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CRM Strategy

Dr. Elijah Ezendu


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


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.

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, CRM Strategy

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


Claimed Importance

Hygiene Factors




Hidden Opportunities

Study/ Invest


Real Relevance


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




Shared Values/ Subordinate Goals




Action Points for Testing CRM Strategy

Examine each of the 7S. Identify the key success factors of each S. Ascertain the gap between the elements and the strategic fit. Solution should be either to amend the elements accordingly or to alter the CRM strategy.

Aligning CRM Strategy to Business Model

Its imperative to align CRM Strategy to a firms 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. The focus of strategy is determination of position and codification of aims and objectives, while business process captures and implements the strategy.

Business Logic Triangle

Planning Level

Business Strategy

Business Model Architectural Level

Implementation Level

Business Process

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.
Source: John McKean, Customers Are People

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, and ensuring effective communication of the standard to customers. CVA = Perceived worth of a businesss offer Perceived worth of a competitive offer

Steps for Implementing CVA

Identify customer values Identify competitors offers Build customer values into firms offer to obtain firms interim offer Compare firms 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

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, CRM Strategy

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.

Ladder of Loyalty
Partner Advocate Supporter Client Purchaser Prospect

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

Source: Christopher, Payne & Ballantyne, Relationship Marketing

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

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.
- Craig Bailey & Kurt Jensen

Aligning Organizational Resources

Personnel Operating practices and procedures Systems (internal and external) Products and services

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

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.

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

Requirements for Building Mutually Profitable Relationships

Ascertainment of customers request Ensuring Profitability Find out repeatability of transaction Determination of feasible term of relationship.

Voice of The Customer Process

Obtain customers pulse Involve the customer Analyze information Socialize results Implement customer-focused changes Respond to the Customer

How to Obtain Customers 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 customers firm.

Factors that Aid Collection of Inputs from Customer-Facing Personnel

Environment of trust Establishing expectations with personnel Managing anecdotes

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

Analyzing information
Analyze customer feedback and information obtained Compare to other information held by the firm

Output: i. Positive trends ii. Challenging trends iii. Issues raised by customers

Such information include the following: i. Customer demographics ii. Transactional history

This gives rise to development of customer segmentation strategy

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

Other Methods of Updating Customers

Newsletter E-mail Website E-zine Instituting the update as a component of firms account management practices Using interactive sessions of forum or board of advisors. Responding immediately to participants during survey.

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, Marketing and Service. Absence of a cross-functional implementation team Biting more than one can chew Organizational unpreparedness

From Product-Focused to Customer Centric Firm

Customer Orientation

Discrete transaction at a point in time Event-oriented marketing Narrow Focus

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, 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

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

Truck Manufacturing

Traditional Product

We sell and service trucks

Financing Service Application/Design support

Aerospace Components

Aerospace Fasteners

We sell highperformance fasteners



We provide electricity reliability

Energy asset maintenance

We can help you reduce total energy costs



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



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?

Its 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

Customer Advocacy Process Framework

Customer segmentation Engagement process Escalation process Response planning, analysis and execution Managing customer experience through resolution Internal management review

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

Dos of Customer Centricity

1. Adjust your mission and vision statement 2. Segment your customer base 3. Align your organization structure with the segmented customer view 4. Make good use of technology 5. Create new performance measures 6. Study the behaviours, attitudes and demographics of your customers 7. Try to understand the true value of your customers

Donts 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. Empower employees, particularly customerfacing staff for proactive relationship-building

9. Set clear goals for achieving a defined state of customer centricity by a certain point in time 10. Encourage and seek to create customer loyalty 11. 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, you got there Think of loyalty as the tenure of a customer (duration of the relationship) Limit your change management efforts to the marketing, sales and customer service functions

The Seven Characteristics of Customer-Centric Companies

i. ii. iii. They conceive of themselves not as a group of products, services, territories, or functions, but as a portfolio of customers. They know how much money they make or lose with each of their customers or customer segments, and they understand why. They understand the different needs of different customers and group them into operational customer segments and sub-segments based on common needs. They thrill their customers by delivering knockout value propositions that competitors cannot match. They continually innovate by evolving their customer segments and sub-segments, and improve their value propositions as customer needs change. 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. 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; because they manage their customer portfolio on this basis, they know what to manage and where to invest in order to create sustainable, profitable growth and drive outstanding share price performance over time.
Source: Wharton Business School

iv. v.



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

Thank You

Dr. Elijah Ezendu, 234 8033024596, 234 8058835237