Nucleus Research Inc.
www.NucleusResearch.com
Europe, Middle East, Africa
Nucleus Research EMEA
17a rue Pavee
75004 Paris FRANCE
Phone: +33 1 42 77 75 38
Corporate Headquarters
Nucleus Research Inc.
36 Washington Street
Wellesley MA 02481
Phone: +1 781.416.2900
Fax: +1 781.416.5252
THE BOTTOM LINE
CardScan Pro for CRM can deliver an initial ROI based solely on time
saving in data entry and data correction. However, the greatest benefits
come from being able to quickly and consistently capture more leads with
complete and more accurate data thus enabling companies to fully
leverage the capabilities of their CRM system.
In its review of hundreds of CRM technology deployments, Nucleus has found data
entry and error correction to be one of the key challenges of achieving a positive
ROI from CRM. When sales or sales support people have to manually enter contact
data into a system:
There are inevitably some errors in the data that, at best, take time to identify
and correct, and at worst, are never identified and reduce the effectiveness of
integrated sales and marketing management.
Many contacts or contact details are never entered at all because they don’t
appear to be important, leading to missed sales opportunities.
When people are entering data, they’re losing time that could be devoted to
other sales and sales support activities.
This research note evaluates the potential ROI from automating entry of contact
information into a CRM system using an automated card scanning system such as
CardScan Pro.
THE CHALLENGE
The advantage of a networked database of lead and customer contacts is the ability
to have cross-company visibility both for tactical sales calls and strategic
relationship building. Although many companies have deployed systems to support
this visibility, they will never be completely efficient in the way they captures and
process contacts because of three key challenges: adoption, tactical filtering, and
data errors.
Adoption
Some of the biggest SFA failures happen because sales people are not willing to
share their contact information with a broader population – and if the user interface
is a challenge or multiple points of data entry are required to update their contact
records, they have a perfect excuse. The more time and effort it takes for a person
to enter information about a lead, the less likely they are to do it. Even companies
that do get sales people to effectively enter leads often find only the minimal
RESEARCH NOTE
EVALUATING THE ROI FROM CARDSCAN PRO
FOR CRM
June 2005
Document
F56
pg_0002
2
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
information required actually makes it into the system – making effective data
entry and extraction the key challenges to achieving a positive ROI from CRM.
Tactical filtering
Even if salespeople have adopted CRM tools and are entering information, you may
not be getting the whole picture. Salespeople tend to be focused on the next deal
or the next commission, not the company’s projected end of year performance.
Without the big picture in mind, they’ll focus on entering the contact information
that’s important to them – and key contacts that may be valuable for another
account manager or a strategic relationship plan will never make it into the
database. For example, one sales person may dismiss a “minor” conversation with
a regional manager at a trade show and never know that with that contact name
alone a colleague could have gotten the regional buy-in needed to close or advance
a deal.
Errors
Even for the most motivated and collaborative sales people, typing information into
a contact management database is likely to produce the occasional error. Manual
error correction is tedious and costly, but the greater loss is the unidentified errors
such as a misspelled company name that break the potential links between records
that could be leveraged for more strategic relationship building.
Adoption of SFA is the first hurdle, and many companies have developed incentives
and other programs to get sales people to actually share information. One
company Nucleus studied, for example, found that its sales people were not
updating pipeline information on a regular basis – making effective forecasting
impossible. The company’s strategy was to reduce the commission percentage for
any lead that wasn’t visible in the pipeline for more than 30 days – because if it
wasn’t there it could be assumed the sales person hadn’t worked on “earning it.”
Many companies have made a significant investment in managing and tracking the
sales pipeline. However, few have attacked the problem of initial data entry
because it’s seen as a human problem without a cost-effective solution: incenting
sales people to enter leads is likely to produce more bad leads and fewer sales than
improve the overall quality and quantity of the contacts.
Poor or inconsistent data entry for CRM is often considered a human problem
without a cost-effective solution – so companies overlook it or devise workarounds
to reduce its potential impact.
The result is a “leak” at the top of the sales funnel that impacts not just tactical
sales performance, but the ability for companies to leverage networked contact
management to support strategic relationship building.
However, as business card scanning and recognition technologies have evolved,
more and more executives have recognized the value of keeping all their contact
information up-to-date in one place electronically. The same technology developed
for personal business card data entry can be used effectively by organizations to
support contact information capture – eliminating the need for manual data entry
and, more importantly, capturing more and better information.
