If you receive errors when attempting to view this white paper, please install the latest version of
Adobe Reader.
"The SAP
Real-Time Offer Management software is an advanced analytical real-time decision engine that enables you to optimize any decision-making process, such as for cross-sell and up-sell offers, retention, service-level adherence, and lifetime value boosting."
Source : SAP
Converting Service Calls into Sales with Real-time Offer Management
Offer Management is also known as :
Offer Management,
Sales Pipeline Management,
Easy Sales Management,
Track Your Sales Leads,
Pipeline Management,
Offer Management Active,
Offer Management Applications,
Customer Relationship Management Solutions,
Real-time Offer Management,
Offer Management Software,
Analytics Offer Management Manager,
Offer Management User's Guide,
Offer Management Leadership,
Price & Offer Management,
Offer Management Console,
Offer Management Improves,
Offer Management Allows,
Interaction Management,
Resource Management Offer Management,
Offer Management Tags,
Launches Offer Management,
Offer Management Find,
Real-time Offer Management Applications,
Generation Offer Management,
Web Offer Management,
Offer Management Liability,
Operating Offer Management,
Offer Management System,
Personalised Web Offer Management,
Offer Management Engine,
Offer Management Demo,
Conditional Purchase Offer Management,
Offer Management Organizational,
Customer Strategy Management,
Offer Management Tools,
Offer Management Data,
Offer Management Solution Overview,
Offer Management Capabilities.
Overview
With response rates to traditional direct marketing dropping, companies
in service-intensive industries are taking a new tack. Banks, utilities, retailers,
and the like are taking advantage of incoming calls and Web visits to make
offers to existing customers. Using real-time offer management applications,
these companies can leverage the customer information that exists in their
own databases. They can learn from inbound interactions, adapt based on
customer responses, and immediately refine the offer for the next customer.
As a result, offers are more likely to result in sales, and companies can
continually improve customer satisfaction, market share, and profitable growth.
RIGHT OFFER, RIGHT CHANNEL,RIGHT TIME
INCREASING CUSTOMERS’PROPENSITY TO BUY
Achieving sustainable success in selling a product or a
service is quite straightforward. A company should
present the right offer to the right customer via the right
channel – and at the right time. By consistently presenting
offers that satisfy these conditions, companies will increase
the propensity of their customers to buy.
By enabling employees
to take the most appropriate
next action to
enhance customer
relationships, this offer
management process
can help marketing
organizations achieve
the customer attention
they seek. Moreover, it
can transform service
centers to profit centers
contributing to the
bottom line.
Of course, it’s not really that simple.
But service-intensive firms – telecommunications
companies, utilities,
banks, insurance companies, and
retailers, for instance – are finding that
they can increasingly make the right
offers, through customer-selected
channels, in real time. Thereby, they
can heighten their customers’ inclination
to purchase their goods
and services.
These firms are doing this by focusing
on inbound interactions that the customer
initiates via an interaction center or
the Web and leveraging the customer
information that exists in their own
databases. This real-time offer management
process thus provides an opportunity
for enormous revenue generation
for service-intensive firms. In fact, realtime
offer management has been
shown to have significantly greater
re sponse rates for cross-sell and up-sell
offers than with traditional outbound
direct marketing.
By enabling employees to take the most
appropriate next action to enhance
customer relationships, this offer management
process can help marketing
organizations achieve the customer
attention they seek. Moreover, it can
transform the cost-center nature of call
centers focused on service centers to
profit centers contributing to the bottom
line.
In the face of rising global competition,
service-intensive firms should try to
make the best of every interaction.
Real-time offer management in inbound
service channels does that by leveraging
already-existing customer-facing mediums.
This approach allows companies
to connect with customers in a personal
way, establish a durable trust, and position
well for attaining continual improvements
in customer satisfaction and
long-term, profitable growth.
OUTBOUND VERSUS INBOUND MARKETING ALTERNATIVES FOR OFFER PRESENTATION
SECURING A FAVORABLE CUSTOMER RESPONSE
Outbound Marketing Approaches:Issues with Effectiveness
The effectiveness of traditional direct
marketing has dropped off substantially:
response rates are sinking as costs
skyrocket. With success rates as low
as 3%, according to industry statistics,
outbound marketing programs make
offers often viewed by customers as
irrelevant. There is simply a low probability
that the key conditions of “right
offer, right channel, right time” are
satisfied due to the inherent lack of
precision. To make matters worse,
customers often perceive such offers
as intrusive, damaging goodwill. Meanwhile,
essential tools like telemarketing
are being nullified by privacy legislation.
