Customer Relationship Management is inarguably the most important business trend of the last decade. Executives are embracing the vision. IT departments are scurrying to acquire the enabling technologies. And boards of directors are being asked to fund enterprise-wide, multi-year CRM efforts.
But the defi nition of CRM is as volatile as the market itself. For some companies, CRM means changing their entire focus from products to customers.
For others, it means ensuring that existing customers remain loyal, and that new customers are converted to valuable ones. Some companies intend to integrate and add to their customer data with the aim of differentiating themselves via innovative products and services.
As many companies have already learned the hard way, CRM involves more than simply selecting a technology vendor. As author and Baseline partner Jill Dyche explains in her best-selling book, The CRM Handbook

CRM is the infrastructure that enables the delineation of and increase in customer value, and the collection of means with which to motivate customers to remain loyal—indeed, to buy again.

CRM is really about mutual benefit: In knowing its customers better, a company can act on that newfound advantage to maximize customer loyalty and profitability. And customers get more relevant communications and better service in the bargain. CRM, by its very definition, is a win-winproposition.
The fact is, CRM involves five separate, and equally-critical, components to benefit both a company and its customers

1. Strategy
A company must be able to articulate customer-focused objectives. This not only means the company’s strategy must be customer-centric, but that its branding, advertising, and sales processes factor in that customer focus. Burger King’s “Have it your way,” ad wasn’t just a catch-phrase, but a customer-centric vision that resulted in tactics, and a slogan that became part of the American vocabulary.

2. Business Processes
One of CRM’s implicit goals is to improve the customer experience. Companies should recognize that improving business processes means not only making sales and support more customer friendly, but streamlining these processes to make it easier for the customer to do business with them.

3. Information
Information about customers, sales, financials, products, and purchase behaviors can be mined to yield some powerful results. Successful CRM projects mandate that meaningful, sustainable data be deployed throughout the enterprise to unify decision-making and provide the so-called “single version of the truth.”

4. Organization
CRM often means that our customer-facing staff members—be they salespeople, branch employees, call center reps, or repair personnel— change the way they do their jobs. A call center CSR, for instance,might be asked not only to troubleshoot, but to cross-sell new products and services while the customer is on the phone. Banks are currently re-designing their branches to become sales centers, complete with sofas and hot coffee, to improve the customer’s banking—and buying—experience. Such paradigm shifts require well-planned staff training, expectations management, and often re-vamped compensation structures to motivate organizations to change.

5. Technology
Software can enable improvements to the four areas listed above. However, acquiring CRM technology is the easiest of the five, which is why companies make the often-irrevocable mistake of starting there. Only after a company has defined its CRM objectives, documented requirements, and managed the expectations of its stakeholders should it begin talking to software vendors.

COMPANIES ARE DISCUSSING CRM OR DOING Why is there still so much buzz about CRM?

With all the inherent complexities of the five components described above— and with the failure statistics rampant in magazines and industry journals— why are companies continuing to jump onto the CRM bandwagon? In a word: Profitability.
Author Frederick Reichheld described it in his book The Loyalty Effect, and in the Harvard Business Review, explaining that a mere 5% increase in customer loyalty can result in up to 125% percent increase in profits. Executives read thisand rushed to their CRM vendors, hoping to ride the wave of increased customer loyalty.

And many have succeeded. After all, happier customers come back. They tell their friends. They are less expensive to serve and support. And they’re more willing to share their personal information. The list goes on and on. Companies that provide value to their customers reap the reward: Profitable customers.
Moreover, your major competitor has probably made significant progress on its own CRM journey. Loyalty cards, customer dashboards, and refined target marketing have become staples across different industries. Companies that are falling behind with these customer focused programs may be reducing their bottom lines—and watching their customers head for the door.

The hard part of CRM is knowing where to begin. This is because companies don’t know how to go about defining and prioritizing their CRM requirements. Managers should ask the question

“What is the need, pain, or problem we need to solve with CRM?”

Often, the answer to this question applies to more than one organization or job function. As the figure below illustrates, different types of CRM usually deliver value to more than one department. They may even span the enterprise
Defining the “need, pain, or problem” means listing different customer focused pain points that need improvement. Examples include
• Our customersatisfaction scores are sliding, and customers are churning. We need to stem the tide.
• Having a loyalty card would let us track our customers’ purchases—and be able to offer them discounts on products they’re likely to buy. It’s a win-win.
• We’d like to understand which of our sales partners (be they web sites, retail stores, dealerships, hospitals, or other resellers) are excelling, and to track which products individual partners sell most often.
• We’d like to start making R&D decisions based on facts, not intuition. This means we need to start gathering information about customer preferences.
• Our call center is the only time most of our customers speak to a human being— we need to capitalize on this and make sure we communicate the optimal message at the time of contact.
• We know we have many different categories of customers. But we don’t know what they are, so we can’t improve our messages.
• We aren’t really doing any marketing—but our chief competitor sure is! We need to target the right message to the right audience, and monitor response rates

Indeed, none of these business requirements is exclusive. Companies frequently consider CRM to be a “portfolio” of customer-focused capabilities, and prepare a delivery roadmap that spans multiple projects. As long as a company and its customers evolve, there will always be new opportunities for launching new CRM projects, and refiningexisting CRM initiatives. Consider CRM part of your corporate DNA.

Notice that with each of the business requirements listed above there’s something in it for the customer, be it a more relevant marketing message or discounts on products they actually buy. It not only improves the customer’s overall experience, it makes it easier for the customer to do business with your fi rm. (Think of
Amazon.com’s “One Click” service or Land’s End’s “Shop with a Friend.”)
And CRM isn’t only about sales, and marketing, it’s about stellar customer service. It means never having to say you’re sorry—or if you do, the ability to offer the right type of compensation—free shipping, a discount on the next purchase, or a dozen roses and a note—for your misstep

The goal is not only to improve your customers’ experience and get them to buy again—it’s about turning them into raving fans. Studies show that an unhappy customer tells an average of nine other people about his bad experience. Conversely, the happy Harley Davidson customer tattoos his forearm with the company’s logo.

While your company might never be that lucky, the results of a CRM effort will not only improve your customers’ perception of your company—it will undoubtedly improve your bottom line.

And that’s definitely an objective worth pursuing.

OMPANIES ARE DISCUSSING CRM OR DOING CRM
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COMPANIES ARE DISCUSSING CRM OR DOING CRM