CRM Begins With a Clear Strategy and ObjectivesRIB-112002-00005
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November 1, 2002
CRM Begins With a Clear Strategy and Objectives
Contributing Analyst: Dan Merriman
How can agreement be reached on a customer relationship management strategy? What should the strategycontain?
As executive skepticism about customer relationship management (CRM) continues to rise, a solid CRMstrategy with clear, measurable objectives becomes even more critical. Too many CRM initiatives are stillfunded based on soft statements such as “exceptional customer service,” “maximize customer value,” or theinfamous “360-degree customer view.” Even specific CRM objectives such as increasing revenue or improving profitability are difficult to achieve (or start) without the next level of detail. CRM must beginwith company objectives and continue with specifics such as the desired customer result, required employeeand partner involvement, necessary information and biggest opportunities. Without a strategy, CRM can behijacked by the strongest participants, turning a business initiative into an IT architecture project, a politicalland-grab or a mire of conflicting objectives and feuding special interests.There are four key aspects to an effective CRM strategy: customer focus, collaboration, consistency andcatalysts (see figure).
Customer focus: What will be different or better for the customer?
CRM starts with the customer. Byidentifying major customer processes — such as purchase (browse, understand, buy), ongoing managementand potential upgrade — and common interactions and issues (drop-off points, customer complaints),companies are better able to identify what should be different and how the customer will be affected.Customer focus also means identifying which customers are the top priority and identifying processdifferences by type of customer (such as business vs. consumer). For example, an insurance company selling primarily to small businesses may decide to focus on rapid quotes and renewals in order to respond to more bids more cost effectively. Since the real sale doesn’t occur until an employee picks the healthcare plan,finding ways to encourage enrollment is also key. CRM processes are often very different for differentcompanies and customers (see IdeaByte,Customer Relationship Styles — and Approaches — Differ Basedon Company Strategy, Erin Kinikin). By putting CRM in the context of the customer and the process,companies can better align CRM to the business.
Collaboration: Who needs to be involved and what incentives are needed?
A second key factor is the willingand capable participation of those needed to make customer activities successful — whether employees, partners or the customers themselves. Company processes and handoff points must be clearly defined andintegrated into core business operations, instead of becoming additional actions after the fact. The role of auxiliary organizations like sales operations, sales administration, order administration or customer serviceshould be examined (they can often help capture customer information, support self-service and fulfillcustomer requests). In the insurance example, the company must target the partners that sell to the company,