Even event-driven marketing programs
are of limited effectiveness. In these
outbound programs, actions by customers
trigger offers – such as for
home owners insurance after submitting
a mortgage loan application. Such
approaches may deliver the right offers,
but they’re very possibly at the wrong
time or through a channel that is unlikely
to elicit a favorable response.
A Focus on Inbound Interactions
Given the issues with outbound marketing,
many companies are shifting their
focus to inbound interactions. After
all, customer service channels secure
and retain customers’ attention on a
regular basis, and agents tend to know
customers’ needs much better than
staffers in marketing and sales. Serviceintensive
firms normally capture a great
deal of information about their customers,
who are often service subscribers.
And these companies receive a very
large number of inbound service calls –
often 10 times the volume of salesspecific
contacts initiated by customers.
Inbound service contacts are now viewed
by these firms as substantial opportunities
to increase their offer success
rates – because they are in a strong
position to satisfy the conditions of
right offer, right channel, and right time.
In this case, as opposed to outbound
marketing approaches, the customer
has taken the initiative and contacted
the firm, using a channel that the
customer regards as appropriate.
The acquisition costs are zero. Moreover,
the customer is likely to be receptive
to an offer – such as a cross-sell
offer – if it’s sensitive to the context of
the contact, and is viewed as a natural
extension of the service being sought.
Figure 1: Generating Optimal Recommendations with Real-Time Offer Management
Deploying Real-Time Offer
Management –For More Effective Interactions
A real-time offer management appli cat ion
allows your company to learn from
inbound interactions, adapt based on
customer responses, and immediately
refine the offer for the next customer.
The decision engine employed in such
a process may use a variety of methods
to optimize its recommendations (see
Figure 1). These approaches include
product affinities, cluster sampling
using demographic data, discovery of
response profiles, prioritization based
on offer profitability, and predictive
analytics covering customer behavior
and likelihood of offer acceptance –
all executed in real time.
A real-time offer management application
creates a central offer repository.
As the application selects the relevant
offers, it can consider factors such
as agent skill and the intent of the
interaction (for example, a complaint,
a request to change payment terms,
a desire to close an account). Arbitration
functionality then selects the
optimal recommendations. Ideally, this
type of real-time business application
will ensure that offers are optimized
with respect to your strategic and
profitability goals, maximizing value
for customers while enhancing the
bottom line.
The real-time and adaptive characteristics
of such application are paramount.
Many alternative offline, rule-based
decision-support technologies do a
good job of helping make offer decisions
provided that market and customer
dynamics remain constant. But customer
behavior changes in response
to any number of factors – ranging
from opting for a competitor’s product
to lifestyle changes, macroeconomic
conditions, and seasonal events.
Thus, a disciplined and agile real-time
offer management application is far
superior to static, rule-based techniques
because it creates a virtuous
cycle of automatic optimization and
provides continuous insights into customer
requirements. As the decision
engine “learns” what offers are likely
to work, the application continuously
improves the offers (see Figure 2).
Figure 2: The Real-Time Offer Management Process and Its Cycle of Continuous Improvement
OPPORTUNITIES AND CHALLENGES OF REAL-TIME OFFER MANAGEMENT
STRATEGIC ALIGNMENT: COMPELLING CROSS-SELL AND UP-SELL OFFERS
Of course, improving bottom-line
revenue generation and market share
is a key motivation for implementing
a real-time offer management process.
But there are underlying strategic factors
that also make this approach compelling.
Improving Competitiveness, Performance, and Brand Equity
Many service-intensive companies are
facing increasing competition from traditional
rivals and new entrants from
across the globe. Delivery channels are
evolving, customer loyalty is fleeting,
price levels are difficult to sustain, and
market share is often declining. The
real-time offer management process
enables these firms to leverage their
existing customer data and increase
share of wallet by providing compelling
cross-sell and up-sell offers at the right
time. This strengthens customer relationships
and enhances brand loyalty.
