CRM vision to reality: How to become more customer-focused

Whether it’s the global credit crunch, rocketing food and fuel prices, increasing interest rates or political instability, businesses have to navigate their way through uncertain times. Keeping revenue flowing whilst keeping an eye on ever- increasing overheads is the key to survival at times like this and it has become crucial that companies continue to bring in those all-important sales that keep the business afloat. Whether it’s services, goods or time that is being sold, the successful businesses outsmart their competitors, and while more advertising will likely bring in more sales, there is one often neglected area that really needs to be given attention when times get tough, and that is customer relationship management (CRM).

Zoran Vasiljev, group chief executive, Affinitiv Management & Strategy Consulting

Despite a wealth of information on the topic and no shortage of professional services to ease the way, many businesses continue to struggle with adopting and using CRM capabilities.

Disappointment with CRM is usually the result of poorly conceived strategies that lack a laser focus on improving a specific set of business capabilities to increase revenues or reduce costs. We have adopted the following definition of CRM: customer relationship management encompasses the broad set of sales, marketing, channel management, and customer service activities associated with serving customers and attracting new ones.

At the same time, the definition of CRM is very broad, sometimes causing confusion in lacking the clear focus for investment. CRM is about acquiring, developing and retaining satisfied, loyal customers in order to achieve profitable growth. Ownership of CRM spreads throughout the organisation, requiring commitment from the top executive and close cooperation among all related departments toward the common goal. Unfortunately, some CRM strategies fail. This leaves CRM vendors and their customers baffled, but there are a few common reasons why a CRM strategy will fail.

1. Too much focus on the CRM vendor and technology Focusing on technologies and ignoring the basics of becoming customer-focused will cause even the most technologically advanced CRM strategy to go wrong.

2. Customer centricity is key Companies can focus too much on technology and strategy, and not enough on what is at the core of CRM: the customer. The first letter in CRM stands for “customer” and so the customer should be first when thinking about any CRM strategy. In order to have success with CRM, a company must work towards building a strong relationship with its customers. CRM is the path through which the customer and the company can understand each other.

3. Rushing adaptation Sometimes, company presidents
have the idea of CRM placed in their heads and decide that their entire companies must be CRM-ready as fast as possible. Rushing into CRM is a recipe for disaster. IT workers need to understand the concept of CRM. Someone who understands the importance of CRM will be better suited to deal with customers and reach the company’s goals concerning CRM.

What is this actually telling us?
Today’s companies do not have the operational capabilities to make their CRM strategy a reality.

The CRM strategy is not aligned with CRM operations. Current structures are not built to establish and leverage the enterprise view of the customer. Marketing, sales and service processes are not linked.

Who has got it right and how to get there?
What we have seen is that customer-focused companies excel in three disciplines:

1. CRM mindset
Management and employees must have a clear understanding
of CRM and be incentivised to build strong customer relationships.

2. CRM strategy
The organisation must understand the value of target segments and differentiate investments in these segments based on their lifetime value.

3. CRM operations
Building effective customer relationships requires a cohesive, integrated structure that leverages an enterprise view of the customer and is designed for rapid change.

Customer-focused winners are distinguished by the strength of their vision in each of these disciplines and the speed in which they can make their vision a reality. Customer-focused organisations benefit from the customer relationship that they build.

Managed correctly, customer relationships provide tremendous value.

• Strong relationships migrate value, price and convenience buyers into loyalty buyers.
• Brands are strengthened and have greater impact on the customer.
• Sales cycles are reduced based on more effective sales processes.
• Product development times are reduced due to increased knowledge of customer needs and requirements.

An editorial by Zoran Vasiljev, group CEO, Affinitiv Management & Strategy Consulting. Affinitiv is a global management and strategy consulting firm.