Six Steps to CRM Success By Lena Benjamin, Director – Client Relationships,
Contents
Introduction
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Customer Strategy
2
Customer Value
3
Customer Information
4
Customer Technology
5
Customer Monitoring
6
Customer Touch-Points
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About the Author
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Contact Us
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Introduction Developing, Maintaining and Exploiting the Customer Base Behind a successful organisation is a strong, sustainable customer base. Managing that asset is a key task, from the boardroom down.
There are six key steps that are crucial in making CRM work effectively:
To help in that task, Ones Business Advice has developed a Strategic Customer Relationship Management (CRM) Framework which can be used to identify gaps in customer-facing processes and systems.
1. Strategy 2. Value 3. Information 4. Technology 5. Monitoring 6. Touch-Points
Once those gaps have been identified, they can be addressed to build stronger and longer customer relationships.
Client Monitoring
Client Technology
Client Information
Client Strategy
Client Touch Points
Client Value
Diagram: CRM Toolkit, developed by Ones Business Advice
Successful implementation of the six key steps produces: • Increased profitability • Better internal collaboration • Satisfied and loyal customer • Continuous business improvement
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Step 1 Customer Strategy An agreed and achievable customer strategy is key to an organisation’s ability to deliver relationship value to its customers. Where CRM systems have been introduced without a strong strategic focus they fail. CRM systems that are regarded as essentially an IT project are often introduced without a clear and achievable strategic aim. When they fail, many companies assume that the CRM concept is a failure, or not a good fit for their business model. In fact, though, it is a strategy failure, not a CRM failure. To implement CRM effectively the strategy needs to be firmly at the forefront of implementation. The task is to build stronger, longer customer relationships that maximise profitability. This can only be achieved if it is clear how customers perceive value, and how the organisation can deliver it.
Key messageS
Senior management support for CRM • Senior management must be at the forefront of introducing and supporting CRM initiatives • There must be a committed, designated CRM sponsor at board level • Senior management must work together to resolve cross-functional conflicts
Business strategy is crucial to the process • The CRM strategy defines a commitment to quality and customer-centricity which must be clearly understood by staff • A clear set of values that support the strategy must be shared and understood by staff • The strategy and supporting business plans must be reviewed at least annually taking account of evolving market trends and customer characteristics, industry evolution, the competitive landscape and technology impacts
The task is to build stronger, longer customer relationships that maximise profitability. This can only be achieved if it is clear how customers perceive value, and how the organisation can deliver it.
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• Management systems impacting on CRM should be reviewed at least annually to ensure that they support fully the evolving CRM strategy
Strategically identifying the most important clients is important • Clearly identify which customers the organisation wishes to serve and which ones it does not wish to serve • Customise the organisation’s service offer to match different segments expectations, concentrating on those which are strategically most important to the business
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Step 2 Customer Value Systematically review the value an organisation delivers to its customers to allow sustainable competitive advantage to be achieved. Understand which factors customers value from the organisation’s service delivery and how those affect the perception of ‘superior service’. The concept of Customer Lifetime Value is important for a business in determining how much resource to allocate to each customer segment. As customers receive a service that they value, the organisation in turn benefits from loyal customers that are prepared to pay a premium for the service.
Key messageS • Understand the value that each customer segment brings to the company in terms of lifetime value. This drives business success • Conduct periodic reviews of what supplementary services could be added to the organisation’s offer, and how these will increase the value received, and perceived, by customers • Regularly review competitor activity to determine how this impacts customer value metrics. Any significant changes must be communicated to senior management • Tailor value propositions to different customer segments This demonstrates the organisation’s strategic focus to building stronger customer relationships both internally and externally
As customers receive a service that they value, the organisation in turn benefits from loyal customers that are prepared to pay a premium for the service.
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Step 3 Customer Information Gathering business and market intelligence about customers is a prerequisite to understanding the strategic direction of the organisation. The organisation can then ascertain which types of customers it should build stronger relationships with, because they are crucial to business success.
Key messageS • Customer information systems allow information about individual customers to be collected and analysed. This produces micro and macro information about the customer and customer sub-sets, for use in customer applications and campaign management • Data collection must be managed to ensure relevancy, accuracy, currency and objectivity • Customer information should be used proactively for cross-selling and up-selling purposes • Predicting customer buying patterns and then applying historic data to these provides a measure of the potential return on investment of a promotional campaign
Predicting customer buying patterns and then applying historic data to these provides a measure of the potential return on investment of a promotional campaign.
