The evolution of customer relationship management: From a market of millions to a million markets of one.
Today, consumers are more educated, better informed, more technology savvy, and hence, more demanding in the products and services they buy. Couple this with increased competitive offerings in the marketplace, with little or no differentiation, and what many marketers face is a new reality where consumers have more purchasing power than ever before. So how do you attract profitable customers? How do you hold on to your customers who are buying from you today but are showing signs of defecting to the competition? And how do you figure out which products and services you should bundle together to increase customer profitability? These are the challenges that business managers face today. For example, a communications services provider identifies a segment of high profitable, technology savvy, upper income customers and prospects. It then studies their behaviour, and better understands the types of services they want. The company next bundles a convenience package of products and services under a single name, a single marketing campaign, and what's more, a single bill. They would very effectively meet that segment's complete communications needs and foster customer loyalty. Enter Customer Relationship Management or CRM. Chances are you've heard about it, and perhaps your company has a CRM program in place. It's really not a new idea, in that any good company, over the years, has had to figure out how to build relationships with its customers that lead to brand loyalty. What seems to be new is that there is an emerging set of tools, especially data information-based tools, that now allow organizations to capture and analyze the large volumes of detailed data needed to better understand their customers. The end result: you are able to treat different customers differently. The goal in CRM is to evolve from a mass marketing model, which was spurred on by a product-centric marketing structure, to dealing with each customer as if they were your only customer. This is a new way of thinking for many companies with thousands, even millions, of customers. Managing customer relationships successfully means learning about the habits and needs of your customers, anticipating future buying patterns, and finding new opportunities to add value to the relationship. Successful companies make the relationship something the customer values more than anything else they could receive from the competition. Your company can do this by looking at your experience with customers, not only with transactions and demographics, but also with every interaction, including a web site visit, a
phone call to your call centre, and a response from a direct mail campaign. By building the data and information technology architecture around the customer, you can ensure that they enjoy a seamless and rewarding expe rience when doing business with your company. So how do you manage each customer relationship individually? As a marketing organization, you need to build a system which allows you to track, capture, and analyze the millions of customer activities, both interactions and transactions, over a long period of time. With this knowledge, you can then createpromotions, develop new products and services, and design communication programs that attract, reward and hence retain your customers. But what's fundamental is that only through operational excellence and technology leadership can your organization predict and maximize the value of each customer relationship. For example, a bank can use data warehousing and data mining technologies to learn from the millions of transactions and interactions with their customers and anticipate their needs. Based on consumer behaviour and attitude patterns identified, the bank can then determine a highly effective segmentation plan whereby customers are scored or flagged based on predetermined criteria. For example: what would be the risk of leaving the bank to go to the competition, which communication channel do they prefer, what is the probability the customer will buy a service or product. This knowledge then helps the bank to develop marketing programs that make sense to each customer segment, support cross-selling and customer retention programs, help the staff understand how to maximize the value of each customer's interaction with the bank, and deliver a consistent branding message by aligning products and services within each channel. To sum up, the key ingredients to creating a successful CRM system include: * An enterprise data warehouse that captures all of a customer's history including purchases, preferences, and promotions. * Customer interaction channels that allow you to reach your customers more effectively and efficiently, where and when they want to be reached. * A data warehouse that enables customer service personnel real-time access so they can use it to interact with their customers. * A long-range budget, upper management support, and appropriate resources. * Segmentation of customers by profitability. Customer Relationship Management through data warehousing is really about taking a long-term approach to building relationships with customers. Back in the good old days, the butcher, baker, or
banker would know their customer base from seeing them on a daily basis and learning their preferences based on the relationship they shared with the customer. CRM is really about using the powerful tools data warehousing and data mining technologies have to offer, not only to achieve the personal relationships businesses once had with customers, but even to predict and serve their future needs!
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Customer relationship management Business benefits of CRM
Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits. A major benefit can be the development of better relations with your existing customers, which can lead to:
• • • •
increased sales through better timing by anticipating needs based on historic trends identifying needs more effectively by understanding specific customer requirements cross-selling of other products by highlighting and suggesting alternatives or enhancements identifying which of your customers are profitable and which are not
This can lead to better marketing of your products or services by focusing on:
effective targeted marketing communications aimed specifically at customer needs a more personal approach and the development of new or improved products and services in order
to win more business in the future
Ultimately this could lead to:
• • •
enhanced customer satisfaction and retention, ensuring that your good reputation in the increased value from your existing customers and reduced costs associated with supporting and improved profitability by focusing on the most profitable customers and dealing with the
marketplace continues to grow servicing them, increasing your overall efficiency and reducing total cost of sales unprofitable in more cost effective ways Once your business starts to look after its existing customers effectively, efforts can be concentrated on finding new customers and expanding your market. The more you know about your customers, the easier it is to identify new prospects and increase your customer base. Even with years of accumulated knowledge, there's always room for improvement. Customer needs change over time, and technology can make it easier to find out more about customers and ensure that everyone in an organisation can exploit this information.
Customer relationship management is a broadly recognized, widely-implemented strategy for managing and nurturing a company’s interactions with clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.  Once simply a label for a category of software tools, today, it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs.
Benefits These tools have been shown to help companies attain these objectives: Streamlined sales and marketing processes Higher sales productivity Added cross-selling and up-selling opportunities Improved service, loyalty, and retention Increased call center efficiency
Higher close rates Better profiling and targeting Reduced expenses Increased market share Higher overall profitability Marginal costing
Challenges Tools and workflows can be complex to implement, especially for large enterprises. Previously these tools were generally limited to contact management: monitoring and recording interactions and communications. Software solutions then expanded to embrace deal tracking, territories, opportunities, and at the sales pipeline itself. Next came the advent of tools for other client-facing business functions, as described below. These technologies have been, and still are, offered as on-premises software that companies purchase and run on their own IT infrastructure. Perhaps the most notable trend has been the growth of tools delivered via the Web, also known as cloud computing and software as a service (SaaS). In contrast with traditional on-premises software, cloud-computing applications are sold by subscription, accessed via a secure Internet connection, and displayed on a Web browser. Companies don’t incur the initial capital expense of purchasing software; nor must they buy and maintain IT hardware to run it on. Despite all this, many companies are still not fully leveraging these tools and services to align marketing, sales, and service to best serve the enterprise. Often, implementations are fragmented; isolated initiatives by individual departments to address their own needs. Systems that start disunited usually stay that way: Siloed thinking and decision processes frequently lead to separate and incompatible systems, and dysfunctional processes. Types/variations Sales
A sales force automation (SFA) system provides an array of capabilities to streamline all phases of the sales process, minimizing the time that sales representatives need to spend on manual data entry and administration. This allows them to successfully pursue more clients in a shorter amount of time than would otherwise be possible. At the heart of SFA is a contact management system for tracking and recording every stage in the sales process for each prospective client, from initial contact to final disposition. Many SFA applications also include insights into opportunities, territories, sales forecasts and workflow automation, quote generation, and product knowledge. Newly-emerged priorities are modules for Web 2.0 e-commerce and pricing.
