Using a CRM Solution to Maximize ROI from SMS Campaigns

According to the research market intelligence firm IDC, the market for CRM solutions has witnessed tremendous growth in recent years with total figures estimated at $ 18 billion for 2011, marking a 7.6 percent year-on-year growth. CRM software applications are used across business functions to optimize processes and increase profitability. As businesses become more and more aware of the benefits of CRM, one question always remains a cause for concern – what is the ROI?

Here we take a look at maximizing ROI of an SMS campaign using CRM solutions. Owing to the constant proximity of a mobile phone to its owner, text messages are considered as one of the most appropriate channels for interacting with the customer. According to research firm IDC, the global Smartphone market is expected to have grown 49.2% over 2011. With such figures, it is safe to say that SMS marketing is here to stay, especially as SMS campaigns are the cheapest form of mobile marketing available.

Link between SMS marketing and CRM
Text messages are one of the most interactive and immediate communication channels available between a business and its customers. Furthermore, these can be narrowly targeted and personalized. In many ways, SMS marketing is inter-connected to the basic concept of customer relations. An SMS establishes a direct contact with the customer and hence, is instrumental in creating and/or maintaining relations with the customer. An SMS can be easily customized to specifically cater to individual clients. It can also be personalized to act as direct communication with the customer. All this improves the quality of communication with the customer leading to a better relationship.

In a cluttered market, SMS acts as a communication channel which can cut right through the cobwebs to reach the client directly. It also provides valuable customer data that goes beyond the mobile phone number. Responses from the customer provide meaningful insight into their preferences and buying behavior which forms the core of CRM.

Text messages are used to create an initial database of phone numbers. After the initial SMS are sent, the database is built based on individual interactions. CRM solutions ensure that valuable data is extracted from each interaction and stored for real-time use. This data is then used to further improve the client interaction and service. The advantage of such a database is that it is customizable. This means that it constantly changes according to the customer so that they can be catered to accordingly.

Increasing ROI with CRM
According to research firm Gartner, companies matching the most appropriate CRM application to desired benefits are likely to witness 15-30 percent faster returns than those which don’t. Companies can increase ROI from SMS campaigns by using CRM applications with an inbuilt ability to enhance text message interactions with the client. Such applications aim at facilitating the SMS campaign, capturing valuable data through it and further using this data for business growth. An effective CRM software also responds instantly to incoming SMS with an appropriate message to inform customers that the organization is following-up shortly or will contact the person soon.

Short Codes are an efficient tool used in SMS marketing to provide automated responses to customers. Usually five digits long, these enable users to get quick answers to their queries, registration requests and other simple interactions. Furthermore, these ensure that customer information is created and updated automatically. As customers get quicker responses to their queries, this increases customer satisfaction which is the basic goal of CRM applications.

Short Code Management aids organizations in running mobile campaigns to increase lead generation, capture data in real-time and use this to enhance the customer experience. In other words, this is a great tool for companies to become more customer-oriented and improve their customer service and offerings. Furthermore, one can schedule campaign messages to be sent automatically at a specific time providing additional flexibility for the campaign.

Keeping a CRM approach in SMS campaigns helps ensure that the customer does not witness any disruption or invasion. For example, providing ‘opt-in’ confirmations and an ‘opt-out’ choice are instrumental in keeping the customer happy. With an ‘opt-in’ confirmation, they know that they are on board and with an ‘opt-out’ choice available, customers are content that they can leave the service when they want. An ‘opt-out’ customer can also be added to the CRM software text message DND (Do Not Disturb) list.

In today’s world where channels of communication are many and widespread, SMS marketing manages to facilitate that personalized contact with the customer which is essential for good Customer Relation Management. Companies seek to integrate their various channels and in this mix, SMS often acts as the stepping stone to other forms of interaction. With such crucial aspects attached to SMS campaigns, CRM solutions are essential to ensure maximum ROI from them.

Role of CRM in Achieving an Unparalleled Customer Experience

Customers are unquestionably the lifeblood of an organization irrespective of size and scale of business. The growth of business organizations is aided by providing a powerful Customer Experience (CE).

Rapid growth of social media and communication channels empowering customers with information - all this coupled with an unpredictably changing, post-recession economy - leaves companies with limited choice in searching for new growth avenues. Customer is the center around which companies are revolving and trying to find unique ways of differentiating themselves.

A positive Customer Experience is a long term objective with spiraling benefits.The million dollar question - How does a company accomplish this complex goal? Managing customer relationships adeptly, via a comprehensive CRM solution system is the most logical answer.

A company that cracks the code of thoroughly understanding & pleasing the customer, realizes that customer satisfaction is not just through distinctive products having value for money, but most significant is the emotional bond a company manages to create with their clients, by living up to the promises they make through deliverables. Customers therefore get emotionally connected and committed to the specific company and will not consider competitors.

Understanding customer experience and the role of CRM solutions
A prodigious Customer Experience is structured around positive feelings, impressions, interactions, and several other factors involving customer-company communication. Based on their interactions with an organizations’ people, services & products, sites, and any other touch point, customers form opinions which leave a lasting impact on their minds.

Providing an exclusive and memorable customer experience should be the ultimate goal of any CRM system. CRM solutions assist in identifying, understanding, classifying, assimilating and ultimately serving customers in an efficient manner. Consumer-focused organizations very well understand the solid connection between good CRM and a superior customer experience.

