CRM's original value proposition is the responsibility of the entire enterprise--not CRM alone.
Posted Jun 1, 2005
Editor's note: The second and final article in this two-part series, by Todd Wilkerson, will appear in Viewpoint in August.
CRM's impact has been felt in just about every organization. But sadly, its thrust has been negative in many cases. We know that CRM has presented a series of difficult experiences; first related to its costly implementation, then its struggles with user adoption, and finally of proving its contribution to the business in real terms. Yet, the pervasiveness of the CRM business concept and technology tool set in today's business environment stands as proof that organizations continue to see promise. So what was the original CRM value proposition that made us all believers? Our experience with hundreds of companies tells us that most have come to expect that deploying a CRM solution will lead you to improved customer knowledge, profitability, value, satisfaction, and retention.
But today, after quite a journey, it seems the primary question being asked by these same companies is, "Are we there yet?" While answers to this question don't come easily, we see two key themes that if understood would enable a company to gain a better handle on their CRM road map and its return. First, CRM cannot be viewed as a destination, but must be viewed as an ongoing discipline. Second, CRM's original value proposition is the responsibility of the entire enterprise--not CRM alone--and must be broken down into discrete elements upon which CRM capability can be directed.
Companies are in need of a new perspective on how to examine and target CRM capability on the things that matter most. When done properly, these items drive the value sought in the original promise. This article introduces a practical framework designed to equip managers in viewing CRM more strategically and holistically for their organizations.
THE CUSTOMER MANAGEMENT DISCIPLINE
Execution of CRM has not been disciplined. We know this to be true because of the frequency of wayward implementations and disappointment in outcomes. Organizations need to engineer their CRM programs with a two-prong discipline: dedication and direction. Most companies have appropriate levels of dedication, expending a lot of energy on instituting and performing traditional CRM activities, like automating sales and optimizing service. But companies are struggling with the direction, or aims, of CRM activity. It is the ambition of this CRM commotion that matters most.
So how do you bring these two facets of CRM discipline together? Companies need to design their CRM solution road maps and processes with purpose. To fully realize all that CRM has to offer, an organization must deliberately diagnose and apply CRM capability to three cyclical activities in order to generate three prized outcomes:
Interpretation for the Sake of Intelligence
Innovation for the Sake of Initiative
Interaction for the Sake of Information
These activities are perpetual and their velocity is observable. They are perpetual in that there is no clear start or end point, and each naturally morphs into the others. This requires the business to closely examine and define discrete processes that will enable them to execute and monitor this cycle in a conscious fashion. They are observable through common metrics and can be modified to directly enhance the value of each subsequent stage. The revolutions of the full cycle, or RPMs, create value for the company. CRM, when applied smartly to improve the actions and generate the outputs, can accelerate the RPMs and deliver on its promise.
INTERPRETATION FOR THE SAKE OF INTELLIGENCE
Interpretation is the analytical dimension of CRM. While CRM applications and databases have flourished, in many cases they have grown without a plan for extracting their value. Companies should conduct a self-audit to determine how well they are using their customer data to get smarter. This would include the types of information they track, the way the information gets shared, and the types of judgments and actions that are resulting. Companies that are effectively translating information into intelligence and allowing their people to build the organization's customer IQ do the following:
Define customer intelligence for their organization, specifying exactly what staff should know and seek to understand customers
Maintain a customer data warehouse, data hygiene engine, and customer data integration (CDI) strategy
Designate business owners for data marts
Optimize presentation and sharing of information at all levels
Educate staff on what to look for in reports, dashboards, and queries
Periodically bring multidisciplinary teams together for interpretation
INNOVATION FOR THE SAKE OF INITIATIVE
Innovation is the strategic dimension of CRM. Companies have invested heavily in CRM initiatives and applications, but few have rested them on fact-based customer strategies that include deep insights around customer needs and value. Companies should allocate their innovation horsepower to those segments and solutions that matter most. Companies that are able to transform their ideas into market-winning initiatives do the following:
institute formal R&D processes for customer management
continually use CRM transactional data to enhance customer segmentation schemes, profiles, and value models
engage the entire business in customer service innovation, reinforced through employee incentive programs
following initial build of CRM applications, institute fixed release windows to incorporate priority enhancements
devise marketing activities that test innovations prior to broad implementation
INTERACTION FOR THE SAKE OF INFORMATION
Interaction is the transactional dimension of CRM. Companies are using CRM applications to improve their business processes and assemble more data than ever before. However an overemphasis on operational efficiency has distracted companies from artfully designing process to optimize strategic data capture. Companies that are able to use every touch point to learn something new about customers do the following:
Tailor customer activities to acquire new information based upon known customer profiles and preferences of segments
Ensure alignment between technology workflow and real-life business scenarios
Configure application screens that allow for efficient data collection
Eliminate collection of data elements that are deemed invaluable
Perform monitoring of system usage and conduct periodic data audits
Organizations will find a way to succeed with CRM. Many are beginning to find that the fastest path is to engineer the solution with the desired outcomes in mind. This discipline and focus on the direction of CRM activities is the only way that they will see their early beliefs about CRM come true. With more realistic goals and shared responsibility for their attainment, companies will improve customer knowledge, profitability, value, satisfaction, and retention to the credit of their CRM investments.
About the Authors
Peter Moses is a vice president at Inforte Corp., a business and customer intelligence consultancy. He can be reached at Peter.Moses@inforte.com John Moses is a vice president at Inforte Corp. He can be reached at John.Moses@inforte.com
|Learn more about the companies mentioned in this article in the destinationCRM Buyer's Guide: