Building Customer Management Capability
CRM, or Customer Relationship Management, is not rocket science. Here's the basic message:
On the revenue side, it's a lot easier to get an additional $10 from a customer you know than $1 from someone new.
On the cost side, you don't have to spend a lot on marketing to people who already know you. And you spend even less if you know them -- who they are, what they want and where they are.
So it makes a lot of sense to do whatever you can to identify, track, and reach your best customers --- especially in a tight global economy -- and we now have the technology to do it.
New customers and new market share are always fine, but chasing them requires more money than most companies are willing to commit right now.
Frequent flyer miles, web cookies, and complimentary suites for high rollers in Las Vegas are all examples of CRM at work. They are all ways to either reach, qualify or retain customers.
They work because companies now realize that there is not a infinite supply of good customers. Look at some of these numbers below:
It's not just the technology, baby. A lot of people seem to think that data mining software and the call center infrastructure are the big areas of focus for a CRM solution. (Those are the technologies that get the most press coverage, especially in the financial community)
I've seen the technology in action, and it is indeed very impressive. But the real challenge is to take those technical tools and integrate them with a real business proposition: convert all that sunk capital cost into revenue-generating assets.
Your customer management strategy must be more than plugging equipment into the wall. You must demand from your organization a clear vision as to how CRM will:
Affect current operations -- the daily work routine
Create a demand for new skills and mindsets within your organization
And above all, generate revenue.
Multi-channel, multi-system, multi-revenue. The ideal CRM concept maximizes your channels to the customer. Each possible interface with the customer is commonly called a "touchpoint." Ideally the information flow is two-way, between the customer and the company. It should flow through the company's systems at several levels, and in many cases, in real-time. That's the ideal vision -- what you are able to achieve in practical terms is likely to be more gradual and less comprehensive, since you have existing legacy systems to consider, some limitations on devices in the mobile data area, and separate priorities for various customer segments.
There's a lot to consider in developing a CRM strategy, and some of the key challenges are shown in the above picture. One of the first tasks you will face is translating these challenges are your own specific requirements into a clear roadmap and some tangible action plans.
Take a look at the above picture. Does your company's CRM strategy have all four key ingredients? If something's missing, you're not ready --- don't make any big capital investments until you are.
Have a roadmap for CRM --- where it will start and how it will grow within your business, and how it will directly extend to include your partners, suppliers, distribution channels and customers. Enlist your marketing and sales people to drive it. Consider how customer support can become a revenue generator -- and what that will mean in terms of training and people when "passive pipes" become two-way channels to the customer. And keep it from becoming just an IT-driven proposition.
Contact me if you'd like to discuss
these issues further, or to see how they can be adapted and applied to your
company or organization. Click
here to see a description of my 1-day workshop on Making CRM Work For You.