A pivotal business advantage that organizations gain from an efficient CRM system is the ability to provide a unique customer experience at all touch points, which works wonders in making an organization stand apart.
Customer Experience (CE) encompasses everything right from first impression to the last, and it is essential to focus on each point in progression.
Intellligent customer data management using CRM solutions
In the CRM world, it is said that a great CRM software is as good as its data. Managing voluminous data in a qualitative manner is what makes a particular CRM software stand a notch above the others. Having the right information at the right time in the hands of the right users creates quality data. This becomes the foundation for positive customer experience and customer retention. The ramifications are experienced throughout the organization directly and indirectly.
  • Data Collection: CRM systems begin with collecting & extracting customer data from various sources. Obtaining complete information is the first step towards a good Customer Experience. 
  • Data inclusions: Every relevant detail about customers is recorded, starting from core profile data such as contact details, information like credit profile, service history and such other details are also included in the system. Minor points like particular personal preferences that customers have towards products & services, should be included in the system too, so that clients are served in the exact manner as they desire. 
  • Clarity: A dependable CRM system helps to maintain clear & updated customer information. Clarity of data brings ease in access, use and application for the necessary departments/ individuals when needed. It also eliminates duplication and redundancy of information. 
  • Business Intelligence (BI) Systems: Voluminous data is crunched by the in-built BI system that modern day CRM systems come with - this can be coupled with accurate profiling. Thus, data discrepancies can be identified early & holistic plans to improvise can be formulated. Thanks to these system combinations, even the most miniscule information can be recorded and used to decode complex customer patterns, helping create an extensive knowledge base. 
  • Heterogeneity converted to Homogeneity: A massive & imperative task that CRM systems assist in, is the segmentation of a large heterogeneous consumer group into homogeneous clusters. This kind of relevant segregation enables companies to plan, budget and design their sales & marketing strategies towards each group. The result of such focused marketing efforts is a completely satisfied customer from every single group. 
  • Consolidation & Personalization: All customer information is sorted and placed in the CRM system, making it easy to gain insights into Customer Profiles. This makes it simple for the sales force to pick & choose the right offer for the right client at the right time. Clients will naturally be attracted to the personalized feel they get out of this. Giving them valuable updated product information & promotions will reap benefits immediately as well as in future.
Deliver an unmatched customer experience with a high impact CRM solution
  • Have a clear vision & communicate it throughout the organization. Vision should hold identical meaning & equal importance to all. Leaders should display firm belief in the concept, only then will the lower rung of people envision it with similar intensity. 
  • Do extensive research - it will build the backbone of the system and allow creating a strong framework for the execution of vision & plan. 
  • Redesign & reorient the entire organization to have the customer centric philosophy imbibed in people and processes. 
  • Recruit, train and empower people to deliver a customer rich experience. 
  • Identify & break silos. All plans, ideas, tools & technologies should be logically connected without any missing links or loopholes. 
  • For a beneficial CE, it is vital that the technological foundation and implications of the CRM system are understood and applied correctly. 
  • Internet, computers, mobile devices, and the permutations & combinations thereof, expose consumers to all kind of information. Today’s customers are not just well informed, but also technologically savvy. Companies must plan how to manage well informed customer. 
  • Identify apertures between present performance of the company and customer expectations. Make every effort to fill the gaps. 
  • Find out ways & means to retain customers psychologically rather than financially trap them. Focus on powerful customer loyalty. 
  • Share relevant and interesting information with each group, instead of sending generic information to everyone. 
  • Make note of customers’ personal details, send greetings on special occasions. Don't treat them like a mere business interest - it’s imperative for customers to feel unique and gauge that the company really values them.  
  • Always maintain an all round view of the customer-company relationship and closely monitor progress of the same. This will provide clarity about acquisition and retention of customers & help in clearly comprehending what customers need, value and desire from the company. 
Regularly calculate ROI to ensure that funds are being invested with adequate returns. A truly profitable company is one that strikes a perfect balance between earning revenues and accumulating goodwill.
CE professionals need to advocate the implementation of CRM solutions that bring an outside-in perspective to CRM efforts, instead of one that takes an inside-out approach. To achieve this, it is mandatory to build a CRM framework that focuses on putting the customers first and lays emphasis on their needs right from the roots.

The next step is to plan how to have that "value" delivered. Instead of the traditional business strategy of first chalking out what is profitable to the company and marketing that to the customer, it is a better bet to gain absolute clarity on every single customer expectation, meticulously lay out the framework of ALL their requirements, then align the company's business strategies & systems to meet those expectations - if possible, exceed them.

Outstanding Customer Experience Management increases sales volume, loyalty and retention of customers. Naturally this brings efficiencies of scale leading to cost reductions, multiplication of revenues and overall growth and development of the company. A satisfied client will recommend the organization, which is one of the key metrics in measuring positive client experience. Every firm should realize the clear link between their business objectives, markets, & their CE strategy. This is important to have balanced results in the CE area.

Finally, to really seep into the minds of customers, organizations should place themselves in the customers’ shoes. This will create competitive differentiation, amplify customers’ trust and confidence in the organization, and ultimately render an unforgettable Customer Experience.

How to Manage Customer Data Privacy in CRM Solutions

Customer Relationship Management software is increasingly being adopted by companies today. In a recent survey of 96 international firms by the Conference Board, fifty-two (52) percent reported of having implemented a CRM solution. The top reasons cited for this were to increase customer retention or loyalty (94%), to be decisive in response to competitive pressure (77%) and to differentiate themselves from their competition based on superior customer service (73%).
The ability to capture and capitalize on customer activities and experiences and in turn distributing customer information is a fundamental function of a CRM software. The question which arises based on this distribution is how the customers’ privacy is maintained and how much does the customer know or understand about the information being collected.

Where is customer information coming from?
The primary sources for information that is fed into the CRM software are customer service inquiries, customer surveys and sales force input. Of the firms interviewed by the Conference Board, over half reported that the data analyzed came from both internal and external sources. Sixty two (62) percent reported capturing data at the point of sale and then using this data to profile existing customers and prospect new customers.

What information is being collected?
While collected information may vary along business lines, the general profile collated includes:
  • Name – so communications can be personalized 
  • Contact details – address, telephone 
  • Profile – age, gender, household or business income 
  • Transaction history – what is the customer’s spending profile 
  • Communication history – has the customer ever contacted the firm and in what context – compliment or complaint 
  • Payment history – does the customer pay on time or fall in arrears
This information, while essential for the analysis of customers, needs to be considered within the confidentiality of the customer base.

