Microsoft CRM 101: Krista Kuehnbaum, CRM Product Manager

2 Agenda  CRM – why?  Understanding the Market  Market opportunity  Microsoft’s position in the market  Identifying opportunities  Messaging to decision makers  Keys to Building a Practice  Profile of Successful CRM Partner  Partner Program & Product Packaging  Question and Answer

3 Every company manages relationships with their customers  Sales relationships  Marketing relationships  Service relationships  Financial relationships However, these relationships are often poorly managed, unstructured and uncoordinated Outside Sales Sales Support OrderProcessing Management Marketing CustomerService InsideSales The Customer The Customer

4 Example: “CANTech” a customer case Copyright © 2004 Customer Marketing International Situation:  2,126 active customers  $ 9,956,000 Revenues  $ 850,000 Profit  Goal: 50% more Profit

5 Segment customers in a Customer Pyramid “Top” “Big” “Medium” “Small” “Inactives” Prospects Suspects “Top” “Big” “Medium” “Small” “Inactives” Prospects Suspects Copyright © 2004 Customer Marketing International 1% of Customers 15% of Customers 4% of Customers 80% of Customers

6 10% Revenues Observation – I 90% Revenues 21 Top 85 Big 319 Medium 1,701 Small 154 Inactive 250 Prospects 1,000 Suspects Copyright © 2004 Customer Marketing International Existing customers deliver ± 90% of revenues

7 21 Top >58, Big 19,000-58, Medium 4,820-19,000 1,701 Small 1-4, Inactive 250 Prospects 1,000 Suspects Observation – II 20% of the customers deliver 80% of revenue Copyright © 2004 Customer Marketing International 1% of Customers 24% Revenues 1% of Customers 24% Revenues 15% of Customers 29% Revenues 15% of Customers 29% Revenues 4% of Customers 27% Revenues 4% of Customers 27% Revenues 80% of Customers 20% Revenues 80% of Customers 20% Revenues

8 21 Top >58, Big 19,000-58, Medium 4,820-19,000 1,701 Small 1-4, Inactive 250 Prospects 1,000 Suspects Observation – III...and same 20% deliver more than 100% of profits Copyright © 2004 Customer Marketing International 114,000 Rev/Cust 45,600 Profit/Cust 114% Profit 114,000 Rev/Cust 45,600 Profit/Cust 114% Profit 9,100 Rev/Cust 1,820 Profit/Cust 74% Profit 9,100 Rev/Cust 1,820 Profit/Cust 74% Profit 31,600 Rev/Cust 9,480 Profit/Cust 139% Profit 31,600 Rev/Cust 9,480 Profit/Cust 139% Profit 1,160 Rev/Cust -522 Profit/Cust -53% Profit 1,160 Rev/Cust -522 Profit/Cust -53% Profit Overall 2,126 Customers 4,680 Rev/Customer 399 Profit/Customer 9% Profit Overall 2,126 Customers 4,680 Rev/Customer 399 Profit/Customer 9% Profit

9 21 Top >58, Big 19,000-58, Medium 4,820-19,000 1,701 Small 1-4, Inactive 250 Prospects 1,000 Suspects Copyright © 2004 Customer Marketing International + 10 What if focusing on Customers led to 2% upwards migration… ,126 Customers No Change 2,126 Customers No Change

10...+/- 10% more revenues, a lot more profit, and a much higher ROI Copyright © 2004 Customer Marketing International BeforeAfterDifference% Revenues9,956,00011,306,1001,350, % Profit850,0001,367, , % ROI on CRM19%35%16%+ 84% Active Customers2,126 00% Bingo!

