Building Blocks of CRM

Achieving the long-term value of customer relationship management (CRM)
requires a strategy involving the whole business and should be
approached at an enterprise level. Only a small, but growing, number of
enterprises are tackling CRM at this level, with most CRM initiatives
consisting of departmental projects or attempts to integrate the work
of multiple projects.

Executing enterprise-level CRM is not easy. It
requires board-level vision and leadership to drive a “relentless focus
on the customer.” It involves learning new customer management skills,
potentially difficult changes to processes, culture and organization,
and grappling with the technology challenges of multi-channel
alignment, systems integration and data quality. Even if the board
accepts the need for enterprise-level CRM, the quarterly demands of
revenue and profit targets, especially in delicate economic conditions,
often mean that, although CRM is the most important challenge facing an
enterprise, it is not seen as the most urgent.

Besides lack of leadership, the main reasons that enterprises are not approaching CRM at an enterprise level are:

An inability to see the “big picture” and understand the extent of transformation that is necessary

Lack of a strategic framework to provide the context for the CRM journey

The framework emphasizes the need to create a balance between the
requirements of the enterprise and the customer. Too many CRM
initiatives suffer from an inward focus on the enterprise, whereas the
point of CRM is to achieve a balance between value to shareholders or
stakeholders and value to customers for mutually beneficial
relationships.

Let’s
drill down into the building blocks of CRM — direction, plan of action,
valued customer experience, organizational collaboration, processes,
information, technology and metrics

Direction
Successful CRM
demands a clear vision so that a strategy and implementation can be
developed to achieve it. The CRM vision is how the customer-centric
enterprise wants to look and feel to its customers and prospects — the
customer value proposition and the corporate brand values are keys to
the CRM vision. Without a CRM vision, the enterprise will not stand out
from the competition, target customers will not know what to expect
from it and employees will not know what to deliver in terms of
external customer experience. A successful CRM direction is the
cornerstone to motivating staff, generating customer loyalty and
gaining a greater market share.

Plan of Action
A
CRM strategy is not an implementation plan or road map. A real CRM
strategy takes the direction and financial goals of the business
strategy and sets out how the enterprise is going to build customer
loyalty. The objectives of a CRM strategy are to target, acquire,
develop and retain valuable customers to achieve corporate goals.

Valued Customer Experience
Customers’
experiences when interacting with the enterprise play a key role in
shaping their perception of the enterprise — the value it provides and
the importance it places on the customer relationship. Good customer
experiences drive satisfaction, trust and long-term loyalty. Poor
customer experiences have the opposite effect and, because bad news
travels faster and further than good news, they harm the enterprises
ability to create new relationships with prospects.

Organizational Collaboration
Many
enterprises believe that implementing CRM technologies makes them a
customer-centric organization. They forget, ignore or deliberately
avoid the necessary changes to the enterprise itself. True CRM means
that individuals, teams and the whole enterprise must become more
focused on the needs and wants of the customer. As a critical part of a
CRM program, it will involve changing organizational structures,
incentives and compensation, skills and even the enterprise culture.
Ongoing change management will be key to success.

Processes
Past efforts to
re-engineer processes were primarily driven by the desire to improve
the efficiency of an enterprise and reduce costs. The beneficiary was
the enterprise, not its customers. The rise in CRM has led to a focus
on reworking key processes that touch the customer and asking customers
which processes matter to them. Enterprises frequently do not realize
that their functionally fragmented processes often mean that the
customer has a poor experience and receives less than the expected
value. Successful re-engineering should create processes that not only
meet customers’ expectations, but also support the customer value
proposition, provide competitive differentiation and contribute to the
desired customer experience.

Information
Successful
CRM requires a flow of customer information around the organization and
tight integration between operational and analytical systems. Having
the right information at the right time is fundamental to successful
CRM strategies, providing customer insight and allowing effective
interaction across any channel. Unfortunately, most enterprises’ CRM
information capabilities are poor — the result of numerous and
fragmented departments, initiatives, databases and systems.

Technology
For
most technologists, CRM is all about technology. CRM technologies are
an essential enabler for any modern CRM business strategy, but they are
just one piece of the puzzle. In many CRM projects, integration issues
start as a relatively low priority, and then rise in prominence (cost
and time) as enterprises realize that true CRM requires seamless
customer- centric processes, supported by integrated technology across
the enterprise and its supply chain.

Metrics
The
other seven building blocks depend on performance targets and metrics
to gauge their success, and enterprises must set measurable CRM
objectives and monitor CRM indicators to successfully turn customers
into assets. Without performance management, a CRM strategy and
associated program is destined to fail. These metrics have an internal
and an external focus and link operations to strategy and corporate
financial benefits. Each enterprise will have a unique set of metrics
applicable to their situation.

The above building blocks are
part of the strategy framework to help organizations go through the
important CRM journey. However, successful implementation and using the
CRM solution to benefit the business depends largely on the people
(from senior management down) within the organization to truly adopt
and embrace it.

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