Can privacy be maintained?
Consumer fears about privacy are a threat to any company’s CRM system. This is especially true for those firms engaged in any type of e-commerce. Of the firms interviewed by the Conference Board over half claimed to use “permission based marketing” where they have requested and received permission from the customer to contact and make product offers to them. Less than half reported communication of their privacy policy to their customers and less than one third had revised their privacy policies based on the new technology available.

It is critical to maintaining the customer relationship that the information collected is not misused. Privacy consultant, Jeff Tomes has outlined five basic privacy guidelines which should be incorporated into all company privacy policies as they relate to Customer Relationship Management:
  • Tell customers you are collecting information 
  • Tell customers what you will use the information for 
  • Give customers the ability to opt out of collection 
  • Allow customers to access their profiles upon request 
  • Alert customers from time-to-time of new threats and the best practices to tacke them 
  • Inform the customers of the risks involved 
  • Keep your data in the most secured infrastructure environment 
  • Sign strict NDAs with internal stakeholders on information sharing 
By following these guidelines there is an assurance to customers that their privacy is important to your company. Explain the information gathered is treated respectfully and that by gathering this information there will be the ability for the company to offer the customer greater value in return.

Privacy Laws and CRM
Companies must be aware of and comply with not only the privacy laws of the country in which they are located but of the countries in which they do business. Staying in compliance with a mass of privacy laws is difficult for even the most sophisticated and dedicated CRM based companies. It is essential, therefore, that a company research and understand the privacy laws of all countries it does business with or plans to do business in at a future date.

Interestingly, to facilitate growing concerns for the security of customer information, CRM systems enable administrators to control employee access to customer data through user and organizational level security settings that can specify I.P. addresses or locations for logging-in to the CRM software. Several CRM tools are also used to specify sharing rules for records, set visibility for files, customize page layouts and assign read/ write access to critical information. These precautions ensure an organization's existing customer data is secure and keeps growing without fears of misuse of critical information.  

5 Points to Keep in Mind while Planning for a CRM Implementation

Understanding CRM Objectives
It is a well established fact that CRM implementations often fail in organizations big and small. Before one delves into the gory details of such failures and conducts an analysis of case studies, it is important to understand the basic causes. Chart out the general dos and don’ts that could help avoid failure. Several factors are responsible for unsuccessful CRM solutions and low ROI (return on investment). The most basic reasons are -
  • Inability to define a clear objective and end goal for the CRM program. If an organization cannot clearly envision the exact reason why they are walking the path of implementing a CRM program, the lack of vision will spread throughout the organization creating confusion and an improper application. 
  • Poor strategic planning in terms of deliverables and not correctly managing critical information necessary for the deployment and operation of the CRM system can lead to failure too. 
  • If the goal is clear but there is no specific roadmap as to how it will be implemented/ deployed, the CRM solution has little chances of succeeding. When a situation arises where there is both lack of goal clarity and an improper framework, the question that will arise is - it if you don’t know “why”, you will not understand “how”. If you don't understand your needs, you'll implement a solution that won't meet them. 
  • Some companies rush into launching their CRM solutions without complete focus and do not plan their strategy in totality, leading to hesitant adoption, and subsequently, poor implementation, and ultimately not meeting the organization’s CRM objectives.
Breaking the Silos
In larger organizations, due to the existence of several departments and the specific people in each domain, sometimes varying levels of interest and initiative is displayed by all departments, and people may have preconceived notions, biases, contrasting sets of priorities, different interests and immediate needs. All this leads to reduced overall enthusiasm. This is also where the vital need to identify, understand and break Silos comes in. Lack of understanding and co-ordination among the different departments of an organization leads to fragmented application of CRM solutions. Not having all the decision makers operating toward a common goal and pulling in one direction is one of the chief reasons for failure. If the challenge of organizational collaboration and overall integration in large organizations is met, there is a good chance for the CRM program to succeed and achieve the desired results.

Understanding what the CRM solution offers
Another hurdle is improper understanding - and the resultant poor application of CRM Solution. If an individual or department has trouble understanding the software in the first place, it could lead to an erroneous application, which may lead to increased inefficiency, errors and frustrations. On the other hand, if it is kept simple, clarity in understanding will be higher, and consequential application will be effective, thus avoiding errors. Another point concerning SaaS is the contrast between customization and flexibility.

In some cases, highly customized software leaves little room for it being flexible, and in others, extremely flexible software cannot be properly customized. This important relationship between customization and flexibility of CRM software should be identified and clearly understood. The key point to be kept in mind while trying to gain an insight into this challenge of balancing flexibility and customization is understanding very clearly what is forcing your business to implement a tailor made solution. Why modify and adapt the CRM to fit in with your operations and more importantly customer requirements, when this will lead to failure in achieving the basic goals of CRM?

Calculate TCO over next 3-5 Years
In certain large organizations, the Top Level views CRM as a mechanical program that has specific start and end dates whereas this is not the case. In fact, CRM implementation is not limited to restricted and pre-decided time limits, it is more of an ongoing process, it is about people and processes, analyzing and improving business rules, user and customer psychology, and even analyzing and improving social interaction; that is, interactions between the organization’s teams and most importantly between the entire organization and its customers.

A key point to consider is a discrepancy between vendors and vendor size, and their quotations. In this aspect, a very important factor is hidden costs. Implementation costs usually inflate to twice or thrice of what the vendor states in the beginning. The financial strain and a project that keeps dragging can lead an implementation to break down and collapse. Hence, it is essential to chalk out a financial plan, dedicate an approximate budget solely towards the planning and execution of the CRM program, and allocate resources accordingly. It would also be wise to have metrics for defining success and not letting the vendor entirely define the methodology.

