CRM Strategy

Dr. Elijah Ezendu
FIMC, FCIM, FIIAN, FBDI, FAAFM, FCCM, MIMIS, MITD, ACIArb, ACIPM, PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CMC

Learning Objectives
At the end of this course, participants should be able to do the following: i. Explain importance of CRM Strategy ii. Explain CRM development and implementation iii. Identify methods for aligning CRM Strategy to business model iv. Explain Customer Value Added and Customer Loyalty v. Conduct proper enterprise-wide implementation of customer-centricity

“70% of CRM initiatives fail”
Source: Cap Gemini Ernst & Young

“90% of enterprises cannot show a positive return on CRM”
Source: META Group

“75% of CRM initiatives fail to substantially impact the customer experience”
Source: Gartner

A CRM Strategy shows the intent of a firm concerning its customer base, pointing out how it shall acquire, maintain and retain customers through improvement in customer value deliverables as the way to enhance corporate performance.

CRM Strategy & Implementation Model
CRM Readiness Assessment

Process 1: Strategy Development

CRM Project Management

ENABLING PROCESSES

Process 2: Value Creation

Process 3: Multi-Channel Integration

Process 4: Information Management

Employee Engagement

Process 5: Performance Assessment

Source: Adrian Payne & Pennie Frow, Customer Relationship Management

CRM Change Management

Strategy Development This involves development of CRM strategic options for achieving established CRM objectives for every targeted segment. thereafter the best option shall be adopted as the CRM strategy and the right measures for performance shall be established. .

CRM Strategy .Strategy Development Process CRM vision stands as established customer value proposition effected through customer audit Target customer segments based on value Establish CRM objectives for every targeted segment Conduct capability analysis Develop CRM strategic options & evaluate them Choose the most appropriate CRM strategy & establish the right measures for performance Review Source: Elijah Ezendu.

Customer Asset Audit Customer Potential (Value to Company) Protect Key Position Invest to Protect Invest to Build Build Selectively Manage for Profitability Secure Invest to Win Damage Limitation Win the Opportunity Manage the Revenue Manage the Revenue Vulnerable Careful Management Manage for Revenue Consider Divesting Fragile Counter Large Share Competition of Wallet Manage Some potential Profitability Manage Transactional Profitability Highly Secure Source: Gartner Strength of Relationship (Value to Customer) .

CRM Investment Framework Maintain Efficiently Invest High Claimed Importance Hygiene Factors Motivators Trim Overspending Hidden Opportunities Study/ Invest Low Low Real Relevance High Adapted from Gartner .

Interoperability of CRM Strategy The CRM Strategy must have a high level of interoperability with the Corporate Strategy and Competitive Strategy of the Business Portfolio. .

Using McKinsey 7S Framework for Testing CRM Strategy Strategy Systems Structure Shared Values/ Subordinate Goals Staff Skills Style .

. • Identify the key success factors of each ‘S’. • Ascertain the gap between the elements and the strategic fit.Action Points for Testing CRM Strategy • Examine each of the 7S. • Solution should be either to amend the elements accordingly or to alter the CRM strategy.

while business process captures and implements the strategy. The focus of strategy is determination of position and codification of aims and objectives.Aligning CRM Strategy to Business Model It’s imperative to align CRM Strategy to a firm’s Business Model due to its role. Business Model is the logic behind value generation. . The Business Model binds Business Strategy and Business Process together and functions as link between them.

Business Logic Triangle Planning Level Business Strategy Business Model Architectural Level Implementation Level Business Process .

” Source: John McKean.Customer Value Added “Customer value added approach is based on providing products and services to customers that are a greater value than they could expect from purchases from competitive companies in similar markets. Customers Are People .

and ensuring effective communication of the standard to customers.The CVA Approach Customer value added facilitates proper customer relationship management through identification the suitable value proposition which is superior to the whole bundle of offering from competitors. CVA = Perceived worth of a business’s offer Perceived worth of a competitive offer .

Steps for Implementing CVA • Identify customer values • Identify competitors’ offers • Build customer values into firm’s offer to obtain firm’s interim offer • Compare firm’s interim offer to competitors offer • Identify value gaps • Use problem analysis tools to identify root causes • Use quality improvement tools for quality enhancement in order to set new standard of value proposition Source: Elijah Ezendu. CRM Strategy .