Marketing Systems for marketing (also known as marketing automation) help the enterprise identify and target its best clients and generate qualified leads for the sales team. A key marketing capability is tracking and measuring multichannel campaigns, including email, search, social media, and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. As marketing departments are increasingly obliged to demonstrate revenue impact, today’s systems typically include features for measuring the ROI of campaigns. Customer
Service and Support
Recognizing that service is an important differentiator, organizations are increasingly turning to technology platforms to help them improve their clients’ experience while aiming to increase efficiency and minimize costs. Even so, a 2009 study revealed that only 39% of corporate executives believe their employees have the right tools and authority to solve client problems.“. The core for these applications has been and still is comprehensive call center solutions, including such features as intelligent call routing, computer telephone integration(CTI), and escalation capabilities. Analytics Relevant analytics capabilities are often interwoven into applications for sales, marketing, and service. These features can be complemented and augmented with links to separate, purpose-built applications for analytics and business intelligence. Sales analytics let companies monitor and understand client actions and preferences, through sales forecasting, data quality, and dashboards that graphically display key performance indicators (KPIs). Marketing applications generally come with predictive analytics to improve segmentation and targeting, and features for measuring the effectiveness of online, offline, and search marketing campaign Web analytics have evolved significantly from their starting point of merely tracking mouse clicks on Web sites. By evaluating “buy signals,” marketers can see which prospects are most likely to transact and also identify those who are bogged down in a sales process and need assistance. Marketing and finance personnel also use analytics to assess the value of multi-faceted programs as a whole. These types of analytics are increasing in popularity as companies demand greater visibility into the performance of call centers and other support channels, in order to correct problems before they affect satisfaction levels. Support-focused applications typically include dashboards similar to those for sales, plus capabilities to measure and analyze response times, service quality, agent performance, and the frequency of various issues.
Integrated/Collaborative Departments within enterprises—especially large enterprises—tend to function in their own little worlds.
Traditionally, inter-departmental interaction and collaboration have been infrequent and rivalries not
uncommon. More recently, the development and adoption of the tools and services has fostered greater fluidity and cooperation among sales, service, and marketing. This finds expression in the concept of collaborative systems which uses technology to build bridges between departments. For example, feedback from a technical support center can enlighten marketers about specific services and product features clients are asking for. Reps, in their turn, want to be able to pursue these opportunities without the time-wasting burden of re-entering records and contact data into a separate SFA system. Conversely, lack of integration can have negative consequences: system isn’t adopted and integrated among all departments, several sources might contact the same clients for an identical purpose. Owing to these factors, many of the top-rated and most popular products come as integrated suites. Small
Basic client service can be accomplished by a contact manager system, an integrated solution that lets organizations and individuals efficiently track and record interactions, including emails, documents, jobs, faxes, scheduling, and more. This kind of solution is gaining traction with even very small businesses, thanks to the ease and time savings of handling client contact through a centralized application rather than several different pieces of software, each with its own data collection system. In contrast these tools usually focus on accounts rather than individual contacts. They also generally include opportunity insight for tracking sales pipelines plus added functionality for marketing and service. As with larger enterprises, small businesses are finding value in online solutions, especially for mobile and telecommuting workers. Social
Social media sites like Twitter and Facebook are greatly amplifying the voice of people in the marketplace, and are predicted to have profound and far-reaching effects on the ways companies manage their clients. This is because people are using these social media sites to share opinions and experiences on companies, products, and services. As social media isn’t moderated or censored, individuals can say anything they want about a company or brand, whether pro or con. Increasingly, companies are looking to gain access to these conversations and take part in the dialogue. More than a few systems are now integrating to social networking sites. Social media promoters cite a number of business advantages, such as using online communities as a source of high-quality leads and a vehicle for crowd sourcing solutions to client-support problems. Companies can also leverage client
stated habits and preferences to personalize and even “hyper-target” their sales and marketing communications. Some analysts take the view that business-to-business marketers should proceed cautiously when weaving social media into their business processes. These observers recommend careful market research to determine if and where the phenomenon can provide measurable benefits for client interactions, sales, and support. Non-profit
Systems for non-profit and membership-based organizations help track constituents and their involvement in the organization. Capabilities typically include tracking the following: fund-raising, demographics, membership levels, membership directories, volunteering and communications with individuals. Many include tools for identifying potential donors based on previous donations and participation. In light of the growth of social networking tools, there may be some overlap between social/community driven tools and non-profit/membership tools. Strategy Choosing and implementing a system is a major undertaking. For enterprises of any appreciable size, a complete and detailed plan is required to obtain the funding, resources, and company-wide support that can make the initiative successful. Benefits must be defined, risks assessed, and cost quantified in three general areas: Processes: Though these systems have many technological components, business processes lie
at its core. It can be seen as a more client-centric way of doing business, enabled by technology that consolidates and intelligently distributes pertinent information about clients, sales, marketing effectiveness, responsiveness, and market trends. Therefore, before choosing a technology platform, a company needs to analyze its business workflows and processes; some will likely need reengineering to better serve the overall goal of winning and satisfying clients. Moreover, planners need to determine the types of client information that are most relevant, and how best to employ them. People: For an initiative to be effective, an organization must convince its staff that change is
good and that the new technology and workflows will benefit employees as well as clients. Senior executives need to be strong and visible advocates who can clearly state and support the case for change. Collaboration, teamwork, and two-way communication should be encouraged across hierarchical boundaries, especially with respect to process improvement.
