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Boosting CRM Adoption
Using customer loyalty data to inject new life into your CRM system.
Posted Feb 22, 2008
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Whether you define CRM as a technique, a business process, or a computer system, it has undoubtedly enjoyed explosive growth over the past decade. Companies such as Siebel, Salesforce.com, Oracle, SAP, E.piphany (now owned by Infor), and many others have earned billions of dollars selling CRM technology and services, while major systems integration firms such as Accenture and IBM have built huge practices around implementing CRM solutions. Despite these ongoing efforts, many organizations face obstacles convincing sales people to use these CRM solutions. One of the reasons for the paltry take-up rate is the perceived value of the information. If all CRM does is recycle stuff sales people already know about their accounts, there is little motivation for them to enter the data at all. One proven way to boost CRM adoption and motivate sales people is to add additional insight to the CRM system from customer loyalty programs. CRM systems typically provide an inside-out view of customers. They capture behavioral data such as what products customers bought and what events shaped their decisions. Loyalty programs, by contrast, deliver attitudinal data about why people buy your products and how they feel about your firm. Behavioral data without attitudinal data lacks the "why" of customer behavior, which is essential to predicting what customers will do in the future. Without behavioral data you lose context and segmentation. These two sets of data are obviously complementary: by linking behavioral and attitudinal data, you can explore both the historic and projected behavior of customers. You can also shape your strategy to meet the needs of the most profitable segments of the customer population. This is precisely the approach taken by one U.S.-based consulting company. Back in 2002, managers at this company were looking for innovative ways to improve growth and profitability within their key accounts. They knew that their account teams were successfully delivering the core attributes important to customers: trustworthiness, honesty, and, industry--focused expertise. However, this analysis alone could not predict future success or reveal hidden problems in their most important client accounts.
The firm already had a CRM solution that addressed basic data-collection and analysis requirements. But to truly get sales reps engaged, managers knew they needed to deliver insight into future account performance. This company launched a customer loyalty program to turn customer feedback into actionable account information. They used the popular Net Promoter loyalty metric, a one-number measurement that links customer loyalty to long-term corporate growth. Net Promoter allows you to categorize customers into three groups based on their willingness to recommend your company or product, on a scale of 1 to 10:
  • Promoters (score 9--10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
  • Passives (score 7--8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
  • Detractors (score 0--6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
This straightforward metric holds companies and employees accountable for how they treat customers. When combined with appropriate diagnostics and follow-up actions, it drives improvements in customer loyalty and enables profitable growth. In this case, tying Net Promoter data to financial expectations enabled managers to create strategic business plans for their key accounts. They used the data to identify model customers, make strategic improvements, and focus resources on growth opportunities. As the customer loyalty program gained momentum, the firm intensified its focus on understanding and strengthening relationships with key accounts. To this day, account teams conduct quarterly dialogues with clients as part of a closed-loop process. And they make sure that clients see results from their suggestions. Of course, closed-loop feedback processes are an important part of a customer loyalty program, but they are only effective if you can scale these processes across the entire company. The easiest way to do this is to tie attitudinal data to an existing system that already has corporate mindshare. That's where CRM comes in. Forward-looking firms see this as an opportunity to improve their CRM programs with an injection of insight. It also presents a great opportunity to engage the customer-facing workforce as active participants in the CRM strategy. Only by combining the customer's perception of their relationship with your organization and internal data about purchase history and forecast can you truly obtain the desired 360 degree view. About the Author Richard Owen is president and CEO of Satmetrix Systems, a leading provider of on-demand software applications and consulting services to measurably improve customer loyalty. Prior to Satmetrix, Owen was Chairman and CEO of AvantGo, Inc. Owen also spent eight years at Dell Computer Corporation in various executive positions.
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