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Step 4 Customer Technology CRM is not just an IT system, it is a management approach. Technology is just a tool to facilitate an understanding of the needs of customers and to allow the management of customer relationships. It is important that the system gathers the right information about the customer so that strategic decision making is fully informed. Acting on correct information will increase sales and add customer value. Capturing the wrong data causes defection and dissatisfied customers.
Key messageS • The location, accuracy and completeness of customer data, particularly if kept in different databases, is crucial • Appraising and addressing any significant systems integration, people, processes and training issues is vital when introducing any new CRM system, e.g. sales force automation • A full investigation and budget for change management, project management and employee engagement issues is intrinsic in any new CRM systems proposal • Customer information links should be integrated with existing systems like fulfilment, service and finance
Acting on correct information will increase sales and add customer value. Capturing the wrong data causes defection and dissatisfied customers.
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Step 5 Customer Monitoring Ensuring that the strategic CRM objectives are delivered to the customer base is at the heart of the monitoring process. Timeliness and accessibility of information from the system is crucial. Understanding and acting on monitoring information will increase performance standards in customer and employee satisfaction, service quality and supplier performance.
Key messageS • CRM metrics must be identified and acknowledged by staff • Senior management should agree on the business monitoring model for the organisation • The most important key performance indicators (KPIs) must been identified • Staff should understand the KPIs and actively work towards scoring highly on them • Customers should have been involved in identifying and structuring the KPIs • There must be a formal process in place for monitoring performance, and this should be reviewed at least on an annual basis
Understanding and acting on monitoring information will increase performance standards in customer and employee satisfaction, service quality and supplier performance.
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Step 6 Customer Touch-Points Ensuring that the customer experience is a highly positive one at each of the organisation’s customer touch-points is pivotal. Done correctly, this ensures the achievement of the strategic objectives and the delivery of customer value, and that it has been perceived as being delivered. Customer/organisation touch-points include pre-sales communication, the sales interaction, post-sales service and support. Each touch-point – whether with the sales team, outlets, telephone, direct marketing or website – should deliver a streamlined and highly professional experience.
Key messageS • A formal review of the range of touch-point strategy options should take place at least annually • Client touch-point usage, preferences and general trends must be reviewed regularly • Identification of what constitutes an outstanding (or perfect) client experience should be understood. The organisation must strive to deliver this, and employees must be aware of this • A client satisfaction policy should be in place as well as a generic service level agreement • The organisation should have an agreed set of metrics for measuring touch-point performance • The organisation must understand which touch-points clients wish to use at different stages of the supplier relationship, e.g. pre-sales, sales and post sales
Each touch-point – whether with the sales team, outlets, telephone, direct marketing or website – should deliver a streamlined and highly professional experience.
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About the Author
Contact Us
Lena Benjamin has over 12 years’ experience developing and delivering client relationship management (CRM), business development and marketing communications initiatives for a variety of small, medium and large businesses. She has an ability to identify business and value propositions and to strategically identify the best marketing and business development tools to acquire and retain the most profitable customers. Lena has an MBA accredited by the Association of MBAs. Memberships include: Institute of Business Consulting, Chartered Management Institute and Association of MBAs. Lena’s research project for her MBA degree was ‘Developing a Strategic CRM Framework’. The results of the research have been applied during the development of Ones Business Advice’s CRM Toolkit.
Lena Benjamin, Director – Client Relationships lena.benjamin@onesbusinessadvice.co.uk T: 020 3005 5357 M: 07590 474 910 Email: info@onesbusinessadvice.co.uk Web: www.onesbusinessadvice.co.uk
Ones Business Advice provides Strategic Client Relationship Management (CRM) advice and consultancy services for mid-sized (and larger) businesses. We specifically target those clients that would like to develop stronger relationships with their customers and in turn maximise profitability. Our existing clients are in the professional services, finance and banking sectors.
Client Monitoring
Client Technology
Client Information
Client Strategy
Client Touch Points
Client Value
Diagram: CRM Toolkit, developed by Ones Business Advice Ones Company Limited trading as Onesbusinessadvice.co.uk has Professional Indemnity and Public/Products Liability Insurance
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