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The Power of CRM

The Power of CRM


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Published by mwells42
The term CRM has, today, become synonymous with costly software applications that help a business manage customer information. But CRM is, at its heart, simply about improving the relationships you have with your customers.

This book is designed to offer an introduction to the intricacies of customer relationship management. While some of the software options are discussed, this course's emphasis is on the employee based process, not the software solutions. These concepts are important for virtually any manager or business owner.

This is the text for the online course "Introduction to CRM" available at http://www.the-wells-group.com/courses
The term CRM has, today, become synonymous with costly software applications that help a business manage customer information. But CRM is, at its heart, simply about improving the relationships you have with your customers.

This book is designed to offer an introduction to the intricacies of customer relationship management. While some of the software options are discussed, this course's emphasis is on the employee based process, not the software solutions. These concepts are important for virtually any manager or business owner.

This is the text for the online course "Introduction to CRM" available at http://www.the-wells-group.com/courses

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Published by: mwells42 on Oct 07, 2009
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The Power of CRM
Managing your Customer Relationships with CRM

By Michael Wells

Michael Wells Michael is a business consultant, project manager, and seasoned advisor to many of the leading companies in the world. He has consulted on over 200 large scale communications, technology, and marketing projects and events. He has been named as one of the top 100 multimedia producers in the world by Multimedia Producer magazine. He holds a BA degree from the University of California and an MBA from Florida Institute of Technology

This book is the text for the online Introduction to CRM course. This course may be found at www.the-wellsgroup.com/courses

The Power of CRM
Copyright 2009

Table of Contents
Preface Chapter 1 An Overview of CRM Chapter 2 That Components of CRM Chapter 3 Planning for CRM Chapter 4 Implementing CRM Chapter 5 Maintaining CRM Chapter 6 CRM Software Chapter 7 A CRM Scenario Chapter 8 What Did You Learn? 1










Preface The term CRM has, today, become synonymous with costly software applications that help a business manage customer information. But CRM is, at its heart, simply about improving the relationships you have with your customers. This text is designed to offer an introduction to the intricacies of customer relationship management. While some of the software options are discussed, the emphasis is on the employee based process, not the software solutions. These concepts are important for virtually any manager or business owner.


Chapter 1 – An Overview of CRM

What is CRM? CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. Good customer relationships are at the heart of business success. These good relationships are people driven. Over the last ten years there have been many software companies that have offered software solutions to help streamline the CRM process, but thinking about CRM in primarily technological terms is a mistake.

CRM starts with your company paying attention to your customers.. This strategy also depends on bringing together lots of pieces of information about customers and market trends so you can sell and market your products and services more effectively. And while software can help in all of this.putting them first. particularly if you are operating a small company or business. while enhancing your bottom line at the same time. We call this having a customer-centric culture in your company. What Is The Goal Of CRM? .. it is by no means a necessary tool.3 A more useful way to think about CRM is as a strategic process that will help you better understand your customers’ needs and how you can meet those needs.

a business can increase revenues by: • • • • • Providing services and products that are exactly what your customers want Offering better customer service Cross selling products more effectively Helping sales staff close deals faster Retaining existing customers and discovering new ones Is It Really That Simple? For CRM to be truly effective. an organization must first understand who its customers are and what their value is over a lifetime.4 Focusing on CRM will help you and your customers. you can be of better service to them. . When you know about them and what their likes and dislikes are. With an effective CRM strategy.

For example. CRM helps you with this important task. This means making sure your customers are treated the way they want to be treated! How Do We Remember Things About Our Customers? . but it also starts with providing terrific customer service to begin with. many financial institutions keep track of customers' life stages in order to market appropriate banking products such as mortgages or IRAs to them at the right time in order to fit their needs at that particular stage. They say it is much easier (and cheaper) to keep existing customers than to find new ones.5 The first thing a company needs to do is determine what the needs of its customers are and how best to meet those needs.

One company. and how it is currently used. bricks-and-mortar stores. and marketing and advertising efforts. The important thing is to make sure you treat your customers as you would like to be treated. simple index cards will work. .6 Your organization must look into all of the different ways information about your customers comes into your business. Then begin to collect data that you can later analyze to obtain a view of each customer and to pinpoint areas where better service may be needed. but it's not always necessary to use software. You can even track this information in a basic email program such as Microsoft Outlook. If you own a small company. We will talk about software that helps us in this effort in future lessons. may interact with customers in a myriad of different ways including mail campaigns. call centers. where and how this data is stored. CRM can help us to keep track of all of these efforts. web sites. mobile sales force staff. for instance.

7 What Can CRM Do For Me? Customer Relationship Management will: 1. . Allow you to form powerful. Help in your marketing efforts . Assist you in improving your sales by optimizing information shared by different employees and by streamlining your existing sales and marketing processes. 2. This will help improve customer satisfaction while also maximizing profit. individualized relationships with your customers.It helps you to identify and target your best customers and to manage marketing campaigns with clear goals and objectives that will also bring you new customers. 3.

you need CRM when it is not clear who your customers are and what their needs or desires are. If you are losing customers to a competitor. your company and your customer. Provide your employees with the information and processes necessary to know their customers' needs and to build relationships between your employee. you probably do need some form of CRM. or will be. at any given stage in their lives. This leads to happier customers and happier customers help make your company more profitable. that’s .8 4. In any case. How Do I Know If I Need CRM? If you find yourself asking this question.

9 a clear indication that you should improve your understanding of your customers. .

The software only made it easier to maintain and obtain information from the data that was being collected. but CRM really was being used in great companies before the computer was even invented. There are two general parts to CRM. Part 1 .10 Chapter 2 – The Components of CRM Your Future Your future depends on customers and that is a simple fact. CRM has become known as a type of computer software. You need them and you want them to need you .

