Jelly Belly Hits a Sweet Spot
Jelly Belly Candy Company (www.jellybelly.com) experienced rapid growth over the last decade, as the company expands into new geographies and product areas. After installing an ERP system from Lawson (www.lawson.com) in 2007 that filled a desperate need for advanced planning tools, Jelly Belly set its sights on deploying an accompanying customer relationship management system to help improve sales and customer service. Throughout the sales process, Jelly Belly sales managers and representatives used a variety of tools and methods to track and report activity. Jelly Belly wanted to standardize the sales process and imbue it with the same rigor that made its manufacturing processes so effective.
"Our manufacturing operations operate with very little waste and produce extremely consistent results. We wanted that same type of efficiency and consistency in our sales, but we needed a tool that would help us achieve that goal," says Dan Rosman, vice president of Information Technology at Jelly Belly.
For example, Jelly Belly sales teams typically attend one or two trade shows each week, where they can gather up to 500 sales leads, depending on the size of the event. However, the company had no formal process for making sure sales representatives or broker agents followed up on these leads in a timely manner.
Besides pursuing new sales, Jelly Belly also wanted to cultivate and retain existing customers, especially in the specialty retail segment.
"It takes a lot more time and energy to acquire new customers than to retain current ones," says Ryan Schader, vice president of Business Development, Jelly Belly. "However, without a customer relationship management system integrated with our ERP system, there was little we could do from an organizational standpoint to remedy this problem. Our customer relationship management project was critical."
However, after 18 months of work struggling to get another system to support the company's sales and service needs, Jelly Belly decided to abandon its CRM implementation and look for a more stable system that would meet its core requirements more effectively.
Considering the Alternative
The Jelly Belly IT team turned to Microsoft Corporation (www.microsoft.com), who's Microsoft SQL Server was already the foundation for its ERP system, to find out about compatible customer relationship management solutions. Jelly Belly agreed to let Microsoft Gold Certified Partner Webfortis (www.webfortis.com) demonstrate how Microsoft Dynamics CRM could meet the company's needs.
"Within one month, Webfortis was able to develop a proof-of-concept that met all our core requirements," says Rosman. "After spending a year and a half trying to set up a system ourselves, we were duly impressed."
Working together with Webfortis, Jelly Belly deployed Microsoft Dynamics CRM within two and a half months, on time and under budget. The solution shares information with Jelly Belly's ERP system so that employees across the company have an up-to-date, holistic view of customer account activity. Jelly Belly also instituted standard processes for tracking and reporting sales activity by taking advantage of Microsoft Dynamics CRM in Microsoft Office Outlook.
"There is no longer a disconnection between customer service, order entry and our sales representatives in the field. Every customer interaction is logged through the system, whether a sales representative or a representative on our customer service team creates it," says Schader.
As desired, Jelly Belly uses the new solution to tackle the problem of customer retention. Historically, the company would lose roughly the same number of specialty retail customers it gained in any given year; largely because of the seasonal nature of its product and the fact that many retailers placed orders sporadically.
To lower its customer churn rate and increase sales, Jelly Belly set up a new outbound-calling program using Microsoft Dynamics CRM, where customer service representatives who are free make calls to customers that have not placed orders in the previous 12 months. This program also puts Jelly Belly in direct contact with customers that it usually sells to through distributors, such as the bike and running shops that purchase its new Sport Beans jellybeans. Previously, Jelly Belly had no formalized way of following up on these customers.
The solution also helps to track store display profitability. Jelly Belly has arrangements with grocery stores and drug stores throughout the United States to house large Jelly Belly candy bins. Before implementing the solution, there was no way to track the chargebacks associated with each display when customers dispensed candy but did not pay for it. Now, Jelly Belly tracks the metrics for each display so it can determine the profitability of each unit.
The Taste of Success
The new enterprise CRM solution that met all its requirements in just five months went live with phase one in May 2009, a deployment that looks especially good compared to the 18-month failed project based on software from another vendor. In addition, Jelly Belly realized returns exceeding the project's investment after just seven months.
Since the deployment, Jelly Belly initially reduced customer churn in its specialty retail division by about 34 percent and that number has since dropped further to 45 percent to 50 percent. However, the full impact of the solution on customer retention is likely much higher but cannot be measured yet because Jelly Belly implemented the solution less than one year ago.
Explains Schader, "Running the numbers for the last 24 months, we know we've gained 4,400 customers and lost only 2,900 customers. The only significant change during that time has been the implementation of Microsoft Dynamics CRM."
With stronger, formalized sales processes, Jelly Belly can pursue organizational strategies to increase sales. In May 2010, it added sales lead management capabilities, allowing the company to more effectively manage leads generated at trade shows and ensure that broker agents follow-up with potential customers. In addition, the outbound-calling program has contributed to increased sales activity.
"Looking at the orders that come in subsequent to sales calls from our customer service team, we've seen approximately $60,000 in additional revenue each month," says Joe Coulter, business systems analyst at Jelly Belly. "Based on these numbers alone, the implementation paid for itself in less than three months."
For a small company, the returns are huge. When asked to share parting words of advice, Rosman and Coulter recommended that companies start out with a small core set of objectives tied to current organizational dysfunction or need.
"Modern CRM solutions are flexible and can be grown incrementally. Don't try to solve every problem out of the gate. Our phase one CRM solution was one of the most readily adopted systems we have implemented. The small set of objectives were meaningful and with the moderate project scope the learning curve was low and met with enthusiasm."
Benefit Breakdown
Jelly Belly's CRM implementation and the corresponding process changes lead to:
- 45% to 50% percent reduction in customer churn
- Additional $60,000 in revenue each month
- Reduction in resources maintaining the new CRM solution compared to the previous software solution
- Increased efficiency in account receivable through transparency of customer status across the organization