STRATEGY AND ORGANISATION OF CRM

Building Customer Relationships

Customer Customer
perceived value satisfaction
•The difference •The extent to
between total which a
customer product’s
value and total perceived
customer cost performance
matches a
buyer’s
expectations
 WHY CRM IS A CUSTOMER AND
COMPETITIVE NECESSITY
 It costs 5-10 times as much to acquire a new customer then to retain
an existing one.
 “Some companies can boost profits by almost 100% by retaining just
5% more of their customers.” Harvard Business Review
 The average new customer spends $24.50 at a given web site in the
first 3 months as a shopper. The average repeat customer spends
$52.50 every 3 months.
 Most companies lose 50% of their customers in 5 years
 On average only 15% of a site’s customers consider themselves loyal
to it. The loyalty rating among people who had experienced a problem
is only 6%, not experienced problems is 19% and the loyalty rating
among customers who had experienced problems but were satisfied
with the way they were handled is 21%.
 (70% of repeat purchases are made out of indifference to the seller,
NOT loyalty. (eLoyalty)
 TOTAL CUSTOMER
DEVELOPMENT™ HIERARCHY
Customer Actualization Management tm

Customer Evangelism Management tm

Customer Lifecycle Management

Customer Experience Management

Cause Marketing Management

Customer Quality Management tm

Customer Innovation Management tm

Customer Relationship Management

Interactive Marketing Management

THE BASIC FUNDAMENTALS OF CRM ARE CONSTANT

We need a 360 degree view of our customer"

"We need to track our marketing leads"
"We need to obtain more customers"
"We need to measure our marketing return on
investment"
"We need sales force automation"
"We need to increase our customer satisfaction”
EIGHT BUILDING BLOCKS FOR SUCCESSFUL CRM
PROJECTS:
1 Vision: The board must take leadership in creating a CRM vision for the
enterprise.
2 Strategy: The CRM strategy is all about how to build and develop a valuable
asset: the customer base. It must set objectives and metrics for attaining that
goal. It directs the objectives of other operational strategies and the CRM
implementation strategy.
3 Customer experience: The customer experience must be designed in line with
the CRM vision and must be constantly refined, based on actively sought
customer feedback.
4 Organizational collaboration: Changes to organizational structures,
processes, metrics, incentives, skills, and even the enterprise culture must be
made to deliver the required external customer experience. Ongoing change
management will be key.
CONT…
5 Process: Successful customer process reengineering should create
processes that not only meet customers' expectations and support the
customer value proposal, but also provide competitive differentiation
and contribute to a designed customer experience.
6 Information: Successful CRM demands the creation of a customer-
information blood supply that flows around the organization, as well as
tight integration between operational and analytical systems.
7 Technology: CRM technologies form a fundamental part of any
enterprise's application portfolio and architecture. CRM application
needs should be considered as the provision of integrated functionality
that supports seamless customer-centric processes across all areas of
the enterprise and its partners.
8 Metrics: Enterprises must set measurable CRM objectives and
monitor all levels of CRM indicators to turn customers into assets.
Without performance management, a CRM implementation will fail.
STEPS BEFORE BUILDING YOUR CRM STRATEGY
1. Understand the issues and challenges that you
currently face when interacting with your
customer.
2. Identify your customer journeys. “A customer
journey is how your customer interacts with your
business, e.g. purchasing a product, reporting an
issue. Then align your internal business processes
with these journeys. This will help you determine if
you are easy or hard to do business with.”
3. Identify how you will measure success, what will
your KPIs be. “Once you have identified them,
measure your current state of play. That way you will
have a comparison point.”
CONT…

4. Identify critical business dates or

milestones. “Do you have a new product
launch coming?”
5. Another task that it is important to
undertaken before strategy building begins in
earnest is ensuring that your data
management is in good shape. “garbage in,
garbage out. ”
 CRM STRATEGIES
Customer Acquisition
 Gain the greatest number of new “Best” customers as early
in their “lifespan” as possible.
Customer Retention
 Retain and expand your business and relationships with
your customers through up-selling, cross-selling and
servicing.
Customer Loyalty
 Offer programs to ensure that your customers happily buy
what you offer only from you.
Customer Evangelism
Enable loyal customers to become a volunteer sales force.
Cost Reduction
 Reduce costs related to marketing, sales, customer service
and support.
Improve Productivity
Enhance your e-business strategies.
 CRM BEST PRACTICES /
CRITICAL SUCCESS FACTORS
Customer-Centric Design
• Leverage Your Marketing Plan, Strategies and Segments.
• Based on Customer Value, Requirements and Related Processes.
Project Plan and Methodology
• Establish Prioritized and Firm Requirements, Scope, Team.
• Nuggets: Demonstrate credibility-building quick results first.
Top Management Sponsorship
• Secure On-going Figurehead, Vision, Communication, Commitment.
User Buy-in and Use
• Train, Fun, Communication, Enthusiasm, Motivation, Workshops,
Support, Recognition, Rewards, Punishment?
Track Key Metrics and Grow
• Increased / Decreased Sales, Costs, Profitability, Satisfaction $, %