It helps prevent defections to the
competition by providing well-crafted
retention offers – and can reignite
revenue growth.
Real-time offer management helps
companies address declining margins.
Companies can refocus their marketing
spending, eliminating expenses for
those outbound campaigns that failed
to improve sales or enhance brand
equity. Call center agent productivity
can be enhanced because automated
functionality can recommend relevant
products and guide the agents to the
next best action. IT costs can be
reduced, because data preparation
and maintenance activities to support
product promotion initiatives can be
shifted directly to marketers who use
the system. Real-time offer management
can also improve the customer
experience on automated interaction
channels such as self-service portals,
other types of Web sites, and ATMs.
By guiding such interactions and offering
customers relevant offers, companies
can employ these low-cost channels
to serve customers efficiently.
Finally, real-time offer management
helps companies reinforce their brands.
Companies can present a consistent
message across channels – and they
can provide world-class support and
service in a way that resonates with
customers and reinforces unique brand
messages.
Securing Useful and Accurate Customer Data
Real-time offer management
has been
shown to have significantly
greater
response rates for
cross-sell and up-sell
offers than with direct
marketing.
In order to ensure an effective real-time
offer management implementation,
companies must leverage information
about customers collected from a variety
of sources. Rapidly assembling and
ensuring the accuracy of this data –
including order history, profitability
measures, and characteristics of orders
accepted – is the foundation for creating
effective offers. And it’s typically
dependent on the functionality of
numerous source systems, business
processes, and analytical methods. A
company can be successful with realtime
offer management only to the
extent that its transaction systems
and analytical capabilities are in good
working order.
Change Management – Helping Service Agents Sell
The persona of a service agent
– indeed, the heart and soul – is that
of a pleaser, thriving on solving customer
problems, placating customers when
they’re upset, providing counsel when
they’re perplexed, or simply keeping
the customers happy. The fact that a
sales dimension is being added to a
service-oriented role is at the core
of the change management challenge
of the real-time offer approach.
Transforming a seasoned service organization
into one skilled at handling upselling
and cross-selling is not simple.
Introducing role changes and organizational
redesign must be handled with
sensitivity: service staffers may resist
the prospect of becoming salespeople,
and some may not have the right skills
for blended sales and service roles.
To succeed, the transition must involve
securing buy-in from service people by
soliciting their input and active engagement
in the metamorphosis. You need
to communicate regularly regarding the
competitive imperatives and visibly
demonstrate management’s commitment.
Also, it’s essential to dispel preconceived
notions about what “sales”
may mean. Management can shift the
perception of salespeople as individuals
focused purely on making a sale
(“out to make a fast buck”) to problem
solvers – in many ways, a role not
much different from the one they play
now
In the end, the financial resources and
political capital deployed for change
management will be well spent.
There’s tremendous value in retaining
and developing service agents who
know customers well and regularly
succeed at engaging their attention.
Proving That Business Value Was Achieved
Demonstrating that a real-time offer
management implementation has yielded
business value should focus on
whether sales and profitability increases
over the long run. But revenue and
margin metrics are influenced by many
factors in a complex organization – and
realization of bottom-line results is not
easily quantifiable in isolation. Thus,
it’s beneficial to focus on more specific
metrics that directly relate to the
implementation, can be readily
measured over time, and are likely
to lead to profitable growth.
The real-time offer management process leverages
already-ex is ting customer-facing mediums. This approach
allows companies to connect with customers
in a per s onal way, establish a durable trust, and position
well for attaining con tinual improvements in customer
satisfaction and long-term, profitable growth.
Examples of such measures include
offer response rates, offer acceptance
rates, customer retention rates, and
customer satisfaction. These mea -
sures may show that a company is
increasingly making the right offers.
Another appropriate measure is call
center agent productivity. This metric
may show that more efficient systems
are enabling a company to free up
agents to focus on sales as well as
service. Ultimately, you should establish
a credible link between the measures
selected and support for achieving
profitable growth – which is often
beyond a specific, finite timeline.
BEST PRACTICES: MAXIMIZE BUSINESS WITH CONTINUOUSLY IMPROVING OFFERS
KEEP IN MIND THAT SERVICE COMES FIRST
Real-time offer management
helps companies
reinforce their brands.