RELATED RESEARCH
F21 ROI Case Study:
Human-I-Tees
F9 ROI Case Study:
Qosina
F1 ROI Case Study: GO
Software
E43 ROI Case Study:
AAA Mortgage
D6 ROI Report:
Microsoft CRM
pg_0003
3
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
CARDSCAN PRO
CardScan Pro for CRM automates the process of entering business card information
into a CRM solution using a business card scanner and CRM solution-specific
software. CRM solutions currently supported include Microsoft CRM, SalesLogix,
GoldMine Corporate Edition, and ACT! premium; support for additional solutions is
under development. The solution is priced on a perpetual-license basis at
approximately $300 per user.
To use CardScan Pro, users enter business cards into the business card scanner,
which reads and captures key contact information. Then, the supporting software
package enters the information into the CRM database in the appropriate fields,
creates contacts or leads, creates or assigns accounts, and checks for duplicates.
KEY BENEFITS
Nucleus has found that, by streamlining data entry, companies can both increase
the volume of contact information captured and leverage that contact information
for more strategic value. Companies can use CardScan Pro to:
Reduce the cost of identifying and correcting errors in contact data.
Reduce the time to enter information versus manual entry.
Increase the percentage of contacts actually entered in the system.
Reduced cost of data errors
Beyond simple timesavings in entering contacts, CardScan Pro enables companies
to reduce the amount of errors or missing data points that result from manual data
entry. Nucleus has found that the average error rate in CRM contact information is
approximately 15 percent; for some companies, it can be as high as 35 percent.
The level of data errors depends on a number of factors including the technical skill
level and attention to detail of sales people, the error-checking functionality in the
CRM system, and the current level of effort devoted to identifying and correcting
bad data.
The average error rate in CRM contact information is 15 percent; for some
companies, it can be as high as 35 percent.
The most straightforward calculation of the savings in data error correction is the
amount of time and fully loaded cost of that employee time required to identify and
scrub contact records; however, the greater cost from data errors is those that are
never identified. For companies seeking to leverage a common CRM system across
sales, marketing, and support efforts, errors in data entry can limit the
effectiveness of outbound marketing campaigns, hide opportunities for cross-selling
and upselling, and reduce customer satisfaction because support representatives
don’t have a complete and correct view of the customer’s relationship.
Reduced time to enter information
The most direct benefit from CardScan Pro is a reduction in time required to enter
contact details for each new contact. Based on its testing of the CardScan Pro
system and evaluation of CRM deployments, Nucleus found companies could expect
an average marginal savings of three minutes per contact by using CardScan.
pg_0004
4
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
Using an average fully loaded cost of $100,000 for a salesperson, CardScan
delivers a positive ROI after the first 125 contacts entered per user.
Based on timesavings alone, CardScan delivers a positive ROI after 125 contacts
are entered.
Even companies that expect to save only one minute per contact can expect a
positive ROI after 375 contacts are entered.
Increased contact entry
Using an automated system such as CardScan to enter contact data increases the
percentage of business cards gathered that are actually entered as contacts.
Nucleus found that companies using an automated data entry point such as
CardScan Pro could increase the volume of contact information captured by 10 to
20 percent.
Increasing the volume of information captured ensures that fewer leads are
missed. It also increases the likelihood that a new seemingly unimportant contact
can be cross-referenced and leveraged – even by a different account manager – to
support strategic relationship building. Automating contact entry also increases the
likelihood that contacts that may be better marketing leads than sales leads still
make it into the CRM database.
The returns from increasing the volume of contacts entered into the system vary
widely, based on the volume of prospects in the sales funnel, the sales and
marketing methodology of the company, and the type of business and product – as
well as how collaborative and effective the sales team is. In reality, sales people
filter leads based on their perceived value and manually enter data from the most
valuable leads first. This implies that the hit rate from the additional set of contacts
entered using CardScan Pro will be less than that of the original set that would
have been entered without CardScan Pro. Still, assuming a sales rate on new
contacts 33% to 50% that of the sales rate for the original set of contacts, most
companies will achieve a positive ROI within a short time frame.
To quantify returns from increased sales using CardScan Pro, companies should
estimate their current sales rate for new contacts, divide that number by 3, and
then multiply by the number of new contacts that will be captured using the
solution, and the profit margin on those potential sales.
OTHER BENEFITS
There are a number of other areas where organizations can likely gain returns from
using CardScan Pro for CRM:
Reduced IT costs. Automated entry of data into the CRM system reduces
potential integration points and the time and cost associated with correcting
data errors and omissions.
Reduced CRM training costs. Companies can eliminate the portion of CRM
training that focuses on data entry and the benefits of sharing contact
pg_0005
5
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
information – potentially cutting technology training time for sales people by
up to 50 percent.
Automating data entry for CRM can reduce technology training time for sales
people by up to 50 percent.
