Selecting the CRM that Aligns with Your Business

© Copyright 2009. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
L E A D E R S H I P  P R O B L E M SO L V I N G  V A L U E C R E A T I O N
Selecting the CRM that Aligns With Your Business
August 8, 2011

Selecting the Right CRM That Aligns With Your Business
May 11, 2011
Contents
I. CRM Software Spend Growing 2
II. Components of CRM 4
III. Client Case Study 8
IV. CRM Roadmap & Evolution 21
1

August 8, 2011
CRM Software Spend Growing
2
According to several industry analysts, organizations continue to spend heavily - $11 billion annually by 2010. By 2015, one-third of
CRM spending will be software-as-a-service (SaaS). Industry analysts also predict by 2013, spending on social software to support
sales, marketing and customer service is set to rise.

May 11, 2011
Contents
3

August 8, 2011
Components of CRM
Marketing & Channel Effectiveness
• Customer research, assessment and segmentation
• Market modeling
• Product development and lifecycle management
• Customer equity and ROI analysis
• Channel alignment and channel profitability
Sales Effectiveness
• Account and opportunity management
• Salesforce automation
• Integration with ordering and fulfillment
• Order configuration
4
In creating a CRM vision, your company needs to evaluate each of the following components of CRM to determine how they add
value, both to your customers and to your business.
Service Effectiveness
• Contact center optimization
• Field fulfillment design and implementation
• Billing and collections
• Customer churn management
Mobile
• Field service and sales representatives
• Blackberry, Android, iPhone, iPad enablement
• Integration with back-end systems in real-time
Social CRM
• Customer strategy is the corporate strategy
• Innovation from both internal and external sources
• Integration with social networks (e.g. Twitter, Facebook)
• Customer participation

August 8, 2011
5
CRM Glossary
“CRM, SFA, Lead Gen, Hosted, SaaS, On-Premise”…there are lots of buzzwords in the software industry that
sometimes make it hard for users to understand what they are evaluating.
Deployment Method Definition Example
Hosted A third party manages the application in a facility
that is remote from the user location.
Unica, SAP
Mid-Sourcing Combines the ease of SaaS with a perpetual
license model typically used by companies with
security concerns.
Neolane
On-Premise (Perpetual) The application resides in the same location as
the user organization and the organization
manages updates, patches, etc.
Teradata, SAP, Unica
Software as a Service (SaaS) The software is delivered as a service across
the internet and is fully managed by the vendor.
Salesforce.com, NetSuite, RightNow
Technologies, Sugar CRM
Some of the systems that may have come top of mind as options for your organization are likely B2B-focused solutions.
• Top of mind CRM solutions for a B2B environment include Salesforce.com, FrontRange Goldmine, Sage, Pardot, Marketo,
and SugarCRM.
• These tools all have strong Lead Generation and Salesforce Automation (SFA) functionality
 B2B organizations typically use a sales force whereas a B2C organization relies more heavily on a marketing and call
center organizations to sell products and/or services.
 B2B marketing specializes in lead tracking and nurturing as a specific target moves through a sales funnel.
 Channels for B2B organizations typically include tradeshows, telemarketing, email, direct mail, and web.

August 8, 2011
Hosted versus Premise-Based CRM
6
Area Hosted On-Premise
Contract Negotiation
Control
Disaster Recovery
Ease of Customization
Implementation/ Deployment
Infrastructure Requirements
Initial Price – Software
Integration
Investment over Time
IT Support Required
Reliance on Internet
Security
Usability
Vendor Reliance
Pro
Con
Key
When considering your purchase of CRM, the way you want to deploy the solution – hosted versus premise – makes a big
difference in terms of price, control and security. Your decision hinges greatly on your strategy. Below is a table that shows the
pros and cons of a Hosted CRM solution versus a Premise-Based CRM solution.
1. Hosted CRM may be a better
option given a short-term horizon
(3-5 years)
2. Integration may be tough with a
hosted system. Need to clearly
understand current architecture
3. Run a Pilot
 Have the vendors simulate
an actual campaign and
report you require
 Most hosted providers offer
a 30-day free trial
4. Scrutinize the contract especially if
you pursue a hosted option
Tips for Vendor
Selection & Contract
Negotiation

