Customers First - Implementing CRM the Right Way
Due to the rapid digitalization of the world around us, customer relationship management (CRM) has again come to the forefront. In order to establish a long term relationship with customer, it’s very important to know the customers first. Unfortunately most of the organizations do not.
KPI of Efficient CRM
Customer behavior and preferences are changing very fast. Smart phones along with services like Wi-Fi and Internet have become a basic need, even more than food and shelter. Having an effective customer relationship management provides edge to the companies who are seeking to ensure long term success. The most basic KPI of efficient CRM is having a single identifier of the customer across the organization (where ever customer has a touch point), so that organizations can understand basic profile of customer (Name, address, gender, date of birth) and advance information like buying preferences, hobbies, 360 degree view of customer etc. Subsequently they can use them effectively to make a connection with the customer, targeted campaigns and thus utilize the marketing budget in the most efficient way.
Asynchrony between Retention and Processing of Customer Data
On the downside, the basic KPI is also the most challenging one for most of the traditional companies. Why? This is because companies have hundreds of legacy systems storing and processing customer data which are not in sync. Thus these companies may approach customers many times, possibly due to the same reason and tend to gradually alienate the customers. Of course, technology companies do not face these challenges due to green-field approach and unified back-end systems. Many of the banks have also overcome these challenges in recent years due to technology investments of the past, and others are only catching up.
The Right Approach
Any company embarking on CRM journey, whether on cloud solution or on premise solution, must decide first the approach for Customer Data Management (CDM). As CDM is a cornerstone of effective CRM systems, right technologies must be selected which are capable of integrating the back-end systems. It is also important to minimize the entry points for customer information in the organization. Best would be one entry point (single point of truth) where customer data is created and modified and subsequently propagated to the rest of the systems in the organization. This is not only technically challenging but also requires effective process governance. And this calls for a close alignment with the business partners.
To start, organizations must draw as-is IT landscape, identify all systems where customer data is used, as these will be recipient of updated customer data from CDM. Secondly, identify all the systems where customer data is created or modified (including deletion) and then identify if number of entry points can be minimized. Subsequently, organizations should build real time interfaces (APIs) which will propagate customer data from CDM system to all the systems which require customer data. Real time basis is a must considering that these systems are used in various processes affecting customer journey. E.g. If a customer calls to a call center and updates his/her address and contact details, other contacts from the same company should not ask him/her for the same information again.
Once this is achieved then organizations must carefully plan their CRM strategy. Which processes will provide biggest benefits in customer acquisition and subsequently customer retention? The key CRM processes are Lead Management, Campaign Management, Care Management and Customer Contact Center. It should be decided which processes should be implemented first and which can be done later. Doing all together will add extra pressure on existing resources, causing the implementations to fail or get seriously delayed.
Learn and Adapt
Although organizations know their processes best, they should also be willing to learn from the industry – from the same sector or different sectors. Implementation of CRM is also providing chance to incorporate processes which can address the needs of customers having different profiles e.g. age group, background etc. Implementation of the tool is also the right time to have process re-engineering in place. It is not necessary that a process which has been working for last 20 years will also work for the next 20 years.
A right selection of the tools is important considering that fast pace of change and long term implementation of the tool will not provide benefits to the organization. Agile approach with package of smaller functionalities in shorter time frame will engage business users more as they will able to see, use and provide feedbacks on the tool. Gone are the days of multi-million multi-year implementation approach.
And finally implementation teams should be trained on the technology and should understand the process as well. Although out-sourcing part of capacity needs will speed-up the implementation process, the overall governance should stay within the organization.
These are the key topics organizations should consider before embarking on the Customer Relationship Journey. Following a wrong approach to CRM is worse than not having a CRM solution in place. Due management attention should be in place, as eventually the success of CRM will ensure long term success of the company.