A Customer-First attitude should permeate your organization. then you can go to the second part: Part 2 Collect and Use Customer Information. Start tracking key information about your customers.Treat your customers right! This should be your CRM mantra! Customers are your most valuable resource and the heart of your business. The ability to access information based on customers' desires can determine how well your business is going to do. . and this eases the pressure of finding new ones... Then use what you find. When you treat your customers right. you are helping to keep customers loyal to you. Smart companies are constantly trying to improve what they know about their customers. Once you know you are treating them right. In short (we said it in Lesson 1 and we will continue to repeat this).11 Provide Great Customer Service.

.12 They do this by paying attention to their customers' comments and actions. Are Your Existing Customers Loyal To You? Why? You not only need the answer to this question. it also tells you what your customers are looking for in terms of your products and/or services.. but the "why?". By collecting customer information. This information arms you to direct your marketing campaigns to similar types of potential customers who are looking for what you are already delivering to your satisfied customers. So what sorts of information are you looking for? It may help guide you to answer the following questions. . as well.

13 The "why?" will tell you what you are doing right! To answer this question you need to be able to recognize those customer behaviors that show their commitment to you.and that you are well aware when these reasons shift or begin to erode... This helps you to know what you are delivering that customers value.. Are Your Customers Vouching For You? Do your customers love you? If they do. they have become your marketers! . You must ask why customers are staying with you.. then they are referring new business to you.

How do we get this information? We ask our customers! . By doing this you'll know the strength of your ongoing revenue stream before you even spend another dollar on marketing. You can keep tabs on this by knowing the rate of referrals from your existing customers. So you want to make sure you treat them in a way that will make them want to vouch for you. growing them and developing other customers like them is the key. Keeping these customers.14 And nothing carries more weight than someone referring business to you. Companies focused on customer profitability want to know how referral rates differ by customer group and the reasons why their customers are not referring.

. But how do you do that? A good CRM process helps. Customers won't find you just because you have started selling a product or service. Indeed. most business owners have to go the extra mile to find customers and to keep new business coming in their doors. How? It helps you to know exactly which products and services your existing customers want and use. You need to sell that product and/or service.15 How Do I Find New Customers? Having a great product or service that you are sure many people will need isn't good enough. and this allows you to target similar audiences in your marketing approaches.

Here is an example. While it was good this customer took the merchandise off your hands. You hold a floor clearance sale and offer some of your floor merchandise at below what you paid for it.16 Are The New Customers You Attract Valuable To Your Business? Despite what you might think. Thus you need to track the volume and value of your incoming customers as closely as you do sales figures. Let's say you own a retail furniture store. The new customers have to be profitable to your business. A new customer comes and buys several pieces at a loss to you. just attracting new customers isn't enough. The part that's not likely tracked is . this is hardly a customer that is profitable to you.

There are many reasons why you will lose customers. The one reason you do not want to lose customers is because they don't get good service from you. This is a critical element. . People move or their needs change.17 the quality of incoming customers. How Many Existing Customers Are You Losing? Losing customers is a fact of life. because as markets become more saturated (or due to economic conditions fewer customers are even available) new. profitable customers are even harder to come by.

you miss a massive opportunity to galvanize your people and your customers into taking action. and so the process of CRM that we'll explore in this lesson will not be the software applications. . For without the right business process in place to begin with. As you can see. most of the answers to those previous questions can be answered without the help of software. no software will be able to really help you.18 You need to know why they don't care to do business with you anymore so you can make changes in your business and customer service processes. That we will save for a later lesson. Without this information. A Wide Swath CRM can definitely cut a wide swath across your business.

Everyone Wins .The Components of CRM Remember your number one goal from CRM is for both you and your customer to come out winners! Now that sounds like it might be hard. but there are only three major components of CRM: • • Satisfying your existing customers Targeting your Marketing .What actually makes up CRM? There are several components that make up CRM...19 So now you might be asking .

. but the execution of each requires a lot of thought and a consistency. This is really the most important component of CRM. Let's look a little closer at each.20 • Creating customer loyalty These may look insanely simple. .. Why? Because keeping your current customers happy should be Job 1! It is far easier and cheaper to keep your current customers than it is to go find new ones. Satisfying Existing Customers You have to satisfy your existing customers.

regardless of how much they spend or how long they've been customers! Recent research validates the pain customers are in: According to a report from Datamonitor. and European consumers surveyed say their trust in corporations has declined in the past five years..and delivering on it.S. consumer surveyed (96%) had a negative service experience in the past year.S. Almost every U. with 80% subsequently severing the relationship.21 The largest challenge for any business is understanding what customers need and want.. a study published by Harris Interactive and RightNow Technologies.200 U. according to the Customer Experience Report. Connecting with customers means making sure they have terrific experiences with your company through your sales efforts and customer service. 86% of 3. . Yet customers are having a harder time than ever getting service from the companies they do business with.

. management. and customer service staff who are willing to go above and beyond what's normally expected.22 Here are some basic things to think about when it comes to satisfying your customers: • • • • • • Above all else. Strive to make each sales transaction as quick and easy as possible Help customers find what they want catering to their needs. product/service delivery personnel. ask your customers what they think about your business and your service. This is what develops long-term relationships. Listen and analyze and report on their responses and then take appropriate action. one to one. Customers expect a cheerful experience from knowledgeable sales staff. be a service-driven company that pays close attention to its customers. It's important that everyone in your organization does what it takes to make a difference for your customers. On a regular and systematic basis.

You appear to be a specialist in the prospective customer's own field. Targeted Marketing Targeted marketing enables you to get to appropriate prospective customers more efficiently than any other marketing strategy.23 • • Listen to your customer. Here are some of the benefits of targeted marketing. and to develop the right merchandise or services. Always look to improve the business transaction experience for the customer. • • Your attention is focused on one specific market area. and you . This helps you to understand his/her needs. which is likely to result in your marketing campaigns being far more costand time-efficient.

24 • • • can increasingly build up a reputation as being just that. thus enhancing your profit margin." . prospective customers are less likely to focus on price as the key issue. It's about creating positive experiences for customers from the word go. Your promotion material is highly relevant to their needs. Creating Customer Loyalty Customer loyalty is not about coming up with new marketing messages or jumping through hoops when things go wrong. through an endless string of "needs understood and promises kept. and is less likely to be junked You stand out from your competitors By differentiating yourself from your competitors.

