Summarize the case study "Bossard Asia Pacific" by identifying three objectives. Based on the case study Bossard Asia Pacific, how would you recommend Bossard to develop its marketing strategy and the CRM system to support it?

case fourteen Bossard Asia Pacific Can It Make Its CRM Strategy Work? JOCHEN WIRTZ' Bossard Asia Pacific, an innovative manufacturer pany with a highly distributed operation. of fastening technology, is facing increasing com- petition from local and regional players. In a bold BACKGROUND TO BOSSARD'S CRM move, the CEO of Bossard AP embarks on a cus- INITIATIVE tomer relationship management (CRM) strategy Some time ago, Scott had set up a task force to that requires its employees to embrace the CRM assess Bossard's current market position and find paradigm and become more customer-centric. He ways to accelerate growth in the Asia Pacific re- now needs to sell the idea of implementing a CRM gion. Bossard's core business of fastening tech- system to his management team and staff in or- nology was becoming increasingly competitive der to make the strategy work. with many large local and regional players. The cost of customer acquisition was rising and hence, Scott MacMeekin, President of Bossard Asia margins were eroding. The task force concluded Pacific, was about to enter the meeting room in their study with a strong recommendation for a his Singapore office. The room was filled with CRM system to be implemented within the next expectant faces of Team Leaders, Country Man- 12 to 18 months. agers and General Managers from Bossard's of- His task force was driven by the Asia Pacific fices from all over Asia. Ahead of him, Scott had office and Bossard's headquarters in Switzerland a difficult task. He needed to sell the idea of did not show much appreciation for Scott's ini- implementing a customer relationship manage- tiative. The resulting lack of support and fund- ment (CRM) system for a medium-sized com- ing further raised the doubts of a successful shift 1 2005 by Jochen Wirtz I gratefully acknowledge the generous help and feedback provided by Scott MacMeekin, President, Bossard Asia Pacific, and Mark Mumenthaler, who was the country manager of Bossard in China and responsible for the CRM implementation at Boassard. Mark is now Vice-President, Sales & Marketing, in Switzerland. Furthermore, the author thanks Tillman Fein for his excellent research assistance provided throughout the case development.Case 14 Bossard Asia Pacific 635 towards a CRM-centred strategy. Nonetheless, quoting US$800,000 and above. Scott showed a Scott and his team decided a year ago to push slide detailing the benefits and challenges of his for a Dashboard CRM-driven (DCRM?) strat- decision (see Exhibit 1). egy and he was now chairing this meeting in or- He said, "If you use 21st century technology der to obtain his manager's endorsement and a to pave a goat path, you will end up with a really green light for the system roll-out. smooth goat path. But, it is still a goat path." In his belief, if a process is fundamentally flawed, IMPLEMENTATION RISK OF CRM technology may give it a boost, but more likely it STRATEGIES will end up helping to do inefficient or ineffect Nonetheless, Scott was wary of the "miracle tive things faster than before. The message that weapon" CRM. He had seen too many corpora- Scott wanted to send to Bossard's manager, em- tions committing enormous resources to the de- ployees and customers was that it will use CRM velopment and implementation of CRM tech- technology to do things differently, not simply nologies designed to capitalize on a deep, inside faster or cheaper. He stressed that Bossard's knowledge of a company's customer base. But DCRM application could be seen as a sophisti- promises of connecting companies and their cus- cated sales force management tool that facilitates tomers for mutual benefit had been unsuccess- both the sales person's knowledge generation and ful or even detrimental in many cases. Despite the management's need for a monitoring and concerted efforts, many companies had failed to decision-making instrument. elevate their CRM performance to a satisfactory level. DCRM DEMONSTRATION Scott realized that most of his audience had not BENEFITS AND CHALLENGES OF seen any visual representation of the DCRM, so THE BOSSARD DCRM SOLUTION he had planned to show a few sample After thorough discussions with his team-Scott screenshots. He also referred his managers to went on to explain to his audience in the meet- an extensive training and user manual that was ing room-he decided to build an internal solu- maintained online. tion, due to tremendous cost advantages, lack of Explaining his online demonstration screens support from Bossard's headquarters in Switzer- (see Exhibit 2), he said: land as well as superior business knowledge that The DCRM system's customer management the Bossard IT team could utilize to accommo- screen provides a comprehensive customer date business-specific requirements. According profile view. From the contact details to the to his team's estimations, an internal Internet- number of visits, and key profitability indi- based solution could be implemented for as little cators, such as margin contribution charts as as US$100,000, whereas external providers were well as the competition proportion, can be analyzed at a glance. 