Technology: In evaluating technology, key factors include alignment with the company’s business
process strategy and goals; the ability to deliver the right data to the right employees; and sufficient ease of use that users won’t balk. Platform selection is best undertaken by a carefully chosen group of executives who understand the business processes to be automated as well as the various software issues. Depending upon the size of the company and the breadth of data, choosing an application can take anywhere from a few weeks to a year or more. Implementation Implementation
Dramatic increases in revenue, higher rates of client satisfaction, and significant savings in operating costs are some of the benefits to an enterprise. Proponents emphasize that technology should be implemented only in the context of careful strategic and operational planning. Implementations almost invariably fall short when one or more facets of this prescription are ignored: Poor planning: Initiatives can easily fail when efforts are limited to choosing and deploying
software, without an accompanying rationale, context, and support for the workforce. In other instances, enterprises simply automate flawed client-facing processes rather than redesign them according to best practices. Poor integration: For many companies, integrations are piecemeal initiatives that address a
glaring need: improving a particular client-facing process or two or automating a favored sales or client support channel. Such “point solutions” offer little or no integration or alignment with a company’s overall strategy. They offer a less than complete client view and often lead to unsatisfactory user experiences. Toward a solution: overcoming siloed thinking. Experts advise organizations to recognize the
immense value of integrating their client-facing operations. In this view, internally-focused, department-centric views should be discarded in favor of reorienting processes toward informationsharing across marketing, sales, and service. For example, sales representatives need to know about current issues and relevant marketing promotions before attempting to cross-sell to a specific client. Marketing staff should be able to leverage client information from sales and service to better target campaigns and offers. And support agents require quick and complete access to a client’s sales and service history.
Historically, the landscape is littered with instances of low adoption rates. In 2003, a Gartner report estimated that more than $1 billion had been spent on software that wasn’t being used. More recent research indicates that the problem,while perhaps less severe, is a long way from being solved. According to a CSO Insights less than 40 percent of 1,275 participating companies had end-user adoption rates above 90 percent. In a 2007 survey from the U.K., four-fifths of senior executives reported that their biggest challenge is getting their staff to use the systems they’d installed. Further, 43 percent of respondents said they use less than half the functionality of their existing system; 72 percent indicated they’d trade functionality for ease of use; 51 percent cited data synchronization as a major issue; and 67 percent said that finding time to evaluate systems was a major problem.  With expenditures expected to exceed $11 billion in 2010,
enterprises need to address and overcome persistent adoption challenges. Specialists offer these
recommendationsfor boosting adoptions rates and coaxing users to blend these tools into their daily workflow: Choose a system that’s easy to use: All solutions are not created equal. Some vendors offer
more user-friendly applications than others, and simplicity should be as important a decision factor as functionality. Choose the right capabilities: Employees need to know that time invested in learning and usage
will yield personal advantages. If not, they will work around or ignore the system. Provide training: Changing the way people work is no small task, and help is usually a
requirement. Even with today’s more usable systems, many staffers still need assistance with learning and adoption.
Whybusiness adopt CRM
1. Get more out of your established customers. Even when money is tight there are opportunities
to sell more to some of your existing customers. The trick is to use effective techniques and offer the right merchandise at the right time. One of CRM's greatest strengths is that it collects and organizes information about your customers and lets you analyze the data for future opportunities. For example, you can use CRM data to do a needs-based segment analysis of your various classes of customers. Needs-based analysis involves taking the customers' perspective and identifying what they need but aren't buying. Using this information, you can develop a sales strategy that will let you offer products in an appealing way even in economically difficult times. Often this involves packaging new goods and services with products your customers are already buying and offering them at an attractive price or with other incentives.
In the same way, CRM can help you identify the most productive items to sell to your customers. These aren't necessarily the highest-margin items — not if those high-margin items have long sell cycles and require a lot of sales effort. One additional useful metric that is easily derived from CRM data is the profit produced per hour of sales effort for each class of items. Armed with this information, you can craft sales programs which emphasize the products which have the most effect on your bottom line. 2. Identify and concentrate on your best customers. While every customer is important when business is slow, some are worth more than others. By allocating your sales efforts accordingly, you can produce more revenue per sales hour and higher average sales. CRM systems contain tools for analyzing your customer base so you can categorize your customers. Sometimes the analysis will turn up surprising, even counterintuitive, results. The customer who gives you an order on every sales call may not be worth as much as the customer who orders infrequently but buys larger quantities of high-value merchandise, for example. You can also use CRM analytical tools to slice and dice your customer base beyond simply ranking by revenue. For example, you can look at the return per sales hour for each customer. Or you can see which lines are most profitable and which customers are more likely to purchase them. In fact, with a good CRM system and a properly populated sales and customer database, you can find all sorts of not-so-obvious but important relationships. 3. Target your customer development efforts. Just because the economy is in a slump doesn't mean that you should stop trying to attract new customers. However, like everything else in a recession, you want to do it more efficiently. This implies paying closer attention to lead analysis. Which leads are most likely to become customers? What are they likely to purchase? Since in a recession you want to go hunting where the ducks are, you can use CRM information to determine where a lead is in the buy cycle. You may want to concentrate your efforts on the potential customers who are closest to making the buying decision to reap more immediate rewards of your sales efforts. 4. Keep your existing customers loyal. In a recession, existing customers are gold. You want to keep them happy. Customer satisfaction covers a lot of ground, but basically it involves two ideas: keep your promises to customers and also meet their demonstrated needs. CRM can help you with both of these. The most common reason for not keeping promises is forgetting they were made. If you stress to your sales force the importance of entering all agreements made with customers into your CRM system, it's easier for your organization to execute on its promises. Even minor mistakes can make a difference in an economic downturn. If you promise to contact a customer on Tuesday and don't get back to him or her until Thursday, you not only haven't met the customer's expectations, but you have subtly implied how much you value that customer. Enough incidents like that, trivial though they may seem, and the customer is likely to be receptive to a competitor even if he or she can't beat you on price. Likewise, CRM can be used to ensure you're meeting customers' needs as fully as possible. This includes efficient handling of after-sales contacts such as service calls, resolving customer concerns or offering the customer the right mix of products at the right prices.
5. Work smarter, not just harder. Finally, CRM lets your sales and customer support reps work smarter. With better information at their finger tips and best practices codified into your business policies, you can optimize service for your customers and maximize revenue.
Get it right first time
How much do quality failures cost your company? Quality defects have significant costs associated with them - some of the most obvious being money, time, resources, and lost reputation. And programs to eliminate quality defects can be expensive and time consuming. Do you insist on eliminating defects entirely no matter the cost? Or, do you accept that a certain, albeit very small, percentage of defects is acceptable, and just accept the costs and learn to live with them? One of the most influential ideas about this was the notion of "zero defects." This phrase was coined by Philip Crosby in his 1979 book titled, "Quality is Free." His position was that where there are zero defects, there are no costs associated with issues of poor quality; and hence, quality becomes free.