What gets measured gets done. and commit to them in writing. Remember each customer and each situation is different. Remember that on both the customer and employee side. Let all employees know exactly what they must do to provide superior customer service. Training and retraining your employees is the best way to retain happy customers. and inspect what you expect. Design flexibility into your service policies. . Everyone in the company must realize he works for the customer and that his job is to ensure ultimate satisfaction. Train employees and empower them to do it right the first time. what gets rewarded is what gets done. Reward loyalty.25 Here are some ideas of how to encourage customer loyalty: • • • • • Create a service-oriented culture and vision. Set performance standards. so you and your employees must operate with enough flexibility to meet shifting demands.

Actively seek out customer and employee input that can enhance satisfaction. Beyond products and services. listen carefully and then make every effort to resolve the complaint. understand what kinds of customer services your competition provides. return policies and loyalty rewards. services. Acknowledge that the customer is upset. and the effects that loss can have on your business. In addition. the cost of losing even ONE customer. such as products. Understand your competition and know the cost of losing a customer. Use the problem resolution as an opportunity to increase loyalty and make additional sales.26 • • • • • Educate the customer. ensure that all employees know the lifetime value of a customer. . Use every customer contact as a chance to provide education about something related to your business. and then do your best to implement suggestions. Solicit customer and employee feedback. Handle complaints properly.

27 Go the extra mile. and then do something extra! . When customers want something from you. give it to them.

. Or. and drafting a game plan. It can be as complex as launching a multi-month project to gather requirements from across the company. interviewing a variety of stakeholders.. Sometimes it as simple as building consensus over a series of meetings with key individuals in your business or operation who all have a vested interest in keeping existing customers and gaining new ones. In many cases you .28 Chapter 3 – Planning for CRM Getting Ready to Plan Planning a CRM program can be a substantial. large scale task or it can be a determined progression of smaller tasks.

. It will take diligence and dedication to ensure it stays on course. The good news is that. . and what standard you want the results to live up to. Whatever its scope. If you plan on implementing a basic CRM program without the aid of software. Here are the general steps you will want to follow. you will find that implementing software will come easily later on. how you will measure it. once you install the business practices that drive CRM. In smaller companies this will no doubt work fine. Defining CRM Success One of the most difficult parts of launching a CRM program is defining how you will measure the success of your program.29 might be working with staff members who might not have ever heard of CRM. good for you. Metrics are what you want to measure. planning for a CRM program is always necessary.. These measurements are called metrics.

Metrics are important because they allow you to tell whether your programs are working. from executives to workers.30 A simple example: Let's say you are going to launch a customer loyalty program. One metric might call for you to track customers' recurring purchases over time. Without metrics you will never know if the amount of time and money you have invested in CRM has even been worth it. should agree on unified CRM metrics. You might collect this data from your sales receipts or POS system. Your standard would be an expectation that existing customers would average $X a month. The thing to remember about metrics is that your entire organization. .

To do this you need to have a complete vision of who you are as a company or operation.. Understanding Your Operation Understanding how you want to be perceived as a company has major implications on how you approach CRM. To do so. You want to build our CRM model to emphasize your brand and reinforce your image. you are ready to move to the next step of the planning process.31 Once you have defined how your CRM process will be determined a success. begin by asking these questions: ..

so that the benefits exceed the risk of leaving? Defining CRM Requirements There are many different functions to CRM. . You might decide to not try and implement them all at once. and who are the ones we can mass-communicate with? How do we want to structure our CRM around these customers? What are our delivery channels? Where do we actually come in contact with our customers? How do we form a collaborative relationship with our customers.32 • • • • • • Who are we as a company (organization or operation)? Who are our customers? Who are the ones we want to interact with individually.

” for example.33 An example: While mining for potential customers may be a high priority. . "improve customer service by focusing on training customer service reps in the intricacies of our product line. Defining this set of requirements that your CRM will address is crucial. is customerfocused but is rather vague. A better requirement would be. Thus you would want to include only those elements that lead to meeting that one requirement. you may decide to establish a comprehensive contact management system instead. In order for CRM to work. The requirement to “improve customer service." This would tighten up this requirement so there is no guesswork regarding what needs to be done. these requirements must be customer-focused and specific in nature.

or a subordinate) says. it’s only a matter of time before someone (this may be you. your boss. There are only three possible financial outcomes for any CRM program: • • Increased profits Break-even .34 Cost Justifying CRM When launching a visible and wide-ranging program like CRM. “So how much money have we spent on this CRM thing and what have we gotten in return?” The degree to which your CRM program has been deliberately planned and executed is the degree to which you’ll have a slam-dunk answer to this question.

Unfortunately. the inevitable executive questions loom large--large enough to mandate tangible benefits. The third outcome is horrible. For others. it’s often difficult to quantify how much additional profit is generated or money saved via CRM. you want to get a pretty good handle on what the approximate costs are to implement CRM and then what your anticipated benefits may be.35 • Lost revenue The first one is great. From a hard ROI perspective. CRM can truly result in revenue or cost savings via the following quantifiable metrics: • More efficient customer-focused business processes . You want to avoid that at all costs! Before you proceed. The second not so bad. simply knowing that after deploying CRM their sales figures exceeded the industry average is enough. For some companies.

and how you will change them. a purchase order or return authorization . Understanding Your Business Processes Here you need to conduct a thorough investigation on the business processes you are currently using (if any). As you go through all of your customer facing (including marketing) processes.. how they are working..36 • • Decrease in loss of customers Increased sales Once you have determined whether CRM makes financial sense you are ready to go on.e. these are some questions you will want to get answered: • Is the tangible result of the process (i.

