Customer
Relationship Management (CRM) is undoubtedly a must-have in today’s business
world. A holistic CRM solution can help organisations achieve competitive
differentiation in several scenarios – when the market environment has matured,
when products and services reach saturation point and face other competitive
challenges, or when at the macro level, the economy is shrinking. In any, or
all of these situations, organisations can gain an upper hand by distinguishing
themselves and their offerings through the establishment of a solid, dynamic,
insightful and intuitive relationship with their customer base. These
relationships in turn can be built upon the foundation of an expansive range of
CRM technologies and solutions.
Development, documentation and execution of an intelligible CRM strategy marks the starting point for any CRM solution to succeed. Even the most comprehensive, nearly perfect CRM solution will fail, if there is lack of clear direction and strategy to implement it. 'Strategy' identifies the core of the CRM solution, it helps create the blueprint as to how organizational objectives can be achieved. The crucial linkage between the ultimate vision of the CRM solution and the value it renders to organisations and customers is another aspect that strategy touches upon.
It is important to remember that a focused, fruitful CRM solution as well as its related strategy is something that every organisation most definitely requires. It may not always be necessary that only those companies that are struggling with wearisome product, market and/or economic conditions, or aiming to achieve operational excellence, or aspiring specifically to attain closer relationships with their customers, are the only ones who need to resort to CRM. It is almost a mandatory pathway to success for any and every organisation – struggling and excelling alike. The only difference lies in the kind of strategy adopted – which again explains how critically instrumental a CRM strategy is in the alignment of objectives and applicable CRM solutions.
An efficacious CRM strategy becomes the mentor that business organisations look up to, it assists in placing customers (instead of brands, products or geographies) at the epicentre of the organisation’s CRM plans, and thereby converts customers into real, lifetime assets.
Pathway to the perfect Customer Relationship Management strategy
Development, documentation and execution of an intelligible CRM strategy marks the starting point for any CRM solution to succeed. Even the most comprehensive, nearly perfect CRM solution will fail, if there is lack of clear direction and strategy to implement it. 'Strategy' identifies the core of the CRM solution, it helps create the blueprint as to how organizational objectives can be achieved. The crucial linkage between the ultimate vision of the CRM solution and the value it renders to organisations and customers is another aspect that strategy touches upon.
It is important to remember that a focused, fruitful CRM solution as well as its related strategy is something that every organisation most definitely requires. It may not always be necessary that only those companies that are struggling with wearisome product, market and/or economic conditions, or aiming to achieve operational excellence, or aspiring specifically to attain closer relationships with their customers, are the only ones who need to resort to CRM. It is almost a mandatory pathway to success for any and every organisation – struggling and excelling alike. The only difference lies in the kind of strategy adopted – which again explains how critically instrumental a CRM strategy is in the alignment of objectives and applicable CRM solutions.
An efficacious CRM strategy becomes the mentor that business organisations look up to, it assists in placing customers (instead of brands, products or geographies) at the epicentre of the organisation’s CRM plans, and thereby converts customers into real, lifetime assets.
Pathway to the perfect Customer Relationship Management strategy
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Identifying target
audiences
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Customer
classification, and definition of objectives in line with overall
organisational goals
The aim of a CRM solution fluctuates in significance and gravity as per segmentation of the broad customer base. Naturally, the CRM strategy process begins with a formal segmentation of the diverse customer base on the basis of relevant customer traits like preferences, demographics, age, cultural background, etc. This is vital because it is these traits that dictate purchasing pa:tterns, loyalty and profitability. The next step is an in-depth analysis of the product and distribution mix required within the segregated customer segments spanning across different geographies and competitive scenarios. Also, the created customer segments must have their own set of unique and reflective goals, which should further be in tune with the overall goals and objectives of the organisation in a larger sense. All goals, be it of customer segments or of the organisation, must achieve the dual benefit of bringing enhanced value to customers while at the same time making sure that the organisation is also able to achieve its intangible and tangible targets.