Explaining the Idea
Zero defects is a way of thinking and doing that reinforces the notion that defects are not acceptable, and that everyone should "do things right the first time". The idea here is that with a philosophy of zero defects, you can increase profits both by eliminating the cost of failure and increasing revenues through increased customer satisfaction. Tip: While this will probably be true, it may not be true in every case! "Zero defects" is referred to as a philosophy, a mentality or a movement. It's not a program, nor does it have distinct steps to follow or rules to abide by. This is perhaps why zero defects can be so effective, because it means it's adaptable to any situation, business, profession or industry. The question that often comes up when zero defects is discussed, is whether or not zero defects is ever attainable. Essentially, does adopting a zero defect environment only set users up for failure? Zero defects is NOT about being perfect. Zero defects is about changing your perspective. It does this by demanding that you: • • • Recognize the high cost of quality issues; Continuously think of the places where flaws may be introduced; and Work proactively to address the flaws in your systems and processes, which allow defects to occur.
Zero defects is a standard. It is a measure against which any system, process, action, or outcome can be analyzed. When zero defects is the goal, every aspect of the business is subject to scrutiny in terms of whether it measures up.
When you think about it, we expect zero defects when we are talking about items or services that we use. If you buy a fancy new plasma TV and your pixels start burning by the thousands, you demand satisfaction. When you take the car in for brake service, you expect that the mechanic will install the parts exactly as the manufacturer prescribes. No defect is an acceptable defect when it affects you personally.
So why then, is it so easy to accept that "defects happen" when you are the one producing the product or providing the service? This is the interesting dichotomy that presents itself. Zero defects is one of the best ways to resolve the discord between what we expect for ourselves and what we can accept for others.
However, if you fanatically follow a zero defects approach in areas which don't need it, you'll most likely be wasting resources. One of the most important of these resources is time, and this is where people are accused of time-destroying "perfectionism."
Adopting Zero Defects
There are no step-by-step instructions for achieving zero defects, and there is no magic combination of elements that will result in them. There are, however, some guidelines and techniques to use when you decide you are ready to embrace the zero defects concept. Management must commit to zero defects. Zero defects requires a top down approach: The bestintentioned employees cannot provide zero defects if they are not given the tools to do so. • When you decide that zero defects is the approach you want to take, recognize that it likely represents a significant change to the way people do things. Manage the introduction using the principles of change management. Understand what your customers expect in terms of quality. Design systems that support zero defects where it matters, but don't over-design if the end-user just doesn't care. Zero defects requires a proactive approach. If you wait for flaws to emerge you are too late. Create quality improvement teams. Zero defects must be integrated with the corporate culture. Zero defects needs to be accepted as "the ways things are done around here". Learn poka - yoke (POH-kay YOH-kay.) Invented in the 1960s by Shigeo Shingo of Japan, it translates to "prevent inadvertent mistakes". It's an approach that emphasizes designing systems that make defects almost impossible or, if they can't be avoided, easy to detect and address. To implement zero defects, you have to have strong systems in place.
• • • •
Monitor your progress. Build mechanisms into your systems and methods of operating that provide continuous feedback. This allows you act quickly when flaws do occur. Measure your quality efforts. It is important to express your progress in terms of the bottom line. Take baseline measurements so you understand the cost of defects in your organization, and can measure the benefits your achieveing in eliminating them. Build quality into your performance expectations. Encourage members of your team to think about how they can achieve zero defects, and reward them when they're successful. Recognize that although zero defects is a destination, circumstances keep changing. Monitor, evaluate, and adapt in a continuous, never-ending cycle.
6 Reasons Companies Adopt a CRM Strategy
In recent years, the diversity and pace of change in business has become mystifying. However, one trend is clear underlying all of this uncertainty; customers are increasingly able and willing to shop around. Therefore, how can companies maintain or increase customer loyalties in the face of the growing array of improbability and competition? According to market analysts and consultants, business success is more difficult now than ever before because of vendor oversupply in all markets. Experts point out that customers have become the scarcest, but most valuable resource for many companies. Therefore, companies need to continually monitor activities to make business processes more effective, more efficient, and more capable of adapting to an ever-changing environment. Companies also need to understand all the ways customers interact with their organizations. Each customer interaction within an organization is equally important because each interaction can bring more sales; or leave companies without sales. In a CRM and SFA strategy, customers need to be the design point and managing the customer experience has to be a major priority.
1. Increase Customer Satisfaction Levels
• How much is customer satisfaction really worth?
2. Increase Customer Retention Rates
• How much does it cost your company to gain a new customer?
3. Provide Better Tracking of Key Metrics
• • • •
Do you really know how your sales people are spending their time doing? How well does your sales team manage significant sales opportunities? Is your sales team able to quantify the value they are providing? How well does your sales team manage the annual sales planning process?
4. Lower TCO (Total Cost of Ownership) per Customer
• How much time and money do your sales people spend on closing an opportunity?
5. Higher Net Profitability per Customer
• Do you know which customers make you money and which ones cost you money?
6. Better Lead Management by Reps & More Efficient Sales Management
• Convert your sales team from reactive firefighters into proactive, strategic sales people.
Customer Relationship Management (CRM)
Customer Relationship Management (CRM)is the strategy that defines how you and your organization will manage the life cycle of a customer relationship. The is the process of adopting a CRM strategy is very difficult and organizations need to take a methodical approach when implementing a CRM strategy. CRM is NOT something you can purchase “Out of the Box”, install, and then hope that the software solves all of your problems. Companies must use the following steps before adopting a CRM strategy and solution: • Identify all of the functional areas of your business that touch the Customer. • Identify all of the business processes that manage these touch points with the Customer. • Select the appropriate enabling tools that allow the business processes that impact the customer to be managed in the most efficient manner. • Document the business processes and then train the users on the utilization of the enabling tools in order to maximize the efficiency of managing customer relationships. CRM touches many different functional areas of an organization, depending on the type of company. The most common areas that need to be considered when implementing a CRM strategy include these top Business Roles.
Business Roles for CRM:
• CRM for Sales and Marketing • CRM for Customer Service • CRM for Customer Support and Case Management • CRM for Quote and Order Management • CRM for Accounts Receivable/Invoicing/Collections • CRM for Research and Development • CRM for Project Management • CRM for Purchasing/Procurement/Production • CRM for Inventory and Warehouse Management At the core of CRM is Sales Force Automation (SFA). Sales Force Automation is the practice of maximizing the efficiency of the repeatable processes a salesperson performs as a part of identifying, qualifying, as well as closing sales and project opportunities.
Key Functional Areas of CRM
The key functional areas of CRM to be considered in a strategy is there are the functions in your Business System and the functions of your Sales Force. Combining both functions you are closing the loop that seperates your back-office and your fornt sales force which is very crucial when implementing a successful sales for automation strategy!
Functions in a Business System
The first key functional areas of CRM to be considered in a strategy is there are the functions in your Business System. Most companies already have a quality accounting or enterprise wide business system that is in place to manage the accounting, purchasing/procurement production, receiving, inventory management, order management, and shipping within the organization. Companies have invested over the years at adopting these solutions and maximizing the efficiency of how using the system to impact the customer.