but you are now starting to get the idea.37 • • • • • • • number) seen or experienced by the customer? Is there an opportunity to gather more customer data at discrete points in the process? Does each interaction demonstrate value to the customer? Does any interaction waste the customer’s time? Does this process improve our ability to see this customer as an individual? Is there an opportunity to impress the customer or personalize the interaction at discrete points? Can we include "exception handling" to ensure accurate service and personalized interactions? Can this process be improved or even eliminated for high-value customers? What about for the mid-value tier? You may develop a set of your own questions specific to your business. .

or how it could be improved so that you can deliver an optimized customer experience.38 Look at Your Organization Here you want to identify areas where your organization is either delivering the best customer experience. answers to questions like those listed below can result in even more highly refined processes and can pinpoint opportunities to improve your overall organization structure: • For any given customer-facing business process. how many departments are involved? . In short. are you organized to properly deliver the customer experiences you desire? While many process-planning activities neglect this step.

you will want to map out exactly what business processes you wish . and how much? Does the information being shared change as it goes through the process? How often? Do the various people involved in each business process agree on your business rules and common terminology? Asking these questions will allow you to obtain a better view inside your operation. departments.39 • • • • How many actual staff members are involved in each process? What data is transferred between people. and/or organizations. Map Out New Processes If after all your investigation. you determine that there is some need for CRM.

. In short. new systems must promote the customer's optimal experience. but its inherent complexity as well.40 to implement. When designing and documenting new business processes. A CRM Readiness Checklist for Success Create a checklist that spells out how ready you are for your CRM to succeed. web-based order process won’t matter much if the process itself is too cumbersome to program and integrate with existing systems. A customer’s potential delight at a new. it’s helpful to understand not only the customer’s view of the process. The main goal of this business process mapping is to focus on improving traditional or broken processes in order to enhance customer interactions.

and are they aware of its intended improvements? Are my people enthusiastic about CRM? Does my management display an understanding of CRM and its accompanying benefits? Have the business area(s) most in need of CRM been identified along with the projected deliverables? Who are the stakeholders in this? Who stands to gain? Who is at risk? Have our customers indicated a need for us to change? This can be through direct communication or loss of revenue.41 Things that should be on that checklist: • • • • • • • • • • Are my people ready. willing. Are our strategic business initiatives supported by CRM? Have we identified CRM benefits? Are there opportunities to improve customer relationships? Has management expressed commitment to fund CRM? . and able to use CRM once it’s deployed.

reorganization.)? Is there a general understanding of all the requirements by all of the stakeholders? Are we willing to empower key customerfacing staff based on increased information and improved processes? Are we willing to implement incentives or modify employee compensation to encourage CRM adoption? Is there consensus that CRM is a process. etc.42 • • • • • • Have customers agreed to modify their own business processes (that might be affected by our change) as a result of our implementing CRM? Do we have an overall willingness to sustain some sort of organizational impact (i. and not a one-time-only activity? Writing the CRM Plan . additional staffing.e.

and technical terms. ask help and suggestions from others. • • • • • • • • • • You must know the importance of the plan.43 You are now ready to write the CRM plan. Use it only if it is absolutely unavoidable. Write in your own style. so that it tells everyone that you created it. abbreviation. Double check the spelling. here are some tips for writing a successful plan. Provide enough supporting information. Keep a framework in your mind so that you never end up wandering in the desert. . It consumes time and twists minds. Deliver it at the right time to the reader. Do some research. But before you get started. what should be included in your plan and what should be excluded. Present your plan in a most enthusiastic and genuine way. Use simple sentences with easy to understand words. Avoid more technical data.

The project goals and objectives A Needs Assessment o Why is the project needed? What situation will it solve? Deliverable Elements o Specifically what will be accomplished? What will be delivered? . this can include examples and situations. what should go in your plan? What Goes In The PLAN? Your plan needs to include: • • • • • An Introduction Project Rationale o Your reasons for the project to be implemented.44 Now.

45 • • • Implementation Schedule Budget Desired Outcomes/Metrics A Sample Plan Creating and organizing your CRM plan can help you with the implementation of CRM in your organization. Things you will want to include: • Mission Statement o A clear statement of your company’s long-term mission as it applies to the customer o Try to use words that will help direct the growth of your company. . but be as concise as possible.

market shifts. with their skills as they apply to CRM. o Review those changes in market share. o State opportunities that CRM will provide.46 • • • • The Team o List key management and personnel by name. costs. and define the nature of product/service opportunities created by those problems. pricing. or competition that provide the opportunity for your company’s success as it pertains to customers. Market Summary o Market: past. CRM Opportunities o State customer problems. & future as it applies to your customers. Business Concept . present. leadership. o Include previous accomplishments to show these are people with a record of success. players.

Goals & Objectives o Five-year goals o State specific measurable objectives (metrics). o State market share objectives as they pertain to CRM. Resource Requirements Technology Requirements Personnel Requirements o . o Outline your company’s competitive advantage. pricing assumptions. o State revenue/profitability objectives as they pertain to CRM. Competition o Summarize what your competition is doing regarding CRM.47 • • • • • • Summarize key technology and concepts on which your CRM strategy is based. and reviews yearly expected sales and profits for the next three years o Present assumptions of improvements caused by CRM. Financial Plan o High-level financial plan that defines financial model.

Isolate key decisions and issues that need immediate or nearterm resolution. . Key Issues o Near term . o Long term . particularly if seeking funding.48 • • • External requirements o Products/services/technology required to be purchased outside company Risks & Rewards o Summarize risks of proposed project. o Summarize how risks will be addressed. o Summarize rewards and estimate expected pay-off. o State consequences of decision postponement.Isolate issues needing long-term resolution.

. the creation of a CRM process in your business starts with the first step... .. Here are some things to consider as you move toward implementation.its implementation. There are a multitude of cases where businesses have taken all precautions to do everything by the book implementing CRM and still have not reaped the benefits.49 Chapter 4 – Implementing CRM It Starts With The First Step As with any journey.

or lack of it. it will show up in your efforts and work ethic. will be carried over to the customer during the interactions with the staff. Be Aware of Behavioral Expectations . That means making sure everyone knows that we want to stress making our relationships with our customers as strong and as comfortable as can be. This belief. If you treat it like a chore.50 It's NOT Just A Company Mandate The important thing here is to incorporate a CRM culture throughout your organization.