May 11, 2011
Contents
7

August 8, 2011
The Moment
8
• Our client, a provider of international theme park
specializing in destination travel & entertainment,
recognized their CRM needs are basic; but, also
recognized the need for a solution that allows for
growth.
• The client has only a few select data sources
leveraged for direct marketing today but would like to
leverage a broader set of enterprise data down the
future.
• The client employs fairly basic campaign strategies on
a limited basis today. However in the mid to long term
future The client expects to expand the usage and
increase the complexity of the campaign strategies.
• Private Equity owners encouraged the client to
negotiate their CRM contract to drive down costs. As a
result the CRM solution provider required the CRM
licenses be repurchased.
• Costs estimated at approximately $400K (one time)
plus $100K annually.
• The client wants a CRM delivery approach that ensures
lowest capital outlay and operating costs, while enabling
the company to improve their CRM needs.
• The client is leaning towards Software-as-a-Service
(SaaS)/Hosted CRM delivery model but would like
education on the CRM solution provider landscape (i.e.
“Why don‟t we purchase Salesforce.com?”)
ComplicationsSituation
Key Questions to be Answered:
Based On Our Requirements, Which CRM Solution Provider Will Be a Best Fit for Us?
The move toward CRM is usually spurred by one final event or realization. In other words, this “moment” is called
“The Straw That Broke the Camel’s Back.”

August 8, 2011
Current State CRM Architecture
9
Guest Database
3,100M
150 Campaigns
E-mail Opt-In
550M
140 Campaigns
Payments
Account
Notifications
Electronic Store
Account
Notifications
Reservations
Leverage 15MM “Marketable” Records to Drive Profits

August 8, 2011
Current State CRM Architecture
10
• Guest Information Only
• Demographics only (no
transactions)
• 10MM members
• 30% purchased online
• 1% Renewal Uplift = $1.5MM3
Direct Marketing
CRM Database
GID
Lifestyle
Call
Center
Reserv-
ations
Merch-
andise
Front
Gate
Not In Scope But
Represents an Opportunity
• Limited, very manual reporting
• Campaigns are by park
• Not correlated to any transactional
data available across enterprise
In 2009…
• 151 Campaigns
• 4.7MM Pieces
• $1.3MM in postage
• $0.60-$0.70 / piece
Direct Marketing Campaigns
Web
E-
Commerce
400K members
20K Guest
E-mail Marketing Campaigns
• Process handled entirely by E-mail Marketing
CRM
• Adequate reporting available – limited use being
made for analysis
• Campaigns are by location and across company
• Not correlated to any transactional data available
across enterprise
• No response data fed back to enterprise
• Primarily e-newsletters with no customization,
personalization or targeting
• Leveraged only for
merchandise & dining
• Not integrated
• Not linked to business strategy
Dining
E-mail CRM

August 8, 2011
11
Direct & E-Mail Marketing Usage
Use of Current Direct Marketing CRM Solution Use of Current E-Mail Marketing CRM Solution
Feature Use
Deliver a single view of the customer (passport) 2
Improve customer acquisition rates 4
Accelerate organic growth 1
Speed time to market (campaign roll-out) 3
Increase customer retention and loyalty rates 2
Improve cross-selling and up-selling 1
Increase average revenue per customer 1
Boost contact/call center effectiveness Unknown
Increase sales effectiveness 1
Streamline the quote-to-order process 0
Feature Use
Email Marketing 2
Survey Unknown
Landing Pages Unknown
Data/List Management 1
Transaction Messages 1
Integration 1
Reporting and Analytics 2
Multichannel Delivery 0

August 8, 2011
CRM Selection Approach
12
Assessment Conduct Research Vendor Evaluation
Organizational Readiness
1
1b. Organizational Structure
1c. Financials
1d. Resources
(Internal/External)
1e. Change Management
1a. Strategy
1f. Risk Management
Refine &
Integrate
Select
CRM
Vendor
3 4
Requirements
Business Technical
2
A Few Points to Consider
1. Develop baseline of current state and future needs
2. Consider everything from usability to privacy
3. Thoroughly understand your current infrastructure to best identify a
solution provider that will integrate properly