Reduced administrative overhead. Nucleus has found that, in many cases, a
second line of sales support and administration is used to enter and edit
contact information in CRM databases. Automation of the data entry process
will eliminate the need for administrative support for data entry and cleaning,
and enable sales support teams to focus on more strategic lead generation,
prospect qualifying, and other sales support activities.
Improved sales force management. When leads are automatically entered into
the system, sales managers don’t have to enforce data entry policies – and
they can ensure no potential sales are missed. They can also use the database
to support strategic relationship building and sales strategy planning by having
a clear view of the universe and types of contacts being entered.
Improved marketing efficiency. Marketing teams that generate leads through
conferences, trade shows, and other events and promotions can enter them
directly into the system and track their progress – reducing the time for data
entry while increasing their ability to evaluate the effectiveness of a particular
strategy in delivering sales.
Entry and tracking of contact information from multiple events and sources enables
marketing to quickly and consistently evaluate the cost effectiveness of lead
generation efforts.
Improved customer support and satisfaction. Consistent, correct data supports
better relationship building with customers – sales people can have a complete
view of the company’s relationship with a particular customer account and
identify new areas of opportunity.
DEPLOYMENT STRATEGIES
Companies considering adding CardScan Pro for CRM to their existing CRM
practices or those considering CardScan Pro into a CRM deployment will want to
consider the number of hardware devices to be purchased as well as a strategy for
ensuring effective adoption. Just like any other technology, the easier it is to use
the greater likelihood it will be adopted.
Human factors
The presentation of CardScan’s benefits to sales people has a significant impact on
its adoption and long-term impact to the company. Companies that are highly
successful in their deployment of CardScan have focused on the benefits accrued
directly to the sales person rather than to the company as a whole. Although
CardScan obviously delivers benefits in greater data retention and accuracy,
presenting its benefits in helping individual sales people meet and exceed quota
requirements by allowing them to more efficiently gather and share information
among themselves is likely to drive a higher level of adoption and reduce any initial
human barriers to deployment.
pg_0006
6
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
CardScan also provides an opportunity for companies that rely on administrative
support or a centralized group to enter business card information to assess their
data entry process – potentially accelerating the time it takes between initial
contact and sales follow-up. For example, some organizations have found using
CardScan as part of their trade show activities enables them to enter cards on-site
and deliver appropriate content to contacts before they return home – increasing
the likelihood of a follow-on sales call while the lead is still active. By deploying
CardScan units directly to sales people, organizations can also potentially relieve
the burden on the administrative staff.
In a broader sense, using CardScan within the marketing department – or with
anyone that has customer contact, including sales support, consultants, and
customer service – can help enrich the CRM database by adding tertiary and other
contact data that may never be uncovered through the traditional lead generation
process. Like CRM, CardScan’s benefits can grow incrementally as more users
adopt the technology.
CONCLUSION
The real ROI from streamlining the contact entry process for a CRM solution is not
in saving time and correcting errors, but in leveraging the benefits of a common
contact base across sales, marketing, and customer support – and reducing the
potential missing contacts or incorrect contact details that result from manual data
entry. Companies can expect initial ROI from reduced data entry and correction
time and cost, but the greater ongoing ROI will come from enabling their sales and
marketing managers to take advantage of strategic sales and relationship building
opportunities.
EVALUATING THE ROI FROM CARDSCAN PRO
Nucleus Research Inc.
www.NucleusResearch.com
Europe, Middle East, Africa
Nucleus Research EMEA
17a rue Pavee
75004 Paris FRANCE
Phone: +33 1 42 77 75 38
Corporate Headquarters
Nucleus Research Inc.
36 Washington Street
Wellesley MA 02481
Phone: +1 781.416.2900
Fax: +1 781.416.5252
THE BOTTOM LINE
CardScan Pro for CRM can deliver an initial ROI based solely on time
saving in data entry and data correction. However, the greatest benefits
come from being able to quickly and consistently capture more leads with
complete and more accurate data thus enabling companies to fully
leverage the capabilities of their CRM system.
In its review of hundreds of CRM technology deployments, Nucleus has found data
entry and error correction to be one of the key challenges of achieving a positive
ROI from CRM. When sales or sales support people have to manually enter contact
data into a system:
There are inevitably some errors in the data that, at best, take time to identify
and correct, and at worst, are never identified and reduce the effectiveness of
integrated sales and marketing management.
Many contacts or contact details are never entered at all because they don’t
appear to be important, leading to missed sales opportunities.
When people are entering data, they’re losing time that could be devoted to
other sales and sales support activities.
This research note evaluates the potential ROI from automating entry of contact
information into a CRM system using an automated card scanning system such as
CardScan Pro.