Make your efforts sincere and heartfelt.51 Customers today are keenly aware (and for some it is very irritating) when they feel that you and your staff are not sincere in your actions. A company with a strong CRM strategy molds and refines the direction of that . but only if any related processes (such as delivery. CRM is Merely A Part of A Larger Strategy A CRM process can offer real and tangible benefits. and sales follow-up) adhere to its principles. If your customer knows that you have "CRMesque" ambitions. his/her expectations are going to rise with that knowledge.

52 company when a CRM culture is encouraged. It is in the small stuff that the customer finds the best of experiences. . Do Sweat the Small Stuff One reason most CRM initiatives fail to score on the customer experience front is that management thinks by installing a CRM strategy it will take care of itself. CRM works best when the details are managed. This trickles from the top down.

. Size and Style Matter Know what it will take to foster cross-department customer-centric programs in your organization.53 Start Early And Give It Time Bringing in cultural change is a long-term process. Start the learning/re-learning process early into the CRM implementation. It takes time and effort to replace existing prejudices and beliefs that are concretely instilled and to replace them with new thoughts and ideas.

54 The path will be different for an entrepreneurial setup where departments enjoy autonomy from a company where information largely flows topdown in a linear movement. . This makes cultural shifts less jarring and disruptive. Keep At It Implementing CRM is a dynamic process in which new observations and information can affect many existing practices in a business. Positive information should be reinforced and successful efforts should be replicated. Accentuate the positive.

55 Reward Performance Develop metrics to measure performance. . training. Compensate the employees for the extra effort they've made to blend in with the new culture. Performance recognition when applied sends out a powerful message to your employees and is a great way to establish a long-term CRM culture. and education.

This information allows you to tweak your process as you go along. What are good suggestions that can help in simplifying the processes and improving efficiency as well? . Ask them for periodic evaluations of the changed processes toward developing a CRM culture.56 Listen To Your Employees Your staff that interfaces with your customers on a regular basis is your best source of pertinent information regarding customer behavior and their demands. Involve them as much as possible in the process. So. encourage your employees to speak up.

thoroughly pervasive process from the top down. To that end. . CRM should be adopted across all departments and not just on the sales front.57 Make It Pervasive Putting your customer at the center of your business approach should be a non-stop. department heads need to buy-in into the process of CRM and propagate down to their staff and subordinates.

they will gladly embrace it. as change is rarely welcomed. but when they see the benefits. Your employees may drag their feet. So what are the most important steps in a successful CRM implementation? .58 Key Steps Implementing CRM is more about implementing a new way of life for your business.

Sales and marketing will be a part of . Directly Impacted Employees Those most familiar with the processes impacted by the firm’s CRM initiative should also be included. Include someone from executive management who will keep other firm leaders interested and up-to-date on progress and milestones.59 A Team Pulling Together The first thing you want to do is make sure you develop an implementation team that represents the entire organization. Three important areas of the firm that should be represented are: Management Commitment from the firm’s leadership is vital to the success of any initiative.

you want someone who has past experience with the selected application and its implementation. He or she can make suggestions and help the team apply the system to existing processes. A critical eye and questioning mind will help improve the firm’s existing . Ideally. Review/Improve Existing Processes Your implementation team should first complete a process review. and billing staff. Likely groups include: customer service staff. shipping & delivery staff.60 this group. but it is likely that you will identify others during your planning stage. These individuals can provide critical input. CRM Process Expert This person can help you fully exploit the potential of your new CRM tool.

Milestones ensure that the project stays on track and allows the CRM process to evolve over time. traceable and can be verified against requirements. Split each of these into manageable milestones so that progress is visible. The CRM process should be designed to fit the newly refined processes.61 processes immensely. Set Reasonable Milestones The CRM processes you intend to address should deal with specific business needs. Conduct Regular Reviews Conducting a review after each milestone will .

Employee Buy In Employee adoption is key to successfully implementing CRM in your business. We will discuss training and communication in a minute. .62 enhance implementation as it moves forward. and training provides the roadmap to getting users on board. Make sure to offer separate training sessions for key users to help them embrace CRM. Instruct users how to work with the process. The team should learn from its missteps and build on its successes.

Adapt If employees are not following the CRM process. it may be that it is not meeting their needs or the . The leadership team can use management reports to hold staff accountable for using the process. The team should ensure that documented processes are followed.63 Monitor Tracking usage is also important to a successful CRM implementation.

Follow up and determine if you need to adapt the process or training to meet evolving needs. They are. Key Considerations Overall there are some key considerations that you will want to take a look at before proceeding on implementation..64 process is broken.. Process Perception/Ownership .

keep the following in mind: • • Encourage users who understand the firm’s day-to-day business processes to offer input during design and development of the process. On the flip side. business users cannot implement the solution alone.65 CRM implementation unites a variety of business processes. clear and regular . Communication and Training Like any initiative in the firm. As such. You need to ensure that your existing resources are capable of complementing the functionality desired of the application before finalizing any plans.

Develop targeted training by organizational role to maximize interest and retention. Toward that end: • • • Keep everyone informed about time and input requirements throughout the course of the project. This .66 communication is critical to the success of a CRM implementation. An end-user’s attention is related to the relevancy of the material to his or her job function. those better suited for specific employees should be conducted one-on-one. Leadership Involvement The involvement of at least one (and preferably several) management personnel during CRM implementation is important to its success. While there will certainly be firmwide training topics.

Toward that end: • Expectations need to be clearly communicated and enforced . An “If it’s not in our CRM process—it didn’t happen” mentality should be promoted from the top down concerning all client communications and new business development efforts.67 should make end-user expectations clear and promote its importance to the firm as a whole. Employees need to be held accountable Management should proactively review how the CRM process is being used.