Training is another important area of consideration in CRM programs. Many companies do not have proper training plans to support their application and proper implementation of the system. It is vital that the CRM implementation team should be assessed in the beginning for its capabilities in delivering the desired outcome, and trained accordingly.
Phases of Implementation
During the implementation of a CRM solution it is more advisable to ensure that the sensitive and important aspects of the solutions are implemented slowly or in a phased manner. Areas that are mandatory yet less sensitive and meant for the marketing and sales and customer support teams should therefore be implemented/activated first. This way the risk element is reduced to an extent. It should also be kept in mind that the system should constantly change, evolve and adjust to changing needs and times. For example, if the system cannot meet the evolving needs of salespeople, they will stop using it. Another key point to remember is ultimately, CRM is all about being customer-centric. However, some organizations fail to remember this ultimate goal. The processes, although meant to be designed for the customer are at times, being run to make it easier for the company staff. The irony here is that customers do value empowered staff, but at the same time they also place the final value on customer focus. This is where most CRM efforts fail to deliver.

Thus, to ensure successful CRM solution implementation, primarily, the CRM objectives and priorities should be well thought out, followed by a well streamlined execution plan and framework. If and where necessary, especially in case of larger organizations, breaking down the program into smaller and more manageable pieces would be a good idea. Involving all the relevant stakeholders inside as well as outside the organization in the most efficient manner, would definitely ensure success. A part of this effort would be integration of existing systems and clear, simple communication with all people involved. People also involves the CRM vendors – they should be thoroughly researched and there should be a clear aim and focus on the exact needs before taking any decisions about vendors and the systems they provide.

Once implementation begins after all the required research on the above mentioned areas, the system should be reviewed from time to time, always leaving room for flexibility and adaptability to changing requirements as well as current trends. Finally, never forget that CRM is always all about the Customer and maintains a Customer-Centric point of view.

3 Ways to Boost your Marketing Campaign's ROI

According to research by Gartner, the spending by marketing on CRM solutions is steadily changing - 21% of CRM spending in 2009 versus 16% in 2000. More and more CMOs (Chief Marketing Officers) are realizing the value of an effective CRM solution as a social networking tool and for managing mobile campaigns.

There is an old adage in business that it costs more to attract one new customer than to retain two current ones. The Harvard Business Review found that a five (5%) increase in customer retention could boost profits anywhere from twenty five (25) to eighty five (85) percent.

So, what does a company have to do to maximize returns on marketing spend? - Run campaigns which increase customer loyalty and attract select new customers most likely to become loyal.

First, the company and its brand must become customer-centric. The world today is becoming increasingly collaborative and co-creating products with customer inputs is becoming a necessity. Social media has the ability to fortify or to damage a brand in record time - with the click of a mouse any news about your brand and the company behind the brand – be it good, bad or awful – spreads like wildfire.

Understanding the Buying Behaviour of Targets
In any industry, be it retail, manufacturing or services, the key to success is targeted relevant information delivered through effective channels. CRM solutions by their very nature are about building relationships with existing customers, all the while identifying those characteristics which make a customer loyal. In turn, this information can be applied effectively to campaigns which attract new customers.

Marketing automation in a CRM solution provides the ability to capture the complete purchasing history of current customers. Providing insight into their behaviours, needs and preferences allows for targeted campaigns at optimal times.

Knowing what the customer’s preferences, behaviours and needs are also enables the planning and production of marketing campaigns faster and the ability to execute them quickly. Through on-going display of results and analysis of those results, campaigns can be tweaked once they are initiated, based on customer feedback. As brands mature the buying behaviours of their customers mature as well. The analyses of these more mature buying behaviours allows customer segmentation to determine how marketing efforts need to be adjusted.

Social and Personalized Channels
In a collaborative environment, email and social media are vital ways in which companies can cultivate their customer relationships. However, misuse of either of these outlets can significantly damage customer relationships as well.

A CRM solution can be used to personalize messages, send them at optimal times and even identify potential customers. Most important, is the ability to use inbound communications from the customer to trigger the targeted outbound marketing efforts. In each case, however, it is critical that management understands the power of the media used. If using social media, there is a required recognition that it will impact not only on current and potential customers, but may spread virally to those not intended to or interested in becoming customers. If email is overused the customer may discontinue the electronic relationship or may simply ignore the communications.

CRM also allows for the integration of marketing and customer loyalty programs. Recognition of action with immediate reward provides increased opportunity for retention of current customers.

Analyzing Effectiveness
The marketing automation component of any CRM solution enables the identification of campaigns and promotions which have been successful and which have failed. Comparing campaign ROI with expenditure generated through the CRM solution can provide useful insights related to profitability and help determine a new strategy. It also identifies trends in the marketplace and customer spending patterns. By analysis of this information, targeted campaigns and channels can be identified. In doing so, marketing dollars can be allocated more effectively – running only those campaigns likely to have the highest return on investment.

To summarize, campaigns driven by an effective CRM solution provide improvements for-
  • Customer communication 
  • Customer service 
  • Customer recognition
All of these points can lead to improved customer retention and profit.

Evaluating your Customers Over their Lifecycle

The customer is a valuable asset to any organization. Every organization tries to incorporate a lot of strategies to gain, and sustain its pool of customers for a longer time span. If a company becomes successful in gaining and retaining customers, it is its biggest achievement. There could be possibly two prime reasons for such an achievement. First, the company has a good standing in the market which is why it could attract ‘prospective customers’. Second, it is consistent in delivering just ‘the best’ and therefore its customers are happy to come back time and again. This further means with the same customers the company can hope to generate predictable profits.

Now that we know if customers keep coming back to the same company the prospects of the company’s growth become higher. Let us understand clearly how. When we talk about life long association of the customers, we also mean to indicate a few other important elements allied like “Lifetime Value of customers” or “LTV”.

