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CRM Begins With a Clear Strategy and Objectives

CRM Begins With a Clear Strategy and Objectives

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Published by Fakhar Imran

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Published by: Fakhar Imran on Feb 14, 2011
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CRM Begins With a Clear Strategy and ObjectivesRIB-112002-00005
© 2002 Giga Information Group, Inc.All rights reserved. Reproduction or redistribution in any form without the prior permission of Giga Information Group is expressly prohibited. This informationis provided on an “as is” basis and without express or implied warranties. Although this information is believed to be accurate at the time of publication, GigaInformation Group cannot and does not warrant the accuracy, completeness or suitability of this information or that the information is correct.
© 2002 Giga Information Group, Inc
Copyright and Material Usage Guidelines
November 1, 2002
CRM Begins With a Clear Strategy and Objectives
Erin Kinikin
Contributing Analyst: Dan Merriman
Client discussions
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,
CRM Begins With a Clear Strategy and Objectives
Erin Kinikin
 © 2002 Giga Information Group, Inc.Page 2 of 3
as well as the employees that must select from multiple benefit plans, respecting the partner’s time andcustomer ownership. Many CRM initiatives fail because the key participants (both customer facing and behind the scenes) don’t have the right tools — or incentives — to contribute.
Consistency: What information is required?
At every step in the customer process, companies must identifywhat information is needed, who needs it, how to get it and what to do with it. Key information includes factsabout the customer (value, propensity, characteristics, actions) as well as internal company knowledge(knowledge bases, scripts, processes). For example, the insurance company may standardize quoting rulesand pricing to streamline requests, insuring consistent and profitable quotes. It may then use customer information provided during the quote to drive cross sells and facilitate renewals (without requiring channel partners to rekey information). Customer information can also ensure a shared context for common customer tasks that span departments or groups. With data protection gaining increased importance worldwide,understanding the purpose and intended use of key customer information is a legislative requirements as wellas a strategic imperative.
Catalysts: Where can CRM have the greatest business impact?
Too many times CRM becomes a business process planning exercise without the “so what” to make it worthwhile. Identify changes or trigger pointswhere rapid action can make a difference — such as following up more quickly on leads, retaining an at-risk customer or offering an additional product to meet an emerging need. For the insurance company, the catalystmight be the annual renewal, or the quote request. Business-to-consumer (B2C) companies often watch for changes in customer life stage (marriage, graduation, retirement) or activity patterns. Business-to-business(B2B) companies are beginning to track product lifecycles of their key customers, as well as identifycommon sales patterns that can drive install base sales priorities. By putting CRM in the context of high potential opportunities or critical risks, companies can translate information more quickly into results.
Source: Giga Information Group
Key Considerations For a CRM StrategyEmployeesPartnersCustomersCollaborationBrowseUnderstand / ConfigureBuyManageUpgradeFocus on the Customer EnterpriseIntegrationCustomer InformationBusiness Rules &Knowledge AssetsConsistencyAlerts,AdviceCatalyst-DrivenPersonalizedExperience
A CRM strategy is not a laundry list of generic “industry” best practices but rather a highly-specific companyaction plan. Don’t start a CRM project without a clear definition of the target customer processes, key

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