selected industry verticals. Gain an in-depth understanding of your market to create integrated service bundles targeted at specific needs. The most important letter in CRM is the C customer information is the cornerstone to any successful CRM programme. To succeed, hosters need to make it easier to combine multiple software-plus-services offerings into a single value-added solution. Bundle software-plus-services based on a clearly defined requirement of an industry vertical rather than target broad market segments. Recruit in-house resources specialised in vertical solutions to support direct and indirect sales channels. Become the customer s trusted adviser with trust comes agreement. Build a portfolio of related customer case studies using multimedia resources to make your marketing more focused and relevant to sales opportunities. Microsoft Communications Sector 11

12 Learn more about CRM (customer facing) (customer facing) (partner only) Join the Partner Network Find out more about Outsourcery Find out more about Exare Group Microsoft February 2010