Alphabet Soup: How CRM, ERP, Web 2.0 & Sales 2.0 is Creating a Superior Sales Experience: A Case Study David Greco David.greco@quinnipiac.edu Bruce White Bruce.white@quinnipiac.edu Computer Information Systems, Quinnipiac University Hamden, CT 06518 USA Abstract CRM, ERP, Web 2.0 and Sales 2.0 are combining for the perfect storm creating a better buying experience. As such, buyers are better informed, sellers are better connected and the experience of buying has shifted from off the shelf to one's mobile devise. Combining these four disparate technologies into one powerful tool helps both sides of the buying process; the sale and the purchase. Technology is radically changing the buying process and helps marketers connect with their buyers on an entirely new level. As such, we can predict buying habits and as buyers demand customization, provide the goods and services needed to create new brands and sustain growth. This combined approached dubbed ‘Sales 2.1’ is a true combination of people, technology and service. While the term Sales 2.1 has been bantered around on the ‘net’, the author will use the term as the concept of the merger and overlapping capabilities of ERP, CRM, Web 2.0 and Sales 2.0 and will treat it as a new concept in the marketing field. One of the authors is developing what might be considered the first Sales 2.1 system. This paper gives a case study of how these components of CRM, ERP, Web 2.0 and Sales 2.0 are converging in a new enterprise. Keywords: ERP, CRM, Web 2.0, Sales 2.0 1. THE COMPONENTS This paper presents a synthesis of four technology components: Enterprise Resource Planning (ERP); Customer Relationship Management (CRM); Web 2.0 and Sales 2.0. In this section, the authors present some of the aspects of each of these components. Enterprise Resource Planning (ERP) According to PC Magazine “An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organization's own software with varying degrees of effort, and, depending on the software, ERP modules may be alterable via the vendor's proprietary tools as well as proprietary or standard programming languages.” (ERP Definition, PC Magazine, n.d.) An ERP system typically has modular hardware and software units and "services" that communicate on a local area network. The modular design allows a business to add or reconfigure modules (perhaps from different vendors) while preserving data integrity in one shared database that may be centralized or distributed”. Traditionally, ERP grew out of Manufacturing Requirements Planning (MRP) and was initially designed for inventory control and back-end billing processes.(History of ERP, taken from http://www.sysoptima.com/erp/history_of_erp.php, n.d.). Today, ERP links many technologies and is cross functional in nature. It not only helps from a billing and reconciliation standpoint, but also acts as a conduit for other technologies to work together on an entire process from initial sale to bill reconciliation and accounts payable. More specifically, when tied directly to a CRM platform, can increase functionality, streamline the buying process and short collection times (Burger, 2008). The implications of ERP are that now (finally) data generated in the sale process can be utilized in the inventory process, supply chain data can be read in the human resource function and all data is available for the finance office. No longer do systems function in a ‘silo’, but there is integrated and available data across the corporate environment. Customer Relationship Management “CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.” (http://searchcrm.techtarget.com/sDefinition/0,,sid11_gci213567,00.html) In the most ideal envisioning of CRM, a sales / marketing company will “know” what the customer wants before the customer “knows’ that he/she wants it! With analysis of what the customer has ordered in the past, their preferences, their finances, and all other personal factors, the sales company can anticipate customer’s desires with a high degree of probability. With the ubiquitous nature of the internet, data warehouses and data mining, CRM can present a powerful tool to sales and marketing environments. This is the concept of CRM within the “cloud computing” environment. CRM is a highly useful tool in a large arsenal and acts as the proverbial cloud in cloud computing. According to Knorr, (2008), cloud computing is a metaphor intended for use where a piece of hardware, software or combination of the two, help link other IT based systems through a host. For purposes of this article, the cloud holds the CRM and all components throughout will link through the CRM in the cloud. Webopedia.com defines Software as a Service (SaaS) as “a software delivery method that provides access to software and its functions remotely as a Web-based service SaaS allowing organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee. Also, because the software is hosted remotely, users do not need to invest in additional hardware. SaaS removes the need for organizations to handle the installation, set-up and often daily upkeep and maintenance. Software as a Service may also be referred to as simply hosted applications”. Since many different types of software exist, almost any software can be defined as SaaS. Having a CRM in a SaaS platform is typically more cost effective, stable and secure allowing for easier access to the CRM since it is a thin client and does require local hosting. CRM has traditionally served one