us calls. This random information
often impeded their call productivity. With our account-focused CRM system,
they see just the information they need to converse intelligently—service
records, for example, or the fact that an account falls into a certain vertical
market. As a result, our telemarketing personnel can now make approximately
80 calls per day versus 60 before the CRM implementation, and the value of
those calls has gone up. Our people’s hit ratio—that is, the proportion of calls
that translate into qualified leads—has gone from 1 lead for every 52 calls to 1
in 33. Most impressive of all, telemarketing’s success as a profit center—what
we calculate as its ‘contribution margin’ toward closing deals—has roughly
doubled since we rolled out the CRM system.
Decreased Cost of Sales
CRM can reduce the cost of sales by increasing sales force productivity, enhancing
partner-channel productivity, decreasing quotation-proposal generation time, and
improving order-configuration accuracy. WilTel Communications provides a
detailed example of the way in which Siebel CRM technology can reduce the cost
of sales.
Excess capacity in the telecommunications industry had driven prices down over
the past few years, making it extremely difficult for communications providers such
as WilTel to maintain profitability. WilTel sought to differentiate itself through a
Why CRM? The Business Case for Customer Relationship Management Page 13
concerted effort to beat industry-standard intervals for service delivery. To
accomplish this, the company had to significantly shorten its order intervals and
focus on meeting the customer’s requested due date. However, its existing legacy
system had limited growth capabilities, poor integration with other systems, and
inadequate data integrity. This led to increasing business costs due to the substantial
effort and human resources required to meet its customers’ dates.
To address these problems, WilTel replaced its legacy system with a Siebel CRM
solution that significantly streamlined the order entry and validation process,
allowing the company to meet customer-requested due dates faster and with fewer
people. As a result of decreased order entry time, WilTel reduced headcount in its
dedicated order entry staff from 22 to 10 people, saving nearly US$500,000.
Additionally, because the order entry process was much simpler, project managers
could enter orders while talking to customers—increasing order accuracy and
leading to higher customer satisfaction.
WilTel’s vice president of service delivery explains, “We saw an almost immediate
increase in customer satisfaction from 56 percent to 89 percent, helping us retain
customers and minimize customer acquisition costs. And the efficiency and
productivity gains are translating directly into dollar savings.”
WilTel also cites the following improvements from its CRM solution:
• A reduction in average order entry time for direct access lines from 8 hours
to 45 minutes
• A 50 to 80 percent reduction in overall order entry time
• Cost savings of US$10,000 each month through a reduction in time spent on
account maintenance, security, and queries, and by eliminating paper files
Decreased Cost to Retain and Serve Customers
CRM can lower the cost to retain and serve customers by deflecting simple
customer service issues to th
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