Who Works Here - Business System?
• • • • • •
Inside Sale Customer Service Purchasing Warehouse Shipping Accounting/AR/AP
Functions in a Sales Force
When evaluating a Sales Force Automation Solutionyou need to make sure the solution provides all the features and functionality necessary for a sales person to manage and perform their job while minimizing the need to jump back and forth between multiple applications day in day out. Your sales force often utilizes Excel spreadsheets, Word documents, or independent access databases to manage all the different areas of their job that ultimately touched the customer. Whether it's an annual sales planning process, project management, opportunity management, call reporting, email management, support/case management, expense reporting, sales reporting and marketing management. In most companies all of these independent systems are independent
applications that the sales person has to access in order to perform their job. They seldom communicate or built off of a centralized database of information.
CUSTOMER LIFETIME VALUE
In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) and a new concept of "customer life cycle management" is the present value of the future cash flows attributed to the customer relationship. Use of customer lifetime value as a marketing metric tends to place greater emphasis on customer service and long-term customer satisfaction, rather than on maximizing short-term sales. Calculation
Customer lifetime value has intuitive appeal as a marketing concept, because in theory it represents exactly how much each customer is worth in monetary terms, and therefore exactly how much a marketing department should be willing to spend to acquire each customer. In reality, it is difficult to make accurate calculations of customer lifetime value. The specific calculation depends on the nature of the customer relationship. Customer relationships are often divided into two categories. In contractual or retention situations, customers who do not renew are considered "lost for good". Magazine subscriptions and car insurance are examples of customer retention situations. The other category is referred to as customer migrations situations. In customer migration situations, a customer who does not buy (in a given period or from a given catalog) is still considered a customer of the firm because she may very well buy at some point in the future. In customer retention situations, the firm knows when the relationship is over. One of the challenges for firms in customer migration situations is that the firm may not know when the relationship is over (as far as the customer is concerned). Most models to calculate CLV apply to the contractual or customer retention situation. These models make several simplifying assumptions and often involve the following inputs: Churn rate The percentage of customers who end their relationship with a company in a given period. One minus the churn rate is the retention rate. Most models can be written using either churn rate or retention rate. If the model uses only one churn rate, the assumption is that the churn rate is constant across the life of the customer relationship. Discount rate
The cost of capital used to discount future revenue from a customer. Discounting is an advanced topic that is frequently ignored in customer lifetime value calculations. The currentinterest rate is sometimes used as a simple (but incorrect) proxy for discount rate. Retention cost The amount of money a company has to spend in a given period to retain an existing customer. Retention costs include customer support, billing, promotional incentives, etc. Period The unit of time into which a customer relationship is divided for analysis. A year is the most commonly used period. Customer lifetime value is a multi-period calculation, usually stretching 3– 7 years into the future. In practice, analysis beyond this point is viewed as too speculative to be reliable. The number of periods used in the calculation is sometimes referred to as the model horizon. Periodic Revenue The amount of revenue collected from a customer in the period. Profit Margin Profit as a percentage of revenue. Depending on circumstances this may be reflected as a percentage of gross or net profit. For incremental marketing that does not incur any incremental overhead that would be allocated against profit, gross profit margins are acceptable.
What Does Activity Based Costing Have to Do With Customer Relationship Management?
Tuesday, September 10 - 2002 at 10:31
Management magazines are full of teamwork concepts: your department is a team; your office is a team; etc. As a marketer, you know the principles behind teamwork sound good, but does such collaboration help your marketing campaigns, and more importantly, the bottom line?
How does a marketer work more closely with departments like accounting? How and why should you translate words to action? You may be thinking, "Teaming up with accounting?" Believe it or not, company's CPAs hold the key to making you a smarter, more successful marketer. The key fact is that your accounting department may know more about your customer than you do. They might not know which demographic group a customer fits into, or to which promotions they're most likely to respond; but they do know how much a customer is
buying, whether they've paid their bills on time, what it costs to market to those customers, etc. So if accounting knows so much about your customers, how do you get that information out of them to use it to do your marketing job better? Two truths emerge: there is a great wealth of information on your customers within your company, and you don't have it. Rather discouraging, I know, but if you can get your accountants to give you their information on your customers, you can begin to take your marketing to the next level. You'll have a greater understanding of your customers, which will allow you to improve your marketing effectiveness. To get there it's important to understand a new concept: Activity Based Costing, or, how much does it cost you to acquire and retain each of your customers. Activity based costing is an accounting term that assigns actual costs to activities. For example, if a bank cashier takes two minutes to cash a check and is paid $30 an hour, then the activity based cost of cashing a check is $1. If a customer cashes 10 checks a day, that customer costs you $10 a day. This is quite different from the simpler, easier, and largely inaccurate method known as cost allocation In cost allocation, you assign a cost to running a bank branch. For example, assume a bank branch is six people at $40/hour, working eight hours a day. The cost allocation is six people times $40 per hour times eight hours per day equaling $1,920 a day to staff that branch. While this tells you how much staffing costs you, it gives you no insight into the cost of each transaction while, activity based costing allows you to know the exact cost to your company for a specific activity. Assume you're a marketing manager for the credit card division of a large bank. You are running a campaign to your current customers to sign them up for a new low-interest credit card. As you begin your campaign, you know the following: 1. Only 20% of your bank's customers are profitable. 2. You don't know who those profitable customers are. 3. Your goal is to market to the profitable 20% of the customers This is where your new-found friends in accounting come in. You need to know one thing right away: Who among my customers are the profitable ones? Under the cost allocation model, you would be up nights trying to find profitable customers by looking at a variety of variables. But there is rarely a pattern you can discern, and if your company uses cost allocation, you don't know what individual customer interactions are costing you. You only know what resources your company allocated to staff all customer interactions with all customers. With Activity Based Costing, and a tight partnership with the accounting department, you can figure out the cost of each activity (some accounting departments actually have people devoted to developing costing figures). Since each customer activity is recorded, then attributed its actual cost, it's easy to figure out the total cost for each customer. And
because accounting also knows the revenue each account brings in, they can figure out the profitability of each customer. At the end of the exercise, accounting has a customer list of your most profitable customers. Unfortunately, it's a list that they own, and it lives within their department and their information systems. There are two ways to deal with this problem. The hard way entails obtaining that list from accounting and merging it into your marketing systems. The problem is that if you do this every time you get a customer list from accounting, you'll begin to have multiple customer records in your marketing systems, and you'll lose the ability to have one view into all customer interactions. The easier way, would be to tie accounting and marketing together by utilizing the same database. Accounting still sees its data in the format relevant to them, while marketing can see its data, along with accounting's data, in a format that makes sense to them. If accounting creates a list of all the profitable customers and flags them in the joint system, you can use that list for your campaigns. Truly forward-looking organizations have realized that a key to effectiveness is having all your information in one place. Just as no man is an island, no department can operate to its fullest potential on its own. Just as you partnered with accounting, you can work with manufacturing to ensure that the products you're about to do a promotion on are actually available, or to help you decide which products to promote, based on inventory levels. Or you could work with sales to share information on the quality of leads to help improve your company's ability to close deals. The most creative campaigns in the world are doomed from the start if they aren't built using relevant information from around the company. By looking around your company for information and relationships that you haven't relied upon in the past, you can make your marketing more effective and your company more successful.