purpose; as a database. Today, it has grown significantly, especially when used in a SaaS model. CRM can still be a standalone database, but when combined with other components such as ERP and multiple functions of the internet, can serve a much wider purpose. CRM can link buyer or prospect to seller on many levels. It can be as simple as entering one’s email address into a website to stay updated on a particular topic or industry. It can serve as the best way to connect buyer and seller to create a more efficient buying experience. According to Beasty, 2008, “CRM is evolving from its roots of being a transactional-based system focused on optimizing customer-facing processes to a system of truly interactive, real-time interactions that leverage technology meant for collaborative and social connections with customers.” As such, having access to real time data can create a real time emotion which can lead to a purchase. In doing so, the buying process is much more customized and shortened through the web. According to the Gartner Group, “Over the next decade, organizations are going to experience a shift in CRM applications, with the rise of social CRM. The ratio of operational CRM, analytical CRM and social CRM in packaged applications will shift from 90:9:1 in 2009 to 70:20:10 by the year 2020.” Therefore, there is sufficient evidence that we are on the verge of the first ever social networking CRM. This could significantly change the way we as consumers buy and are exposed to marketing tactics in real time sent to and from our mobile devices. The future of CRM is exponentially bright. According to Erin Kinikin, vice president of CRM for Giga Information Group, CRM is the Holy Grail in creating customer loyalty. If we as marketers can predict, manage and deliver a better buying experience, the sale and purchase just got better. By harnessing customer data, no matter how detailed, or lack thereof, we can create a better buying experience. We can anticipate a buyers needs based on past purchases and take online window shopping to the next level. We can deliver real time data to a customer’s PDA, inform them of instant sales, and repeat the process over and over. The boundary is the limit of the capacity for a given CRM program. As a marketer, it is more about the process than the product. It’s about connecting with the buyer at their level. Marketers and sales professionals alike try to constantly get their customers to adapt to their process when it should be the reverse. We should be adapting to the customer before they even think of purchasing. We should be able to predict what the buyer wants it give it to them at the correct time. CRM is one way to do this, but CRM alone cannot sustain the needed technology to deliver such an elaborate campaign. By harnessing the power of the internet, specifically, Web 2.0, we can take this experience to the next level. Web 2.0 Wikipedia defines "Web 2.0" as the second generation of web development and web design. It is characterized as facilitating communication, information sharing, interoperability, user centered design and collaboration on the World Wide Web. It has led to the development and evolution of web-based communities, hosted services, and web applications. Examples include social networking sites, videos sharing, wikis, blogs, mashups and folksonomies. The term is now closely associated with Tim O’Reilly because of the O’Reilly Media Web 2.0 conference in 2004. Although the term suggests a new version of the web, it does not refer to an update to any technical specifications, but rather to cumulative changes in the ways software developers and end users utilize the Web. (O’Reilly, 2005). According to Tim O’Reilly: “Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as a platform, and an attempt to understand the rules for success on that new platform.” (O’Reilly, 2005) Generally Web 2.0 is considered a highly interactive, dynamic web environment with social networking, wikis, blogs, mashups, RSS feeds, forums and much more. When a user creates a profile on Facebook, giving their name, age, location, marital status, political and other information, this information can be very helpful to marketers. Knowing that the author is a 27 year old graduate student in Connecticut, married with two young children can be very valuable. When coupled with other readily available information (like buying a house or renting), income, credit score, recent purchases and more, marketers can create and modify profiles. However, whether it is qualitatively different from prior web technologies has been discussed and challenged on many levels. For example, World Wide Web inventor Tim Berners-Lee called the term a "piece of jargon". (Berners-Lee, 2006) By combining the power Web 2.0 with CRM and ERP, it is entirely possible to recreate the delivery of a personalized buying process time and again. Connecting with buyers through media such as Facebook, Linkedin and MySpace, marketers have a new channel. The mobile market on Blackberries and iPhones is expanding and the information to connect buyer and seller is available. According to Horzewski (2009), the functionality of Web 2.0 combined with other methodologies benefits both buyer and seller on such a level that has never been measured in the past. It is actually difficult to measure how effective the two technologies are, but most experts noted above agree that they work together. The technologies are just so new that providing