Iconic Candy Maker Reduces Customer Churn by 34 Percent with CRM Solution

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1 Microsoft Dynamics Customer Solution Case Study Iconic Candy Maker Reduces Customer Churn by 34 Percent with CRM Solution Overview Country or Region: United States Industry: Consumer goods manufacturing Food and beverage Customer Profile Founded in 1890, Jelly Belly Candy Company is world-famous for its naturally flavored, gourmet jellybeans. The company has 700 employees and is headquartered in Fairfield, California. Business Situation Wanting to strengthen sales and reduce customer churn, Jelly Belly spent 18 months struggling to implement a customer relationship management solution that was unable to meet the project s core business requirements. Solution Jelly Belly worked with Microsoft Gold Certified Partner Webfortis to successfully deploy Microsoft Dynamics CRM for its sales force, customer service center, and order entry staff. Benefits 100 percent ROI in less than three months 34 percent reduction in customer churn Additional $60,000 in revenue each month Reliable, low-maintenance system The mantra for our company right now is Work smarter, not harder. Tools like Microsoft Dynamics CRM are helping us grow even as the economy goes through a rough period. Ryan Schader, Vice President of Business Development, Jelly Belly Jelly Belly Candy Company has experienced rapid growth over the last decade, as the company expands into new geographies and product areas. The company installed an ERP system in 2007 and began work on a project for an accompanying customer relationship management system. However, after 18 months of work, Jelly Belly decided to abandon the project and look for a more stable system that would meet its core requirements more effectively. Working with Microsoft Gold Certified Partner Webfortis, Jelly Belly implemented Microsoft Dynamics CRM in two-and-a-half months, meeting core requirements, such as integration with the ERP system and creating a single view of customer information across the company. Jelly Belly uses the solution to strengthen relationships with customers and has reduced customer churn by at least 34 percent and added U.S.$60,000 each month in sales.

2 Fast Facts Jelly Belly served three terms in the White House as the favorite candy of President Ronald Reagan and President George H. W. Bush. The company manufactures 1,400 SKUs across three facilities and boasts 30,000 active customer accounts. Jelly Belly jellybeans travelled aboard the space shuttle Challenger as the first jellybeans into space. 80 percent of the company s approximately $200 million in revenue comes from jellybeans. Jelly Belly has manufacturing facilities in California, Chicago, and Thailand. Situation Famous for its naturally flavored, gourmet jellybeans, Jelly Belly Candy Company manufactures and sells more than 100 chocolates, gummies, sour candies, and other confections to specialty retailers; to large, national chain stores; and through distributors. With roughly 700 employees and approximately U.S.$200 million in annual sales, Jelly Belly continues to expand its business into international markets and new product lines, such as the Sport Beans jellybeans. When Jelly Belly implemented a new enterprise resource planning (ERP) system in 2007, the company planned to deploy an accompanying enterprise customer relationship management system to help improve sales and customer service. Explains Ryan Schader, Vice President of Business Development at Jelly Belly, Although we ve diversified our sales channels, the bedrock of our business remains the same mom and pop candy stores that Herman Goelitz sold candy to when he founded the company in This customer segment typically requires a significant amount of interaction and followup, which means we need to make our sales force as efficient as possible. Throughout the sales process, Jelly Belly sales managers and representatives used a variety of tools and methods to track and report activity. Jelly Belly wanted to standardize the sales process and imbue it with the same rigor that made its manufacturing processes so effective. Our manufacturing operations operate with very little waste and produce extremely consistent results. We wanted that same type of efficiency and consistency in our sales, but we needed a tool that would help us achieve that goal, says Dan Rosman, Vice President of Information Technology at Jelly Belly. For example, Jelly Belly sales teams typically attend one or two trade shows each week, where they can gather up to 500 sales leads, depending on the size of the event. However, the company had no formal process for making sure sales representatives or broker agents followed up on these leads in a timely manner. Besides pursuing new sales, Jelly Belly also wanted to cultivate and retain existing customers, especially in the specialty retail segment. It takes a lot more time and energy to acquire new customers than to retain current ones, says Schader. However, without a customer relationship management system integrated with our ERP system, there was little we could do from an organizational standpoint to remedy this problem. Our customer

