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Unit 10: Delivering Customer Offer

early wins, no matter what state the economy is in. As the economy turns into recovery, the Notes
winners are likely to be those who have not only stabilized their customer service and sales
costs, but those who are improving the effectiveness of customer retention and loyalty programs.
Improved customer segmentation, customer satisfaction, and service strategies should be tailored
in downturns and expanded in upswings, but need to remain long-term goals of any successful
CRM program.

Avoid the Whipsaw Effect

Senior management commitment is critical to the success of any major corporate initiative.
CRM is certainly no exception. In fact according to CRM magazine/the A.T. Kearney survey
results, IT decision-makers ranked executive sponsorship as the most important factor for
maximizing the return on their CRM investments. If CRM initiatives are not in the CEO’s
agenda, then investments in these initiatives have a much lower probability of success.
Additionally, because CRM is a fundamental shift in the way a company does business with its
customers, rather than just a one-time e-business initiative, it requires continuous leadership
support over multiple years. This type of long-term senior management support can only be
achieved and maintained if a long-term strategic plan is developed. The time frame also requires
the strategic plan to have built-in contingencies for the ups and downs of the business cycle.
Without this type of flexible strategy, companies get caught in a CRM whipsaw: over investing
in one year and then cutting to the bone in the next. The result is unrealized investments,
squandered opportunities, and a loss of employment for the CRM champion. The whipsaw may
affect users as well.

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Caution Employees whose new customer-centric behaviours enable CRM success can get
caught in the whipsaw if communications about customer strategy and CRM processes are
not clear or consistent throughout changes in the business cycle.

Don’t Buy into the Technology Magic Bullet

The CRM vendor landscape is changing rapidly. Placing all bets on a single vendor or technology
can prove disastrous. The unstable economy has caused a vendor shakeout. It has reduced the
number of CRM vendors, but also has enabled the strongest companies to survive with the
best-integrated offerings. Strong vendors, after acquiring or merging with smaller niche vendors,
still have to refine the resulting integrated offerings. Even so, research indicates software
functionality is not the prime factor in selecting a CRM vendor. Financial viability and ROI
remain the most important factors in selecting a vendor, and reflect the fact that the best-of-
breed approach in recent years has left a number of companies holding the bag of unsupported
applications. The focus on vertical expertise has also been increasing. Companies stung by the
challenges and high costs of customizing standard applications are demanding that the major
vendors of the CRM world ensure that vertical customizations are prebuilt into the application
they install. Customers are focusing on implementing the best vertical application available.
This shift has also been pressuring vendors that have not caught up with the verticalization
wave or have poorly packaged and standardized their industry experience within applications.

Example: It includes the anticipation of going to Starbucks, walking up to a shop, opening
the door, ordering and paying for the coffee, getting the coffee, sitting down in the atmosphere
of the shop to enjoy the coffee.

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