CRM Strategy .Branding to Breed Customer Value Proposition Ascertain vision (establish customer value proposition) Communicate the value proposition Determine the fitting culture for delivering the value proposition Establish clear cut identity that highlights both functional & emotional benefits to customers Establish a character to deliver the promised customer experience Develop personality and emotional elements of the value proposition Source: Elijah Ezendu.

Customer Loyalty Customer loyalty is aggregation of attitudes and emotional disposition developed in the course of interaction with value proposition either directly or indirectly. . such that a customer would tend to purchase a particular product/service over and over again.

 Supporter: Someone who likes your organisation.  Client: Someone who has done business with you on a repeat basis but may be negative. or at best neutral. Payne & Ballantyne.  Purchaser: Someone who has done business just once with your organisation. Relationship Marketing .  Advocate: Someone who actively recommends you to others. but only supports you passively. who does your marketing for you.  Prospect: Someone whom you believe may be persuaded to do business with you. towards your organisation.Ladder of Loyalty Partner Advocate Supporter Client Purchaser Prospect  Partner: Someone who has the relationship of partner with you. Source: Christopher.

The ducks run around the ground quacking all the time. Eagles soar high above to get the best perspective and decide what is best for the customer. Leading at a Higher Level . following orders."There are ducks. doing what they are told and often pecking at other ducks." . and there are eagles. stating rules.Ken Blanchard.

Craig Bailey & Kurt Jensen .What is Customer-Centricity? “Customer-centricity involves aligning organizational resources for effectively responding to the ever-changing needs of customers. while building mutually profitable relationships.” .

Aligning Organizational Resources     Personnel Operating practices and procedures Systems (internal and external) Products and services .

Using communication tools and techniques for highlighting the firm’s progress in customer-centricity . Training every staff on customer-centricity.Aligning Personnel • • • • Recognizing and rewarding customer-centric behaviour. Ensuring that decision-making hinges on customers.

Entrenching Customer-Centricity via Training cum Internalization Customer-centricity can be embedded on organizational processes through adequate training and modeling of interdepartmental transactions as depiction of customer relationships that require optimization. .

Managing complex and taxing conversations. People and communication styles • • • . Identifying and exploiting opportunities.Focus of Training • Communicating effectively and building rapport.

.Requirements for Building Mutually Profitable Relationships Ascertainment of customer’s request Ensuring Profitability Find out repeatability of transaction Determination of feasible term of relationship.

Voice of The Customer Process • • • • • • Obtain customer’s pulse Involve the customer Analyze information Socialize results Implement customer-focused changes Respond to the Customer .

How to Obtain Customer’s Pulse Survey the Customer Interview the Customer Get information from customer-facing personnel Observe actions and behaviours of customers Embark on mystery shopping .

Three Different Faces of a Customer • • • Business decision-maker End-user of product or service Procurement function .

Customer Survey Transactional Surveys Focuses on measuring customer satisfaction with individual or collection of Interaction with firm. Relationship Surveys Focuses on all aspects of the firm such as • Marketing • Product Management • Service and Support • Sales/Account Management • Engineering/Development • Professional Services • Training and Education • Accounting/Finance Survey on many individuals in customer’s firm. .

Factors that Aid Collection of Inputs from Customer-Facing Personnel • • • Environment of trust Establishing expectations with personnel Managing anecdotes .

Factors that determine selection of customers include strategic importance. level of complexity/sophistication in use of products or service. . attitudes or purchase patterns. 2. Customer Board of Advisors: For holding periodic meetings with selected number of senior executives from firm’s customer database. Focus Group: For obtaining information through discussion with a group of participants. diversity of industries which the firm represents. taking cognizance of commonality in demographics.Involving Customers This can be done by means of the following: 1.

Customer demographics ii. Transactional history This gives rise to development of customer segmentation strategy . Issues raised by customers Such information include the following: i. Challenging trends iii. Positive trends ii.Analyzing information Analyze customer feedback and information obtained Compare to other information held by the firm Output: i.

Socialize Result Top-level reporting for general awareness Comprehensive report for sectional. departmental and project action-planning .

Steps for Implementing Customer-Focused Changes • • • • Getting management commitment Conducting cross-functional reviews Voice of customer tracking and reviews Forecasting .

