How to Solve the CRM Puzzle

Customer relationship management has been around long enough that companies have begun codifying best-practice strategies. A recent study from Carlson Marketing Group surveyed 32 organizations and generated 10 activities common among them.

The study broke CRM implementation into eight steps: Preliminary planning; evaluation of current CRM efforts; analysis of competitors’ practices; assessment of internal capabilities and target audiences; appraisal of relationship marketing options and business issues; program goal generation; financial authorization from those controlling the corporate purse strings; and overseeing the implementation.

The study found that best-practice organizations:

• Develop a clear, holistic vision of all stakeholder relationships. Not surprisingly, customers, management and employees ranked essential to fostering CRM initiatives. But companies placed integrating vendor relationships higher than concerns of shareholders or board directors, due to vendors’ ability to influence day-to-day operations. Some firms included regulatory agencies and special interest groups as worth considering too.

• Understand the relative importance of their customers and allocate resources accordingly. Six in 10 firms treat their best customers differently from their regular customers. Their practices include computing actual and potential value of individual customers; segmenting based on these computations; tracking customers’ progress along a value continuum; designing messages to modify customer behavior; gaining a better understanding of individual customers’ needs; and linking employee training, customer service and brand management to customer value enhancement.

• Centrally coordinate the relationship marketing strategy and customize it locally. While CRM strategies often are developed at the organization level, letting smaller units modify them frees the company to deliver specialized products, services and messages to segmented groups.

  The study revealed that firms with management that considered building long-term, sustainable relationships a core strategy were more likely to embrace decentralization than those that saw such programs as short-term revenue gainers.

• Deploy relationship marketing in stages, yet possess a comprehensive vision. The best marketing programs can’t be developed overnight, nor can the strategies and processes remain static from the time they were designed. Companies that rigidly stick to predetermined goals and timetables may find that their business needs have changed, or that their customers have moved on to the competition.

• Realize that a successful relationship marketing strategy is tightly integrated with several functional areas. Three-quarters of the companies surveyed integrate finance, sales and technology departments into CRM efforts, while half included R&D and manufacturing and operations. One-quarter included purchasing departments, while none said they had made HR part of the process.

• Rely on change management to involve employees in an internal partnership for relationship marketing. Management’s failure to include human resources in its CRM decision is further reflected here. Only 17% of the firms surveyed include CRM requirements that applicants must demonstrate during the hiring process. Even beyond the initial selection, management should allow front-line employees to have access to customer data, and to tailor their conversations and reactions based on that information. Meanwhile, HR can play a key role in evaluating desired employee behavior, such as friendliness and helpfulness.

• Provide a constant customer experience through multiple contact points. The classic failing here is a customer who receives two different offers, such as one discount level through a direct mail solicitation and another online. This doesn’t mean that customer segments can’t be divided for testing, but once in a given segment, a customer should not receive conflicting messages. In the past, the biggest hurdle in this area has been integration of online and offline operations.

  One way this catch can be smoothed out is by assigning specific service personnel to specific customers, allowing a consistent level of dialogue between the same two people. For larger-scale targeted promotions, customer interactions can trip off a unique identifier key