CUSTOMER RETENTION STRATEGIES
Customer Retention Strategies for Online Businesses
WHAT IT MEANS
Customer retention is about making sure existing customers keep buying from you. On the Net, customer retention also means making sure your site visitors keep returning. They are after all customers - they're just not converted yet.
Your customer retention plan must remind her of your business (and URL). Customer retention is about not trusting your customer / visitor to remember you. It's about making her remember you.
CUSTOMER RETENTION STRATEGIES
Before we get into details, here's a quick list of customer retention strategies that you can implement on your site.
• • • •
Fresh content - regularly A regular (free) publication Signups for fututre notifications Data mining
CUSTOMER RETENTION STRATEGY #
1 REGULAR FRESH CONTENT
Most professional Internet marketers agree: content sells. If your site has great content, the word gets around and people start flocking to your site. But that's great for customer acquisition. What about retention? To get the same customers to keep coming back for more, you have to add fresh content on a regular basis. This customer retention strategy works great for some sites (like news/ weather sites) but what if you are selling one product - like we are at Pandecta? Let's face it. If you're not subscribing to Pandecta Magazine today, you probably won't be back - no matter how many free tutorials we put up. It's a wide web with lots to see. Right? Right, so I have to get you to leave your e-mail address or I have to give you something to remember Pandecta by before you leave. I'll try really hard further down. ;-)
2 REGULAR FREE PUBLICATION
CUSTOMER RETENTION STRATEGY #
Free newsletters are great tools in customer retention. You should offer a signup-box on most pages within your site, and checkboxes for newsletters on most major forms on your site - like the feedback and order form. Your newsletter establishes your expertise in the eyes of your customers and it keeps them updated on what's on offer at your web site but... The best thing about a newsletter is that your name and/or your company name is under the customer's nose on a regular basis. It keeps reminding her of you. It tells her that your dotcom bubble did not burst. It get's them coming back. The bottom line about newsletters is that they require a lot of time. Time that most of us don't have. Generating enough good content to fill a newsletter every week or even every month can be a daunting task. For more about newsletters, check out our Top 20 business newsletters. Subscribe to a couple and see how the pros are doing it. But you're not limited to newsletters. At Pandecta Magazine we have a free e-book about search engines. People love free stuff.
Getting a free e-book just sounds so much better than getting a free newsletter. Get your copy and take a look: The MOTHER of all Search Engine Reference Books Hang on - how do you promote Pandecta Magazine in a book about search engines? We didn't just grab the topic for the book out of nothing. Our magazine is for Internet entrepreneurs and there is not one Internet entrepreneur (that we know of) that is not interested in search engine positioning. Sure, off-target visitors also download it, but that's o.k. It gets our name out there and costs us nothing.
3 SIGNUPS FOR FUTURE NOTIFICATIONS
CUSTOMER RETENTION STRATEGY #
I've updated my thinking on sign-ups. This is where I used to tell you to ask visitors to sign up for notifications of changes to your site. In the years that I've asked people to sign up for Pandecta notifications, I had maybe 10 sign ups - so I dropped it. If it doesn't work it just clutters. I am however not completely against sign ups as a technique in customer retention, because there's a chance that I simply didn't make it as appealing as it needed to be. Try it for yourself. People who sign up for site notifications usually make great customers. They already know you deliver good value and they're ready to buy from you.
CUSTOMER RETENTION STRATEGY #
This customer retention strategy is simply about getting people to bookmark you. Tutorials like this one is not really bookmark material. You'll read it once. No need to come back to this page later. Data mining means getting information from fairly large and frequently updated resources. Resources like our search engine list is bookmark material. Any exhaustive links list, glossary of terms etc. qualifies as data mining resource
Ten Tips to Build Customer Loyalty
The key to a successful business is a steady customer base. After all, successful businesses typically see 80 percent of their business come from 20 percent of their customers. Too many businesses neglect this loyal customer base in pursuit of new customers. However, since the cost to attract new customers is significantly
more than to maintain your relationship with existing ones, your efforts toward building customer loyalty will certainly payoff. Here are ten ways to build customer loyalty:
1. Communicate. Whether it is an email newsletter, monthly flier, a reminder card for a tune up,
or a holiday greeting card, reach out to your steady customers.
2. Customer Service. Go the extra distance and meet customer needs. Train the staff to do the
same. Customers remember being treated well.
3. Employee Loyalty. Loyalty works from the top down. If you are loyal to your employees, they
will feel positively about their jobs and pass that loyalty along to your customers.
4. Employee Training. Train employees in the manner that you want them to interact with
customers. Empower employees to make decisions that benefit the customer.
5. Customer Incentives. Give customers a reason to return to your business. For instance,
because children outgrow shoes quickly, the owner of a children’s shoe store might offer a card that makes the tenth pair of shoes half price. Likewise, a dentist may give a free cleaning to anyone who has seen him regularly for five years.
6. Product Awareness. Know what your steady patrons purchase and keep these items in stock.
Add other products and/or services that accompany or compliment the products that your regular customers buy regularly. And make sure that your staff understands everything they can about your products.
7. Reliability. If you say a purchase will arrive on Wednesday, deliver it on Wednesday. Be
reliable. If something goes wrong, let customers know immediately and compensate them for their inconvenience.
8. Be Flexible. Try to solve customer problems or complaints to the best of your ability. Excuses
— such as "That's our policy" — will lose more customers then setting the store on fire. Read our 60-Second Guide to Managing Upset Customers for more information.
9. People over Technology. The harder it is for a customer to speak to a human being when he
or she has a problem, the less likely it is that you will see that customer again.