THE CHALLENGE
The advantage of a networked database of lead and customer contacts is the ability
to have cross-company visibility both for tactical sales calls and strategic
relationship building. Although many companies have deployed systems to support
this visibility, they will never be completely efficient in the way they captures and
process contacts because of three key challenges: adoption, tactical filtering, and
data errors.
Adoption
Some of the biggest SFA failures happen because sales people are not willing to
share their contact information with a broader population – and if the user interface
is a challenge or multiple points of data entry are required to update their contact
records, they have a perfect excuse. The more time and effort it takes for a person
to enter information about a lead, the less likely they are to do it. Even companies
that do get sales people to effectively enter leads often find only the minimal
RESEARCH NOTE
EVALUATING THE ROI FROM CARDSCAN PRO
FOR CRM
June 2005
Document
F56
pg_0002
2
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
information required actually makes it into the system – making effective data
entry and extraction the key challenges to achieving a positive ROI from CRM.
Tactical filtering
Even if salespeople have adopted CRM tools and are entering information, you may
not be getting the whole picture. Salespeople tend to be focused on the next deal
or the next commission, not the company’s projected end of year performance.
Without the big picture in mind, they’ll focus on entering the contact information
that’s important to them – and key contacts that may be valuable for another
account manager or a strategic relationship plan will never make it into the
database. For example, one sales person may dismiss a “minor” conversation with
a regional manager at a trade show and never know that with that contact name
alone a colleague could have gotten the regional buy-in needed to close or advance
a deal.
Errors
Even for the most motivated and collaborative sales people, typing information into
a contact management database is likely to produce the occasional error. Manual
error correction is tedious and costly, but the greater loss is the unidentified errors
such as a misspelled company name that break the potential links between records
that could be leveraged for more strategic relationship building.
Adoption of SFA is the first hurdle, and many companies have developed incentives
and other programs to get sales people to actually share information. One
company Nucleus studied, for example, found that its sales people were not
updating pipeline information on a regular basis – making effective forecasting
impossible. The company’s strategy was to reduce the commission percentage for
any lead that wasn’t visible in the pipeline for more than 30 days – because if it
wasn’t there it could be assumed the sales person hadn’t worked on “earning it.”
Many companies have made a significant investment in managing and tracking the
sales pipeline. However, few have attacked the problem of initial data entry
because it’s seen as a human problem without a cost-effective solution: incenting
sales people to enter leads is likely to produce more bad leads and fewer sales than
improve the overall quality and quantity of the contacts.
Poor or inconsistent data entry for CRM is often considered a human problem
without a cost-effective solution – so companies overlook it or devise workarounds
to reduce its potential impact.
The result is a “leak” at the top of the sales funnel that impacts not just tactical
sales performance, but the ability for companies to leverage networked contact
management to support strategic relationship building.
However, as business card scanning and recognition technologies have evolved,
more and more executives have recognized the value of keeping all their contact
information up-to-date in one place electronically. The same technology developed
for personal business card data entry can be used effectively by organizations to
support contact information capture – eliminating the need for manual data entry
and, more importantly, capturing more and better information.
RELATED RESEARCH
F21 ROI Case Study:
Human-I-Tees
F9 ROI Case Study:
Qosina
F1 ROI Case Study: GO
Software
E43 ROI Case Study:
AAA Mortgage
D6 ROI Report:
Microsoft CRM
pg_0003
3
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
CARDSCAN PRO
CardScan Pro for CRM automates the process of entering business card information
into a CRM solution using a business card scanner and CRM solution-specific
software. CRM solutions currently supported include Microsoft CRM, SalesLogix,
GoldMine Corporate Edition, and ACT! premium; support for additional solutions is
under development. The solution is priced on a perpetual-license basis at
approximately $300 per user.
To use CardScan Pro, users enter business cards into the business card scanner,
which reads and captures key contact information. Then, the supporting software
package enters the information into the CRM database in the appropriate fields,
creates contacts or leads, creates or assigns accounts, and checks for duplicates.
KEY BENEFITS
Nucleus has found that, by streamlining data entry, companies can both increase
the volume of contact information captured and leverage that contact information
for more strategic value. Companies can use CardScan Pro to:
Reduce the cost of identifying and correcting errors in contact data.
Reduce the time to enter information versus manual entry.
Increase the percentage of contacts actually entered in the system.
Reduced cost of data errors
Beyond simple timesavings in entering contacts, CardScan Pro enables companies
to reduce the amount of errors or missing data points that result from manual data
entry. Nucleus has found that the average error rate in CRM contact information is
approximately 15 percent; for some companies, it can be as high as 35 percent.
The level of data errors depends on a number of factors including the technical skill
level and attention to detail of sales people, the error-checking functionality in the
CRM system, and the current level of effort devoted to identifying and correcting
bad data.