Key Performance Indicators Targeted for Improvement • • • • Customer Satisfaction Customer Retention Churn Revenue and Profitability -Overall -By Customer Segment -By Customer Product/Service Diversity By Customer • .

Responding to Customers 1. vi. ii. iii. Inform the organization and respond resourcefully. Implementing ‘immediacy’ team. Record account-specific results ii. Prepare for customer review meeting iv. Involve senior management in customer experience. Engage customer in meeting v. Immediate Response i. Establishment of criteria for ‘immediacy’. Management reporting. Continue the process . 2. iii. Responding with Account Strategies The six steps for implementing Account Strategies: i.

 Responding immediately to participants during survey. .Other Methods of Updating Customers  Newsletter  E-mail  Website  E-zine  Instituting the update as a component of firm’s account management practices  Using interactive sessions of forum or board of advisors.

Marketing and Service.Common Pitfalls of CRM  Accepted as a technical instead of business problem  Using a top-down approach  Non-involvement of senior management  Lack of focus on areas of high adoption  Driven by IT department instead of Sales.  Absence of a cross-functional implementation team  Biting more than one can chew  Organizational unpreparedness .

services and knowledge  Bottom-up. designed on the front lines  Working as an insider  Solutions focus  Advisory relationship  Team-based selling  Innovation and authority at the front line with customer Incentives based on customer economics and team performance  Tailored business streams  Balance between customization and complexity Complexity isolated within the system  Cross-organizational teaming  Joint credit High degree of organizational trust Solution Mindset  Narrow distribution of customer value proposition  Off-the-shelf products  Top-down design  Perceived as outsider selling in  Push product  Transactional relationship  Individual to individual  Centrally driven  Limited decision-making power in field  Incentives based on product economics and individual performance  “One size fits all” processes  Customization adds complexity  Rigid organizational boundaries  Organizational silos control resources  Limited trust across organizational boundaries Advice Orientation Customer Interface Business Processes Organizational Linkages & Metrics Source: Booz Allen Hamilton .From Product-Focused to Customer Centric Firm Feature Customer Orientation Product-Focused  Discrete transaction at a point in time  Event-oriented marketing  Narrow Focus Customer-Centric  Customer life-cycle orientation  Work with customer to solve both immediate and long term issues Build customer understanding at each interaction  Broad definition of customer value proposition  Bundles that combines products.

Solutions Advance Customer Value Proposition Traditional Value Proposition Value-Added Services Customer-Centric Value Proposition “We can help you reduce life-cycle transportation costs” “We can reduce your operational costs” Industry Truck Manufacturing Traditional Product  Trucks = + = “We sell and service trucks”  Financing  Service  Application/Design support Aerospace Components  Aerospace Fasteners “We sell highperformance fasteners” Utilities Electricity “We provide electricity reliability”  Energy asset maintenance “We can help you reduce total energy costs” Chemicals  Lubricants “We sell a wide range of lubricants”  Usage and application design  Lubricant analysis  Product support  Outcomes-driven information database “We can increase your machine performance and up-time” “We can help you better manage your patient base” Pharmaceuticals  Drugs “We sell pharmaceuticals” Source: Booz Allen Hamilton .

Developing Customer-Centric Culture Put employees in the customers’ shoes Put employees in the shoes of a particular colleague Review your habits and attitude Be evaluated in a 360-degree approach by colleagues you frequently deal with (through a random selection). .

.What is Customer Advocacy? It’s a cross-functional role empowered to marshal organizational resources to resolve troublesome customer issues and identify root cause while balancing the financial realities and strategic goals of the company.

The Need for Customer Advocacy Function To steer customers away from veiled gaps. . inefficiencies and organizational complexities that perturb perception. thereby managing “customer experience” effectively.

Key Skills for Customer Advocates Straight-forward and honest Interpersonal management and communication Good business sense and judgment Organizational navigation Executive Presence Time management Project management .

analysis and execution Managing customer experience through resolution Internal management review .Customer Advocacy Process Framework Customer segmentation Engagement process Escalation process Response planning.