What is Lifecycle Value of customers?
Customer Lifecycle Value is all about the future. It is based on the customer’s retention with the same company primarily, and then the rate with which a customer spends. If any company is sure of its reliable customers, then by applying a strategic estimate it can analyze roughly how much revenue those customers can generate in the nearing future. This estimated value is the ‘Lifetime Value’ of customers. Interesting?

The simple formula to calculate the customer lifetime value is by multiplying the average sales by the average number of times they will come back. 

Customer Lifecycle Value is the value of expected cash flow from the customer in the future.

Not only this, but there are also some additional benefits attached to it. Let us presume a company named ‘Xylon’ starts its business and progressively starts to get a good customer response. If it has more capital to invest, it is probable that it would try to expand its business. With analysis of past performance, suppose now Xylon expand in a different geography to earn more customers. Now here, Lifetime Value of customers comes into play. Not only does Xylon intend to attract new customers, but also needs profits to keep flowing in because of existing customers to fund future expansion.

Importance of Lifecycle Value of customers
Since Lifecycle Value of customers can be adopted by the companies to look at the investments they make to acquire customers (like sales and promotion, customer service, customer retention, etc.), and also the fruitful returns they get from them, it often gives them satisfaction of long-term customer relationships.

In a business, though one can never be certain of profits and losses, but by following a strategic plan we can become cautious. It is always preferred to chalk-out a rough plan of action to determine its marketing strategies. This is required in order to fetch more business, that too with negligible wastage of funds. After all, acquiring new customers and retaining old ones is not an easy task!

It will be a positive forward-looking strategy for any company to keep a watch on what it spends in adding new customers, and what it gains from the existing ones. Besides this, if a company continues to create a positive experience and take care of its loyal customers it will be benefited doubly –
  1. The company will encourage word-of-mouth marketing through each of its satisfied loyal customers, who will share their positive reviews with their friends using social networks and always-connected devices. 
  2. Earning profits from the existing customers will be cost effective because the company will only be required to fulfill their usual demands which will be similar to those in the past. This will be less challenging and far more cost-effective than trying to get business from new customers.
Companies often tend to scrutinize the behavior and needs of the customers and try to base their sales and marketing plans on them. They often see their customers with the value of purchases they make. For an instance, if a customer buys a product worth USD 1,000 the company sees the customer as being worth USD 1,000. If the same customer purchases another product of the company worth USD 500, company sees the customer as being worth USD 1,500 (adding his previous purchase). But the right way to see a customer is not only with his present purchase records, but also with the purchases they are likely to make in the future. This is known as the Customer Lifetime Value (CLV).

Studying such records about the customers is important as it gives important clues to the company to determine their future along. From the ongoing business relationship that a company has with its existing customers, the future prospects of the company can be calculated easily. Customer Lifecycle Value is used by the company to calculate cumulative profit and loss data of the company with the existing chain of customers in the future, this s also known as Customer Lifetime Value (LTV). Since for a company it is all about satisfying the present customers and spreading across through them, CLV is of utmost importance. The key to keep your customers contented is to show them ‘you care’, keep them engaged with you, and ask them for their valuable feedback.

It is important for any organization to put into practice the calculation of Lifetime Value of customers. Once a company becomes sure of its approach to attract new customers with pocket-friendly measures, it will simultaneously become more confident about its profits. An effective CRM solution and data mining a good estimate of CLV can be calculated. This can help in execution of strategies for gaining competitive advantage.

Based on the customer lifecycle value, customers should be segmented and serviced. Business persons should be smart move makers opting for measures which are result oriented. If they perceive that by only spending more on ostentatious marketing methodologies more new leads will be generated, then they should think again! Lifetime Value of customers is an effective tool, which is valuable for determining the future of businesses.

5 Effective Ways to Use Social Media Analytics for your Business

The social media revolution
1994 - Geocities
1997 - Sixdegrees
2002 - Friendster
2003 - Myspace
2004 - Facebook
2006 - Twitter
Does the above list ring a bell? A large percentage of the planet’s population is interacting with friends and peers as users of these social media and networking sites. Today, sites like Facebook and Twitter jointly account for close to one billion active users. There are many more sites where users can freely share their views through forums and blogs or even videos. The world of commerce is suddenly waking up to the ever-growing volume of conversations happening on these sites. But, how do they tap the potential of this new online content?

Impact on business
Most of the social media sites were originally created for like-minded communities with shared interests. The conversations on these sites often include explicit or implicit opinions about an industry, a brand, a product, a service or customer services. Positive references to a specific brand in these conversations can have a viral effect on the brand’s image in the marketplace. On the flip side there are possibilities of negative sentiments voiced by the online social communities which may quickly tarnish a brand’s image in the marketplace.

Oceans of data
It is easy to get lost in the sheer volume of social media content that is available today. The volume is growing exponentially even while you are reading this blog. Can you guess the record for number of tweets per second during an event? Hold your breath -its 7196. This was during FIFA Women’s world cup final between Japan and USA, held last year at Germany. It is not unusual to see such amazingly high number of users “Like”-ing a Facebook comment or viewing a Youtube video. Similarly there are comments by millions of users on topics ranging from ‘Dachshund training’ to ‘the latest cool gadget’. Businesses with ambition to tap this vast volume of social media content must be prepared to answer a few important questions.
  • How do they filter the data that is relevant for them?
  • How do they monitor the data real time?
  • How do they understand the user sentiment about their brands?
  • How do they transform the distributed and conversational content into actionable intelligence?  
Social media analytics vs traditional web analytics
The traditional role of business analytics is based on structured data available in enterprise applications. The focus has mostly been on extraction, organization and presentation of the data. The last big breakthrough in business analytics has been the advent of OLAP servers that facilitated multi-dimensional data analysis without using predetermined queries. The more recent discipline of web analytics deals with extraction and analysis of structured data available from the APIs, offered by popular sites like Facebook and Twitter. Searching of keywords from unstructured web content is also widely used in web analytics. However the challenges that the social media content presents are of a far higher level of complexity. Analyzing the structural patterns of interactions between humans is of utmost importance to discover the perception about a brand among the network users. The complexity becomes overwhelming when the source of texts is tagged to users across time, demographics, language and cultures.