Know Their Names. Remember the theme song to the television show Cheers? Get to
know the names of regular customers or at least recognize their faces
CRM IN SERVICE SECTOR
6 Steps From Customer Service
by Susan and Derek Nash One of the ongoing challenges successful businesses face is in optimizing customer satisfaction and developing Customer Relationship Management. So many companies "jump on the bandwagon" of improving customer service in order to impact customer retention levels. Yet, since 1994, customer satisfaction has dropped in nearly every sector of the economy according to the American Customer Satisfaction Index compiled by the University of Michigan. So why is this? Raising customer satisfaction levels requires a comprehensive systems approach. This article will cover: 1. The importance of a clear customer experience strategy 2. Selecting the correct people 3. Developing, motivating and managing your people 4. Establishing effective service delivery processes 5. Building in continuous improvement 6. Ensuring managers are the key change-agents
Setting A Clear Customer Experience Strategy
Often organisations confuse defining a customer experience strategy with creating a "slogan". How many companies create a slogan without any supporting initiatives, thereby disillusioning employees and creating a "flavour of the month?" To establish a good strategy certain key practices are required: • Understand the overall organisational vision and mission • Define the organisation's customer service direction, slogan and values • Ensure customer service is defined as a key responsibility for the business/department • Share the customer experience strategy via a comprehensive communications program • Ensure that this strategy does not conflict with other business strategies. As consultants, it is amazing how often we hear organisations say, "Improving Customer Service is a priority, and we are also introducing stringent cost-cutting measures." This can present a tough dichotomy.
Selecting The Correct People
It's really hard to teach an elephant to dance! When recruiting employees to provide customer service, the process often tends to concentrate more on functional expertise, technical competence and knowledge rather than interpersonal skills. However, lack of the right attitude can drastically impact client satisfaction levels. Research has in fact shown that attitude is the most important requirement: skills and functional expertise can be taught. Therefore in selecting the right people: • Define the critical job requirements • Develop scenario-based interviews/assessment centres to screen and select candidates • Involve multiple team members in the hiring process • Ensure evaluation is based on objective, not the subjective "Be Like Me" criteria
Developing, Motivating And Managing Your People
Even though you have hired the right people, there is still a need to orient them into the organisation's customer relationship culture and define key communication skills. In Call Centers and Technical Support departments, there is a tendency to rely on technical/functional skills and neglect interpersonal skills development. This can result in providing acceptable material service, the more tangible aspect, yet unacceptable personal service, the competitive differentiator.
Therefore to build a customer relationship culture, it is important to: • Provide training in key areas required to deliver exceptional personal service • Reinforce these skills using ongoing coaching and feedback • Measure current performance levels • Reward performance using a combination of monetary awards and non-monetary recognition
Establishing Effective Service Delivery Processes
Effective processes and procedures provide the foundation for smoothing or inhibiting the material service element of the customer interaction. Efficient service delivery systems appear transparent to the customer. Poor systems create those 'speed bumps' that necessitate personal intervention in order to satisfy the customer requirements. The critical elements in ensuring a positive material customer experience are: • Mapping the service delivery processes • Evaluating critical success points in the process • Defining service standards and objectives for these essential points • Establishing service delivery procedures to optimise material service • Creating service level agreements to smooth internal service delivery
Building In Continuous Improvement
No matter how effective the service delivery processes, or well-trained the service deliverers, things go wrong. Products have faults. Customers get frustrated. Things slip through the cracks. The organisations that are built around managing the customer experience are able to resolve these issues effectively. This process known as "recovery" is an important differentiator in building customer loyalty. In order to recover effectively, it is necessary to: • Actively seek customer feedback and complaints: you cannot improve if you don't know what went wrong in the first place. • Train staff how to handle customer complaints effectively using the correct mix of empathising, apologising and resolution. • Make sure that the real problem is solved, not just the symptoms. • Focus on proactive (prevention) as well as reactive (cure) problem solving.
Ensuring Managers Are The Key Change-Agents
As consultants, we observe that senior management often has the vision, intention and commitment to introduce a comprehensive customer relationship management system. The "make or break" element is in involving middle management in the change process, and empowering them to be the key changeagents. To do this, it is important to: • Engage the management team early and often in the process • Involve management members in articulating the customer experience strategy • Teach managers coaching skills so that they are able to articulate and reinforce the key personal service skills • Use managers as facilitators when rolling out interpersonal skills training • Reward managers on establishing, monitoring and updating service delivery processes • Ensure managers are able to act as an example to their teams.
As you can see, in order to deliver outstanding service, it is essential to build a customer relationship focused culture. This can take up to two years and can involve changing the way the company operates in all aspects of service delivery. The time investment can be high, but the pay-off can be enormous building long-term customer loyalty and helping to ensure business profitability.
Nine steps for successful CRM implementation: Check IT List
Laurie McCabe, Contributor 02.24.2005 Rating: -3.75- (out of 5)
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Customer relationship management, or CRM, may seem somewhat like alphabet soup to many small- and mediumsized businesses (SMB). The variety of CRM options (and acronyms that come with sales, customer service and marketing terms) can make decision-making quite difficult for SMBs when it comes to solving business needs. CRM doesn't have to be difficult. Here are some key guidelines to follow before you implement CRM at your company.
1. Develop corporatewide CRM engagement from key stakeholders. Many CRM projects fail because
critical stakeholders are not involved in setting CRM strategy, assessing requirements and selecting options. Get key sponsors involved from the get-go and make sure that the individuals involved can make the financial and time commitments to ensure success. If possible, involve customers in this dialogue through surveys, councils and other ways to ensure that your strategy is in sync with their expectations. At the executive level, start determining the kinds of information that various people need to better understand and respond to customers. Envision the company's CRM strategy. CRM is more than just software. It is also about selecting appropriate methodologies and business practices to help your business enable better relationships with customers. Benchmark your company's current CRM practices with peers in your industry, and set some high-level customer relationship goals in areas such as increasing customer retention, speeding problem resolution, closing a higher percentage of sales, etc. Determine and prioritize CRM drivers and requirements. Even in small companies, CRM decisions are often stovepiped in relation to departmental needs and business problems. For example, sales managers may want to get better pipeline and forecasting capabilities, while customer service groups want to provide Web-based self-service customer support. Engage a corporate team of decision-makers to prioritize CRM requirements. Priorities should include solving problems in areas such as functional areas that are causing the most pain, cost and missed opportunity for the business; areas where employees are most or least resistant to changing business; weaknesses compared with competitors; complexity of each area that requires addressing; and with what other systems this needs to integrate. Develop a CRM roadmap. Once you have the high-level vision and know which areas are likely to bring the greatest reward, develop a master plan consisting of several smaller steps and projects that will move you toward achieving the corporate CRM vision. For each step, spell out key outcomes and metrics; roles and responsibilities; budgets and timelines. Start with low-risk/high-reward projects to build momentum and success. Make sure all key stakeholders in each project are included up front and early in the solution evaluation and implementation process to ensure faster, higher user adoption at the end. Think integration. Determine how, where and when CRM tools need to integrate with one another and with other applications. At a high level, this includes evaluating the business processes flow, and identifying process-related customer interactions and transactions that need to be integrated. For example, it's likely that you'll want to integrate sales initiatives and transactions across channels, including e-commerce storefronts, to optimize sales opportunities, and link your CRM system with your financials and/or ERP system. Do your homework and create a short list. Check out prospective vendors' financials and customer references; eliminate any that appear shaky. Talk to peers who have more experience in the CRM area, search Web sites and peruse publications. Many hosted CRM vendors offer 30-day free trials. Get an independent perspective from an independent CRM consultant, too. With a roadmap in place and your needs defined, you can come up with a manageable list of RFP-worthy vendors. Apply the 80-20 rule in the selection process. Don't get snowed under by competing vendors' feature-
function wars. You've already determined your top needs and priorities: stick to that list and determine which vendor can best meet those needs before you get sidetracked with the nice-to-have -- but not essential -features. Compare how vendors stack up in terms of solution strengths and weaknesses. Have vendors spell out terms and conditions, thorough document pricing, training, methodology, milestones and metrics for a successful deployment. Finally, listen to your intuition, and select a vendor that you think will be as responsive to your needs,after the sale is closed. Keep everyone in the loop. Once you've made a selection, err on the side of over-communicating. Get internal evangelists involved early, and encourage input along the way as you roll it out. Offer flexible training options to help accommodate different schedules and learning preferences. This will also speed adoption and produce benefits more quickly.
