CRM Strategy

Alignment of customer value deliverables to total customer nodes so as to boost corporate performance.

Transcript

1. CRM Strategy Dr. Elijah Ezendu FIMC, FCIM, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM, PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr
2. Learning Objectives At the end of this course, participants should be able to do the following: i. Explain importance of CRM Strategy ii. Explain CRM development and implementation iii. Identify methods for aligning CRM Strategy to business model iv. Explain Customer Value Added and Customer Loyalty v. Conduct proper enterprise-wide implementation of customer-centricity
3. “70% of CRM initiatives fail” Source: Cap Gemini Ernst & Young “90% of enterprises cannot show a positive return on CRM” Source: META Group “75% of CRM initiatives fail to substantially impact the customer experience” Source: Gartner
4. A CRM Strategy shows the intent of a firm concerning its customer base, pointing out how it shall acquire, maintain and retain customers through improvement in customer value deliverables as the way to enhance corporate performance.
5. CRM Strategy & Implementation Model CRM Readiness Assessment Process 1: Strategy Development ENABLING PROCESSES Employee Engagement Process 5: Performance Assessment Process 2: Value Creation Process 3: Multi-Channel Integration Process 4: Information Management CRM Project Management CRM Change Management Source: Adrian Payne & Pennie Frow, Customer Relationship Management
6. Strategy Development This involves development of CRM strategic options for achieving established CRM objectives for every targeted segment, thereafter the best option shall be adopted as the CRM strategy and the right measures for performance shall be established.
7. Strategy Development Process CRM vision stands as established customer value proposition effected through customer audit Target customer segments based on value Establish CRM objectives for every targeted segment Conduct capability analysis Develop CRM strategic options & evaluate them Choose the most appropriate CRM strategy & establish the right measures for performance Source: Elijah Ezendu, CRM Strategy Review
8. Customer Asset Audit Protect Position Invest to Protect Invest to Win Damage Limitation Counter Competition Invest to Build Win the Opportunity Careful Management Manage Profitability Build Selectively Manage the Revenue Manage for Revenue Manage Profitability Manage for Profitability Manage the Revenue Consider Divesting Key Large Share of Wallet Some potential Transactional Highly Secure Secure Vulnerable Fragile Strength of Relationship (Value to Customer) Customer Potential (Value to Company) Source: Gartner
9. CRM Investment Framework Hygiene Factors Motivators Overspending Hidden Opportunities Real Relevance Claimed Importance Low High Low High Invest Study/ Invest Maintain Efficiently Trim Adapted from Gartner
10. Interoperability of CRM Strategy The CRM Strategy must have a high level of interoperability with the Corporate Strategy and Competitive Strategy of the Business Portfolio.
11. Using McKinsey 7S Framework for Testing CRM Strategy Style Staff Shared Values/ Subordinate Goals Structure Systems Strategy Skills
12. Action Points for Testing CRM Strategy • Examine each of the 7S. • Identify the key success factors of each ‘S’. • Ascertain the gap between the elements and the strategic fit. • Solution should be either to amend the elements accordingly or to alter the CRM strategy.
13. Aligning CRM Strategy to Business Model It’s imperative to align CRM Strategy to a firm’s Business Model due to its role. Business Model is the logic behind value generation. The Business Model binds Business Strategy and Business Process together and functions as link between them. The focus of strategy is determination of position and codification of aims and objectives, while business process captures and implements the strategy.
14. Business Strategy Business Model Business Process Planning Level Architectural Level Implementation Level Business Logic Triangle
15. Customer Value Added “Customer value added approach is based on providing products and services to customers that are a greater value than they could expect from purchases from competitive companies in similar markets.” Source: John McKean, Customers Are People
16. The CVA Approach Customer value added facilitates proper customer relationship management through identification the suitable value proposition which is superior to the whole bundle of offering from competitors, and ensuring effective communication of the standard to customers. CVA = Perceived worth of a business’s offer Perceived worth of a competitive offer
17. Steps for Implementing CVA • Identify customer values • Identify competitors’ offers • Build customer values into firm’s offer to obtain firm’s interim offer • Compare firm’s interim offer to competitors offer • Identify value gaps • Use problem analysis tools to identify root causes • Use quality improvement tools for quality enhancement in order to set new standard of value proposition Source: Elijah Ezendu, CRM Strategy
18. Branding to Breed Customer Value Proposition Ascertain vision (establish customer value proposition) Determine the fitting culture for delivering the value proposition Establish a character to deliver the promised customer experience Communicate the value proposition Establish clear cut identity that highlights both functional & emotional benefits to customers Develop personality and emotional elements of the value proposition Source: Elijah Ezendu, CRM Strategy
19. Customer Loyalty Customer loyalty is aggregation of attitudes and emotional disposition developed in the course of interaction with value proposition either directly or indirectly, such that a customer would tend to purchase a particular product/service over and over again.