3 This portrait, made entirely of jellybeans, resides at the Reagan Library in Simi Valley, California. President Reagan famously served Jelly Belly jellybeans in the Oval Office and on Air Force One. Within one month, Webfortis was able to develop a proof-ofconcept that met all our core requirements. After spending a year and a half trying to set up a system ourselves, we were duly impressed. Dan Rosman, Vice President of Information Technology, Jelly Belly relationship management project was critical. With a list of requirements in hand, Jelly Belly began work on implementing a customer relationship management system that was purported to work with its ERP system. However, the Jelly Belly IT team could not implement all the functionality desired and the system experienced frequent technical issues. Says Rosman, One of our business stakeholders called the system a Rube Goldberg machine because of the way it required convoluted processes to perform simple tasks, like interfacing with the ERP system. It seemed that we had a new glitch to deal with on almost a daily basis. After 18 months of work, Rosman and his colleagues halted the project. We decided not to move forward with the customer relationship management system because it was unsatisfactory from both a business and IT standpoint, says Rosman. Looking forward, I anticipated more work for the IT staff and frustrated business users. We didn t want to sour the organization on customer relationship management. Solution Because their ERP system is based on Microsoft SQL Server, the Jelly Belly IT team contacted Microsoft to find out about compatible customer relationship management solutions. From an IT perspective, we were looking for stability, low maintenance requirements, and technology that fit with our existing infrastructure from Microsoft, says Rosman. Deploying the Solution on Time and Under Budget Jelly Belly agreed to let Microsoft Gold Certified Partner Webfortis demonstrate how Microsoft Dynamics CRM could meet the company s needs. Says Rosman, Within one month, Webfortis was able to develop a proof-of-concept that met all our core requirements. After spending a year and a half trying to set up a system ourselves, we were duly impressed. Working together with Webfortis, Jelly Belly deployed Microsoft Dynamics CRM within two-and-a-half months, on time and under budget. Says Marc Wolenik, CEO of Webfortis, Microsoft Dynamics CRM is extremely flexible and easy to deploy. It is able to meet customers specific business requirements in less time than competing systems and has proven to deliver a higher return on investment. With the solution, organizations can quickly deliver functionality that can adapt and grow to meet their evolving needs. Creating a Transparent Clearinghouse For Customer Information The solution from Microsoft shares information with Jelly Belly s ERP system so that employees across the company have an up-to-date, holistic view of customer account activity. Microsoft Dynamics CRM serves as a transparent clearinghouse for customer information at Jelly Belly, says Schader. There is no longer a disconnection between customer service, order entry, and our sales representatives in the field. Every customer interaction is logged through the system, whether a sales representative or a representative on our customer service team creates it. Adding Rigor to Sales Processes Jelly Belly instituted standard processes for tracking and reporting sales activity by taking advantage of Microsoft Dynamics CRM in Microsoft Office Outlook. Our salespeople know Outlook, and one of our primary requirements for the solution was that it work in that client, says Schader.

4 Jelly Belly continues to expand into new geographies and product lines, such as its Sport Beans performance jellybeans. Microsoft Dynamics CRM fits into Outlook seamlessly to make following best practices as easy as possible. In addition, it has seamless offline capabilities so that sales representatives out in the field can keep data synchronized. Tracking Store Display Profitability Jelly Belly has arrangements with grocery stores and drug stores throughout the United States to house large Jelly Belly candy bins that the company owns. Before implementing the solution, there was no way to track the chargebacks associated with each display when customers dispensed candy but did not pay for it. Now, Jelly Belly tracks these metrics for each display so that it can determine the profitability of each unit. Harnessing Customer Service Jelly Belly also uses the new solution to tackle the problem of customer retention. Historically, the company would lose roughly the same number of specialty retail customers it gained in any given year, largely because of the seasonal nature of its product and the fact that many retailers placed orders sporadically. To lower its customer churn rate and increase sales, Jelly Belly set up a new outbound-calling program by using Microsoft Dynamics CRM, where customer service representatives who are free make calls to customers that have not placed orders in the previous 12 months. This program also puts Jelly Belly in direct contact with customers that it usually sells to through distributors, such as the bike and running shops that purchase its new Sport Beans jellybeans. Previously, Jelly Belly had no formalized way of following up on these customers. Our Director of Customer Service has been with the company over 30 years and was skeptical that customers would respond positively, says Schader. But since we ve started the calls, we ve found that most specialty retailers are happy to hear about new products and what is selling well at other stores. In most cases, they ve simply forgotten about us because they re busy. Benefits By using Microsoft Dynamics CRM, Jelly Belly implemented an enterprise customer relationship management solution that met all its requirements in just five months a deployment that looks especially good compared to the 18-month failed project based on software from another vendor. In addition, Jelly Belly has realized returns exceeding what the company invested in the project after just seven months. The mantra for our company right now is Work smarter, not harder, says Schader. Tools like Microsoft Dynamics CRM are helping us grow even as the economy goes through a rough period.

