Page 261 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes It involves learning new customer management skills, potentially difficult changes to processes,
culture and organization, and grappling with the technology challenges of multi channel
alignment, systems integration and data quality. Even if the board accepts the need for enterprise-
level CRM, the quarterly demands of revenue and profit targets, especially in delicate economic
conditions, often mean that, although CRM is the most important challenge facing an enterprise,
it is not seen as the most urgent. This typically results in a focus on isolated tactical “quick wins”
until conditions are better. Through 2005, enterprises that use a strategic CRM framework to
estimate, plan and promote their CRM initiatives while building up their capabilities in small
piloted steps are twice as likely to achieve planned business benefits as enterprises that pursue
projects without a framework.
The framework emphasizes the need to create a balance between the requirements of the
enterprise and the customer. Through 2005, 90 percent of successful CRM initiatives will have
balanced the needs of improved customer experience with improved organizational collaboration
(0.8 probabilities). Too many CRM initiatives suffer from an inward focus on the enterprise,
whereas the point of CRM is to achieve a balance between value to shareholders or stakeholders
and value to customers for mutually beneficial relationships.
1. Vision: Successful CRM demands a clear vision so that a strategy and implementation can
be developed to achieve it. The CRM vision is how the customer-centric enterprise wants
to look and feel to its customers and prospects – the Customer Value Proposition (CVP)
and the corporate brand values are key to the CRM vision. Without a CRM vision, the
enterprise will not stand out from the competition, target customers will not know what
to expect from it and employees will not know what to deliver in terms of external
customer experience. A successful CRM vision is the cornerstone to motivating staff,
generating customer loyalty and gaining a greater market share. “Creating a CRM Vision”
defines a CRM vision, outlines the key steps and challenges in creating it and discusses its
role in creating a successful CRM program.
2. Strategy: A CRM strategy is not an implementation plan or road map. A real CRM strategy
takes the direction and financial goals of the business strategy and sets out how the
enterprise is going to build customer loyalty – that “feel-good factor” of customer
connection with an enterprise that means customers stay longer, buy more, recommend
the enterprise to others and are more willing to pay a premium price. The objectives of a
CRM strategy are to target, acquire, develop and retain valuable customers to achieve
corporate goals.
3. Valued Customer Experience: Customers’ experiences when interacting with the enterprise
play a key role in shaping their perception of the enterprise – the value it provides and the
importance it places on the customer relationship. Good customer experiences drive
satisfaction, trust and long-term loyalty. Poor customer experiences have the opposite
effect and, because bad news travels faster and further than good news, they harm the
enterprise’s ability to create new relationships with prospects. No amount of internal
“second guessing” can simulate what it’s really like to be a customer.
4. Organizational Collaboration: Many enterprises believe that implementing CRM
technologies makes them a customer-centric organization. They forget, ignore or
deliberately avoid the necessary changes to the enterprise itself. True CRM means that
individuals, teams and the whole enterprise must become more focused on the needs and
wants of the customer. The term “organizational collaboration,” highlights the many
facets of the customer-centric internal change needed to deliver the required and desired
external customer experience. As a critical part of a CRM program, it will involve changing
organizational structures, incentives and compensation, skills and even the enterprise
culture. Ongoing change management will be key.

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