Customer Solution Case Study
/ / Music Education Company Doubles Sales Productivity, Cuts Marketing Costs
by 50 Percent
Overview
Country or Region:United States
Industry:Education
Customer Profile
Kindermusik International is the world leader in childhood music education, with more than 5,500 educators in 43 countries reaching 300,000 families. The Greensboro, North Carolina,company has 70 employees.
Business Situation
Kindermusik was managing leads with its Microsoft® Business Solutions–Great Plains® accounting system. The company needed a full-fledged CRM system to expand its marketing channels.
Solution
Kindermusik deployed Microsoft CRM and integrated it with Microsoft Great Plains to create a single system for nurturing leads, servicing customers, and managing orders.
Benefits
Doubled sales productivity
More sales with same staff
50 percent reduction in marketing costs
Expected boost in customer service / “Whereas our staff of 5 was able to contact 10 leads a day before, it’s able to contact 20 today.”
Brian Healy, Vice President of Sales and Marketing, KindermusikInternational
Kindermusik International, the world’s leading publisher of music and movement curricula for children and their parents, has enjoyed tremendous growth over the past 10 years. However, the company realized that it could grow its licensed educator base and profits even faster if it managed leads and customers more effectively. Kindermusik was using its business management software for recording customer information. With the help of Microsoft® Certified Partner Intelligent Technologies, Inc., Kindermusik deployed Microsoft CRM. Using this new solution, Kindermusik has increased its sales productivity, enabling it to reach many more prospects without increasing staff. The company has also been able to slash its marketing costs by 50 percent due to more effective campaign tracking.
Situation
The Wall Street Journal has called Kindermusik International the General Motors of early childhood music education. Founded more than 25 years ago in Germany, Kindermusik educators now encircle the globe, with more than 5,500 licensed Kindermusik educators in more than 43 countries reaching more than 300,000 families each year. The company’s extensively researched and award-winning curriculum, which includes books, CDs, games, and instruments, nurtures skills in the whole child: cognitive, physical, social, emotional, and linguistic. In a Kindermusik class, educators lead a group of parents and their children, from newborn to 7 years old, through activities using music and movement. Kindermusik is an employee-owned company headquartered in Greensboro, North Carolina, with 70 employees.
Kindermusik has enjoyed a growth boom over the past 10 years, especially in North America. The number of educators has more than quadrupled since 1995, from 1,500 to more than 5,500 today. Kindermusik is not only expanding its marketing reach to educators and families butto childcare facilities through a new music curriculum business called ABC Music & Me. In addition, Kindermusik has launched a new direct sales division called Do-Re-Me &You! that sells music education products through consultants.
“We find our educators and Do-Re-Me & You! consultants through a variety of marketing efforts, including the Internet, direct mail, and trade shows,” says Brian Healy, Vice President of Sales and Marketing at Kindermusik International. “We realized that the growth of our business is directly tied to how quickly we can recruit and train new educators and distributors.”
For years, Kindermusik had been forcing its accounting software to double as its customer relationship management system, an arrangement that began to break down as the company grew. Kindermusik deployed the Great Plains business management system in 1995 as its centralized financial manage-ment application, a job it performed extremely well. Because all Kindermusik educators and prospects were stored in Great Plains anyway, the company began to use the “notes” field in the application to store educator and lead contact information. This information ranged from problems educators were having to personal information, such as birthdays and family member names, product quality problems, and so forth.
“Great Plains was not meant to be used in the way that we were using it,” says Paige Cassada, Marketing and Operations Analyst for Kindermusik International. “We not only used the notes field for recording a variety of comments about customers, but we had customized several fields to store codes that we had defined to describe various customer attributes. The problem was, we couldn’t get information back out of the system, because there was no easy way to do targeted reporting. The notes field information was not searchable, which meant that we were dumping information in without an easy way to use that data in a company-wide context.”
Kindermusik was getting more sophisticated in its marketing efforts,as well as growing its business in new areas, and needed a more capable customer management system to succeed. “Our lead volume was picking up, and we realized that our method of handling prospects was not going to cut it,” Healy says. The company set out to identify a customer relationship management (CRM) application that would help it move into new markets, handle an increased lead load, and cultivate a closer relationship with current customers.
Solution
Kindermusik looked at several CRM applications, including iMIS (from Advanced Solutions International, Inc.), an association management software application, and Siebel. Kindermusik had concerns about integrating either iMIS or Siebel with Microsoft® Business Solutions–Great Plains®, and Siebel was too expensive.
In 2004, Microsoft introduced Microsoft CRM, a full-featured, modular CRM solution targeting companies seeking to automate and more tightly integrate their sales and customer service processes. Kindermusik was immediately interested because of its all-Microsoft infrastructure and the ability to integrate Microsoft CRM with Microsoft Great Plains on the back end and Microsoft Officeon the desktop.
“The ability to easily link Microsoft CRM with Microsoft Great Plains was a huge factor in our decision,” Cassada says. “Because all our customer and prospect data was already loaded in Great Plains, we wanted to be able to migrate this data into Microsoft CRM without a lot of data re-entry.”
Microsoft Certified Partner Intelligent Technologies (ITI) of Greensboro, North Carolina, helped Kindermusik with its Microsoft CRM deployment and Microsoft Great Plains integration. “ITI showed us all the capabilities of Microsoft CRM, explained what they thought it could do for us, performed the installation, and customized Microsoft CRM to our needs,” Cassada says. The ITI customizations consisted of adding custom data fields, modifying data entry forms, and integrating additional data.