Companies can present
a consistent message
across channels – and
they can provide worldclass
support and
service in a way
that reso nates with
customers and rein
forces unique brand
messages.
Your company should approach planning
and implementing real-time offer management
as you would any other implementation
investment. The first step
is development of a business case,
which shows how the implementation
will support your strategic objectives –
particularly with respect to enhancing
sales, improving retention, sustaining
and improving service, and building
brand value.
As suggested above, another impor -
tant step to address in early phases
(comparable to the approach for any
business systems implementation)
is change management, where the
central challenge is to introduce the
sales role to service staff. Though
the CEO may communicate that it’s
become a competitive necessity that
“everybody sells,” such a high-level
proclamation alone is insufficient to
ensure a well-managed transition. It’s
essential to counter organizational
inertia and resistance – and that
begins with setting realistic goals.
Pace the implementation with the
capacity of service personnel in your
company to embrace change
embodied in the new sales roles.
Among other actions, change management
in this case means arranging an
appropriate union among marketing,
sales, and service. Senior management,
in guiding the implementation
and demonstrating commitment,
should build on what each stakeholder
group brings to the table: marketing
– the big picture; sales – the nuts
and bolts of execution; and service –
intimate customer contact.
Make Effective Offers
Remember that if you ask customers
why they called, they will answer: “for
service.” First and foremost, then, the
most effective offers will be wrapped
in the envelope of proactive customer
service – addressing the customers’
primary concerns and building on the
reason your company was initially
granted the inbound contact. Providing
superior service means that your company
should ensure that agents have
visibility across channels to customer
interactions. They need the ability to
interact seamlessly with the customer,
strive for first-call resolution – and do
everything else it takes to make sure
that the service experience exceeds
the customer’s expectations.
A corollary for real-time offer management
is “less is more.” A customer
should receive no more than one or
two offers per interaction. That is,
since the customer called for service,
make sure that any offer extended is
extremely focused and linked with the
needs implied by the customer call,
as seamlessly as possible.
Another corollary: make offers relevant.
Think one-to-one marketing. If the offer
is outdated, aimed at the wrong customer
profile, was refused in a previous
call, or is presented in the wrong type
of interaction, it will fall flat. Worse,
it could adversely impact the customer
relationship and thwart future sales
efforts. An effective real-time offer
management implementation can
ensure that offers are indeed relevant
and timely, and add value – in the
eyes of the customer – to the service
interaction.
Finally, effective offers will factor in
resource availability and constraints
in the call center. During off-peak times,
it’s appropriate to generate offers to
be made during service interactions –
since the agents are available and
service won’t suffer. On the other
hand, if the volume in the call center
is too high, the agents may need to
focus exclusively on service. In that
case, generating offers might detract
from service and support delivery.
Adapt to Various Channels
Beyond its benefit for supporting
agents in the interaction center
channel, real-time offer management
can add value in other channels,
and certainly should be coordinated
with all channels in use. For example,
real-time offer management is appropriate
for physical branches, where
the walk-in customer’s interaction with
staff is similar to that with call center
agents over the phone.
Since customers often use the Web
for 24x7 self-service access to an
enterprise, an integrated real-time
offer management application is also
appropriate for the Web. In this case,
the implementation principles are
adjusted for the absence of agents
and applied to concepts intrinsic to
Web-based interactions (such as
graphics presentation and logical flow).
The key is that the interaction still
focuses on service, providing offers
that are effective and appropriate
given the nature of the interaction –
and, again, coordinated with all
other channels.
While the scope of this paper encompasses
inbound interactions, real-time
offer management principles can be
applied to event-driven outbound
marketing. You can use decision-engine
technology to offer customers what
they most likely will need, precisely
at the right moment. For example,
a decrease in account activity or a
large deposit may trigger an offer
related to information in the customer
profile, the nature of the event, and so
forth – provided through an outbound
channel such as telemarketing.
Learn from Interactions and Track Performance
A core principle of real-time offer management
is that the decision engine
“learns” from each interaction – updating
the database with information about
each call’s outcome and fine-tuning the
offers for the next interaction. You’ll
achieve success to the extent that you
make the right implementation decisions,
establishing analytic methods
most likely to deliver the best rate of
offer improvement with every iteration.
In short, learning from interactions
and tracking performance is intrinsic
to real-time offer management itself.
