It is found that all CRM strategies cannot be adopted by all types of businesses. This is mainly because different businesses have different operational models and functions. Therefore, the feedback and support to customers also vary (Buttle, 2013). However, implementing an efficient CRM strategy comprises of initial steps.
Evaluating the business outcomes
In order to implement a new CRM strategy, a business should first be capable to identify the outcomes of its business operations from the new strategy (Finnegan & Currie, 2010). The outcomes are measured in the form of sales, customer attrition rate, the number of customer feedback and complaints. The business outcomes help businesses to assess limitations and compare the outcomes. However, businesses use the performance balanced scorecard according to Al-Safi, Al-Safadi, & Al-Mudimigh (2012) and Kim & Kim, (2009).
To begin with, the performance scorecard comprises of four main key performance indicators (KPIs);
- process and,
Organizational performance is scored on the basis of customer equity, shareholder value, profitability. Whereas, customer assessment is based on customer loyalty, satisfaction, and value. Businesses further score their performance for existing CRM process on the basis of customer acquisition, retention, and expansion. Lastly, infrastructure performance is measured on the basis of IT technology, human capital, organizational structure, and organizational culture. These performance checklist items help in systematic cost-benefit assessment for performance monitoring of CRM initiatives. Businesses use this multi-criteria, quantitative and qualitative approach with an aim in assessing the return on CRM-related investments.
Situation analysis to develop a CRM strategy
Situation analysis of CRM assesses a business’s served market segments, market offerings and market channels (Buttle, 2013). The models or tools used by businesses comprise of three main aspects;
- the present state of the business,
- challenges of the business model and,
- resolution strategies.
Businesses seek to answer the methods they have used until now with respect to customer-related marketing, database management, retention policies and sales objectives. Same assessments go for market offerings and channels used by the businesses, and help to differentiate the business objectives and the business models used, and find the gaps.
Businesses use different models of conventional situation analysis such as SWOT, 5C-7C-4C Situation Analysis, and mix of BCG Matrix, SWOT and 7C situation analysis Gallo et al., (2017). The BCG matrix is used by the businesses solely to assess the current state of the product portfolio in marketing and sales planning, whereas, the 7C uses to assess the current state of the business, competitors, customers, cost, country, climate, and change.
However, this model is measured in 2-dimensional aspects, the external factor analysis and the internal factor analysis. At the end of the findings from the mix of BCG Matrix, SWOT and 7C situation analysis, the businesses are able to assess:
- the gaps in the internal structure of the company,
- external factors affecting the CRM and business operations and,
- macro-environmental drawbacks of the existing CRM strategies.
Software tools such as SAP CRM and HubSpot CRM has integrated these models for evaluation of the situation of the present CRM strategy.
CRM awareness and education
The most important task is to educate the importance and the basic concept of CRM in a business. This involves understanding the CRM strategy, along with the misunderstandings. In addition, it is also important that the management as well as the administrators of the business, understand the models of CRM fit for their particular business operation and function (Buttle, 2013; Dyche, 2006). The main aim of the awareness schemes of CRM amongst the employees and the business administration is to learn to effectively organize customer contact info and effectively manage the relationship with current and prospective customers. Building conceptual awareness about CRM is not limited to theoretical aspects but also to capability building in using the software. Awareness and education also involve learning to use different CRM tools for different purposes, such as:
- marketing based CRM (Hubspot),
- contact CRM (Zoho CRM),
- conversation CRM (Nimble) and,
- lead-based CRM (Salesforce).
The CRM vision is a high-level statement of how CRM will change the current business state and relate to customers. The vision should be such that the business objectives intersect the customer management objectives (Buttle, 2013; Finnegan & Currie, 2010). In addition, CRM vision gives shape and direction to the CRM strategy. CRM vision is implementable only if the awareness and education of CRM are well understood. Subsequently, the main aim of forming the vision is connecting the business achievement to customer retention and acquisition.
For instance, common visions include building long-term relationships with valuable customers and fulfilling their interests and to satisfy customer needs.
In order to integrate the CRM vision to the business objectives, businesses assess their gaps from outcome analysis and situation analysis to identify the gaps. These gaps are then filled by integrating CRM objectives to operational objectives.