20. Ladder of Loyalty Partner Advocate Supporter Client Purchaser Prospect Source: Christopher, Payne & Ballantyne, Relationship Marketing ▪ Partner: Someone who has the relationship of partner with you. ▪ Advocate: Someone who actively recommends you to others, who does your marketing for you. ▪ Supporter: Someone who likes your organisation, but only supports you passively. ▪ Client: Someone who has done business with you on a repeat basis but may be negative, or at best neutral, towards your organisation. ▪ Purchaser: Someone who has done business just once with your organisation. ▪ Prospect: Someone whom you believe may be persuaded to do business with you.
21. "There are ducks, and there are eagles. The ducks run around the ground quacking all the time, stating rules, following orders, doing what they are told and often pecking at other ducks. Eagles soar high above to get the best perspective and decide what is best for the customer." - Ken Blanchard, Leading at a Higher Level
22. “Customer-centricity involves aligning organizational resources for effectively responding to the ever-changing needs of customers, while building mutually profitable relationships.” - Craig Bailey & Kurt Jensen What is Customer-Centricity?
23. ✓ Personnel ✓ Operating practices and procedures ✓ Systems (internal and external) ✓ Products and services Aligning Organizational Resources
24. • Recognizing and rewarding customer-centric behaviour. • Training every staff on customer-centricity. • Ensuring that decision-making hinges on customers. • Using communication tools and techniques for highlighting the firm’s progress in customer-centricity Aligning Personnel
25. Customer-centricity can be embedded on organizational processes through adequate training and modeling of interdepartmental transactions as depiction of customer relationships that require optimization. Entrenching Customer-Centricity via Training cum Internalization
26. • Communicating effectively and building rapport. • Identifying and exploiting opportunities. • Managing complex and taxing conversations. • People and communication styles Focus of Training
27. ✓Ascertainment of customer’s request ✓Ensuring Profitability ✓Find out repeatability of transaction ✓Determination of feasible term of relationship. Requirements for Building Mutually Profitable Relationships
28. • Obtain customer’s pulse • Involve the customer • Analyze information • Socialize results • Implement customer-focused changes • Respond to the Customer Voice of The Customer Process
29. ✓Survey the Customer ✓Interview the Customer ✓Get information from customer-facing personnel ✓Observe actions and behaviours of customers ✓Embark on mystery shopping How to Obtain Customer’s Pulse
30. • Business decision-maker • End-user of product or service • Procurement function Three Different Faces of a Customer
31. Customer Survey Transactional Surveys Relationship Surveys Focuses on measuring customer satisfaction with individual or collection of Interaction with firm. Focuses on all aspects of the firm such as • Marketing • Product Management • Service and Support • Sales/Account Management • Engineering/Development • Professional Services • Training and Education • Accounting/Finance Survey on many individuals in customer’s firm.
