Development, documentation and execution of an intelligible CRM strategy marks the starting point for any CRM solution to succeed. Even the most comprehensive, nearly perfect CRM solution will fail, if there is lack of clear direction and strategy to implement it. 'Strategy' identifies the core of the CRM solution, it helps create the blueprint as to how organizational objectives can be achieved. The crucial linkage between the ultimate vision of the CRM solution and the value it renders to organisations and customers is another aspect that strategy touches upon.
It is important to remember that a focused, fruitful CRM solution as well as its related strategy is something that every organisation most definitely requires. It may not always be necessary that only those companies that are struggling with wearisome product, market and/or economic conditions, or aiming to achieve operational excellence, or aspiring specifically to attain closer relationships with their customers, are the only ones who need to resort to CRM. It is almost a mandatory pathway to success for any and every organisation – struggling and excelling alike. The only difference lies in the kind of strategy adopted – which again explains how critically instrumental a CRM strategy is in the alignment of objectives and applicable CRM solutions.
An efficacious CRM strategy becomes the mentor that business organisations look up to, it assists in placing customers (instead of brands, products or geographies) at the epicentre of the organisation’s CRM plans, and thereby converts customers into real, lifetime assets.
Pathway to the perfect Customer Relationship Management strategy
|Identifying target audiences|
The aim of a CRM solution fluctuates in significance and gravity as per segmentation of the broad customer base. Naturally, the CRM strategy process begins with a formal segmentation of the diverse customer base on the basis of relevant customer traits like preferences, demographics, age, cultural background, etc. This is vital because it is these traits that dictate purchasing pa:tterns, loyalty and profitability. The next step is an in-depth analysis of the product and distribution mix required within the segregated customer segments spanning across different geographies and competitive scenarios. Also, the created customer segments must have their own set of unique and reflective goals, which should further be in tune with the overall goals and objectives of the organisation in a larger sense. All goals, be it of customer segments or of the organisation, must achieve the dual benefit of bringing enhanced value to customers while at the same time making sure that the organisation is also able to achieve its intangible and tangible targets.
Specific objectives of each customer segment differ. For some clusters, the main objective may be to improve loyalty and retention, for others it could be growing relationships through cross selling thereby also increasing revenues, and for some, the aim could be moving customers to more cost effective channels so that profitability can be increased. In order to make sure that these ‘segment specific’ objectives are well aligned with the organisation’s corporate goals, the value rendition of every customer segment should be in unity with the corporate objectives. If not, then the company could either redefine company goals, or not follow through with that particular customer segment.
It is crucial for CRM leaders and managers within the organisation to build an unambiguous governance structure to develop, manage, monitor and if and where necessary, amend the ongoing CRM strategy. All top executives must be closely involved in defining vision and strategy. Also, a highly driven CRM leader, segments managers for important customer segments, and designers from the functional areas of sales, marketing and customer service should be appointed by the organisation. Together, this empowered group of individuals can ascertain every employee at every level within the organisation is accredited to execute the strategy as and when required.
|Real time analytics|
Attune offerings and distribution channels with customer segments
|Efficient customer segmentation|
Evaluation of existing CRM processes, tweaking where necessary
|Pinpointing existing inaccuracies|
Further, the strategy must be such that it is closely aligned and co-dependent with the individual functional processes of sales (including e-commerce and social media networks), marketing, distribution channel, and customer service processes. To illustrate, if the main focus of the CRM strategy is to expand market share, then the sales personnel can exercise higher agility in terms of pricing, being fully aware that profit margins could be adversely impacted for a short while. From a long-term perspective, these temporary adverse impacts should be withstood by the business to guarantee long term profitability.
- Pinpoint exact customer infrastructure needed to drive pertinent CRM activities.
- Define KPIs (Key Performance Indicators) to evaluate and compare costs of sales and marketing campaigns, with short and long term value of acquired customers, and thereby justify costs.
- Keep key business stakeholders in the loop by clearly communicating the CRM strategy
An example could be of sales personnel, who insist on the application of CRM solutions that support lead management and forecasting for their department, but essential customer data which may be of assistance to the customer service department may not necessarily reflect back.
To combat this challenge, it is wise to start off by clearly communicating the CRM strategy and long-term vision to important stakeholders, especially those dealing with customer-facing responsibilities in the areas of marketing, sales (e-commerce and social), and customer support. Next, the overall corporate goals must be quantified, and appropriate explanations should be given to all stakeholders as to how the CRM strategy is in support and alignment with the organisational objectives. Following this, integration points need to be created to fuse key stakeholders’ (within the organisation) requirements with corporate objectives. This effective alignment is not necessarily brought about by specific technology solutions provided by hand-picked vendors, but it is rather generated by focusing on the key integration points between corporate customer data and applications, with state-of-the-art CRM solutions.
Even the most outstanding financial CRM software is valueless without the right vision, direction and strategy. A thorough understanding of how the right CRM strategy can be formulated and thereafter followed through will hold the key to unrivalled success.