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What are the most important factors in a CRM strategy?
Posted Jul 31, 2002
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The primary output of a CRM strategy should be some type of roadmap of projects prioritized by economic benefit, with each project driving profitability in some way. The approach we use that most directly ties CRM to profitability usually starts by focusing on two major areas of analysis: First, an understanding of customer value and the different segments of customers. Not all customers are equal in profitability to the firm, and focusing on anything other than the profitability of customer segments (such as loyalty, satisfaction, "delight," etc.) can make any economic analysis very difficult. Some recent research has actually found a negative correlation of profitability to loyalty, showing that in many cases the most loyal customers are the least profitable! Second, developing an approach to differentiate processes in the front and back office using the segmentation of the different groupings of customers. The focus should be on differentiating the fulfillment of essential goods or services through back office processes based on the profitability and needs of the various customers or customer segments. Examples would include setting different service-level commitments based on profitability to ensure high customer satisfaction from the most valuable customers or re-defining and segmenting supply chain planning activities by customer value to ensure that the most profitable customers are supported by the most agile supplier relationships and processes.
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