2 DCRM describes a CRM implementation where customer-related information and key data points are organized in dashboards at a glance (i.e., one screen shows all the relevant information, and further drill-down into more detailed data can be performed from each dashboard for key data.636 Case 14 Bossard Asia Pacific Exhibit 1 Benefits and Challenges of Bossard's DCRM Strategy Implementation Benefits: 1. Cost of development Is about 10 to15 percent of an off-the-shelf DCRM software solution 2. Documents such as existing Excel spreadsheets can be reused for ease of Implementation 3. Part of the DCRM development team are Bossard employees, which have a strong understanding of the business model. Flexibility for chance and adjustment are high 4. The tool Is built especially for Bossard and Its requirements on customer data. This provides additional flexibility 5. Minimal data entry and migration 6. Compatibility to existing ERP systems 7. Customized according to Bossard strategy; best fit Challenges: 1. Development process takes longer 2. Bossard people who are Involved In developing the tool have to be taken out of their regular duties. Employees are a scarce resource In a medium-sized company like Bossard Asia Pacific, which comes without extra IT support 3. Inputs from the market-such as from sales people-are essential to continuously Improve and upgrade the system and keep It on a very high standard Exhibit 2 DCRM Customer Management Screen Budget, Scales, GM% for past 12 months Indicator to BU/sales Team/Individual sales trend over the past 12 months. Further Drill Down IAHAB AHAHA ARAHA ARRAHCase 14 Bossard Asia Pacific 637 I want everyone from the country gen- CRM IS BEING USED FOR MARKET eral manager downwards to use the DCRM IDENTIFICATION AND system to present the company's perfor- SEGMENTATION, AS WELL AS mance to all members of the company. All the important indicators, such as the KPI CUSTOMER TRACKING (Key Performance Index), are captured in Scott elaborated that the selection of target cus- the DCRM system. tomers is done through several different analyti- Referring to Exhibit 3, Scott said, "As you cal processes. First, it was important to look at can see, the DCRM system's segmentation the market segmentation. Once a segment is screen divides customers into different segments. defined, the next step would be to select the most This will help the sales force to stay in line with profitable customer in that segment. For this Bossard's target segmentation and not to move purpose, Bossard Asia Pacific had implemented too far from a given strategy. If the focus changes, a high yield margin contribution (HYMC) screen for instance after a strategy meeting, a new seg- as part of the DCRM implementation. The mentation can be selected in the CRM system HYMC included cost of sales, engineering sup- to reflect the new situation." port, cost of line items, 12 percent of annual rev- Exhibit 3 DCRM Segment Screen Enable to view by different segment - to select on BU-Segment main screen. 1AAA IAHE ARAHH638 Case 14 Bossard Asia Pacific enue (AR) and inventory holding costs. After sured by scheduled management meetings. Scott deducting the HYMC from the customer profit, presented the different meeting types to his au- what remained is the "true profit" that helped to dience, elaborating on each of the four different decide whether the customer should be targeted. types of meetings that the DCRM implementa- A separate screen was used to analyze tion team had defined (see Exhibit 4). whether a company is growing or shrinking in conjunction with the margin trend (up or down). TOP DOWN SUPPORT IS CRITICAL This was conceived as a very powerful tool to FOR SUCCESS understand in which company Bossard shall in- Scott was of the strong opinion that without him as vest. Scott explained: a decisive top-management sponsor taking respon The DCRM system also includes a report sibility for the final sign-off on the completed sys- about new working and market opportunity tem, the inevitable result would be that strong- analyzing the pipeline trend. The pipeline re- willed steering committee members would shape port provides an excellent overview of whether the final implementation to reflect their desires for the company has enough potential customers their departments or divisions. In an initial meet- lined up as a back-up, which in return indi- ing with the regional GMs, Scott pushed: cates the company's future growth potential. What you are dealing with is a whole set of TOP TO BOTTOM USAGE OF THE new roles and responsibilities; you are mov- ing toward a much more customer-focused CRM SOLUTION FOR REVIEWS AND organization. To implement CRM, you need MEETINGS people on your side to make change happen. At Bossard Asia Pacific, the continuous use of This was I need from you and that is what the newly developed DCRM tool was to be en- you need from your organization. Ask them Exhibit 4 Planned Meeting Schedule Involving the DCRM Strategy Implementation Bossard Asia Pacific Meeting Schedule Meetings Main Objectives Attendees Information flow Sales Team Review Meeting Ensure team members' prospective Team leader with Bottom up Weekly, 1 hour choices fit the given market team members segmentation strategy Financial / KPI Review Measure results to plans and GM and team Top Down-led by Meeting Monthly, half day prescribe corrective action as leaders finance needed Strategic Planning GM to ensure strategic allgnment CEO, GM, team Bottom up and Meeting Trimester, 1 day of team and members to business leader and team top down unit misslon member General Staff Meeting Prepare general staff and guide GM, Team leader Top down future expectations and all staffto use the system and request their feedback. With the feedback, the wstem willconstantly and quickly improve. For our DCRM sys tem to be successful, every single person must support it. Using the DCRM system is not an option but a compulsory task For all people involved. The DCBM is a Bossard customemade tool and none of the Bossard employees have experience. So, don't back off at the first sign of problems. No matter how much thought is put into the system, there will always be unanticipated problems to deal with. The rst CRM application is like a 157 watt light bulb in a dark room. It is not very bright, but can make a huge difference. The wattage can be turned up to 250 watts when relationships are viewed as a selected set of assets to be developed. Across the company, each member of the sales team (sales executive, sales manager and general manager) was asked to use the DCRM system to present the latest activities in their acw counts. Points to be presented were, for instance, how many visits were done during the week1 what was discussed, and what kind of action would be undertaken in response. Scott stressed that having every