Factors to Consider When Crafting Message Ensure your communication stands alone Consider the audience Read it “as if” you were the recipient Acknowledge the “bigger picture” Special handling procedures when emotionally charged .

particularly customerfacing staff for proactive relationship-building 9. Make good use of technology 5. attitudes and demographics of your customers 7. Try to understand the true value of your customers Don‟ts of Customer Centricity Expect a brand new mission statement to make you a customer-centric company Overcomplicate the segmentation Reorganize too often and for the sake of it Expect technology to build customer relationships for you Throw out the old performance measures Confuse behaviours and attitudes with needs Rely on the customers past buying patterns 8.Do‟s of Customer Centricity 1. Set clear goals for achieving a defined state of customer centricity by a certain point in time 10. sales and customer service functions . Empower employees. Encourage and seek to create customer loyalty 11. Adjust your mission and vision statement 2. Communicate and engage all stakeholders in the process Allow anyone in the company to say (or think) “this is not my job/responsibility” Assume that your project/ programme were completed. Align your organization structure with the segmented customer view 4. you „got there‟ Think of loyalty as the tenure of a customer (duration of the relationship) Limit your change management efforts to the marketing. Segment your customer base 3. Create new performance measures 6. Study the behaviours.

iii. profitable growth and drive outstanding share price performance over time. but as a portfolio of customers. They understand the different needs of different customers and group them into operational customer segments and sub-segments based on common needs. territories. and they understand why. They conceive of themselves not as a group of products. Source: Wharton Business School iv. they know what to manage and where to invest in order to create sustainable. because they manage their customer portfolio on this basis. vii. vi. They know how much money they make or lose with each of their customers or customer segments. v. They organize their businesses into customer segment business units to establish clear ownership of the customer experience and accountability for the financial performance of each customer business unit. or functions.The Seven Characteristics of Customer-Centric Companies i. They create a competitively unassailable customer innovation advantage based on a customer R&D model grounded in continual experimentation at key customer touch points. They understand in precise analytic terms exactly how their different customer relationships contribute to or subtract from the total value of the firm. . They thrill their customers by delivering knockout value propositions that competitors cannot match. ii. They continually innovate by evolving their customer segments and sub-segments. services. and improve their value propositions as customer needs change.

Institute of Business Development. The Institute of Business Development. Ladoke Akintola University of Technology. International Project Management Commission. Member of Marketing Committee. Fellow. Institute of Management Consultants. he received Merit Award for Excellence in Consulting. Associate. South Africa. Fellow. Project Manager E-Business. Chartered Institute of Arbitrators (Nigeria). he is an information technology management professional certified by Institute for the Management of Information Systems. private and public firms including extra-governmental agencies and institutions. He is a Chartered Manager certified by Canadian Institute of Management. Member. Regent Business School. International Council of Management Consulting Institutes. He holds a doctoral degree in Management from St. American Academy of Financial Management. and Examiner to various Professional Institutes. He is a Certified Business Development Analyst and Competitive Intelligence Professional. Management Institute of Canada. Member. Institute of Management Consultants. He is concurrently Senior Partner. Director of MBA Programme (Nigerian Outreach). who has functioned as Speaker/Facilitator at myriad programmes of professional institutes. Chief Operating Officer. . Canada and holds numerous professional qualifications including Master Project Manager. Lead Assessor and Member of Governing Council. Director of Strategy and Performance. Nigerian Institute of Training and Development. International Council of Business Development Professionals. Fellow. Second Vice President and Member of Governing Council. Shevach Consulting. He is a prolific writer and author who had served as Editor-in-Chief. Director of Programmes and Member of Governing Council. Cost Management Journal. USA and stands as a Member of International Association of Software Architects. He is an outstanding motivational speaker with a knack for recalibration of positive influence. Additionally. Chartered Institute of Personnel Management of Nigeria. Part-Time Lecturer & External Examiner (MBA Programme). Rohan Marine. Fortuna. Associate. Director of Training. and Programme Coordinator (Nigeria). Clements University. Fellow. Honorary Global Advisor. Fellow. licensed by International Council of Management Consulting Institutes which has a Special Consultative Status in United Nations Economic and Social Council. Institute of Analytics Professionals. Director. As a result of his strides in management consulting. He is a Certified Management Consultant.Dr. British West Indies. Refined Shipping. Institute of Internal Auditors. Certified Institute of Cost Management. and a world-class consultant. Certified Institute of Cost Management. international development organisations. Elijah Ezendu is a multidisciplinary professional whose business experience mounts through diverse fields. UK along with Microsoft Corporation.

com. Elijah Ezendu elezendu@yahoo. 234 8058835237 . 234 8033024596.Thank You Dr.