It includes: • Phased Approach (logically defined and separated based on functional areas) – Decide upon and adhere to requirements addressed throughout all phases. Push wish list items into subsequent phases – New requirements and needs may arise during design and development of the current implementation phase. This functionality is designed so that the process is easy to follow. Small requests can quickly expand into a large list that will consume resources.68 • Employees need to understand what is expected of them. • . Understanding Functionality Deliver a clear and concise scope of functionality.

Just keep in mind that you are trying to modify your employees' behaviors so that they adopt a 100% "customer first" attitude.69 Customer First Attitude As you can see implementing a comprehensive CRM process can be a bit daunting. . But in actuality it is fairly straight forward.

convert them into customers. more than anything it's about the corporate and employee attitude toward it that will continue to make it effective. So Rule #1 is to make sure your attitude is is right! How do you do that? . and keep existing customers satisfied and loyal. and technology to help you attract sales prospects.70 Chapter 5 – Maintaining CRM It's All About The Attitude CRM is a business strategy that blends processes. people. Once CRM is installed.

in your customer. . But attitude is not just about you.71 Why Attitude Counts If You Want Loyal Customers Poor service has a direct impact on new and repeat sales. That is why your attitude is so important. what his or her attitude is about you and your company. It is also detecting. It impacts your delivery of service. and it directly effects how your customers feel about you and whether or not they will pass your name along to their friends and associates.

but this is a myth! . People are quick to believe that repeat purchase equals loyalty..... which is. This is done by allowing your business to sense and act on your customers' attitudes toward you and your products and services.in fact CRM by itself is worthless.72 It's Really About Employee Behavior CRM doesn't do it all. CRM set out to unlock the secrets of loyalty by examining historical purchasing behavior in order to predict future purchasing behavior. in your customers' best interest. It is about how your people behave. hopefully.

most repeat purchases are simply a lack of other choices.. Unhappy customers will change their buying patterns when given an alternative. In fact.it makes the customer's experience one that is enjoyable and memorable. Make a Real Impact Making a real impact on customer experience will derive more benefit to your business than anything else you can do. .. That is why attitude (yours and your customers) is so important.73 This is readily accepted because companies want to believe that they can predict purchasing behavior from the data collected.

Getting the Timing Right There is a discrete amount of time between a change in attitude and a change in behavior.’ but how many actually ask their customers what they think and then act on it in order to retain them? This helps you gauge their attitude.74 Why? Because all behavior. . You can run out of time. including purchasing decisions. whether it be five minutes. is directed by attitude. But the clock is not endless. Companies talk about facilitating the ‘voice of the customer. five hours or five weeks.

It determined that feedback collected immediately after an event is 40% more accurate than feedback collected 24 hours after the event. And once that customer has gone elsewhere. the most important aspect of feedback is timing. the more time it has to intervene to prevent a customer from going elsewhere. This heads off problems down the line and your . Handle It Quickly Any indication of customer dissatisfaction must be handled as quickly as possible after they provide feedback. in order to turn them around. you probably won't get them back According to analysts at Gartner.75 The sooner a business learns of a change in attitude on the part of the customer.

an emotion. When you establish trust and credibility with a customer. What Does It All Mean? CRM is a concept that should promote a feeling. a sense that the customer gets that you care about them.76 customer will appreciate how much you value them. The customer trusts that you will provide the product or service you promoted.. Put simply. yet it has extremely tangible results associated with it.. you are laying the groundwork for a longterm relationship.increased business. and profits. and you trust that the customer will pay . It is intangible at best. simply because you dealt with their problems so quickly. this relationship is based on mutual and reciprocal trust and commitment. revenue.

. Do whatever you must to promote that feeling. These elements have underlying psychological traits. The more this happens..77 for it and use it properly.. the deeper the relationship becomes. Remember that attachment is a feeling one person has about another. They are. There are seven key elements that strengthen this relationship. Attachment Customers should become attached to you and want to continue to do business with you to the exclusion of competitors.

Sometimes they cannot express it. you will stop throwing your .78 Intrinsic Satisfaction Customers must "feel" they are satisfied with you. but they know it when they feel it. Work to cultivate the feelings of satisfaction so that the relationship grows. Motivation When you realize that motivation comes from within the person.

an unmet need or unfulfilled expectations. and this mindset determines the depth and breadth of their relationships.79 money away at offers that have no chance of creating repeat purchases. Your relationship building efforts must place you in the forefront of their minds so they come to you when this motivation stirs them to action. Perspective People maintain a certain mindset about each other. What perspective and perception do your customers have in relation to their relationship with you? . and their motivation comes from an unsolved problem. People will buy from you only when they are motivated to do so.

A positive attitude is catching. and recognize their achievements (personal and business). Reward them for positive behaviors. but it bears repeating here. applaud them for positive results (e. This is another feeling or thought process that is reciprocal. just as a negative attitude is. You must maintain a positive attitude towards your customers so they remain positive with you.g. Which "cold" do you want to catch? .80 Attitude We've already discussed this. performance improvements because they used your product)..

Relationships just happen. You need to focus more on the R in CRM than the M. Trust is . Are you? Trust Trust is the foundation of any relationship. They are not a process or a technology. You can't manage relationships.81 Commitment People who have a relationship are psychologically and emotionally committed to each other. we have no relationship. Without trust. and you must be committed to making them work.

and from keeping promises. Keep it Going You have spent a lot of time and effort installing a CRM process that is working. trust is a two-way street. you have to earn it and give it first before you get it. from meeting and exceeding expectations (both stated and unstated). and they are critical to every psychological contract. Trust leads to respect. . Just like respect. justice. All these are feelings. Keep it going by following the guidelines in this lesson. Plus. fairness.82 born from credibility and reliability. and empathy.

83 Chapter 6 – CRM Software The Power of Software We mentioned earlier that the term CRM has become synonymous with software applications. no amount of money spent on CRM software is really going to help you. This will not be a an in-depth . In other words. CRM software only helps you manage that process. But we also said that underlying all of that were the principles of a viable business process. This lesson will focus on a broad overview of software and how it can impact each area of CRM. if your customer-oriented business process is not good. Some of this software can be expensive and other solutions are less so.