visit re corded would help sales team leaders to under stand what each sales person was focusing on as well as whether there were any qualitycontrol problems or other issues that required the team leader's attention. CRM A6 A KNOWLEDGE BASE AND SALES FORCE MANAGEMENT TOOL While Scott was going through his slides, Mark Miimenthaler, Country Manager, China, was sitv ting in the meeting room, pondering a problem he had faced time and again. One of his Sales Managers, Loong Pong Pang had just resigned. Case 14 Bossard Asia Pacic _3 Pong Pang, being with Bossard in China for more than two years, had put in hard work and achieved tremendous success in client acquisiv tion and account management. He had gained great knowledge of Bossard's business and the market segments that were identified as key in~ dustries to the company. Seeing him leave felt like an enormous waste to Mark. Mark knew that as a Sales Manager, Account Manager or even as a Sales Executive, it was not easy to be up~tov date on each project and customer account. Without having the account's complete data and without capturing the customerspecific informa- tion, it was very hard to develop effective strate~ gies to grow an account and increase revenue from the customer. If, like in Pong Pang's case, a Bossard sales,' account employee was to leave the company, a tremendous customer~specific knowledge base would be lost with the departure of each staff. It occurred to Mark that with all data of a specic customer available any time through the DCRM, it was much easier for a new sales person to un derstand an account fast and anticipate the customer's behavior. Furthermore, the DCRM would enable sales staff to provide the customer with better advice for mutual benefit. For instance in the high yield margin contribution screen, the sales person could see that the customer ordered frequently, but in small quantities (meaning high order cost) or identify a potential for rationalization on the product range in use. Providing the customer with valueadded services on possible improve ment greatly helped to build a closer relation- ship while, at the same time, reducing costs and translating revenue opportunities. Mark realized another strong advantage of the DCRM implementation, namely, its ability to provide an impartial source of information to a Case 14 Bossard Asia Pacific his sales staff, which can be used to determine the optimal choice of which prospect to go after. This was critical, as each decision to engage a given Prospect results in costs between US$20,000 and US$100,0003. Given that there were more potential prospects than resources at any given point in time, DCRM could be used by Mark and his team to direct the sales team more effectively. By the time Scott had reached the end ofhis presentation, his audience seemed convinwd that Bossard was embarking on a winning sta'ategy. Nonetheless, Scott cautioned his managers and highlighted that a successtiil CRM strategy was an ongoing process. After developing the strategy, dening a project plan, involving all the right people, choosing appropriate technology and implementing the program across the enterprise, the mission was not completed. In order to sustain a successful DCRM strategy and harness its ben ets, continuous monitoring, improvements and system maintenance were necessary. Study Questions 1. What role can the CRM system potentially play in Bossard's marketing strategy? How will it help Bossard to segment existing markeB and develop new ones? 2. What are the likely problems Scott will face with his CRM rollout, and how should he address them? What are the main opportunities the CRM system will offer, and how can Bossard enhance its chances of realiz ing them? 3. Based on the information provided, how would you recommend Bossard to develop its marketing strategy and the CRM system to support it? Case 14 Bossard Asia Padik 3 Appendix Bossard's Research on Customer Relationship Management Strategies Bossard's research had revealed that CRM sys~ tems are commonly used by major multinational companies around the globe. Its benefits are easily identified as enabling a business strategy that allows businesses to create and sustain long term protable customer relationships. However, CHM strategy implementations often did not succeed, and Scott knew that up to 75 percent of implementations did not deliver up to expece tations. In addition, a substantial amount offunds could be tied up in a CBM system development, easily reaching up to several million dollars until implementation. Speaking to other business leaders and acaw demics, Scott had realized that successful CRM initiatives start with a business philosophy that aligns company activities around customer needs. Only then can CRM technology be used the way it should beas an enabling tool of the processes required to turn customerwcentric strategy into business results. During the assessment and planning stage, he and his taslc force concluded that a successful CHM strategy implementation had to affect the entire corporation, from top to bottom. Not only the company structure had to revolve around their customer, but the employees' customer oriented sldlls needed to be fostered. Hence his initial claim that the business had to be disci plined in implementing the strategy change or else it would fail. He encouraged his team lead ers and regional managers to communicate the value proposition of DCBM for its clients and to Bossard clearly to everyone in their teams. Em~ ployees at the sales executive or administrative level, especially, would not immediately see the benets of CRM, but rather perceive it as an additional burden due to additional data entry. Scott and his team had conducted extensive research and were approached by large consultancy firms and application development companies, all pledging to implement Bossard's customervcentric strategy with a customized CRM solution. Bossard's requirements were matched with the external offers and compared to a purely internal solution using Bossard's IT team and an external system development rm in Singapore