Specific objectives of each customer segment differ. For some clusters, the main objective may be to improve loyalty and retention, for others it could be growing relationships through cross selling thereby also increasing revenues, and for some, the aim could be moving customers to more cost effective channels so that profitability can be increased. In order to make sure that these ‘segment specific’ objectives are well aligned with the organisation’s corporate goals, the value rendition of every customer segment should be in unity with the corporate objectives. If not, then the company could either redefine company goals, or not follow through with that particular customer segment.
It is crucial for CRM leaders and managers within the organisation to build an unambiguous governance structure to develop, manage, monitor and if and where necessary, amend the ongoing CRM strategy. All top executives must be closely involved in defining vision and strategy. Also, a highly driven CRM leader, segments managers for important customer segments, and designers from the functional areas of sales, marketing and customer service should be appointed by the organisation. Together, this empowered group of individuals can ascertain every employee at every level within the organisation is accredited to execute the strategy as and when required.
Quantification
The aim of a CRM solution fluctuates in significance and gravity as per segmentation of the broad customer base. Naturally, the CRM strategy process begins with a formal segmentation of the diverse customer base on the basis of relevant customer traits like preferences, demographics, age, cultural background, etc. This is vital because it is these traits that dictate purchasing pa:tterns, loyalty and profitability. The next step is an in-depth analysis of the product and distribution mix required within the segregated customer segments spanning across different geographies and competitive scenarios. Also, the created customer segments must have their own set of unique and reflective goals, which should further be in tune with the overall goals and objectives of the organisation in a larger sense. All goals, be it of customer segments or of the organisation, must achieve the dual benefit of bringing enhanced value to customers while at the same time making sure that the organisation is also able to achieve its intangible and tangible targets.
Specific objectives of each customer segment differ. For some clusters, the main objective may be to improve loyalty and retention, for others it could be growing relationships through cross selling thereby also increasing revenues, and for some, the aim could be moving customers to more cost effective channels so that profitability can be increased. In order to make sure that these ‘segment specific’ objectives are well aligned with the organisation’s corporate goals, the value rendition of every customer segment should be in unity with the corporate objectives. If not, then the company could either redefine company goals, or not follow through with that particular customer segment.
It is crucial for CRM leaders and managers within the organisation to build an unambiguous governance structure to develop, manage, monitor and if and where necessary, amend the ongoing CRM strategy. All top executives must be closely involved in defining vision and strategy. Also, a highly driven CRM leader, segments managers for important customer segments, and designers from the functional areas of sales, marketing and customer service should be appointed by the organisation. Together, this empowered group of individuals can ascertain every employee at every level within the organisation is accredited to execute the strategy as and when required.
Quantification
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Real time analytics
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For
every identified customer segment, appropriate metrics must be assigned with
respect to customer acquisition, retention, satisfaction, loyalty,
profitability, distribution and product mix, cross-selling, up-selling and so
on. Following this, baseline targets must be established for each segment for
the forthcoming year. Since, different customer segments have different
characteristics and objectives, the identified metrics used for computation
will also vary. Identification of relevant metrics also empowers CRM managers
to gauge how successful (or unsuccessful) the customer segment managers have
been in their respective accountabilities, specifically applicable to that
particular segment that they have been assigned to.
Attune offerings and distribution channels with customer segments
Attune offerings and distribution channels with customer segments
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Efficient customer
segmentation
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Once
goals are set and metrics are established for each customer cluster, the next
step for organisations is to figure out the best product and channel mix which
will aid in the achievement of those objectives and metrics. This involves
remuneratively and competitively grouping the business’s range of offerings.
Following this, a situation may sometimes arise where the organisation realises
that they need fresh channels and products/services. In case of which, the
necessary channels and/or products must be developed which are in harmony with
customer needs, wants and preferences along with the value propositions that
underpin the overall CRM strategy. The primary idea is to graduate from the
traditional approach of positioning products and channels at the centre and
working backwards to get customers to purchase the products or utilise the
channels. Contemporary businesses are now moving on from
product/channel-centricity to customer-centricity, by placing customers and
customer segments at the heart of their plans, actions, business offerings and
distribution channels. An ideal CRM strategy is therefore one which keeps
customers (including segmentation and related metrics) at the centre, and
re-arranges everything else keeping customers as the focal point.