11 Why Do Businesses Need CRM? Increase customer retention  Disparate systems for tracking customer which lost important information  The technician that made three calls to the same site  The sales call you’d like to forget Productivity Gains  Napkin forecasts  The support call that cost you an employee  The marketing campaign results you can’t quantify Increasing Profits  Increase customer profitability  Lengthen customer lifetime  Increase share of customer

12 Understanding the Market

PCs 1,000 + employees 1.2k Corporate PCs 50-1,000 employees 54.1k Midmarket <25 PCs 1-49 employees 991k Small Business Characteristics # CAN Entities Understanding the Canadian CRM Market MARKET POTENTIAL 437M 212M 25M CRM Projected Spending Next 3 years

customers 70,000+ users 27+ months in Market 93% YOY growth, fastest in market partners 500+ Global ISVs Deal Size 5 to 2,500 users Key customers: Early adopters and Professional Services Designed for small and mid-size deployments, across all segments Sold in 53 countries, 9 language Stats Microsoft CRM centralizes customer information Microsoft CRM standardizes sales and service processes Microsoft CRM integrates with Outlook and other Office applications Why Customer BuyMicrosoftBusinessSolutionsCRM Sales Customer Service Reporting Analytics Automation & Repeatability Release Feature Pack IBF Mobility 1.2 Reporting Pack Microsoft CRM 1.2

15 Just of few Canadian Customers

16 Understanding the Market POTENTIAL TARGET CUSTOMERS Top Industries Top Industries (Priority Order) Professional services Financial Technology services Insurance Wholesale/Distribution Non-profit/charitable Manufacturing High-end retail Local/State government Emerging Industries Good Fit - Psychographics Early adopters Technology savvy Microsoft fans Have customer focused goals/strategy Strongly desire cross- business system integration Good Fit – Based on MS Technologies Organizations with up to date networks Organizations with Exchange 2000/2003 deployed Existing Active Directory deployments Microsoft Office Lovers – Heavy Outlook Users Small Business Server (SBS) owners Have SQL Server 2000 deployed.Net Evangelists Microsoft CRM CORPORATE >500 PCs >1000 Emp Upper PCs, Emp MIDMARKET Core PCs, Emp Lower PCs, Emp SMALL Core 5-24 PCs, Emp BUSINESS Lower <5 PCs, 1-10 Emp Target Market

17 Understanding the Market TARGET SEGMENTS  Small and medium-sized business; and regional divisions, satellite offices, or subs of larger companies  Organizations with growing sales and/or customer service departments  Organizations reliant on relationship-oriented sales and service  Organizations with multiple branches or groups interacting with the same end-customer  Applications associated with target segment  Current users of ACT! and GoldMine  Existing users of SQL Server and the.Net framework  Existing customers of Microsoft Business Solutions

18 Understanding the Market TARGET AUDIENCES  Business Decision Makers (BDMs)  C-Level Executive – i.e. CEO or CFO  Vice president of sales, marketing, or customer service  Controller or VP of finance, among others  Messages that resonate with BDMs  Centralize customer information  Standardize CRM processes  Ensure adoption by integrating with Outlook  Technical Decision Makers (TDMs)  Director of technology or IT infrastructure, technology specialist, Chief security officer, among others  Messages that resonate with TDMs  Integration with Outlook, back-office, etc.  Microsoft CRM workflow, configuration & customization capabilities  Microsoft’s commitment to CRM  Security Business Decision Makers Technical Decision Makers

19 Understanding the Market BASIC QUALIFICATIONS GoodPotential Red Flag Driven at director levelGroupWise/Lotus Notes loyalty Relationship at director levelOracle loyalty Frustrated by previous CRM install Up-to-date networkIT team who is “curious” Exchange 2000/2003 & BizTalk ServerComplex CRM needs Active Directory No project ownership Heavy MS Office & Outlook useNo executive sponsor SQL Server 2000No perceived benefit Small Business ServerUnrealistic expectations of CRM roll out MBS Financial Solutions/Back OfficeWindows NT user

20 Understanding the Market QUALIFYING OPPORTUNITIES  Focus on IT infrastructure early  Understand the total opportunity size  Discover the specific pain points  Know the budget  Understand who makes the decision  Understand the decision-making process  Identify the competition