The average error rate in CRM contact information is 15 percent; for some
companies, it can be as high as 35 percent.
The most straightforward calculation of the savings in data error correction is the
amount of time and fully loaded cost of that employee time required to identify and
scrub contact records; however, the greater cost from data errors is those that are
never identified. For companies seeking to leverage a common CRM system across
sales, marketing, and support efforts, errors in data entry can limit the
effectiveness of outbound marketing campaigns, hide opportunities for cross-selling
and upselling, and reduce customer satisfaction because support representatives
don’t have a complete and correct view of the customer’s relationship.
Reduced time to enter information
The most direct benefit from CardScan Pro is a reduction in time required to enter
contact details for each new contact. Based on its testing of the CardScan Pro
system and evaluation of CRM deployments, Nucleus found companies could expect
an average marginal savings of three minutes per contact by using CardScan.
pg_0004
4
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
Using an average fully loaded cost of $100,000 for a salesperson, CardScan
delivers a positive ROI after the first 125 contacts entered per user.
Based on timesavings alone, CardScan delivers a positive ROI after 125 contacts
are entered.
Even companies that expect to save only one minute per contact can expect a
positive ROI after 375 contacts are entered.
Increased contact entry
Using an automated system such as CardScan to enter contact data increases the
percentage of business cards gathered that are actually entered as contacts.
Nucleus found that companies using an automated data entry point such as
CardScan Pro could increase the volume of contact information captured by 10 to
20 percent.
Increasing the volume of information captured ensures that fewer leads are
missed. It also increases the likelihood that a new seemingly unimportant contact
can be cross-referenced and leveraged – even by a different account manager – to
support strategic relationship building. Automating contact entry also increases the
likelihood that contacts that may be better marketing leads than sales leads still
make it into the CRM database.
The returns from increasing the volume of contacts entered into the system vary
widely, based on the volume of prospects in the sales funnel, the sales and
marketing methodology of the company, and the type of business and product – as
well as how collaborative and effective the sales team is. In reality, sales people
filter leads based on their perceived value and manually enter data from the most
valuable leads first. This implies that the hit rate from the additional set of contacts
entered using CardScan Pro will be less than that of the original set that would
have been entered without CardScan Pro. Still, assuming a sales rate on new
contacts 33% to 50% that of the sales rate for the original set of contacts, most
companies will achieve a positive ROI within a short time frame.
To quantify returns from increased sales using CardScan Pro, companies should
estimate their current sales rate for new contacts, divide that number by 3, and
then multiply by the number of new contacts that will be captured using the
solution, and the profit margin on those potential sales.
OTHER BENEFITS
There are a number of other areas where organizations can likely gain returns from
using CardScan Pro for CRM:
Reduced IT costs. Automated entry of data into the CRM system reduces
potential integration points and the time and cost associated with correcting
data errors and omissions.
Reduced CRM training costs. Companies can eliminate the portion of CRM
training that focuses on data entry and the benefits of sharing contact
pg_0005
5
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
information – potentially cutting technology training time for sales people by
up to 50 percent.
Automating data entry for CRM can reduce technology training time for sales
people by up to 50 percent.
Reduced administrative overhead. Nucleus has found that, in many cases, a
second line of sales support and administration is used to enter and edit
contact information in CRM databases. Automation of the data entry process
will eliminate the need for administrative support for data entry and cleaning,
and enable sales support teams to focus on more strategic lead generation,
prospect qualifying, and other sales support activities.
Improved sales force management. When leads are automatically entered into
the system, sales managers don’t have to enforce data entry policies – and
they can ensure no potential sales are missed. They can also use the database
to support strategic relationship building and sales strategy planning by having
a clear view of the universe and types of contacts being entered.
Improved marketing efficiency. Marketing teams that generate leads through
conferences, trade shows, and other events and promotions can enter them
directly into the system and track their progress – reducing the time for data
entry while increasing their ability to evaluate the effectiveness of a particular
strategy in delivering sales.
Entry and tracking of contact information from multiple events and sources enables
marketing to quickly and consistently evaluate the cost effectiveness of lead
generation efforts.
Improved customer support and satisfaction. Consistent, correct data supports
better relationship building with customers – sales people can have a complete
view of the company’s relationship with a particular customer account and
identify new areas of opportunity.
DEPLOYMENT STRATEGIES
Companies considering adding CardScan Pro for CRM to their existing CRM
practices or those considering CardScan Pro into a CRM deployment will want to
consider the number of hardware devices to be purchased as well as a strategy for
ensuring effective adoption. Just like any other technology, the easier it is to use
the greater likelihood it will be adopted.