Evaluation of existing CRM processes, tweaking where necessary
Evaluation of existing CRM processes, tweaking where necessary
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Pinpointing existing
inaccuracies
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Monitoring, evaluating, and if necessary, challenging the
existing CRM processes is a critical requirement to verify that that the
ongoing processes and practices are indeed aligned with the overall CRM
strategies and goals. If deviations are discovered, it is imperative to amend,
replace, rebuild or redefine the processes and practices so they are back on
track.
Further, the strategy must be such that it is closely aligned and co-dependent with the individual functional processes of sales (including e-commerce and social media networks), marketing, distribution channel, and customer service processes. To illustrate, if the main focus of the CRM strategy is to expand market share, then the sales personnel can exercise higher agility in terms of pricing, being fully aware that profit margins could be adversely impacted for a short while. From a long-term perspective, these temporary adverse impacts should be withstood by the business to guarantee long term profitability.
It must also be remembered that raising questions against
existing CRM software go beyond the implementation of solutions to meet the
requirements of just one particular line-of-business (LOB), product division,
region, etc. Solutions must apply to overall systems and the entire
organisation in order to bring about substantial changes. Key CRM investments
should constantly be monitored and challenged when necessary, to make sure that
deviations (if any) are eliminated, and there is always an alignment with
overall organisational goals and objectives. To assist in achieving the same,
certain actions may be necessary – audits to understand how well equipped the
business is to compute the value of customers - both actual and potential
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Pinpoint exact customer infrastructure needed to drive pertinent
CRM activities.
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Define KPIs (Key Performance Indicators) to evaluate and compare
costs of sales and marketing campaigns, with short and long term value of acquired
customers, and thereby justify costs.
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Keep key business stakeholders in the loop by clearly
communicating the CRM strategy
Building a CRM strategy comes with another huge challenge of
managing the tactical CRM requirements of the various stakeholders spanned
across the organisation, and the alignment of their requirements with corporate
objectives. It very often happens that particular departments or LOBs with
their own specific CRM needs may concentrate merely on the implementation of
those strategic solutions which primarily cater to their requirements,
irrespective of whether or not there is calibration with the CRM strategy at
corporate and/or global levels.
An example could be of sales personnel, who insist on the application of CRM solutions that support lead management and forecasting for their department, but essential customer data which may be of assistance to the customer service department may not necessarily reflect back.
To combat this challenge, it is wise to start off by clearly communicating the CRM strategy and long-term vision to important stakeholders, especially those dealing with customer-facing responsibilities in the areas of marketing, sales (e-commerce and social), and customer support. Next, the overall corporate goals must be quantified, and appropriate explanations should be given to all stakeholders as to how the CRM strategy is in support and alignment with the organisational objectives. Following this, integration points need to be created to fuse key stakeholders’ (within the organisation) requirements with corporate objectives. This effective alignment is not necessarily brought about by specific technology solutions provided by hand-picked vendors, but it is rather generated by focusing on the key integration points between corporate customer data and applications, with state-of-the-art CRM solutions.
Summing up
Even the most outstanding CRM software is valueless without the right vision, direction and strategy. A thorough understanding of how the right CRM strategy can be formulated and thereafter followed through will hold the key to unrivalled success.
An example could be of sales personnel, who insist on the application of CRM solutions that support lead management and forecasting for their department, but essential customer data which may be of assistance to the customer service department may not necessarily reflect back.
To combat this challenge, it is wise to start off by clearly communicating the CRM strategy and long-term vision to important stakeholders, especially those dealing with customer-facing responsibilities in the areas of marketing, sales (e-commerce and social), and customer support. Next, the overall corporate goals must be quantified, and appropriate explanations should be given to all stakeholders as to how the CRM strategy is in support and alignment with the organisational objectives. Following this, integration points need to be created to fuse key stakeholders’ (within the organisation) requirements with corporate objectives. This effective alignment is not necessarily brought about by specific technology solutions provided by hand-picked vendors, but it is rather generated by focusing on the key integration points between corporate customer data and applications, with state-of-the-art CRM solutions.
Summing up
Even the most outstanding CRM software is valueless without the right vision, direction and strategy. A thorough understanding of how the right CRM strategy can be formulated and thereafter followed through will hold the key to unrivalled success.