Forming priorities to develop a CRM strategy
CRM vision helps in developing the priorities the business seeks to provide the customers. However, the CRM itself must become a priority of the business likewise:
- businesses prioritize sales,
- financial performance,
- use of technology and,
- marketing strategic models (Buttle, 2013).
Therefore, CRM priorities involve the structure as to which customers’ need to be given priority. Businesses usually do this on the basis of customer service segmentation planning.
For instance, a retail business received 3 queries and 3 complaints at the same time. Now, customer service segmentation should prioritize as to which of the two groups requires priority to address. However, one way of solving this issue is to increase human capital and categorize on the basis of feedbacks and queries. In another instance, the use of tools to efficiently categorize or even address all queries or complaints at the same time. Salesforce-IQ is one such tool that is used by businesses to prioritize CRM segmentation.
Identifying people, process and technology requirements
To begin with, the process of identifying the people, process and technology requirements for the goals and objectives to be achieved (Buttle, 2013). However, this process is repetitive and never ends. It is done by keeping two things in mind, costs and business objectives. For instance, to increase the rate of customer complaint responses and query solving, a business intends to use automated software with predefined possible queries and resolution to the same, such as Oracle Sales Cloud and Agile CRM.
As mentioned earlier, there are different types of CRM tools for different purposes, businesses use only those tools that are related to their CRM goals. However, most businesses use lead generation CRM based tools and communication-based CRM tools to build relations with customers. Common types of lead generation CRM tools include Zoho CRM, amoCRM, and Salesflare; whereas, common types of communication CRM tools include Hubspot, Infusionsoft, and Quickbase. However, there are tools that combine both communications as well as lead generatio, such as Salesforce and SAP CRM.
Consequently, for people, businesses train and hire new people to specifically deal with customer complaints and queries with the an aim to build relationship. In order to meet the new goals of integrated business objectives and CRM objectives, choosing the right people and technology is important. In addition, this step also serves for efficient prioritization of customer requests vide the CRM goals of the business.
The next step of developing a CRM strategy
The next phase of implementing a CRM strategy is to build the CRM project foundations. This involves building the foundations for the CRM strategy building. However, this phase involves identifying stakeholders, establish governance structures, and identifying the change that the current management needs to optimize the business operations. This phase also looks into changing and optimizing the idea of organizational culture and develop intellectual buy-in and develop the knowledge as to what needs change and understand the scope of the change.
Businesses mainly use the governance structure models for effective planning and implementing of CRM strategy. Furthermore, businesses also use risk management planning models so that critical success, as well as the failure factors, are optimized and mitigated respectively. Lastly, these models according to Kaur et al., (2014) mainly include SEI’s Continuous Risk Management (CRM) model, Microsoft Solutions Framework Risk Management Model and Support Vector Machine models.
- Buttle, F. (2013) Customer Relationship Management Concepts and Technologies. 2nd edn. Burlington: Elsevier. doi: 10.1017/CBO9781107415324.004.
- Dyche, J. (2006) ‘The CRM Handbook – A business guide to customer relationship management’, in The CRM Handbook – A business guide to customer relationship management.
- Finnegan, D. J. and Currie, W. L. (2010) ‘A multi-layered approach to CRM implementation: An integration perspective’, European Management Journal. doi: 10.1016/j.emj.2009.04.010.
- Gallo, P., Píchová, R., Šenková, A., Matušíková, D., & Mitríková, J. (2017, September). TECHNIQUES AND ANALYSIS OF MANAGEMENT AUDITS. In CBU International Conference Proceedings (Vol. 5, pp. 132-137).
- Kaur, K., Kaur, A., & Kaur, R. (2014). Study of different risk management model and risk knowledge acquisition with WEKA. International Journal of Engineering Research and General Science, 2(4).
Latest posts by Avishek Majumder (see all)
- Using Psychoanalytic theory and Pavlovian theory by online marketers - August 14, 2019
- Supply chain costs management models - August 12, 2019
- Quantitative and qualitative forecasting techniques in logistics management - August 6, 2019