5 Looking at the orders that come in subsequent to sales calls from our customer service team, we ve seen approximately $60,000 in additional revenue each month. Based on these numbers alone, the implementation of Microsoft Dynamics CRM paid for itself in less than three months. Joe Coulter, Business Systems Analyst, Jelly Belly 34 Percent Reduction in Customer Churn Since deploying Microsoft Dynamics CRM, Jelly Belly has been able to reduce customer churn in its specialty retail division by at least 34 percent. However, the full impact of the solution on customer retention is likely much higher but cannot be measured yet because Jelly Belly implemented the solution less than one year ago. Explains Schader, We re seeing a very real turnaround in our customer retention numbers for specialty retailers at least 34 percent improvement. Unfortunately, we can t assess the full impact because we don t have a full year of data. That s important because some customers only order our seasonal products once each year. What we do know is that we typically gain and lose an equal number of customers in any 24-month period. Running the numbers for the last 24 months, we know we ve gained 4,400 customers and lost only 2,900 customers. The only significant change during that time has been the implementation of Microsoft Dynamics CRM in the last seven months. We look forward to collecting a full year s worth of data so that we can measure the full impact of the solution year-over-year. Says Joe Coulter, Business Systems Analyst at Jelly Belly, Looking at the orders that come in subsequent to sales calls from our customer service team, we ve seen approximately $60,000 in additional revenue each month. Based on these numbers alone, the implementation of Microsoft Dynamics CRM paid for itself in less than three months. Reliable, Low-Maintenance System Jelly Belly spends little resources maintaining Microsoft Dynamics CRM compared to the previous software solution. The technology in Microsoft Dynamics CRM is much more modern, and although no technology is perfect, the solution definitely doesn t expose us to the type of trauma that we would have had with the alternative, says Rosman. From an IT perspective, Microsoft Dynamics CRM has been a very low-maintenance solution so far. Coulter, who handles trouble tickets from 57 employees who use Microsoft Dynamics CRM, agrees with his colleague. Mostly, the issues I get from users are about how to use the software, not technical issues, he says. Once we get it tested and in place on an employee s machine, it is really nice and quiet. Additional $60,000 in Revenue Each Month With stronger, formalized sales processes that Microsoft Dynamics CRM supports, Jelly Belly can pursue organizational strategies to increase sales. For example, the company uses the solution to more effectively manage leads generated at trade shows and ensure that broker agents follow-up with potential customers. In addition, the outbound-calling program running on Microsoft Dynamics CRM has contributed to increased sales activity.

6 For More Information For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) In Canada, call the Microsoft Canada Information Centre at (877) Customers in the United States and Canada who are deaf or hard-ofhearing can reach Microsoft text telephone (TTY/TDD) services at (800) Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: For more information about Jelly Belly Candy Company products and services, call (800) JB-BEANS or (800) (United States only) or (707) (all countries) or visit the Web site at: For more information about Webfortis products and services, call (866) or visit the Web site at: Microsoft Dynamics Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success. For more information about Microsoft Dynamics, go to: Software and Services Microsoft Dynamics Microsoft Dynamics CRM Partners Webfortis This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published December 2009