August 8, 2011
CRM Requirements
13
Rating Legend
Response Explanation
SUP Supported as delivered “out of the box”
MOD Supported via modifications (screens, GUI
etc)
3rd Supported as a third party solution
CST Supported via customization
FUT Supported as a future release
NS Not Supported
Priority Rate 1 to 3 where 3 is a must have
Mandatory Mark „Yes‟ only for “must-have” factors
Hierarchy Criterion
1 Marketing Automation
2 Analytics & Reporting
3 Customer Service & Support
4 Technical Requirements
5 Privacy & Security
6 Data Management
7 Workflow
8 Processing & Performance
Sample Criterion
It’s Important For You to Determine Your Business & Technical Requirements; a Methodology for
Evaluating Each CRM Solution Provider Objectively to Make a Fact-Based Decision for Your Pending
Investment

August 8, 2011
14
Expected Benefits – <insert $ amount here>
More Revenue from CRM
Better conversion from inquiry to revenue i.e. park
attendance, park spend
Better lead generation i.e. customer acquisition through
lower cost marketing channels compared with mass
marketing spend
Increased „order size‟ – encourage visitors to spend
more money in the parks
Projected Investment – <insert $ amount here>
The Investment is heavy upfront but tapers over time
CRM system costs
Hardware/infrastructure costs
Internal costs to get the system up and running
Time for 3rd parties (consultants, Systems Integrators,
etc.)
invested
earned
- invested
Return On
Investment
The <insert $amount here> ROI projection is meaningless without a strong business case behind it
CRM Business Case

August 8, 2011
CRM Vendor Selection Implications
15
There are several issues that were uncovered as we went through this exercise
Data Governance
• Desired civil use of customer data
• Data not integrated across all databases
• Lack of unique customer data identifier resulted in
unmatched customer records
System Ownership & Accountability
• Previous CRM instance did not have an internal
champion
• The use of CRM was sporadic across the company
Reporting & Analysis
• Lacked evidence for tying financial together with
CRM/Precision Marketing
• People clamored for the more reporting but had no
intent of using the information
Implementation Planning
• Formal change management protocols were not
established

August 8, 2011
CRM Vendor Demonstration – Sample Campaign Renewal
16
March April May
Treatment A Treatment B
5 14-17 22-24 25 29-31 1 - 15 16 - 30 5 13-15 15 20 29-31
Data Pull: All of April₁
Mailing House
Email
Process all
April mail
Drop
Treatment A
Treatment A
In-Home
Drop
Treatment B
In-Home
Blast
Treatment A
1 Lists are pulled from 2 different MS.SQL100 Databases;
records are matched on a specific field that exists in both
databases; additional suppression and date range criteria
are also applied to generate the lists
2 Lists are re-pulled as close possible to the date of the
mailing to suppress those members who renewed during
the first wave of communication
Treatment B
In-Home
Blast
Treatment B
Data Pull₂:
Non-Renewals
April 1-15
Mailing House
Email
Blast
Treatment A
Non-
Renewals
Data Pull:
Non-Renewals
April 16-30
Mailing House
Email
Blast
Treatment B
Non-
Renewals
Process &
Drop
Treatment A
Process &
Drop
Treatment B
Treatment A
In-Home
Treatment B
In-Home
Direct mail, prior to
expiration
Email, prior to
expiration
Direct mail, post-
expiration
Email, post-expiration
Color Key
The renewal campaign was targeted at members whose memberships expired in the month of April. The renewal campaign was
broken into two phases – A) the month prior to expiration; and B) the month post expiration (for those who did not renew). The
renewal campaign involved a direct mail and email to members in each phase.