But the best implementations will
ensure that the information collected
over time will serve higher purposes –
to assist with product planning, ena ble
adjustments in sales and service
deployment, and facilitate strategic
planning. The best practice encompasses
achieving tactical success day
after day, continually improving offer
acceptance rates and sales performance
– but also positioning the firm
for creating sustainable growth and
superior shareholder value for the
long run.
Among other actions,
change management in
this case means arranging
an appropriate union
among marketing, sales,
and service. Senior
management, in guiding
the implementation and
demonstrating commitment,
should build on
what each stakeholder
group brings to the
table: marketing – the
big picture; sales – the
nuts and bolts of execution;
and service – intimate
customer contact.
AN INTEGRATED APPROACH –IMPROVING END-TO-END OFFER-RELATED PROCESSES
GREATER VISIBILITY AND SUPERIOR PERFORMANCE
Tight integration of the real-time offer management
application with CRM is essential to ensure that
the implementation achieves its intended outcomes.
This integration is particularly important for generating
offers that continually improve, because the
decision engine is updated with the most recent
orders and offer responses.
As noted, attaining success with realtime
offer management depends on
timely access to customer information,
including customer profile, product
preferences, psychographics, order
history, and more. This type of information
is typically available in a company’s
core customer relationship
management (CRM) applications.
Tight integration of the real-time offer
management application with CRM is
essential to ensure that the implementation
achieves its intended outcomes.
This integration is particularly important
for generating offers that continually
improve, because the decision engine
is updated with the most recent orders
and offer responses. Moreover, integration
with the CRM interaction center
functionality is essential, especially in
large-scale implementations with
scores of agents and thousands of
customers. Here, integration ensures
relevancy of the offer to the interaction
context and visibility into real-time
customer preferences. Also, integration
of decision data with the CRM marketing
functionality will enable continually
improving outbound marketing campaigns
– when companies choose to
execute them – and is particularly
valuable for the event-driven outbound
marketing discussed above.
SAP® Real-Time Offer Management Software
SAP® Real-Time Offer Management
software provides an advanced analytical
real-time decision engine that lets
you optimize the offer process for
cross-sell and up-sell offers, retention,
service-level adherence, lifetime value
boosting, and more. The software
takes into account all relevant information,
including up-to-the-moment
interaction information, to enable you
to take the most appropriate next best
action to enhance customer relationships.
SAP Real-Time Offer Management
software integrates with the SAP
Customer Relationship Management
(SAP CRM) application. This allows
call centers, service centers, and
other interaction channels to successfully
execute real-time cross-sell and
up-sell offers, product promotions, and
market messages, leveraging advanced
decision-support technology. The integration
allows automation of the full
process encompassing offer promotion
to sales-order creation – and provides
managers with a real-time view of
sales and productivity. SAP CRM also
provides feedback to the decision
engine regarding customer reaction,
to close the loop and allow the selflearning
functionality of the software
to optimize future recommendations.
SAP CRM is integrated with the full
array of SAP solutions covering enterprise
resource planning, supply chain
management, supplier relationship
management, and more. Thus, through
its connection with SAP CRM, implementation
of SAP Real-Time Offer
Management can allow your company
to enable complete end-to-end
customer-facing service and offer
management processes.
If you want to know how SAP can help
your company turn service calls into
sales opportunities with real-time offer
management, call your SAP representative
today or visit us on the Web at
www.sap.com/crm.
CONTENT
- Right Offer, Right Channel,
Right Time
- Outbound Versus Inbound
Marketing – Alternatives for
Offer Presentation
- Outbound Marketing Approaches:
Issues with Effectiveness
- A Focus on Inbound Interactions
- Deploying Real-Time Offer
Management – For More
Effective Interactions
- Opportunities and Challenges of
Real-Time Offer Management
- Improving Competitiveness,
Performance, and Brand Equity
- Securing Useful and Accurate
Customer Data
- Change Management – Helping
Service Agents Sell
- Proving That Business Value
Was Achieved
- Best Practices: Maximize
Business Value with Continuously
Improving Offers
- Make Effective Offers
- Adapt to Various Channels
- Learn from Interactions and
Track Performance
- An Integrated Approach –
Improving End-to-End
Offer-Related Processes
- SAP Real-Time Offer
Management Software