32. • Environment of trust • Establishing expectations with personnel • Managing anecdotes Factors that Aid Collection of Inputs from Customer-Facing Personnel
33. This can be done by means of the following: 1. Focus Group: For obtaining information through discussion with a group of participants, taking cognizance of commonality in demographics, attitudes or purchase patterns. 2. Customer Board of Advisors: For holding periodic meetings with selected number of senior executives from firm’s customer database. Factors that determine selection of customers include strategic importance, level of complexity/sophistication in use of products or service, diversity of industries which the firm represents. Involving Customers
34. Analyzing information Analyze customer feedback and information obtained Output: i. Positive trends ii. Challenging trends iii. Issues raised by customers Compare to other information held by the firm Such information include the following: i. Customer demographics ii. Transactional history This gives rise to development of customer segmentation strategy
35. Top-level reporting for general awareness Comprehensive report for sectional, departmental and project action-planning Socialize Result
36. • Getting management commitment • Conducting cross-functional reviews • Voice of customer tracking and reviews • Forecasting Steps for Implementing Customer-Focused Changes
37. • Customer Satisfaction • Customer Retention • Churn • Revenue and Profitability -Overall -By Customer Segment -By Customer • Product/Service Diversity By Customer Key Performance Indicators Targeted for Improvement
38. 1. Immediate Response i. Establishment of criteria for ‘immediacy’. ii. Implementing ‘immediacy’ team. iii. Management reporting. 2. Responding with Account Strategies The six steps for implementing Account Strategies: i. Record account-specific results ii. Involve senior management in customer experience. iii. Prepare for customer review meeting iv. Engage customer in meeting v. Inform the organization and respond resourcefully. vi. Continue the process Responding to Customers
39. ➢ Newsletter ➢ E-mail ➢ Website ➢ E-zine ➢ Instituting the update as a component of firm’s account management practices ➢ Using interactive sessions of forum or board of advisors. ➢ Responding immediately to participants during survey. Other Methods of Updating Customers
40. ➢ Accepted as a technical instead of business problem ➢ Using a top-down approach ➢ Non-involvement of senior management ➢ Lack of focus on areas of high adoption ➢ Driven by IT department instead of Sales, Marketing and Service. ➢ Absence of a cross-functional implementation team ➢ Biting more than one can chew ➢ Organizational unpreparedness Common Pitfalls of CRM
41. Feature Product-Focused Customer-Centric Customer Orientation ▪ Discrete transaction at a point in time ▪ Event-oriented marketing ▪ Narrow Focus ▪ Customer life-cycle orientation ▪ Work with customer to solve both immediate and long term issues ▪Build customer understanding at each interaction Solution Mindset ➢ Narrow distribution of customer value proposition ➢ Off-the-shelf products ➢ Top-down design ➢ Broad definition of customer value proposition ➢ Bundles that combines products, services and knowledge ➢ Bottom-up, designed on the front lines Advice Orientation ▪ Perceived as outsider selling in ▪ Push product ▪ Transactional relationship ▪ Individual to individual ▪ Working as an insider ▪ Solutions focus ▪ Advisory relationship ▪ Team-based selling Customer Interface ➢ Centrally driven ➢ Limited decision-making power in field ➢ Incentives based on product economics and individual performance ➢ Innovation and authority at the front line with customer ➢Incentives based on customer economics and team performance Business Processes ▪ “One size fits all” processes ▪ Customization adds complexity ▪ Tailored business streams ▪ Balance between customization and complexity ▪Complexity isolated within the system Organizational Linkages & Metrics ➢ Rigid organizational boundaries ➢ Organizational silos control resources ➢ Limited trust across organizational boundaries ➢ Cross-organizational teaming ➢ Joint credit ➢High degree of organizational trust From Product-Focused to Customer Centric Firm Source: Booz Allen Hamilton
42. Solutions Advance Customer Value Proposition Source: Booz Allen Hamilton Industry Traditional Traditional = Value Product Proposition Truck Manufacturing ▪ Trucks “We sell and service trucks” Aerospace Components ▪ Aerospace Fasteners “We sell high- performance fasteners” Utilities ▪Electricity “We provide electricity reliability” Chemicals ▪ Lubricants “We sell a wide range of lubricants” Pharmaceuticals ▪ Drugs “We sell pharmaceuticals” Value-Added Customer-Centric + Services = Value Proposition ▪ Financing ▪ Service “We can help you reduce life-cycle transportation costs” ▪ Application/Design support “We can reduce your operational costs” ▪ Energy asset maintenance “We can help you reduce total energy costs” ▪ Usage and application design ▪ Lubricant analysis “We can increase your machine performance and up-time” ▪ Product support ▪ Outcomes-driven information database “We can help you better manage your patient base”
43. ✓Put employees in the customers’ shoes ✓Put employees in the shoes of a particular colleague ✓Review your habits and attitude ✓Be evaluated in a 360-degree approach by colleagues you frequently deal with (through a random selection). Developing Customer-Centric Culture
44. It’s a cross-functional role empowered to marshal organizational resources to resolve troublesome customer issues and identify root cause while balancing the financial realities and strategic goals of the company. What is Customer Advocacy?