Human factors
The presentation of CardScan’s benefits to sales people has a significant impact on
its adoption and long-term impact to the company. Companies that are highly
successful in their deployment of CardScan have focused on the benefits accrued
directly to the sales person rather than to the company as a whole. Although
CardScan obviously delivers benefits in greater data retention and accuracy,
presenting its benefits in helping individual sales people meet and exceed quota
requirements by allowing them to more efficiently gather and share information
among themselves is likely to drive a higher level of adoption and reduce any initial
human barriers to deployment.
pg_0006
6
© 2005 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leader in the return on investment analysis of technology. www.NucleusResearch.com
June 2005
Document F56
CardScan also provides an opportunity for companies that rely on administrative
support or a centralized group to enter business card information to assess their
data entry process – potentially accelerating the time it takes between initial
contact and sales follow-up. For example, some organizations have found using
CardScan as part of their trade show activities enables them to enter cards on-site
and deliver appropriate content to contacts before they return home – increasing
the likelihood of a follow-on sales call while the lead is still active. By deploying
CardScan units directly to sales people, organizations can also potentially relieve
the burden on the administrative staff.
In a broader sense, using CardScan within the marketing department – or with
anyone that has customer contact, including sales support, consultants, and
customer service – can help enrich the CRM database by adding tertiary and other
contact data that may never be uncovered through the traditional lead generation
process. Like CRM, CardScan’s benefits can grow incrementally as more users
adopt the technology.
CONCLUSION
The real ROI from streamlining the contact entry process for a CRM solution is not
in saving time and correcting errors, but in leveraging the benefits of a common
contact base across sales, marketing, and customer support – and reducing the
potential missing contacts or incorrect contact details that result from manual data
entry. Companies can expect initial ROI from reduced data entry and correction
time and cost, but the greater ongoing ROI will come from enabling their sales and
marketing managers to take advantage of strategic sales and relationship building
opportunities.
EVALUATING THE ROI FROM CARDSCAN PRO
Nucleus Research Inc.
www.NucleusResearch.com
Europe, Middle East, Africa
Nucleus Research EMEA
17a rue Pavee
75004 Paris FRANCE
Phone: +33 1 42 77 75 38
Corporate Headquarters
Nucleus Research Inc.
36 Washington Street
Wellesley MA 02481
Phone: +1 781.416.2900
Fax: +1 781.416.5252
THE BOTTOM LINE
CardScan Pro for CRM can deliver an initial ROI based solely on time
saving in data entry and data correction. However, the greatest benefits
come from being able to quickly and consistently capture more leads with
complete and more accurate data thus enabling companies to fully
leverage the capabilities of their CRM system.
In its review of hundreds of CRM technology deployments, Nucleus has found data
entry and error correction to be one of the key challenges of achieving a positive
ROI from CRM. When sales or sales support people have to manually enter contact
data into a system:
There are inevitably some errors in the data that, at best, take time to identify
and correct, and at worst, are never identified and reduce the effectiveness of
integrated sales and marketing management.
Many contacts or contact details are never entered at all because they don’t
appear to be important, leading to missed sales opportunities.
When people are entering data, they’re losing time that could be devoted to
other sales and sales support activities.
This research note evaluates the potential ROI from automating entry of contact
information into a CRM system using an automated card scanning system such as
CardScan Pro.
THE CHALLENGE
The advantage of a networked database of lead and customer contacts is the ability
to have cross-company visibility both for tactical sales calls and strategic
relationship building. Although many companies have deployed systems to support
this visibility, they will never be completely efficient in the way they captures and
process contacts because of three key challenges: adoption, tactical filtering, and
data errors.
Adoption
Some of the biggest SFA failures happen because sales people are not willing to
share their contact information with a broader population – and if the user interface
is a challenge or multiple points of data entry are required to update their contact
records, they have a perfect excuse. The more time and effort it takes for a person
to enter information about a lead, the less likely they are to do it. Even companies
that do get sales people to effectively enter leads often find only the minimal
RESEARCH NOTE
EVALUATING THE ROI FROM CARDSCAN PRO
FOR CRM
June 2005
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information required actually makes it into the system – making effective data
entry and extraction the key challenges to achieving a positive ROI from CRM.
Tactical filtering
Even if salespeople have adopted CRM tools and are entering information, you may
not be getting the whole picture. Salespeople tend to be focused on the next deal
or the next commission, not the company’s projected end of year performance.
Without the big picture in mind, they’ll focus on entering the contact information
that’s important to them – and key contacts that may be valuable for another
account manager or a strategic relationship plan will never make it into the
database. For example, one sales person may dismiss a “minor” conversation with
a regional manager at a trade show and never know that with that contact name
alone a colleague could have gotten the regional buy-in needed to close or advance
a deal.
