Customer Relationship Management

In any rapidly changing business environment it is essential to manage the

expectations and quality of service and support to the market. Serious flaws in this
area have emerged in relation to the management of service consistency and
customer care. This section provides interesting research and guidance from DH
and other sources that will assist in avoiding problems in this critical area. The
consistent and effective management of the customer relationship across all
channels and functions within an organization is a key competitive differentiating
and success factor for any evolving Business. Customer relationship management
(CRM) can e defined as an integrated set of usiness processes and enaling
technologies in support of a consistent entry! management and use of customer
related information across and etween channels of sales and service.
The essence of Customer relationship Management
"t the heart of CRM is the issue of data and relationship ownership. #n the past!
marketing or sales have een deemed to own the customer. #n the CRM model any
single entity or function does not own the customer. The customer is managed
cooperatively y all the parties with a customer contact responsiility or service
provision $ support role. The purpose of CRM remains the same as that of e%isting
customer management processes. These are&
'. The growth of usiness y leveraging e%isting relationships! (sing
information availale to improve the customer relationship
). The use of information to create and enale repetitive sales and support
processes
*. To generate a value proposition that increases customer value and loyalty
+. The aility to increase or institutionalize pro,activity
To achieve these in a multi channel organization a supplier of CRM applications
must ensure the aility to support and drive integration across all relevant
channels and functions.
Establishing CRM successfully
To estalish a successful CRM installation! changes will e re-uired within the
organizational processes! data and operation of the customer management. .ome
of the changes re-uired are&
'. /stalishing and implementing the key information sets that identify the
customer appropriately
). /stalishing a consistent set of data that descries customer activity
*. /stalishing consistent data and usiness rules in gathering! processing and
storing data
+. Reengineering estalished and emerging channels to comply with CRM
re-uirements
0. Reengineering estalished information and support processes to reflect
availale normalized data
1. Management of change in any application or process related to CRM
support! feed or presentation
2. #ntegration of manual and on,line processes to e mutually supportive
.hould any of the aove not e achieved! then islands of data and process
will remain un,integrated and add time! cost! inconsistency and Customer
Relationship Management /2 inefficiency throughout the entire organization.
What should CRM contain3
"ny successful CRM implementation integrates the following&
'. Customer 4etail #nformation This provides a total view of all activities and
information related to the customer! their activities! their interactions and
their stated or intimated needs
). Modes and means of contact or service provision This defines the channels
of access the customer has operated within in the past and future channel
needs and allows the activities performed over each channel to e codified
to a single! integrated! consistent relationship history.
*. .ervices! processes or support used This identifies the elements of the
organization offer that the customer has used in the past. This information
can e used to illustrate customer trends in service use! trends! patterns of
use and allows proactive offers or channel transition suggestions to e
made to hem.
+. Relationship information on other relationship stakeholders 5o customer or
supplier relationship operates in isolation. (nderstanding the precursors to
a trade and the follow,on relationships of the customer allows the supplier
to investigate and introduce innovative new services at an individual!
corporate or industry level.
0. "pplication and process integration This looks to ensure that the
organization6s internal application set is geared to integration in support of
the customer relationship. 7ere an organization looks to have access and
normalize all information from 8egacy! emerging and future applications and
processes in support of a single consistent ut customizale view of the
customer for all functions and support activities.
From Islands to Integration
The organization into which CRM is introduced must also change. Traditional
concepts of ownership and responsiility! contriution and value pro9ection have to
e addressed. The introduction of CRM re-uires present isolated and uncoordinated
players in the customer relationship to realign to focus on the relationship as a
collegiate responsiility to which all cooperatively contriute and gain reward.
:ailure to ensure that this is the overriding and e%plicitly stated o9ective of the
implementation of CRM will cause the pro9ect to deliver less enefit internally and
e%ternally. This can only e achieved through the inclusion of all stakeholders!
realignment of their focus in relation to the customer and a singular focus on
creating a totally consistent customer support resource for the customer and the
organization.
The role of the customer in CRM
The essential purpose of CRM is to ma%imize organizational effectiveness and
efficiency in the servicing of and enefit from customer needs. This is a learning
and analysis process that is generally focused on active customers. Customer
Relationship Management /3
This! whilst central to the organization6s operational efficiency! should e
augmented with careful analysis of customers no longer trading with it. /very lost
customer is a lost opportunity for additional revenue and growth.
7owever it is also an opportunity to identify failings or inade-uacies that the
customer felt compelling enough to force them to emark on a process of changing
suppliers and initiating the development of a new relationship. #n support of any
CRM pro9ect! special attention should e focused on lost customers and their
perception of the organizations failings. ;enerally the feedack received will e
very precise and a very good indicator of issues that many e%isting customers may
have ut have yet to feel are sufficient to force change.