Application areas
Social media analytics can bring a completely new perspective on how various business functions traditionally work. Social CRM can be potentially the greatest beneficiary of the social media revolution. In addition to the customer touch points already available in standard CRM solutions, there are a few areas where use of social media analytics is going to be imperative if not critical in the near future.
1. Campaign accountability - Campaigns organized by marketing departments of big corporations often create a flutter in the social networks. A recent example is the telecom major Vodafone’s Zoo-Zoo campaign, which took the whole nation by storm. Metrics like Facebook “Like”s and Tweeter “Retweet”s can give insights on a campaign’s popularity index. Traditionally the success of a campaign is generally measured by its effect on the bottom line. Metrics derived and analyzed from social media can provide much needed alternate perspectives. Quantitative and qualitative analysis across a time axis to capture the campaign life-cycle, can provide alternative insights into the success of a campaign.
2. Public sentiments on brand - Blogs, review sites, forums specific to industry segments or brands can provide useful insights on the sentiments of the online community. Heuristic analysis on public comments against important brand announcements or product launches can play an important role in deciphering sentiments from free texts. The same applies to peer to peer conversations which is an exclusive offshoot of social media content. These analytics can provide essential intelligence inputs to marketing strategies and product design along with the traditional market research techniques.
3. Customer service - Even though forward looking corporations are going great length to out perform each other with quality customer service, the efficacy of their services are often limited by the limitations of their CRM applications. It is never realistically possible to capture customer opinions beyond the service touch points. Frustrated customers often vent out their anger in public forums to draw attention. It is critical to monitor such content and turning a deaf ear to such conversations may be damaging to the business. On the flip side mining similar contents on competitors may present useful intelligence to convert brand loyalty. An interesting byproduct of monitoring customer grievances on social media is an opportunity to reduce the cost of customer service by enabling peer support through social media sites.
4. Inputs to product roadmap - Indifference from consumers lead to untimely death of promising products. Turning a deaf ear to consumer’s reaction on the latest product releases is no more an option for design teams. There are enough examples to substantiate the fact that great products were born from a flash of brilliant idea generated by a talented and maverick individual. However to sustain the relevance and competitive edge, design teams need to carefully study analytics derived from social media about their own products as well as competitors. General discussions on an industry or a product segment often throws up interesting needs and wants of prospective customers. Listening to those discussions with the help of useful analytics may offer interesting insights into the product road-map. A more proactive approach of testing concepts, prototypes and ideas may be to organize polls or events on social media sites and engage prospects and customers. This approach would give them a feeling of inclusiveness to the process of building a brand or product and improve their loyalty.
5. Opportunity mining - Traditionally, opportunity mining efforts are constrained by size of the sales force and have limited access to prospects and markets. Social media platform presents an opportunity to enter into previously untapped demography and geographies, by analyzing living habits, product usage patterns and social interaction patterns of users. Analyzing relevant metrics may help sales teams to qualifying prospects and leads more efficiently and optimize their resources. 

Other than social media CRM there can be other applications where social media analytics can play a crucial role in the future. For example, social profile of prospective candidates can be analyzed before hiring, to ensure fitment into a company’s culture.

Analyzing sentiments hidden in textual conversations, blogs or even videos is the key challenge in the paradigm of social analytics. However, in order to establish a 360 degree communication with millions of online users and bloggers, there are greater challenges in the horizon. While technology can be used to analyze information relevant to a business, human inputs are needed to engage in conversations and maintain good public relations. With the technology options available at present, it may be more realistic to design work-flows involving systems and humans to make businesses interact with social media in an optimal way. Can future business systems adapt to an inclusive approach towards social media? Well, this can be an interesting future blog topic..

3 Ways to Gain Competitive Advantage by Analyzing Lost Opportunities

The disciplined use of a well-designed, well-implemented CRM solution will generate droves of data about the sales and pre-sales processes in your enterprise. If you have a well defined process, you can chart the sales process from its inception (as a cold-call, sales pitch, web click, and/or marketing campaign), to the first order, shipment, and invoice. However, what is actually more interesting is looking at those processes that don’t make it to the receivables column. Concentrating on the customer interactions that don’t lead to sales can become more valuable than gold. Performing an analysis on lost opportunities can help turn your CRM system into a powerful continuous improvement tool, as well as profit center.
Let’s look at a few ways we can take lost opportunities and use them to gain an edge over the competition:
i) Catch Up On Housekeeping
Customers ‘know’ when they’re dealing with an efficient, well managed organization. We all feel an intrinsic level of security and confidence about a company when we don’t need to constantly repeat personal information on the phone, or when a company is pro-active about disseminating order information and/or changes.

‘Housekeeping’ is just a generic term used to refer to the improvement of the inner workings of the enterprise. For example, do a root cause analysis of every lost opportunity in a given time period and Pareto the list of causes. You will undoubtedly find some common threads. Here are some possibilities:
  • Personnel Issues: Maybe you’re losing sales because of a certain department, or sales person. This might be an area where you need to invest in some training, re-organizing, or trimming.
  • Content Issues: Maybe you’re losing sales because you’re sales people don’t have enough product data, or can’t differentiate themselves from competitors. This might call for new communication processes with marketing, or updates to your existing sales processes. 
  • Mechanical Issues: Are you just losing sales because of something trivial – like your order entry system is unreliable? Or your web site is convoluted? Mechanical issues like these are easiest to identify, but not always the cheapest to fix. Regardless of cost, these are lost opportunities that are completely within your control. Make the investments you need to be successful and eliminate mechanical problems.
Once you have your list of housekeeping items, start working through each item. Keep going until you’ve finished, then generate the list again. Like actual housekeeping, this process never ends.

ii) Improve Your Market Knowledge
Kodak and Blockbusters are great examples of companies that started out on top, but couldn’t hold on for the long haul. It’s probably the greatest fear of any enterprise – fading into irrelevancy. Both of these companies failed for primarily the same reason – lack of market knowledge and awareness. Kodak didn’t see how much digital technology would disrupt their product offerings and Blockbuster figured out too late that content, convenience, and ease of delivery are more important than physical locations and selling popcorn and candy.

