What is a CRM strategy? This is common question, and it does not help when answers differ. There is a lot of confusion between a CRM business strategy and a CRM implementation strategy or plan. A CRM strategy is the blueprint for how you are going to achieve the ideal customer base. To do this means revisiting the marketing strategy. What products/services are you going to sell, to whom, at what price and through what channels. In a CRM strategy, this is extended to how is the enterprise going to build customer loyalty once it has got its target customer. How is it going to build that “feel good factor” of a customer’s connection with the company and it’s belief in the company’s proposition, and brand? That “feel good factor” means the customer stays longer, buys more, recommends the company to others more often and is willing to pay a premium price.
To achieve this, it is highly likely that new capabilities will be needed — in analysis, metrics and service. New technology will be required, customer contact processes will need revamping, staff will be asked to act in different ways and data will need managing to a much greater degree. However, a plan for building these is not the customer strategy, it’s the road map for building enabling capabilities. The one supports the other, and an enterprise should write the top level road map into the CRM strategy — but don’t confuse them.
The customer base needs to become an asset, and financial analysts are starting to value it as such — although only 10 percent to 15 percent of companies know this. That is what a CRM strategy does.
Developing the customer asset base, then, is not just a matter of developing and automating current sales, service and marketing capabilities and processes. Rather, it necessitates understanding how an enterprise is going to achieve financial goals through targeting, acquiring, developing and retaining customers of value efficiently — this is a CRM strategy. Once done, relevant processes can be put in place.
A CRM strategy must look at the customer from a life cycle perspective, not a sales, service or marketing capability perspective — that leaves out the rest of the company. Processes that support the customer life cycle take center stage to deliver the objectives of a CRM strategy. Which means that allareas of the company play a part. “If you are not serving a customer, serve someone who does.” Organizational structures, training programs, attitudes, behavior, metrics and compensation plans all need to change to reinforce the life cycle view. These are some of the capabilities needed to support the CRM strategy.
A customer base only becomes an asset when it has a degree of loyalty, and the only way to do that is to acquire customers who value your proposition; welcome them (a key point in a relationship); get to know them and develop all around value (enterprise to customer, customer to enterprise); manage problems (another key relationship point); understand when they might defect and stop it; or win them back if they do. Loyalty and value are achieved by delivering through a strategy supported by the right enterprisewide capabilities and processes…