August 8, 2011
Vendor Short List Identification Approach
17
KEY TENETS SOUGHT IN
VENDOR SOLUTIONS
1. Solution has multichannel
capabilities specifically
direct mail and email
2. Solution is easy to use
and best of breed
3. Solution is agile, flexible,
scalable and expandable
to adapt to client‟s
evolving direct marketing
needs
4. The vendor has a proven
track record in B2C
campaign management
5. The solution provides
data security
We employed a structured approach to identify a short list of recommended campaign management vendors and
understanding of the functional and technical requirements, along with our knowledge of the multi-channel
marketing application space.
Confirm
business and
technical
requirements
• Internal document review
• Interviewed key
Consumer Marketing
Stakeholders
Conduct
empirical
research
• Reviewed Gartner‟s
Magic Quadrant o for
Multichannel Campaign
Management 2010
against business &
technical requirements
• Conducted external
interviews with Direct-to-
Consumer (DTC)
marketing practitioners
and thought leaders *
Engage Vendors
• Developed an initial list of
13 possible campaign
management solutions
• Shared high level
business requirements
• Disqualified vendors who
were not a fit
• Held vendor
demonstrations to confirm
campaign management
capability & feasibility
against requirements
Short List of
Potential Campaign
Management
Vendors

August 8, 2011
18
CRM Vendor Demonstration
The initial list was limited to a smaller group of vendors of whom we found to be a potential fit for our client‟s
CRM requirements based on empirical research and user feedback. A demonstration was conducted for each of
these vendors and evaluated accordingly against our client‟s main criteria.
CRM Solution Provider Pricing Deployment Method
Aprimo* • N/A Premise & Hosted
CDC Software • Determined by # of users Premise & Hosted
Microsoft Dynamics CRM • Free trial for first 30 days
• Full Client Access - $995 for up to 40 users
Premise & Hosted
Neolane # of active participants in a campaign Premise, Hosted, & Hybrid (Mid-
Sourcing)
Responsys • N/A Hosted Only
OnContact Software • Premise - $995/named user; Maintenance - $225/named user + $1,495/concurrent
user; Maintenance - $300/concurrent user
• Hosted - $59.95/user/month; first 30 days is free; no annual contract
Premise & Hosted
Oracle Siebel • Starting at $70/user/month; Free trial for first 30 days Premise & Hosted
Pardot • Group edition is $500/month; Professional edition is $1,000/month Enterprise
edition is $1500/month. Unlimited users and no contract for Group, Professional or
Enterprise editions
Hosted
SAP • Premise - $150K + 22% maintenance + $3K/year
• Hosted - $150/user/month + hosting costs
Premise & Hosted
SAS • N/A Premise & Hosted
Teredata* • N/A Premise & Hosted
Unica • N/A Premise & Hosted

August 8, 2011
19
CRM Vendor Demonstration – Evaluation Factors
The initial list was limited to a smaller group of vendors of whom we found to be a potential fit for our client‟s
CRM requirements based on empirical research and user feedback. A demonstration was conducted for each of
these vendors and evaluated accordingly against our client‟s main criteria.
THE OUTCOME
• 3 vendors made it to
the short list – Aprimo,
SAP, and Unica
• 4 solutions fell off the
list – MS Dynamics,
Neolane, SAS, and
Teradata
• All of the CRM
systems would be
worth exploring
however our client‟s
plan to address the
customer data
management issues,
analytics, and budget
were critical factors.

May 11, 2011
Contents
20

August 8, 2011
CRM Roadmap & Evolution
21
As you CRM efforts progress from a tactical approach to one more disciplined there will likely be a sharper focus on the business
results and an increased requirement to act with agility to respond to the marketplace.
Maturity Date
2012
Maturity Date
2013-2015
Maturity Date
2015 & Beyond
Executive Participation • Owner & Sponsorship • Integrated • Active
Management Attention • Monthly to weekly • Weekly to daily • Continuous
Strategy • Transactional direct
marketing
• Integrated multichannel
marketing
• Social marketing & CRM
Enabler • Marketing plan approved;
budget set
• Data management plan in
place
• Cross-functional Steering
Committee
• Data hygiene and master
data management structure
• Rigorous and disciplined
marketing approach.
Marriage between marketing
as an “art” as well as a
“science”
• Customer-centric & CRM
culture established and
accepted
Potential Key Indicators • CRM tool selected and
implemented
• Campaign ROI and
response rates
• Centralized customer data
warehouse
• Advanced campaign
analytics and ROI
• Marketing spend as a % of
cost of sales
CRM Roadmap & Evolution