Understanding every opportunity lost to the competition is a crucial analysis. It needs to be done as objectively as possible, showing no bias to your own enterprise and/or products. In every lost opportunity like this, the facts are simple – you lost a sale to another company the does or make the same thing. The difficult question is – why?
Do your best to empathize with your customers and reverse-engineer their tastes and preferences. If your competitors can do something better than you, figure out what it is and adjust. Adapt. Use a loss to a competitor as the ultimate teaching tool. Try not to repeat mistakes and never stop paying attention to what else is happening in your market.

iii) Make Incentives Work For you
Let's be honest, incentives, especially monetary ones, motivate companies to work harder, to win. Lost opportunities provide a great place from where to derive new incentives. Once you know how and why you’re losing sales, incentivize the appropriate points on the sales cycle to fix the problems. This is a great morale booster for staff as well – it shows personnel that they intuitively know how to make the company better, which in turns increases their confidence, loyalty, productivity, and effectiveness.

Your CRM solution can tell you many things, some good, some bad. It’s always nice to hear the good stuff, but if you really want to improve and get better, then focus on the bad stuff. Look at lost sales and lost opportunities as teaching tools and roadmaps that can be used to educate, improve and strengthen your enterprise.

5 Visible Trends in Financial Services CRM

Financial services CRM solutions have made a big difference for companies in the financial services sector in recent years as they allow companies to focus more on the needs of the customer. While CRM has made an impact for companies in this sector, it is poised to change the industry even further in the future. As CRM solutions continue to advance, financial services companies will begin to rely on them more and more over time.
In the future, financial CRM solutions may put more of an emphasis on social media and networking. Social media sites like Linkedin, Facebook and Twitter have exploded in popularity in recent years and businesses are trying to find a way to capitalize on this movement. With advancements in CRM solutions, companies can more easily interact with their customers and track customer behavior. Online social networks are a type of bidirectional CRM in which both you and the customer can learn about one another.

1. Targeted Offers Using Social Media
For instance, with a quality financial CRM solution, can send out new offers, run campaigns through social networking platforms. You can easily track the effectiveness of the message to see how many people responded to it or clicked on a link within the message. At that point, the information can be recorded in the correct customer’s profile in the financial CRM solution, so that future marketing messages can be tailored to that person.

2. New Methods of Communication
Financial services CRM solutions may also put more of an emphasis on meeting customers where they are instead of trying to pigeonhole them into a particular method of communication. For instance, when a marketing message is sent out, it will encourage the customer to get back to the company in one of several ways. The customer may be able to respond through an email, social networking site, text message, mail or over the phone. Regardless of how the customer response to the message, the appropriate information can be input into the CRM program and tracked accordingly. This way, it gives the customer flexibility and increases the odds of getting a response. If you send out a direct mail campaign and you expect the recipients to respond by mail, you may be missing out on many people who would be willing to quickly send out a text message or an email instead of mailing it back. This will increase conversion rates and make customers happier.

3. Managing Regulatory and Compliance Changes
In the financial services industry, companies continually have to worry about changes in government regulations. With much attention on the financial industry in relation to the economic recession across the globe, most financial services companies have to abide by new regulations. Because of this, it can be hard to keep up with all the new rules. Many CRM platforms will help financial service businesses stay on top of all of these rules. This can help your company avoid possible fines or litigation and give your customers the service and products they need.

4. Mobile CRM
As technology continues to improve, CRM systems will also integrate with much of it. For example, instead of interacting with your CRM system by using a keyboard and a mouse, you may be able to interact with it through speech. The newest smartphones such as the iPhone 4S have speech recognition capabilities that allow you to simply talk to the device. According to Forbes, “for many sales reps, the new iPhone would be more useful, in more situations, than a traditional keyboard and monitor.”CRM developers will eventually integrate this type of functionality into the system so that you can just say what you want to happen and it will be done.

In addition to changing the input method, more attention will also be given to mobile devices. When you work in the financial sector, you are not always able to be in front of your computer. You have to get out and socialize with your customers. Because of this, having access to the CRM portal on your smartphone could be beneficial. When you need to keep track of some piece of information that you just obtained, you simply pull up an app on your phone and then talk to it. Then the information is sent over a cellular network to the server at your business. While some of this functionality is already available, it is not quite as seamless as it should be. Besides smartphones, more people will work on tablets such as the iPad as well. Integrating tablet and smart phone applications with the CRM programs at the office will be essential. This makes the data collection process much easier. It can also provide access to this information while sales reps are out in the field.

5. Tailored to Match
More customization will also be seen in the CRM solutions of the future for the financial services industry. In today’s world, most of the CRM programs out there are considered to be one-size-fits-all. This means that regardless of which person in the company is looking at the program, it looks virtually the same and gives the same information. In the future, CRM providers will put more of an emphasis on customizing the program to fit the needs of the financial services industry. The employees answering the phone don’t necessarily need access to personal information about the portfolios of customers. Sales reps may need access to all of the information about a customer quickly while out in the field. Because of this need, CRM solutions will eventually be tailored to the different departments of a financial services business so that each person feels comfortable with the interface.

With these types of advancements in financial services CRM, it will also enhance the possibility of working while on-the-go. You may not necessarily have to be sitting at your desk in the office to do your job. This may increase the number of people who telecommute or do some of their work from home. These advancements have the potential to completely change the landscape of the financial services industry over the long-term. Ultimately, it will come down to providing better service for the customer and increasing sales for the business. When your business looks to upgrade your CRM software at some point in the future, look for some of these features to slowly be integrated.

