Page 89 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes Create a Synchronous Customer Strategy

This should be one of the first activities in a CRM program. Initially prepared in outline it
evolves and expands as new capabilities are implemented and new customer information
becomes available. It is important to start with at least an outline strategy, as this will help to
ensure that all subsequent design and implementation activities are totally focused on achieving
specific customer goals with quantifiable business value. A customer strategy comprises set of
strategic goals that will provide initiatives that can be applies to customers in identifiable
segments to achieve the overall objective of sustained profitable growth.
Typical Elements of a Strategy

Obtaining high value customers to improve market-shares; rewarding the best customers to
improve loyalty ranges of sleeping customers and to reduce agitation; stimulation of occasional
customers to bring more frequent contact; cross-selling to frequent low-value customers to
improve the share of wallet reduction of cost to market, sell, and serve to low-value customers.
The ability to create intuitively sound actionable segmentation is important. It is important to
as segment customers for a meaningful CRM. An enterprise should start by examining what
data is available or is going to be available and use common sense to determine the level of
segmentation that will be possible.

Prioritize Initiatives

The next step is to prepare the business case. This will entail assessing the commercial impact of
the customer strategy in terms of growth of customer base, development of customer
relationships, and reduction of service costs. This should be carried out in a detailed manner
such that the value of different elements can be evaluated. This will help support the prioritization
of development of initiatives. This prioritization will also allow a phased implementation plan
to be created, which will generate an early-benefits stream whilst moving towards the goal of a
fully functional CRM capability. The plan will typically involve three types of activity: (i) Quick
wins – activities that rollout existing best practices across the business; (ii) Short-term
developments – initiatives that can exploit the existing infrastructure to create benefits quickly;
and (iii) Long-term developments – detailed design and implementation activities that will
create the technical infrastructure, processes, and an organisation that will finally support the
fully functional capability.

Measurement of the Customer

CRM will to be able to deliver significant benefits with a good data. However, this can bring
significant challenges. Effective target marketing, for example, depends on the availability of
discriminatory information on customers. To do well, a good mix of demographic, psychograph,
geographic, behaviour, and attitudinal information maybe required. This could mean
implementation of new capabilities to strengthen the ability to measure the customer. In certain
situations where customer transactions are infrequent or non-descriptive, third party information
might be employed, acquired through affinity partnerships, or purchase of commercially available
data.

Adopt a Piloting Study

CRM business cases are often highly theoretical, and it can be unclear how well a solution
element will work in practice. The careful implementer will adopt a piloting approach where,
critical elements are tried out in the field prior to commitment to full roll out. This will also help
to refine the solution and expose significant problems and organizational issues at an early

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