Kindermusik also used an off-the-shelf Microsoft Great Plains–Microsoft CRM integration tool provided byMicrosoft and engaged ITI to migrate more than400,000 customer records from Microsoft Great Plains into Microsoft CRM. Todd Fleming of Intelligent Technologies commented on the ease of the data migration from Great Plains to Microsoft CRM. “Most migrations of this size take nearly a week, but the Kindermusik migration was completed in a matter of days.” Kindermusik additionally integrated Upstream Works Easy Reach Express telephone dialer software into the solution, which improves sales staff productivity by displaying and auto-dialing prospects. Integrating the total solution took approximately three months, followed by a week of testing.
Kindermusik runs both Microsoft CRM and Microsoft Great Plains on the Microsoft Windows® 2000 Server operating system and uses Microsoft SQL ServerTM 2000 as the database for both applications. The company uses Microsoft BizTalk® Server 2002 for real-time integration of data between Microsoft CRM and Microsoft Great Plains. Windows 2000 Server, SQL Server 2000, and BizTalk Server 2002are all part of Windows Server SystemTM integrated server software.
Before Microsoft CRM, Kindermusik sales people used Microsoft Great Plains to record lead and customer contact information. However, Microsoft Great Plains offered little ability to capture in-depth customer/lead contact information, limiting sales people to one or two code fields and the non-searchable notes field. Salespeople looked up individuals in Microsoft Great Plains, found their phone number, called, and supplemented the data-capture capabilities of Microsoft Great Plains with a hodgepodge of paper records.
Today, when leads come in from e-mail or off the Web, they’re entered into Microsoft Great Plains, which still serves as the central customer and lead repository at Kindermusik. Records entered or updated in Great Plainsare automatically updated in Microsoft CRM. Outbound sales staff members sit at PCs running the integrated Microsoft CRM–Microsoft Great Plains–Upstream Works solution.The Upstream Works dialer pops up a Microsoft CRM screen with a dialer frame showing a customer/lead. The salesperson clicks a button, and Upstream Works dials the customer. If the salesperson speaks with the individual, he or she records the result of the call in Microsoft CRM activities. The sales representative then clicks a button and moves on to the next lead.
Benefits
Since rolling out its Microsoft CRM solution, Kindermusik has seen the productivity of its sales staff double and its prospect-to-customer conversion rate rise. In fact, the company has been able to increase sales from the prior year without an increase in sales staff. More effective lead tracking has helped Kindermusik monitor its marketing campaigns more carefully, which has led to a 50 percent reduction in marketing expenditures with no drop in sales. When it rolls out the Customer Service module of Microsoft CRM, Kindermusik will be able to develop a world-class customer recognition/loyalty program that not only engenders customer loyalty and closeness but contributes additional revenue.
Doubled Sales Productivity
The new Microsoft CRM–Microsoft Great Plains solution has increased sales productivity at Kindermusik. “Whereas our staff of 5 was able to contact 10 leads a day before, they’re able to contact 20 today,” Healy says. “They spend far less time on data input, leaving them far more time to sell.” The increased sales productivity is allowing Kindermusik to tremendously broaden its marketing reach without increasing sales staff.
The richer, more flexible reporting made possible by Microsoft CRM has allowed Kindermusik to analyze its sales activities in far greater detail. “We have the ability to sort sales effort by successful contacts, degree of interest, geographical location, educator age and gender, and a wide variety of other indices,” Cassada says. “Microsoft CRM helps us fine-tune our marketing efforts and increase our customer conversion rate. We can also more easily track the productivity and effectiveness of our sales staff.”
More Sales with Same Staff
The more effective sales cycle enabled by Microsoft CRM has not only dramatically reduced sales time for Kindermusik but has also increased unit sales. “Our sales have increased from the prior year since implementing Microsoft CRM, with no increase in sales staff,” Healy says.
50 Percent Reduction in Marketing Costs
Kindermusik has also been able to immediately identify winningversuslosing marketing campaigns and thus preserve precious marketing dollars. “Before, it was very difficult to track the effectiveness of various marketing tools such as Web banners versus trade shows, so we could make better decisions on marketing expenditures,” Healy says. “With the sales efficiencies we’ve been able to achieve with Microsoft CRM and Upstream Works dialer solution, we’ve been able to achieve the same sales levels with 50 percent less marketing expenditures.”
Expected Boost in Customer Service
Kindermusik is in the process of deploying the Customer Service module of Microsoft CRM, which will allow the company to provide better customer service to its 5,500 educators, childcare facilities, its families, as well as its growing channel of Do-Re-Me & You! consultants. When educators, consultants, childcare workers, or family members have problems or quality issues with Kindermusik products or educational materials, Kindermusik customer service agents will be able to better track the progress of cases using Microsoft CRM. “We’ll be able to better link customer service cases to educators and even parents so we can track customer service issues, know which items were involved, what steps have been taken, and who at Kindermusik has been involved,” Cassada says.
However, Kindermusik is most excited about using Microsoft CRM to create greater customer loyalty. “The biggest opportunity on the service side is creating a high-end customer recognition program,” Healy says. “We’ll be able to personally recognize educators for their individual efforts, for achieving a high sales level one month, or just about anything else we want to recognize. Without a system like Microsoft CRM, it would be impossible to manage such a program for a customer base of more than 400,000. Microsoft CRM will allow us to automate a personalized customer closeness program that will build customer loyalty and generate future sales.”
Microsoft Business Solutions
Microsoft Business Solutions offer integrated business applications and services that allow small and midsize organizations and divisions of large enterprises to connect employees, customers, and suppliers for improved efficiency. The financial management, customer relationship management, supply chain management, and analytics applications work with other Microsoft software, including the Microsoft Office System and the Windows operating system, to streamline processes across an entire organization. This gives businesses insight to respond rapidly, plan strategically, and execute quickly. Microsoft Business Solutions are delivered through a worldwide network of channel partners that provide specialized services and local support tailored to a company’s needs.
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