August 8, 2011
CRM Risk Identification
22
The following example serves to illustrate the use of a risk management approach to identify risks associated
with the CRM initiative.
Inaccurate Data
Development timeframes may
be dramatically extended
Campaign developers may not
trust the tool
Customers may lose
confidence in The client
Development of resources tied
up longer than initially planned
Development costs will be
higher than planned
Reduced ROI
Campaign Managers will resist
tool adoption
The investment may need to
be written off
Customer churn; associated
loss of cost per attendee
Cause
Risk
Effect
Begin by identifying the main cause of risks. In this example, inaccurate is identified as a key cause
leading to 3 risks. From this, The client should think about what’s the impact of the risk, i.e. the effect.

August 8, 2011
CRM Risk Prioritization
23
Next pull the identified causes, risks, and effects into a matrix and determine the impact and the
probability of occurrence for each one . This will provide The client with the information it will need to
prioritize risks and determine which ones need a mitigation plan.
# Cause Risk Effect Probability Impact
1 Inaccurate
data
Timeframes extended Resources tied up longer than
planned
Very high High
2 Inaccurate
data
Timeframes extended Development costs are higher
than planned
Very high High
3 Inaccurate
data
Timeframes extended Reduced ROI High Medium
4 Inaccurate
data
Developers may not trust
the tool
Reduced ROI Medium Medium
5 Inaccurate
data
the tool
Campaign managers resist
tool adoption
Medium Very low
6 Inaccurate
data
the tool
May need to write off the
investment
Medium High
7 Inaccurate
data
No customer confidence in
The client
Reduced ROI Low Medium
8 Inaccurate
data
No customer confidence in
The client
Customer churn; lower cost
per attendee
Low High
By completing this matrix, The client will have the information necessary to prioritize identified risks.

August 8, 2011
CRM Risk Mitigation
24
Following the example, the table below illustrates possible mitigation strategies The client could adopt to address
high priority risks.
Risk Possible Mitigation Strategy
Extended
development
timeframes
Focus on a limited number of simple campaigns initially to reduce risk of other
schedule and resource impacts.
Incorporate sufficient time and resources into the development schedule to cleanse
and correct the data as required.
Ensure the right business and technical resources are in place to minimize other
impediments to completion.
Campaign
developers mistrust
the tool
Early and repeated communication to the consumer marketing highlighting that data
quality may need to be improved.
Working with consumer marketing users to establish clear benchmarks for data
quality that are reasonable and achievable.
Ensuring that the development plan includes an effective “user acceptance” test plan
with associated test scripts and acceptance criteria.
Customer churn;
lower cost per
attendee
Strict standards of acceptance and a complete and proven methodology for technical
and business testing of the data quality is required
With the prioritization determined, next The client can develop mitigation strategies for those risks
deemed to have the greatest influence on the organization and likelihood of occurrence.

August 8, 2011
SO WHAT HAPPENED?!
25

August 8, 2011
CRM Vendor Selection Implications
26
The result of the exercise lead to addressing data governance issues first
Data Governance
• Desired civil use of customer data
• Data not integrated across all databases
• Lack of unique customer data identifier resulted in
unmatched customer records
System Ownership & Accountability
• Previous CRM instance did not have an internal
champion
• The use of CRM was sporadic across the company
Reporting & Analysis
• Lacked evidence for tying financial together with
CRM/Precision Marketing
• People clamored for the more reporting but had no
intent of using the information
Implementation Planning
• Formal change management protocols were not
established

August 8, 2011
Let‟s Keep In Touch
27
Art Hall
Director
Alvarez & Marsal Business Consulting
Monarch Tower
3426 Peachtree Road Suite 1500
Atlanta, Georgia 30326
Phone: (404) 759-9158
Email: ahall@alvarezandmarsal.com
Twitter: @ahall3649 and @AskCRMA

August 8, 2011
28
www.alvarezandmarsal.com

Selecting the CRM that Aligns with Your Business

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