9. Learn, adjust and evolve. Develop a mechanism to monitor use, get feedback and adapt the solution as
necessary to make sure it's evolving with business and customer needs. Depending on the type of CRM package you've deployed, you can use surveys, ongoing education, user groups and other venues to stay on top of how these needs are changing, as well as what types of adaptations the solution will need over time.
NEW PRODUCT LAUNCHES
Most new products earn half their sales and profits far earlier in the product life cycle than company leaders realize. After an early window of opportunity, new products are often smothered by copycat competitors rushing to market, waning media and analyst attention, sales channel apathy, price pressures and purchasers unable to distinguish the product through all the competitive clutter. With the correct launch, new and innovative products have great advantages early in their life cycles—competition is light, media and analyst interest is heavy, sales channel enthusiasm is passionate and buyers are energized by the novelty of the product's promised solutions. In today's “speed of thought” mentality, getting your product to market first is absolutely critical to your sales and profit success. Steve Sarno, President of Impact Marketing, is a 17-year veteran of creating, implementing and measuring successful high-technology product launches. Sarno and his firm specialize in helping new and Fortune 500 companies successfully position their new products and services to maximize early sales and profits. I invited Sarno to speak to a recent gathering of RMR clients and prospects at our free Seminar Series and he shared the following “11 Product Launch Do's.” 1. Ensure a launch process is in place. A successful launch is a process, not an event. Too many companies focus all their energies on the announcement and first trade show and then wonder six months later why they missed their sales goals or disappointed early customers with lack of support. A successful launch process must include buy-in from all levels of your organization to synchronize and integrate efforts. ALaunch Team should be established. A clearly written, comprehensive Launch Action Plan should then spell out individual responsibilities and overall objectives, strategy, time-frames and requirements. Knowledge sharing systems should then be devised to share best practices and adjust actions as needed. 2. Set objectives and success measurements up front.Know where you're going and how to recognize if you've gotten there. Gather and analyze market intelligence, assess your current situation and then determine what you want your launch to accomplish within the market, company and with prospects, analysts and editors. Now gain consensus so all stakeholders are invested in the plan. 3. Develop a formal and comprehensive integrated Product Launch Plan. This plan should guarantee sales integration, involve all critical organizations, establish accountability with actions and timelines and ensure alignment, consensus and success. The Product Launch Plan should address the following 12 critical components:
• • • • • •
Structure and organize resources for success Define launch objectives Gather intelligence Develop launch strategy, action plan, budget and timeline Craft a supportive PR strategy and plan Effectively position the product
• • • • • •
Ensure product readiness Guarantee sales channel readiness Create critical marketing and sales tools Develop new product programs Track, monitor and report on execution Measure performance
4. Monitor and track execution. This works far better when you assign a launch team, enlist management involvement and support and consistently establish ways to easily track progress. Then regularly and frequently communicate results with the group. 5. Ensure ingredients for success. You can't succeed without the proper tools. A professional and effective product launch normally requires a good six months to handle all the unexpected issues, delays and snafus that will arise. You also need an adequate budget, resources, systems and most importantly, healthy relationships with all team members, sales channels, analysts and editors. Repair any broken relationships before product launch because these types of issues are the greatest time-eaters. 6. Invest upfront in the right positioning. Do whatever it takes to identify your prospects, analysts and media before engaging in a launch. Make sure your beta version of the product works and goes to the right reviewers. Do your homework and establish the exact message you want to convey to the market. Remember, this message will be the banner your new product carries to the world. Invest in the right advertising, collateral materials and sales tools. 7. Have a winning public relations strategy and plan. You must capture attention by educating pundits, opinion leaders and editors. These are the people who will be carrying your flag. Once you've won these people over, you gain credibility and acceptance from the marketplace. This makes the selling process far easier, maximizing the chances of hitting your goals. 8. Ensure channels can effectively sell right out of the blocks. Your sales channels are equally as important as analysts and editors. It's critically important to continually educate the sales force about what the product does, not only in terms of features and functions, but in terms of its real business value to customers. You should treat the sales force just as attentively as you would prospects and customers. 9. Involve the company. Touch everyone within your organization with your zeal for the new product. Educate them, communicate the plans, goals and progress, use the launch as a way to build morale and unify the team through a common cause. Let everyone share the glory of successes along the way. 10. Disseminate best practices. Identify what's working and what isn't and share this information throughout your organization. Be flexible, be nimble, be willing to adjust your plan as results are tabulated. Remember that a launch is a process, not an event. 11. Accelerate the launch. There are a million excuses for why the launch can't occur in the established time frame. Don't succumb to them. Track and monitor the plan everyday. Anticipate bottlenecks and have elimination solutions ready to implement. Hold all contributors accountable. And finally, gain the support of top management so they will eagerly use their influence when complex issues threaten to slow the process. With 13 years of experience here at RMR helping dozens of high-technology companies launch new products, I've certainly seen that Sarno's “11 Product Launch Do's” are right on the money. We've been fortunate to have worked with and assisted some of the most innovative firms in the country, including Sarno's Impact Marketing. Doing your homework can prepare you for a successful product.Blastoff!