.84 discussion. front-of-house customer service. and they vary in their approach to CRM. CRM is not just a technology but rather a comprehensive. This includes policies and processes. marketing. However. customer-centric approach to an organization's philosophy of dealing with its customers. as the topic goes far too deep to be covered adequately in an introductory course. as mentioned previously. Hence. systems and information management. it is important that any CRM implementation considerations stretch beyond technology toward the broader organizational requirements. Various Software Strategies There are numerous CRM software packages available. employee training.

Some companies consider a CRM strategy only to focus on the management of a team of salespeople. marketing.85 The objectives of a CRM software strategy must consider a company’s specific situation and its customers' needs and expectations. CRM software has for some time been seen to play an important role in many sales process engineering efforts. However. . complexity. and by identifying the organization's most profitable customers. From this perspective. project management. and scope. improving product offerings (by better understanding customer needs). other CRM strategies can cover customer interaction across the entire organization. CRM software strategies can vary in size. Many commercial CRM software packages provide features that serve the sales. improving customer retention. and finance industries. Information gained through CRM initiatives can support the development of marketing strategy by developing the organization's knowledge in areas such as identifying customer segments. event management.

86 The following sections highlight some of the various types of CRM software.g. Reaching out to the customer at the right time and at the right place is preferable. The contact history provides staff members with immediate access to important information on the customer (products owned.). e. to sales. eliminating the need to individually obtain this information directly from the customer. . prior support calls etc. and staff can retrieve customer information as necessary. Operational CRM software Operational CRM software provides support to "front office" business processes. Interactions with customers are generally stored in customers' contact histories. marketing and service staff.

g. cross-selling. e. add-on selling .87 Operational CRM software processes customer data for a variety of purposes: • • • • Managing campaigns Enterprise Marketing Automation Sales Force Automation Sales Management Systems Analytical CRM Software Analytical CRM software analyzes customer data for a variety of purposes: • • Designing and executing targeted marketing campaigns Designing and executing campaigns. customer acquisition. upselling.

g. pricing. It is at the analytical stage that the importance of fully integrated CRM software becomes most apparent. Sales Intelligence CRM software . financial forecasting and customer profitability analysis) Analytical CRM software generally makes heavy use of data mining and other techniques to produce useful results for decision-making. the better its predictions and recommendations will be.g.88 • • Analyzing customer behavior in order to make decisions relating to products and services (e. product development) Management information system (e. the more information that the analytical software has available for analysis. Logically speaking.

Campaign management functions include: .89 Sales Intelligence CRM software is similar to Analytical CRM software. but is intended as a more direct sales tool. Features include alerts sent to sales staff regarding: • • • • • • Cross-selling/Up-selling/Switch-selling opportunities Customer drift Sales performance Customer trends Customer margins Customer alignment Campaign Management Software Campaign management software combines elements of Operational and Analytical CRM software.

g.g. on special offers)to selected recipients using various channels (e. e-mail. and analyzing campaign statistics. such as sales. Staff members from different .90 • • • Target groups formed from the client base according to selected criteria Sending campaign-related material (e. technical support and marketing. telephone. SMS. including tracking responses and analyzing trends Collaborative CRM Software Collaborative CRM software covers aspects of a company's dealings with customers that are handled by various departments within a company. storing. post) Tracking.

suppliers and partners by using new information systems such email. Simple CRM . Collaborative CRM software facilitates communication between customers. links and data bases. This also plays a role of data distributor within customers. For example. feedback received by customer support agents can provide other staff members with information on the services and features requested by customers. producers and partners.91 departments can share information collected when interacting with customers. Producers can use CRM information to develop products or find new market. Collaborative CRM's ultimate goal is to use information collected by all departments to improve the quality of services provided by the company.

Simple CRM software systems breakdown the traditional CRM system to focus on the core values--managing contacts and activities with customers and prospects. organizational unit. Many times they focus on satisfying the needs of a particular marketplace niche. These systems are designed to create the most value for the immediate end user rather than the organization as a whole. As described above there are countless supplemental features and capabilities. At their core. or type of user rather than an entire organization. Social CRM . these CRM software tools are designed to manage customer relationships.92 A relatively new spinoff of the traditional CRM software model first appeared in 2006.

Other emerging capabilities include messaging. They must be monitored for real-time marketplace feedback and trends. but there are still many skeptics. the rapid growth in social media and social networking forced CRM product companies to integrate "social"features into their traditional CRM software systems.93 Beginning in 2007. and other analytics. sentiment analysis. typically built into the system dashboard. Many industry experts contend that Social CRM is the way of the future. Some of the first features added were social network monitoring feeds (ie Twitter timeline). Software Implementation Issues . Top CRM minds agree that online social communities and conversations carry heavy consequences for companies.

. significant preplanning is essential for smooth roll-out. An effective tool for identifying technical and human factors before beginning a CRM project is a pre-implementation checklist. This evaluation is critical to determine the level of effort needed to integrate this data. Equally critical is the human aspect of the implementation. If a company's CRM software strategy is to track life-cycle revenues. A checklist can help ensure that any potential problems are identified early in the process. Many CRM software project "failures" are also related to data quality and availability. A successful implementation requires an understanding of the expectations and needs of the stakeholders involved. "Data cleaning" is a major issue.94 Because of the company-wide size and scope of many CRM software implementations. This preplanning involves a technical evaluation of the data available and the technology employed in existing systems. An executive sponsor should also be obtained to provide highlevel management representation of the CRM software project.

service etc. Data must be extracted from multiple sources (e. this must be reflected in all business processes.). which requires an integrated. Privacy and Data Security Issues One of the primary functions of CRM software is to collect information about customers. finance.95 costs. departmental/divisional databases such as sales. logistics. supply chain. Data from other systems can be transferred to CRM software systems using appropriate interfaces.g. and interactions between individual customers. manufacturing. margins. a company must consider the desire for customer . comprehensive system in place with well-defined structures and high data quality. When gathering data as part of a CRM solution.

