Despite the body count, we cannot leave it alone. Hundreds of websites, books and consultancy practices are devoted to Customer Relationship Management (CRM).

Not to mention the enormous investment in software products. Deep down, we all know that we don’t have a choice.

Global marketplaces, reduced barriers to entry for new entrants into those marketplaces, increased competition and reduced margins, the fight for customers is on.

So we put CRM on the list of projects this year and scope out the ballpark project budget. The budget may make you blink, so if you cannot put hand on heart and say exactly what you will get for your money then stop.

You are quite right to be concerned if you cannot define your investment in CRM in terms of the benefits to your business. You must have confidence that those benefits are real.

It is unreasonable to expect a software product to delver customer intimacy, loyalty and retention - despite the sales pitch. CRM should be treated like any other growth strategy, the benefits must outweigh the cost. The reality is that CRM needs to permeate every aspect of your delivery processes for you to reap any significant benefit.

October 2006

Prepare to be successful
There is enough experience in the market to ensure that CRM projects do not fail for those willing to listen and to question. The CRM landscape is evolving. There are now experienced practitioners and experienced customers alike who have been there, done that and know how to get it right. It simply was not like that 10 years ago.

The marketplace for CRM toolsets is consolidating. We can buy tools that offer basic functionality and full integration with transactional systems or niche tools that offer more of a gee-whiz factor. The advent of Microsoft’s toolset has opened up the market in New Zealand in a subtle way – it has brought the concept of CRM into the mainstream. Current research shows that the appetite for CRM projects is increasing and senior managers are willing to try to understand how to develop and leverage such a powerful capability for competitive advantage.

With more organisations seeking to put a toe into the CRM waters and the toolsets moving towards commodity status then the competitive edge will not come from simply having CRM tools, it will come from having a CRM capability – from what you do with the toolsets. In my experience, CRM has six key elements – ignore any of these at your peril.

Strategy
Call it what you will - vision, strategy, but you need to know who you want to manage and how you intend to go about it. This cannot be delegated to the project team. This is an executive activity first and foremost. Operational excellence is most certainly an aspect of the strategy and should always be included but the competitive edge will come from what you do after you ensure that you consistently meet service expectations. Sometimes called ‘surprise and delight’ strategies, these can be those little ‘moments of truth’ that make your customers think twice when being wooed by a competitor. With luck, those same customers will happily recount their experience to friends and family. Both these outcomes are the end game for a viable customer management strategy; a strategy which must seek to understand what is needed to attract new customers and to retain existing ones as repeat purchasers.

People
People implement strategy – every day in every way. Too often we forget that we deal with individuals when we interact with customers, we don’t deal with organisations. Individuals form customer organisations but we sometimes forget the personal nature of each and every interaction.

Fostering positive attitudes in your staff is a perfectly valid CRM strategy. Understanding what satisfies your customers is another. How you develop people who will take your message consistently to market is not always easy but one of the starting points in your CRM journey must be to make it easy for your staff to deliver the message by supporting them with processes and tools.
 
Process
Processes hold CRM together and drive CRM experiences, good and bad. When customers complain, often they do it about the process rather than the person who is simply following procedure. Sadly, when customers are happy they are sometimes complimenting the behaviours of an individual who stepped outside the process to deliver exemplary services. Processes are the dirty dark backroom stuff that are only ever noticed when it goes wrong. When you embark on the CRM journey you have an opportunity to involve your staff in the design of processes that truly work for your customers.

Tools
Too often the driver for projects to implement CRM capability, the tools should be the last aspect to be considered in a CRM project. In today’s market, the toolsets are varied and affordable – from rented solutions to fully integrated functionality embedded in ERP product to niche products that handle specific aspects of capability such as web based marketing. But don’t go shopping until you know what you are looking to buy.

Analytics
The need to understand pops up again and again. The old adage that you cannot manage what you cannot measure is never truer than in the CRM world. Without the ability to measure and analyse, you will never know whether you are making your customer experience better or worse and therefore improving or damaging your bottom line. This is a critical step in the journey that will make sense of it all and a true business intelligence capability will drive and refine more than just your CRM strategy. It is worth considering whether this should in fact be the first, not the last building block in the CRM landscape.

Getting your customers to notice
The purpose of a CRM project is to make you more attractive to customers. With all the tools available; your marketing tools to communicate, your campaign tools, your channel management tools. The drive to do it more conveniently, more efficiently, more successfully is paramount.

However the desire to be better can increase the costs to a point where your business model is unsustainable. Focus on understanding the expectation level of your customer and meeting this again and again with no exceptions.

When you can consistently meet the service expectations of your customers then it is time to focus on developing those single experiences which truly mean that your customer has an emotional bond with you as an organisation. Reward customers who stay with you as well as those you switch to your services. Surprise and delight each and every customer on occasion, and never dilute the value by failing to meet core service expectations.

Focus on your core metrics – these support operational excellence – and keep analysing until you know how it works in your chosen marketplace. Measure behaviours – and then use CRM to change them. Then your customers will notice and you will no longer simply be counting the cost.

Further Reading

• CRM Buyers Guide

For more information visit the CRM Research Pavilion for exhibits, case studies, white papers and downloads from a range of New Zealand’s leading CRM vendors.