metrics to support the claim is nearly impossible. However, the customization factor is here and marketers can use the information in the CRM to connect to the user through Web 2.0, sell a product or service and reconcile the entire transaction through the ERP module. CRM 2.0 is where is Web 2.0 intersect (Enrico, 2009). These powerful tools combine for smart e-commerce, according to Enrico. In order to engage the customer, the marketer has to have something of value. The value proposition, when delivered effectively creates the market. Harnessing this data from a website hit, registration on a website or blog or direct action taken by a marketer gives the marketer the necessary ingredients to create the perfect buying experience. The secret is in the recipe, but the recipe is secret. This may sounds like hyperbole, but the consumer knows what they want and the marketer is always trying to better understand their customers. As such, the marketer’s job is to collect consumer data, analyze it and customize it for the end user; the buyer. When done correctly, companies can use Web 2.0 functionality in their CRM to harness this data and deliver a customized result, ala better buying experience. A better buying experience can open new markets, create new brands, connect buyers with partners and cross sellers to sustain growth (Beal, 2009). Web 2.1 According to Hauer, 2008 “Web 2.0 is about the technology. Web 2.1 is about people using the technology.” The way in which we adapt to the changes in technology effects our daily lives will dictate how we use this technology to further or curtail our ability to adapt to the buying process. Marketers are constantly adapting to the way they began using CRM in the mid 1990’s to the way they use it today (Haigis, 2005). By mixing technology and people, the result is a quicker, more sophisticated relationship between buyer and seller. Thus, buyers can provide their preferences towards a particular brand or product and sellers and sell to those preferences. Data integrity is a critical component to building and sustaining reliable data from which one works and turnaround time as well as security of this data are the highest priorities. The emergence of Web 2.1, or the people element, proves nothing can substitute the handshake or in person interaction during a sale. However, technology does allow for this experience to take place much faster than pre Web 2.0. There are also some drawbacks as to where technology stops and personal interaction begins. For example, a computer cannot read body language, interpret tone or communicate directly with a user on an ad hoc basis. The technology we use, be it CRM, ERP, Web 2.0 or others is only as good (or transparent) as the information provided. Meaning, the way we process, digest and create outputs like sales metrics, forecasts and P & L statements begins with the initial data entry of the information provided by the end user. How we harness this information as marketers can make the difference in selling something versus not selling something. This is where the people who use the technology make all the difference in the world. Thus the emergence of Web 2.1: the people’s technology. Sales 2.0 Sales 2.0 focuses on customer engagement rather than customer data harvesting (Baker, 2009). It has become more of a sales field tool versus an upper management tool. Sales 2.0 is essentially a digital file / database for all customer interactions from phone calls to in person meetings to web conferences and trade shows; all of which relate to the sales cycle. According to Baker, 2009, “Sales 2.0 engages the customer, fosters brand loyalty and cues sales reps in real time to pivotal buying signals and drivers.” Having this information is imperative from a marketing perspective because it gives new meaning to the word customer and can help to forge unbreakable bonds between buyer and seller. In doing so, the customer’s buying experience becomes better and stronger relationships are created. Access to any data related to the customer is the key link in engaging buyer and seller. However, sales 2.0 has a major drawback; it will not replace the human contact created when buyer and seller meet in person. Sales technology can heighten the buyer’s interest, make transaction times quicker and connect buyers to sellers, but it will never replace the actual personal relationship or handshake. It will never be able to completely remove the human aspect of the buying process. 2. SALES 2.1 – THE NEW CONCEPT IN MARKETING The knowledge driven buyer has access to information but still seek intelligent vendors they can trust in order to support their buying decisions (Is Sales 2.0 In/Out, 2009). Technology is proven effective in shortening sales cycles, but buyers have higher expectations too. They want to trust the information they are given to make better buying decisions but given the recent influx of social media, buyers can quickly become overwhelmed (Marketing Automation, 2007). The adage that ‘knowledge is power’ is prominent in any sale. The more informed and educated a buyer, the more the buyer feels in control. Conversely, the more the seller knows and understands about their buyer, the more prone they are to meet the increasing demands of the buyer. The layering of technologies is creating an interesting mix of buyers and sellers and how they find one another. According to Cunningham, 2009, sales organizations are faced with the challenge of