96 privacy and data security. as well as the legislative and cultural norms. . Some customers prefer assurances that their data will not be shared with third parties without their prior consent and that safeguards are in place to prevent illegal access by third parties.

97 Chapter 7 – A CRM Scenario Start With You Even though you walk through the door of your office every day — and we assume because you’re enrolled in this course that you spend some. of your time trying to figure out how to handle customer interactions — you probably forget (at least for the 8 to 20 hours that you work) that you are a customer. That very information affects how you should be thinking about handling the interactions with your customers. Read our lips: You are a customer! . if not all.

98 This means that you. So when you buy stuff. This means that the last interaction you had with a company. have a personal-value chain. So if your last experience with a company was bad. as well as a history that sculpted those behaviors and emotions. impacts the interactions that you are currently having. as a customer. Your customer thinks the same way! . you purchase according to a complex set of behaviors and emotions. regardless of whether it’s a company that you’re actively buying from or not. the odds increase that you won't do further business with them. That personal-value chain consists of the effects that each and all of your interactions have on each and all of your interactions.

How much more likely are you to abandon that purchase because of your unpleasant experience with the cell-phone provider? Probably likely.99 What If This Happened to You? In addition. so that the purchase you were attempting to make seemed to take an incredibly long time. bad experiences from other companies impact your customers' attitudes as well. . is it?) and then began to buy something online at a site that had a problem. think about how you would react! You just finished a call with a rotten customerservice representative from your cell-phone provider (not too much of a stretch. Again.

The Customer is King CRM is focused on a unified approach to the customer. As we have discussed. technologies. or if the call had been very pleasant? Considerably less likely. systems and culture help a company manage their customer’s activities and improve methods for customer acquisition. We don't know what hidden trials our customers have gone through prior to contacting us! CRM helps us to stay on our toes at all times. its processes. programs. don't you think? That is why we have to be really careful with our own customer service.100 What if you hadn't made that call at all. retention and thus increase loyalty. .

. Unfortunately in those types of organizations. In many organizations. How you relate to your customers is vital because it can impact everything else! In a CRM driven company.101 In short. sales is king (because with sales you make no money). CRM is driven by a customer-centric set of processes. the Customer is King! Footloose . when in fact. the customer is not king.An Example Footloose is a small chain of shoe retail stores in the southeastern part of the United States. he or she should be. They also have an online store.

Customer Acquisition Cost To acquire new customers. The result is a calculation of acquisition cost per customer. Footloose employs a number of offline and online marketing techniques. it is common that the cost to . They track the cost of all marketing efforts and apply that expense against the number of new customers acquired. and Footloose compares the value of this order against their average acquisition cost for new customers.102 Let’s look at this fictional company and see how they might apply CRM techniques to several areas of their business. Each new customer completes an order. In most businesses.

Their CRM efforts told them this. In other words. Footloose places a priority on building rapport with all new customers to encourage repeat sales. the company actually loses money on their recruiting effort. Customer Life-time Value . So. but their average new customer order is only $79. In the case of Footloose. The sales for each customer are tracked in a database profile to create a projected life-time value for all customers with similar attributes.103 acquire a new customer exceeds the profit contributed by that customer’s initial order. their average customer acquisition cost is a healthy $90. unless a new customer makes a repeat purchase.

Footloose has learned from customer profiling. product. online advertising. that women from 25 to 49 years old are their best prospects and customers. Customer life-time value is also a useful benchmark to decide what efforts are most effective in building lasting customer relationships. who come from online advertising. CRM helps you to determine each customer's value. For example. and other attributes.. .104 Do you remember we discussed the value customers have on your business? Some customers simply aren't that valuable to you. Footloose has learned that women aged 30 to 39. The company segments these customers by marketing source.. whether the customer came from direct mail. These segments are then further subdivided by age. This helps the company tailor future advertising where they receive the best return on their investment. income. for example. are likely to order more often and spend more than other customer groups. or a magazine ad.

but it is very important. If a new customer order exceeds $200. Using CRM techniques. the company tracks the cost of these calls against future orders to confirm whether the $200 threshold is cost effective. a customer service representative will call that customer after one week to see if the products purchased met their expectations. new customers whose orders meet the expected $79 average receive a free scarf in their order as a surprise thank you gift. Footloose uses a number of CRM techniques.105 Building Customer Relationships In the fast paced world of retail. it is often hard to build lasting customer relationships. . To better service customers and build long-term customer relationships. For example.

106 All new customers who opt into a permissionbased email list in their stores or on the website receive a discount offer. within 45 days. . depending upon the season of the year. Footloose offers optional paid service benefits to certain customers. This email offer comes earlier if near the holiday season.

107 .

often busy business women. and then make recommendations on specific ensembles. This service includes recommendations for new styles every season. The personal shopper helps individual customers. customer relationship areas. CRM has helped Footloose in several key. inventory their wardrobe. As you can see.108 One such service is a personal shopper. .

But thinking about CRM in primarily technological terms is a mistake. Good customer relationships are at the heart of business success. A more useful way to think about CRM is as a strategic process that will help you better . These good relationships are people driven.109 Chapter 8 – What Did You Learn? In Summary CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. Over the last ten years there have been many software companies that have offered software solutions to help streamline the CRM process.

. CRM starts with your company paying attention to your customers. but you should always remember that making your company customer-centric is the key to the successful management of your customer relationships. use them .. There are many software tools available to help you with CRM. We call this having a customer-centric culture in your company.putting them first.110 understand your customers’ needs and how you can meet those needs and enhance your bottom line at the same time. This strategy also depends on bringing together lots of pieces of information about customers and market trends so you can sell and market your products and services more effectively. particularly if you are operating a small company or business. Now it is up to You! Take all of your valuable tools you've learned here. go out there into the workplace. it is by no means a necessary tool. And while software can help in all of this.

111 and enjoy the results! CRM can arm you with what you need to provide awesome customer service! .

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