Why Knowledge Management is a Critical Part of Modern CRM

Accumulated facts constitute information; this information brings intelligence; and further this intelligence leads to ‘knowledge’. It is not limited to sources. If we look around, we will find ample resources to extract knowledge from.

What knowledge can do for any organization?
  • Sharing knowledge improves gradual working probability 
  • It also attracts innovation 
  • Innovations can be adapted to the changing market trends 
  • Creation of new smart products 
  • Improved service and quality
Knowledge Management makes use of several strategic practices to ensure that the available knowledge is absorbed optimally. The thrust in Knowledge Management is laid on gathering the useful knowledge, categorizing it for immediate notice, restoring it for future references so that it can be used for other novel advancements.

Knowledge Cycle

Organizations implement Knowledge Management system to disseminate best of the knowledge among its employees. The understanding thus gained by the employees leads to the enhanced performance of the organization. If the knowledge is utilized effectively it can yield manifold profits. There is no double thought in admitting that knowledge is one of the pillars of success. Knowledge Management is just like giving meaning to the available information in the strategy-driven manner so as to fetch profits. The workers (with knowledge) interpret, implement and enhance their knowledge for the betterment of the organization.

The decisions or the actions that we take are directly proportional to the knowledge that we imbibe. Thus, it becomes immensely important that we are adequately knowledgeable. In the today’s world of cut-throat professional competition, utmost care is taken while hiring new employees. This is to make sure that the best of intellectual minds enter the organization to share their polished knowledge for its betterment. Further, a few organizations also lay on shoulders the responsibility to train the employees in a manner beneficial to them. Here again Knowledge Management comes into play.

Knowledge Management and CRM
While Knowledge Management system caters to essentially in-house activities of enlightening the sales generating or marketing faction, Customer Relationship Management or CRM revolves around both – the customers and the organization. The chief requisite of CRM strategy is to govern the interaction of the organization with its valuable assets – customers. CRM can be classified as an IT enabled business strategy to retain the valuable clientele of any organization.

With the ongoing competition in the market which may instigate decrease in customer loyalty, it is essential to introduce concepts which lay thrust on fostering company-customer relationships. To accomplish this, CRM comes to the forefront. CRM is the customer-centric (long-term) business strategy which is off-lately being followed based on the knowledge. CRM solution is all about managing the knowledge of the customers in order to serve them better in the nearing future. Thus, it is understood that ‘knowledge’ is an integral part of a successful CRM system.

Both KM and CRM solutions key functions boil down to dealing out resources in order to generate competitive benefits. While KM finds the knowledge engrossed within the company as a major factor to its success, CRM lays thrust on managing good relations between the company and its customers. No wonder, together KM and CRM work to bring in positive changes for the company.

It is important to include the variables of the organization such as – the structure of organization, human resource management and resource allocation to measure the success of CRM system. In order to implement CRM solution, the redesigning of its basic structure, business process, etc is required because CRM strategy has to develop right synergy within the organizational structure.

Knowledge is considered as the fundamental process to learn all about the organization, its ability and processes which are further on required by CRM system to base its strategies on. Therefore, an effective CRM is also the outcome of the effective Knowledge Management tactic.

Benefits of CRM and Knowledge Management
Customer is a valuable asset to any organization. Thus, attracting more and more customers becomes the priority of the organization. With the help of superior knowledge, companies try to gain a good customer base. The knowledge about customer, the current market position, ongoing business trends, etc information is helpful in fetching customers. With sufficient knowledge, the organization can apply best of its methodologies to attract customers, and understand their requirements so as to fulfill them.  

Studies suggest that both KM and CRM are effective in their approach of developing and retaining stronger relationships of the customers with the organization; and no one can be identified as the sole determinant of the organization’s success, as both have their own shares of pros and cons. Thus, here intervenes the question that which one of these two is sufficient and workable alone?

The reason CRM is also the chief point of contact is that it ensures a balance between expenditures being made by an organization and profits generated by satisfied chain of customers. CRM majorly portrays the responsibility of –
  • Exploring inputs and outputs of the organization (esp. funds invested, and revenue generated) keeping in view all its basic functions. 
  • Acquiring knowledge about the customers (esp. understanding their expectations, and behavioral pattern over the lifetime). 
  • Implementation of enhanced plans and procedures with experiences. 
  • Maintaining flexibility in order to match-up with the changing market trends, customer’s needs to make profits unwavering.
To accomplish the above mentioned responsibilities, CRM seeks knowledge of different types.

  • Knowledge about customers - Understanding customers’ needs, expectations and buying acts to become able to cater to them effectively.
  • Knowledge for customers – Gathering information of use to the customers to instigate their purchasing activities. For example information about products of importance to the customers.
  • Knowledge from customers – Extracting information from the customers about products, services or suppliers can be useful for future improvements.
Though gathering such vast information sounds easy, but it’s one of the biggest challenges of CRM. Knowledge is generated, disseminated and utilized resource fully within CRM processes. This knowledge, as learnt earlier, is purposeful for effective implication of CRM strategies, but it is mandatory that it fulfills the essential prerequisites for its relevant usage.
  • The knowledge should be significant from business point of view.
  • It must be manageable and measurable.
  • It must have consistent structure which should not interrupt the pre-adopted style, or characteristics of the organization.
On the whole, Knowledge Management system completes the cycle of CRM business processes. Knowledge Management and Customer Relationship Management are used in conjunction. KM offers the raw data, resource, or potential information which enables CRM solution to broaden its area and encompass several elements which are purposeful in generating profits. Thus, it would not be unjustified to suggest that Knowledge Management is an integral part of CRM process, and it has a direct role to play in its varied approaches of serving the customers.