45. To steer customers away from veiled gaps, inefficiencies and organizational complexities that perturb perception, thereby managing “customer experience” effectively. The Need for Customer Advocacy Function
46. ➢Straight-forward and honest ➢Interpersonal management and communication ➢Good business sense and judgment ➢Organizational navigation ➢Executive Presence ➢Time management ➢Project management Key Skills for Customer Advocates
47. ➢Customer segmentation ➢Engagement process ➢Escalation process ➢Response planning, analysis and execution ➢Managing customer experience through resolution ➢Internal management review Customer Advocacy Process Framework
48. ➢Ensure your communication stands alone ➢Consider the audience ➢Read it “as if” you were the recipient ➢Acknowledge the “bigger picture” ➢Special handling procedures when emotionally charged Factors to Consider When Crafting Message
49. Do’s of Customer Centricity Don’ts of Customer Centricity 1. Adjust your mission and vision statement Expect a brand new mission statement to make you a customer-centric company 2. Segment your customer base Overcomplicate the segmentation 3. Align your organization structure with the segmented customer view Reorganize too often and for the sake of it 4. Make good use of technology Expect technology to build customer relationships for you 5. Create new performance measures Throw out the old performance measures 6. Study the behaviours, attitudes and demographics of your customers Confuse behaviours and attitudes with needs 7. Try to understand the true value of your customers Rely on the customers past buying patterns 8. Empower employees, particularly customer- facing staff for proactive relationship-building Allow anyone in the company to say (or think) “this is not my job/responsibility” 9. Set clear goals for achieving a defined state of customer centricity by a certain point in time Assume that your project/ programme were completed, you ‘got there’ 10. Encourage and seek to create customer loyalty Think of loyalty as the tenure of a customer (duration of the relationship) 11. Communicate and engage all stakeholders in the process Limit your change management efforts to the marketing, sales and customer service functions
50. The Seven Characteristics of Customer-Centric Companies i. They conceive of themselves not as a group of products, services, territories, or functions, but as a portfolio of customers. ii. They know how much money they make or lose with each of their customers or customer segments, and they understand why. iii. They understand the different needs of different customers and group them into operational customer segments and sub-segments based on common needs. They thrill their customers by delivering knockout value propositions that competitors cannot match. iv. They continually innovate by evolving their customer segments and sub-segments, and improve their value propositions as customer needs change. v. They organize their businesses into customer segment business units to establish clear ownership of the customer experience and accountability for the financial performance of each customer business unit. vi. They create a competitively unassailable customer innovation advantage based on a customer R&D model grounded in continual experimentation at key customer touch points. vii. They understand in precise analytic terms exactly how their different customer relationships contribute to or subtract from the total value of the firm; because they manage their customer portfolio on this basis, they know what to manage and where to invest in order to create sustainable, profitable growth and drive outstanding share price performance over time. Source: Wharton Business School
51. Dr Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise in Interim Management, Strategy, Competitive Intelligence, Transformation, Restructuring, Turnaround Management, Business Development, Marketing, Project & Cost Management, Leadership, HR, CSR, e-Business & Software Architecture. He had functioned as Founder, Initiative for Sustainable Business Equity; Director, Archtalento; Director, Speakers Africana; Chairman of Board, Motus Health Initiative; Chairman of Board, Charisma Broadcast Film Academy; Group Chief Operating Officer, Idova Group; CEO, Rubiini (UAE); Special Advisor, Road Transport Employers Association of Nigeria; Director, MMNA Investments; Chair, Int’l Board of GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training), Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Lead Consultant/ Partner, JK Michaels; Turnaround Project Director, Consolidated Business Holdings Limited; Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles), Fortuna, Gambia & Malta; Chief Advisor/ Partner, D & E; Vice Chairman of Board, Refined Shipping; Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria; Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria; Country Manager (Nigeria) & Adjunct Faculty (MBA Programme), Regent Business School, South Africa; Adjunct Faculty (MBA Programme), Ladoke Akintola University of Technology; Editor-in-Chief, Cost Management Journal; Member of National Executive Council, Institute of Internal Auditors of Nigeria; Member, Board of Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business Administration and Fellow of Professional Institutes in North America, UK & Nigeria. He is an Innovator of heralded frameworks: Among other things, Corporate Investment Structure Based on Financials and Intangibles, for all-inclusive valuation, highlighting intangible contributions of host communities and ecological environment. It’s a model celebrated internationally (including Social Innovation Side Event of 2016 United Nations Climate Change Conference COP22 in Marrakech, Morocco) as remedy for unmitigated depreciation of ecological capital and developmental deprivation of host communities. He had served as Examiner to various Professional Institutes and External Examiner to Universities. He had been a member of Guild of Soundtrack Producers of Nigeria. He's an author and extensively featured speaker.
52. Thank You