/%isting customers will also illustrate weaknesses and strengths. The strengths
should e the core of the CRM initiative and the weaknesses the core of
development in support of a fuller management offer in support of the customer.
<nce addressed and in place there then e%ists the opportunity to re,contact lapsed
or lost customers to sell the new offer to them. #t should e realized that
customers might have a very tactical view of the service and support offer made.
This tactical view and feedack must e carefully merged to the strategic
o9ectives the organization has for the CRM pro9ect. <nly through the correct
alance of the tactical and strategic can CRM pro9ects address to days needs in a
manner which allows fle%iility to address future situations.
Moving Forward
=here the decision is made to progress with a CRM initiative there are a few
simple ut relatively standard steps that are needed to assist in the successful
delivery and operation of the final deliverale.
'. Customer analysis "nalyze e%isting and past customers to have a truly
rounded view of the organization strengths! weaknesses! opportunities and
threats. Competitive enchmarking is a critical element of this process as it
identifies e%ternal offers more attractive to past customers and potentially
to e%isting ones also. This process should also include the analysis of
internal customers.
). .cope the pro9ect and its o9ectives #n this process the organization
carefully analyses the entire organizational scope of the customer
relationship! their channels! services products and support already in place.
:rom this a clearly defined! organizationally agreed! focused pro9ect
description is created.
*. Create the usiness case The usiness case must e created in a manner
that identifies the usiness prolem across the organization and the
individual functional and overall enefits that can e gained from a CRM
pro9ect. The CRM usiness plan must illustrate and make clear that no
single solution will deliver everything all at once. CRM is an evolutionary
process that will re-uire consistent! multi year resource for people and
udgets.
+. Cross integrate CRM strategy to the e%isting <rganizational strategies "ll
organizations have usiness! technical and! in most cases! customer care
strategies already in place. The CRM strategy must e fitted to the
framework of e%isting strategies. /-ually! ecause of the strategically
important nature of CRM! e%isting strategies have to e reviewed to ensure
alignment at a usiness! technical and customer care o9ectives level. The
o9ectives arrived at must support and e supported y those of the core
organizational strategies.
0. Technology choice will e critical 5o e%isting CRM package will fulfill all your
immediate needs. The CRM strategy needs to identify! in priority order! the
re-uirements that must e delivered in se-uence. This allows the technical
teams to clearly vet the technology offers in line with their aility to address
the organization>s priorities. /ase of doing usiness and integration
simplicity must e key criteria for application choice.
1. .implify pro9ect management The organization must appoint one single
accountale and empowered manager to deliver against the strategy.
:ailure to have a distinct leader! e%plicitly supported y senior management
empowered to align disparate functions and processes will increase the
opportunity for failure. "ll functions should e tasked to participate and
contriute key knowledge personnel to the process. 4elivery of the CRM
o9ectives should e a stated ?ey deliverale and metric for all managers in
the affected functions.
2. .tage the implementation process CRM is a rapidly evolving field. The
comple%ity of aligning the internal processes and functions is enormous and
if not rolled out in manageale sections will overwhelm the organization>s
aility to integrate its capailities. /-ually the staging of the rollout allows
the organization to review oth the strategy and the priority schedule to
reflect changing market and user needs $ trends.
@. "llow no e%ceptions CRM can only e successful where it guarantees a
consistency of customer management and service across all channels!
functions and processes. "n organization ill prepared to align all channels!
functions and processes in support and use of the CRM deliverales has
undermined the pro9ect from the eginning.
A. Measure the process CRM will! where staged deploy into an organization
that will have e%isting and new processes running in parallel for a period. #t
is critical that the metrics used allows the value of oth e%isting and new
processes to e measured to comparale criteria. This allows the
effectiveness of the new to e measured against the old and allows for
usiness plans to e readdressed to ensure reality is reflected in them.
These consistent measures also allow processes to e analyzed to see
inefficiencies or gains that are less that pro9ected. This allows ongoing
realignment of the processes and supporting technologies to provide
e%pected or etter service levels.
Some Things to remember
'. dissatisfied non,#nternet customer tells on average A people of their ad
e%perience. " dissatisfied #nternet customer can tell the world
). .elling to an e%isting customer is 0BBC cheaper than selling to a new
customer
*. "0C customer retention improvement can increase profitaility y @0C
+. ;ood customer care will ensure that 2BC of complaining customers trade
again /%isting customers are successfully sold new products in 0BC of
cases. :or new customers the figure is '0C.