21 Keys to Building Success

22 Profile of a Successful CRM Partner TYPES OF CRM PARTNERS  MBS  Great Plains, Solomon, GP/FO  Competitive  SalesLogix, ACT!, GoldMine, Siebel  Infrastructure/Platform  SQL, BizTalk, IW, Windows, Exchange  Application Development  Small Business Server

23 Profile of a Successful CRM Partner CRITICAL SUCCESS FACTORS  In-house CRM Champion  Built strong Microsoft CRM practices & developed their own methodology  Focus on Solution/Business Processes, not the software  Goals, success criteria, key business needs, implement prioritized features  Product Expertise  Must be certified on Microsoft CRM  Knowledge of Microsoft Technology Stack  NOT relying on Microsoft for demand generation

24 Profile of a Successful CRM Partner CRITICAL SUCCESS FACTORS: GO VERTICAL!  You can’t be a master of all industries. Pick several industries where you have experience and know-how.  Interview your customers to identify common “challenges” in that industry.  Configure Microsoft CRM to resolve these challenges.  Get a reference site(s) - existing good customer in that industry.  Use the references!

25 Profile of a Successful CRM Partner TOP 10 FOR SUCCESS  Business plan  Dedicate resources to practice  Install Microsoft CRM internally  Business application experience  Development resource  Microsoft technology experience  Invest in training/certification upfront  Marketing to ensure full pipeline  References, References, References

26 Partner Program & Packaging

27 CRM Software Advisor Fee Program Benefits of Success  Fee to compensate partners who:  Invest in certification  Involved in the pre-sales process  Implement the solution to the customer  Apply for the fee testifying to their involvement  Partners do not have to place license order to claim the fee.  Work with uncertified partners to sell Microsoft CRM licenses  Support customers with Select and EA license agreements  Provide implementation Services  Still eligible for the fee

28 CRM Certified Software Advisor Fees n%* Transaction related opportunity 20% +10% + Tier 1: 20% of Reference Price Tier 2: Additional 10% for meeting quarterly volume goals CRM Certified Software Advisor Fee Tier 1 Tier 2 Software ordered through a channel distributor or Authorized License Provider on behalf of your customer Up to 30% partner Opportunity on Initial License & Service CSA Fee Eligibility Criteria:  Microsoft CRM certified  End-to-End services engagement with the customer  Involved in the presale software assessment process  Primary post-sale CRM implementation partner = Total revenue opportunities available 30%+n

29 Technical Training and Support TECHNICAL TRAINING REQUIREMENTS At minimum, 2 certified individuals per company combined must complete and pass a total of 5 unique exams as detailed below: Required exams: Microsoft CRM Customization (MS ) Microsoft CRM Installation and Configuration (MS ) Microsoft CRM Applications (MS ) Plus 2 of the Partner’s choice from the following exams: Microsoft Exam Implementing and Administering a Microsoft Windows 2000 Network Infrastructure Microsoft Exam Managing and Maintaining a Microsoft Windows Server 2003 Environment * Microsoft Exam Installing, Configuring, and Administering Microsoft Windows 2000 Professional* Microsoft Exam Managing and Maintaining a Microsoft Windows Server 2003 Environment * Microsoft Exam Designing Security for a Microsoft Windows 2000 Network Microsoft Exam Installing, Configuring and Administering Microsoft Windows XP Professional* Microsoft Exam Implementing and Administering a Microsoft Windows 2000 Directory Services Infrastructure Microsoft Exam Designing a Microsoft Windows Server 2003 Active Directory and Network Infrastructure* Microsoft Exam Installing, Configuring, and Administering Microsoft SQL Server 2000 Enterprise Edition. * Microsoft Exam : Installing, Configuring, and Administering Microsoft Exchange 2000 ServerExam Microsoft Exam : Implementing and Managing Microsoft Exchange Server 2003Exam Microsoft Exam 70–305: Developing and Implementing Web Applications with Microsoft Visual Basic®.NET and Microsoft Visual Studio®.NETExam 70–305 Microsoft Exam 70–315: Developing and Implementing Web Applications with Microsoft Visual C#™.NET and Microsoft Visual Studio.NETExam 70–315 *The 2003 versions of these exams will be considered towards the MBS Competency requirements as equivalents. eCourse Promotion $1,000 USD worth of e-training – take course, pass & be reimbursed! Expires end of June, 2005

