The world's fourth-largest media company, Bertelsmann AG, is to install a new CRM solution to improve service to its 25 million book club members across the globe. Called Common Club IT, the project will integrate Recognition Systems‚ Protagona software with SAP’s mySAP.com offering, allowing the company to expand across a new set of delivery channels in 53 countries.
Bertelsmann, which had a turnover of $12.8 billion last year, provides information, education and entertainment in the fields of book publishing; book clubs; music labels and clubs; professional information; and all forms of media and multimedia. Its companies include: Random House, the world's largest English-language book publisher; CompuServe Europe, internet service provider; BMG music record label and distributor; Barnesandnoble.com, bookseller; BCA, UK book club ; Doubleday Direct, American book club; ECI, Netherlands book club; France Loisirs book club; Club Germany book club; BOL, Internet book store; RTL Television, Cologne; UFA, sports film and tv production; Pixelpark, multimedia agency and Prisma Presse, France, publisher.
Running a multi-channel direct marketing business for many millions of customers with over 3000 campaigns each year is a huge challenge. Dr Robert Marek, CCIT project manager for Bertelsmann, said: “Agreements outlining customers’ orders and our obligations to them told us where they were, their buying patterns, what their interests were, and how long they’d been clients; but we’re now implementing a CRM campaign based on a hybrid SAP with an integrated Protagona tool. MySAP will combine our order, request, quotation and customer relationship processes. Protagona gives us marketing support systems. Together we expect them to bring our company improved customer loyalty and significant savings through precise customer targeting.”
The company also expects CCIT improve times to market. For instance, business models in areas such as the internet will be developed much faster, and telemarketing scripts will reduce call centre staff training in the handling of customer complaints and requests.
Bertelsmann hopes that marketing costs will be reduced because profitable customers will be easy to identify. Productivity will increase through better process support. Campaign-driven forecasts will allow the company to keep smaller stocks and improve inventory management, forecasting and shop replenishment.
According to Dr Marek: “Our campaigns in telesales, telemarketing, as well as personalised e-mails and web pages, will be steered using personalised product offers to our members.”
For instance, Doubleday Direct has a huge volume of mail-outs, supporting 40 different special interest clubs, each with about 10 variations within. For example, cooking may be broken into French, Italian, vegetarian, seafood, and so on, and each variation has 10-20 catalogues each year. So between 4,000-8,000 catalogues are distributed each year to targeted audiences based on their previous orders.
Dr Marek said: “Our goal is to increase member revenue and lifetime value by creating a greater sense of community. At the same time we will reduce operational costs in service, marketing and logistics.”
The aim is to have the CCIT CRM solution live later this year at the first club ECI in the Netherlands, rolling out to the four other largest Bertelsmann book clubs in the world. Each club has between three and six million members, mainly individuals who buy by direct mail or the net.
Software integrator and SAP development partner in CRM, Syskoplan, is the key designer of the CCIT project. Jointly with Bertelsmann mediaSystems and CM4, it will manage the implementation and ensure that Protagona works with SAP R3’s operational processes, SAP’s APO and the data warehouse SAP BW that holds the operational data.
Protagona and mySAP.com support a multitude of CRM organisational roles, including:
Marketing Analyst – measures the effectiveness of a campaign by tracking planned and actual costs and revenues.
Retention Manager – develops customer retention campaigns based on CRM metrics in mySAP.com.
Product / Brand Manager – plans products or services marketing mix, events and resources; targets new prospects or existing customers.
Dr Marek said: “We can evaluate an individual’s value to our business and treat them accordingly. If a valuable customer complains, we may offer them a discount and work hard to ensure we keep their patronage. Whereas, if they were not perceived as being of great value to our business we would not administer the same effort. We can analyse this through the information we gather in the OLTP system and make it available in the datawarehouse for analysis applications such as Protagona”.
SAP.com provides customisable capabilities for interacting with customers based on flexible front-office and back-office applications and services.
The CCIT Project is now being tested on a virtual company model and, once installed in the five biggest Bertelsmann book clubs, it will be implemented in the internet book clubs.