reducing costs while improving results. In doing so, buyers are also more knowledgeable craving a more streamlined process and increased functionality. Sales 2.0/1 is redefining the buying process making it better, faster and cheaper for both buyers and sellers while maintaining or increasing the measurable level of the relationship created during such a process (Levitt, 2009). Sales 2.1 does not exist and is being introduced here as a concept. The case study will make a case for the reality of “Sales 2.1” as the ‘perfect storm’ of ERP, CRM, Web 2.0 and Sales 2.0 3. THE PERFECT STORM; CRM, ERP, WEB 2.0/1 AND SALES 2.0/1 COMBINE FOR A BETTER BUYING EXPERIENCE – A CASE STUDY. Technologies new and old are coming together to create a better, more insightful buying experience for both buyer and seller. It is clear that technology helps to foster relationships between marketers and their respective buyers, however, it is understood that nothing will ever take the place of personal interaction. The use of CRM and ERP have helping transition the manual components of finding the buyer, then once found, figuring out what to do with them in terms of marketing and sales strategy. Prior to CRM, one would keep paper records of accounts and clients and bill them for services rendered. Today, the entire process can be done electronically. From finding the customer, compelling them to input their personal data to selling them a product or service to billing them for these products or services the buying experience has changed dramatically. CRM has crossed over to SaaS and can better streamline data to meet the wants and needs of buys and sellers. Data is better organized, quantified and measured allowing for marketers to intelligently design and create innovative programs which were unavailable a few short years ago. Today, CRM when used as a SaaS is proven efficient in organizations such as Google, Yahoo, and Salesforce.com. These companies are leading the way in which CRM is used to find, manage and distribute information to their buyers. ERP initially started out as software designed for inventory management controls in the manufacturing sector. Now, it is used in virtually every industry from accounting and finance to e-Commerce and enhancing the customer relationship during the entire process. It allows for the servicing of customers better and faster and is less expensive from and internal component in the business model. ERP, once positioned for large companies is now easily accessible, affordable and implementable for small and midsized organizations private, public and not-for-profit entities. Emerging technologies like social networks have replaced book clubs and networking groups. Now buyers can search the web for their favorite products and services and complete the transaction electronically. Speeding up the entire process has helped and combining Web 2.0 with Sales 2.0 allows for the buyer to touch the seller in a more complete way. Sellers can multi-market through blogging, email, web chats and video to distribute their message. This also means buyers are in new places, not just on a seller’s website. They can be found just about anywhere on the web or sitting right in front of you. Introduction to the Case Study: As an illustration, the authors presents the following case study : a new sales consulting company wanting to utilize the concept of the merger and overlap of ERP, CRM, Web 2.0 and Sales 2.0 and will treat this as a new concept in the business development field. Companies once dependent on paper to track customers and bill them can electronically streamline everything from a simple PC or laptop with standard internet access. By combining CRM to house the data and ERP to bill the customer, the company can create a marketing campaign, launch it on a social network site like Facebook and sell directly to the consumer, all without ever speaking or interacting with the consumer live. The consumer can identify preferences for future orders indicating what they liked or disliked about the product or service, create a testimonial and grade the experience which can be directly uploaded to the seller’s website; all in real time and in a matter of seconds. A process which once took weeks can easily be completed in seconds, costs less for buyer and seller and best of all, is completely measurable, trainable and repeatable. Thus, Sales 2.1 is alive! The reality is that one of the authors is on the cutting edge in creating such a company. For the review of this paper, we’ll call it Sales2.1 Entrepreneur (or http://sales21entrepreneur.com) Sales 2.2 Entrepreneur was the brainchild of David Greco. A marketing undergraduate major, David had experience in the sales field and had used Salesforce.com (a leader in the cloud computing and customer relationship management for business field). David was familiar with the techniques of social networking sites, blogs, forums and micro-blogs like Twitter. In June 2009, he launched Sales 2.1 Entrepreneur, and its corresponding website: http://sales21entrepreneur.com. The Salespreneurpresents their strategy as: “Passion, Communication, Versatility, Responsibility and Value”. They state that “Today, you have be better, faster and creative to create value”. The premise is that (as presented above) that data (captured in ERP systems), ERP, CRM, Web 2.0 and Sales 2.0 when disconnected, have little value. However, when combining these four technologies, the end result is the perfect