Errors
Even for the most motivated and collaborative sales people, typing information into
a contact management database is likely to produce the occasional error. Manual
error correction is tedious and costly, but the greater loss is the unidentified errors
such as a misspelled company name that break the potential links between records
that could be leveraged for more strategic relationship building.
Adoption of SFA is the first hurdle, and many companies have developed incentives
and other programs to get sales people to actually share information. One
company Nucleus studied, for example, found that its sales people were not
updating pipeline information on a regular basis – making effective forecasting
impossible. The company’s strategy was to reduce the commission percentage for
any lead that wasn’t visible in the pipeline for more than 30 days – because if it
wasn’t there it could be assumed the sales person hadn’t worked on “earning it.”
Many companies have made a significant investment in managing and tracking the
sales pipeline. However, few have attacked the problem of initial data entry
because it’s seen as a human problem without a cost-effective solution: incenting
sales people to enter leads is likely to produce more bad leads and fewer sales than
improve the overall quality and quantity of the contacts.
Poor or inconsistent data entry for CRM is often considered a human problem
without a cost-effective solution – so companies overlook it or devise workarounds
to reduce its potential impact.
The result is a “leak” at the top of the sales funnel that impacts not just tactical
sales performance, but the ability for companies to leverage networked contact
management to support strategic relationship building.
However, as business card scanning and recognition technologies have evolved,
more and more executives have recognized the value of keeping all their contact
information up-to-date in one place electronically. The same technology developed
for personal business card data entry can be used effectively by organizations to
support contact information capture – eliminating the need for manual data entry
and, more importantly, capturing more and better information.
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D6 ROI Report:
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CARDSCAN PRO
CardScan Pro for CRM automates the process of entering business card information
into a CRM solution using a business card scanner and CRM solution-specific
software. CRM solutions currently supported include Microsoft CRM, SalesLogix,
GoldMine Corporate Edition, and ACT! premium; support for additional solutions is
under development. The solution is priced on a perpetual-license basis at
approximately $300 per user.
To use CardScan Pro, users enter business cards into the business card scanner,
which reads and captures key contact information. Then, the supporting software
package enters the information into the CRM database in the appropriate fields,
creates contacts or leads, creates or assigns accounts, and checks for duplicates.
KEY BENEFITS
Nucleus has found that, by streamlining data entry, companies can both increase
the volume of contact information captured and leverage that contact information
for more strategic value. Companies can use CardScan Pro to:
Reduce the cost of identifying and correcting errors in contact data.
Reduce the time to enter information versus manual entry.
Increase the percentage of contacts actually entered in the system.
Reduced cost of data errors
Beyond simple timesavings in entering contacts, CardScan Pro enables companies
to reduce the amount of errors or missing data points that result from manual data
entry. Nucleus has found that the average error rate in CRM contact information is
approximately 15 percent; for some companies, it can be as high as 35 percent.
The level of data errors depends on a number of factors including the technical skill
level and attention to detail of sales people, the error-checking functionality in the
CRM system, and the current level of effort devoted to identifying and correcting
bad data.
The average error rate in CRM contact information is 15 percent; for some
companies, it can be as high as 35 percent.
The most straightforward calculation of the savings in data error correction is the
amount of time and fully loaded cost of that employee time required to identify and
scrub contact records; however, the greater cost from data errors is those that are
never identified. For companies seeking to leverage a common CRM system across
sales, marketing, and support efforts, errors in data entry can limit the
effectiveness of outbound marketing campaigns, hide opportunities for cross-selling
and upselling, and reduce customer satisfaction because support representatives
don’t have a complete and correct view of the customer’s relationship.
Reduced time to enter information
The most direct benefit from CardScan Pro is a reduction in time required to enter
contact details for each new contact. Based on its testing of the CardScan Pro
system and evaluation of CRM deployments, Nucleus found companies could expect
an average marginal savings of three minutes per contact by using CardScan.
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Using an average fully loaded cost of $100,000 for a salesperson, CardScan
delivers a positive ROI after the first 125 contacts entered per user.
Based on timesavings alone, CardScan delivers a positive ROI after 125 contacts
are entered.
Even companies that expect to save only one minute per contact can expect a
positive ROI after 375 contacts are entered.
Increased contact entry
Using an automated system such as CardScan to enter contact data increases the
percentage of business cards gathered that are actually entered as contacts.
Nucleus found that companies using an automated data entry point such as
CardScan Pro could increase the volume of contact information captured by 10 to
20 percent.
Increasing the volume of information captured ensures that fewer leads are
missed. It also increases the likelihood that a new seemingly unimportant contact
can be cross-referenced and leveraged – even by a different account manager – to
support strategic relationship building. Automating contact entry also increases the
likelihood that contacts that may be better marketing leads than sales leads still
make it into the CRM database.