30 Microsoft CRM Standard Edition  Lead management  Opportunity management  Correspondence / mail merge  Account & contact management  Notes & attachments  Activity & task management  Search  Direct  Territory Management  User & business management  Calendar  Set of reports  Customization tools & utilities  Lead management  Opportunity management  Correspondence / mail merge  Account & contact management  Notes & attachments  Activity & task management  Search  Direct  Territory Management  User & business management  Calendar  Set of reports  Customization tools & utilities  Case management  Service request  Knowledgebase management  Direct  Search  Queuing  Account & contact management  Activity & task management  Calendar  Notes & Attachments  User & Business management  Set of reports  Customization tools & utilities  Case management  Service request  Knowledgebase management  Direct  Search  Queuing  Account & contact management  Activity & task management  Calendar  Notes & Attachments  User & Business management  Set of reports  Customization tools & utilities Microsoft CRM Customer Service Standard Microsoft CRM Sales Standard

31 Microsoft CRM Professional Edition  Lead Routing  Workflow  Sales process management  Product catalog  Quotes, orders, invoices  Quotas  Sales literature  Competitor tracking  ERM Integration  PLUS ALL STANDARD FEATURES  Lead Routing  Workflow  Sales process management  Product catalog  Quotes, orders, invoices  Quotas  Sales literature  Competitor tracking  ERM Integration  PLUS ALL STANDARD FEATURES  Workflow  management  Product catalog  Routing  Contract management  PLUS ALL STANDARD FEATURES  Workflow  management  Product catalog  Routing  Contract management  PLUS ALL STANDARD FEATURES Microsoft CRM Customer Service Professional Microsoft CRM Sales Professional

32 Microsoft CRM Product Licensing Standard & Professional Users may not be mixed for the same module Sales Module Sales Module Service Module Suite Module Combines Sales & Service Suite Module Combines Sales & Service or Sales Users Standard Professional or Service Users Standard Professional or Suite Users Standard Professional

33 Next Steps Step 1: Learn more about Microsoft CRM Attend a Webcast on Friday May 6 th –12 to 1:30 * or leave business Step 2: Propel your Business and earn up to US $5300! Part 1: PASS Assessment Test (Online) For certification remember $1000 in training reimbursement Part 2: ADD 1st customer (ANY 5-seat PRO) GET: FREE Copy (for resale) of Microsoft CRM Sales Professional (1 server + 5 user license = $5300 in value) Contact for more information

34 QUESTION & ANSWERS

35 Appendix

36 Microsoft CRM next release Release Timeline Q3 CY05 Beta Q1 CY05 Alpha Q4 CY 05 RTM Confidential – Microsoft Corporation CRM next release imperatives Drive huge adoption across the globe Recognized as industry thought leader Drive happy partners and customers Q1 CY 06 GlobalLaunch Beta and RTM Customer and partner validation Industry press and analyst feedback True global launch Global ISV Alpha 50 ISV solutions co- launched with CRM 2.0

37 Windows Server System SQL Server Full Service and Sales and Marketing Sales and Marketing Offline client Microsoft Outlook Microsoft Internet Explorer User interfaces Microsoft CRM Architecture Overview Core CRM Server Sales & Marketing Customer Service.NET / XML Custom Enterprise Portals Custom Enterprise Portals BI and Analytics.NET / XML 3rd Party Applications 3rd Party Applications MBS Financials MBS Financials Web Services Web Services

38 Microsoft CRM Product Licensing Standard & Professional Users may not be mixed for the same module Sales Module Sales Module Service Module Suite Module Combines Sales & Service Suite Module Combines Sales & Service or Sales Users Standard Professional or Service Users Standard Professional or Suite Users Standard Professional

39 Administration & Operations VOLUME LICENSING OVERVIEW

40 Administration & Operations SOFTWARE ASSURANCE