marketing storm. Buyers are more intelligent and expect superior intelligence from vendors. Marketers have new ways to harness data and process it so that it appeals at the highest level to the perceived buyer. Mobile technology is allowing for real time data from both buyers to sellers and creating new marketing techniques which are not yet measured. This real time data exchange is paramount to seamlessly completing exchanges of information so that transactions can happen faster and more efficiently. As technology continues to mature, it is the opinion of this author that sellers will have the capacity to harness data about their buyers on multiple levels. Buyers will be able to expand their knowledge base and create a more level and fair exchange of goods and services. The The Salespreneuris a start-up company attempting to put the various pieces together to become a leading sales management and promotion company. Since its start in June 2009, The Salespreneurhas actually been profitable and does rely on Salesforce.com, LinkedIn, Facebook and other social networks for leads and advertising. Hypothetical Case The company has been in business since June 2009. The following is a hypothetical case study. William Holmes and Associates is a Real Estate company on Long Island New York. Like many real estate companies, their sales have dropped as the economy has sagged. The traditional marketing of Real Estate companies has been a mix of newspaper ads (generally in the weekend editions of newspapers), feature ads on web pages (like http://realtor.com), and through open houses and street signs in the yards of houses for sales. These avenues seem to have dried up. They contacted David Greco, the founder of The Salespreneur to help with getting into the Sales 2.1 arena. David met with the William Holmes and Associates group on August 10th, 2009 and made the following proposal: - Placing ads on LinkedIn and Facebook – limited to the Long Island region. These ads would be based on age, employment, and marital status (all available on LinkedIn and Facebook. For married couples from 25 to 35, with employment with certain employers, the pitch would be for affordable starter homes in the area. For married couples from 35 to 50, the pitch would be for better homes, closer to schools, more bedrooms (as the couples had children). For those from 50 to 65, their ads pushed shorter commutes or with access to golf courses or other recreational activities (frequently available with LinkedIn and Facebook accounts). With other data, such as religious affiliation, they could suggest homes closer to parochial schools. For couples over 60, they suggested smaller homes possibly on one level as both the ‘empty nest’ and aging occurred. - Using public records for taxes, and as much financial information as could be gathered and stored in data warehouses, David suggested financing options that would appeal to the potential clients of William Holmes and Associates - Depending on the age group and additional information (such as iPhone, Blackberry or other smartphone devices), William Holmes and Associates could promote a smartphone app (homebuyer application) that would give GPS directions to houses that seemed to fit the clients situation. Other (non smartphone users) would get very targeting (and personal) emails about potential homes. - On servers at William Holmes and Associates, The Salespreneur representative would install the comprehensive ERP system that interfaced with a CRM database. The software would produce high reliable leads for William Holmes and Associates. “Spiders” that scanned LinkedIn and other such professional networks gathered reports of promotions and honors that might signal a positive change in income (and thus a higher value client). - Prior to meeting a William Holmes and Associates sales representative in person, the software would scan various social and professional networks to find additional information about the client, such as what college he/she graduated from, favorite movies and sports teams, and more, so that the sales representative could establish rapport quickly with celebrating the Yankee’s wins over the Red Sox, or commiserating a loss by the New York Giants. Monica Passarella, the sales manager of William Holmes and Associates liked the concept, but needed to think it over. She brought in her management team and asked them to display their LinkedIn and Facebook pages in a meeting. In doing so, she learned more about his team than he had ever known. She found that Rose volunteered in a hospital; that John was a tri-athlete; that Greg was Scoutmaster for his son’s troop (and that Greg and Karen had four children and that Karen was homeschooling the family). As she presented The Salespreneur’s plan to this management team, she was surprised to learn that most of the team (especially those under 40) were “addicted” to social networking sites like LinkedIn and Facebook. It was an easy sell to convince Monica and the management team to try out The Salespreneur plan. Within a few months, sales and revenues were up at William Holmes and Associates. The sales agents spent more time on the Internet and mobile devices, data was gathered and stored for a more complete understanding of clients. 4. CONCLUSION This paper has presented the concepts of the synthesis of ERP, CRM, Sales 2.0 and Web 2.0 into a new concept, named “Sales 2.1” by the authors. 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