The returns from increasing the volume of contacts entered into the system vary
widely, based on the volume of prospects in the sales funnel, the sales and
marketing methodology of the company, and the type of business and product – as
well as how collaborative and effective the sales team is. In reality, sales people
filter leads based on their perceived value and manually enter data from the most
valuable leads first. This implies that the hit rate from the additional set of contacts
entered using CardScan Pro will be less than that of the original set that would
have been entered without CardScan Pro. Still, assuming a sales rate on new
contacts 33% to 50% that of the sales rate for the original set of contacts, most
companies will achieve a positive ROI within a short time frame.
To quantify returns from increased sales using CardScan Pro, companies should
estimate their current sales rate for new contacts, divide that number by 3, and
then multiply by the number of new contacts that will be captured using the
solution, and the profit margin on those potential sales.
OTHER BENEFITS
There are a number of other areas where organizations can likely gain returns from
using CardScan Pro for CRM:
Reduced IT costs. Automated entry of data into the CRM system reduces
potential integration points and the time and cost associated with correcting
data errors and omissions.
Reduced CRM training costs. Companies can eliminate the portion of CRM
training that focuses on data entry and the benefits of sharing contact
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information – potentially cutting technology training time for sales people by
up to 50 percent.
Automating data entry for CRM can reduce technology training time for sales
people by up to 50 percent.
Reduced administrative overhead. Nucleus has found that, in many cases, a
second line of sales support and administration is used to enter and edit
contact information in CRM databases. Automation of the data entry process
will eliminate the need for administrative support for data entry and cleaning,
and enable sales support teams to focus on more strategic lead generation,
prospect qualifying, and other sales support activities.
Improved sales force management. When leads are automatically entered into
the system, sales managers don’t have to enforce data entry policies – and
they can ensure no potential sales are missed. They can also use the database
to support strategic relationship building and sales strategy planning by having
a clear view of the universe and types of contacts being entered.
Improved marketing efficiency. Marketing teams that generate leads through
conferences, trade shows, and other events and promotions can enter them
directly into the system and track their progress – reducing the time for data
entry while increasing their ability to evaluate the effectiveness of a particular
strategy in delivering sales.
Entry and tracking of contact information from multiple events and sources enables
marketing to quickly and consistently evaluate the cost effectiveness of lead
generation efforts.
Improved customer support and satisfaction. Consistent, correct data supports
better relationship building with customers – sales people can have a complete
view of the company’s relationship with a particular customer account and
identify new areas of opportunity.
DEPLOYMENT STRATEGIES
Companies considering adding CardScan Pro for CRM to their existing CRM
practices or those considering CardScan Pro into a CRM deployment will want to
consider the number of hardware devices to be purchased as well as a strategy for
ensuring effective adoption. Just like any other technology, the easier it is to use
the greater likelihood it will be adopted.
Human factors
The presentation of CardScan’s benefits to sales people has a significant impact on
its adoption and long-term impact to the company. Companies that are highly
successful in their deployment of CardScan have focused on the benefits accrued
directly to the sales person rather than to the company as a whole. Although
CardScan obviously delivers benefits in greater data retention and accuracy,
presenting its benefits in helping individual sales people meet and exceed quota
requirements by allowing them to more efficiently gather and share information
among themselves is likely to drive a higher level of adoption and reduce any initial
human barriers to deployment.
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CardScan also provides an opportunity for companies that rely on administrative
support or a centralized group to enter business card information to assess their
data entry process – potentially accelerating the time it takes between initial
contact and sales follow-up. For example, some organizations have found using
CardScan as part of their trade show activities enables them to enter cards on-site
and deliver appropriate content to contacts before they return home – increasing
the likelihood of a follow-on sales call while the lead is still active. By deploying
CardScan units directly to sales people, organizations can also potentially relieve
the burden on the administrative staff.
In a broader sense, using CardScan within the marketing department – or with
anyone that has customer contact, including sales support, consultants, and
customer service – can help enrich the CRM database by adding tertiary and other
contact data that may never be uncovered through the traditional lead generation
process. Like CRM, CardScan’s benefits can grow incrementally as more users
adopt the technology.
CONCLUSION
The real ROI from streamlining the contact entry process for a CRM solution is not
in saving time and correcting errors, but in leveraging the benefits of a common
contact base across sales, marketing, and customer support – and reducing the
potential missing contacts or incorrect contact details that result from manual data
entry. Companies can expect initial ROI from reduced data entry and correction
time and cost, but the greater ongoing ROI will come from enabling their sales and
marketing managers to take advantage of strategic sales and relationship building
opportunities.