“CRM is not software, CRM is an attempt to encode corporate values, putting the client ahead. It is a culture and a corporate discipline for the definition of priorities. In other words, if you have managed to interest the most desirable market segment on earth, but they do not get answers to the concerns sent by email, you are not doing a sensible practice of CRM. ”
CIO MAGAZINE- Nov. 2000
creating-a-strategy-crm-1Like all previous trends, CRM holds great promise. In order to implement this strategy and make it part of their business arsenal, companies need to spend enough time grouping their different departments together to take the necessary steps in creating a plan to implement CRM. Senior management and project managers need to know and evaluate the corporate infrastructure, to understand its gaps and gaps in order to really know what state the company is in to evolve to a new way of doing business and create an implementation plan. to the CRM strategy. The Company's CRM strategy is uniquetherefore, it should include detailed recommendations on how the total customer orientation goals can be achieved, and these should be aligned with the company's general business strategy. The battle to achieve this type of competitive advantage begins within the company with the allocation of the necessary financial and human resources to achieve success.
Failures in the implementation of a CRM Project are generally attributed to technology, although this is not the main cause of the failure. Most of the failures are due to: Inadequate business strategies; Poor planning and development processes; Lack of support from senior management; and / or Lack of support and information from the employees in charge of using it. That is to say that a correct technological implementation can be made to support an erroneous process or a wrong strategy, in this way the only thing that is achieved is the automation of the failure or error. For the chosen solution to work, those responsible for using it must know it and embrace it, senior management must support it throughout the journey and the company must be prepared to receive it.
The key to successfully formulating a CRM project is to create a dynamic balance between the strategy, the processes, the technology and the initiatives of those responsible for using it, within time and with the limited resources that are delivered to each project. This is why minimum premises must be taken into account:
Guidance based on a clear corporate vision and a sound business strategy;
The commitment of senior management in the development, evaluation, launch, implementation and start-up of the initiative;
Creation of open, flexible and sensible processes that allow us to accommodate changes in business;
Possibility of rapid implementation to see results in the shortest possible time
Close interaction with the changes that are made in business processes and the current possibilities of the organizational environment.
In the same way, there are some fundamental principles that determine the orientation of the corporate strategy towards the client.
Define customer engagement strategies to:
Acquire new customers through the dissemination of the differentiating element offered by your product or service.
Retain your best customers through a better response to meet their needs.
Increase the value of your customer relationship.
Design and implement CRM programs and processes that allow you to:
Create a continuous and closer relationship with your client.
Manage the life cycle of the client's relationship with the company and its employees.
Respond and react in real time to needs, concerns, problems, complaints and opportunities through all points of contact.
Select, develop and integrate the tools and technological infrastructure required to:
Capture all transactions and relevant information about customer behavior, requirements, attitudes and expectations.
Analyze all the information collected, in order to create a favorable and meaningful environment that develops the relationship with the customer through experience, even without taking into account the objectives of Marketing, sales, service or communication.
Based on the client's needs and corporate objectives, plan the tactics, programs and initiatives that will be implemented in the interaction with the client.
Provide the necessary support so that the personnel in charge of interacting with the client can execute, without delay and in real time, the processes, programs and initiatives proposed.
It should also be borne in mind that there are four Critical Concepts that prepare the ground for the implementation of a successful CRM strategy.
The relationship between the customer and the company is a two-way value exchange relationship.
The relationship of customers with the company progresses in stages as a "life cycle", therefore, the main goal of a CRM strategy is to move customers through that cycle, take them to the most profitable stages of the cycle and keep them there.
All interaction with the client is based on a series of contact points and therefore the relationship must be maintained and exist only through those points.
True CRM is based on a business architecture that closes the gap and narrows the circle of the relationship with the client, allowing an interaction to be attended in real time and its impact measured immediately.
It is important to remember that a CRM project is not completely successful when the new processes have been implemented or the software has been correctly installed. A CRM project is successful only when it contributes to meeting the company's strategic objectives. There are no shortcuts, the stages must be fully implemented, always thinking about the type of relationships you want to establish with your clients. Companies currently interact inconsistently with customers at different points of contact. Customers want a consistent and enjoyable high-quality experience in their interaction with companies.
To achieve success, it is then necessary to define a series of practices that allow you to define the strategy, technology, level of investment and human resources necessary to implement the CRM strategy.
Practice Number 1. DECIDE WHAT YOU WANT TO KNOW ABOUT YOUR CLIENT
Practice Number 2. ESTABLISH A CUSTOMER SEGMENTATION MATRIX
Practice Number 3. DETERMINE HOW YOU WILL LEARN AND OBTAIN THE INFORMATION FROM YOUR CLIENTS
Practice Number 4. CREATE A UNIQUE MODEL OF INTERACTION FOCUSED ON THE CLIENT'S EXPERIENCE
Practice Number 5. DEFINE HOW TO CAPTURE CRITICAL INFORMATION OF THE CLIENT
Practice Number 6. ANALYZE THE MARKETING OPPORTUNITIES AND THE INTELLIGENCE OF CUSTOMERS
Practice Number 7. PROVIDE MARKETING TACTICS TO CLOSE THE GAP AND ENSURE THE CLIENT'S EXPERIENCE
Practice Number 8. EXECUTE THE BUSINESS PLAN AND MARKETING TACTICS
Practice Number 9. CLOSE THE GAP
Each of these practices must be implemented correctly and if the organizational structure allows it, they must be carried out simultaneously.
Practice Number 1. DECIDE WHAT YOU WANT TO KNOW ABOUT YOUR CLIENT
Technology makes available to any company, large or small, the possibility of establishing CRM practices. However, technology is just the tool. CRM technology has not changed the nature of business or the competition. These rules still apply. You must therefore start with the client. The first serious stage of a CRM strategy is to find the answer to the following questions.
What are your most valuable customers?
What is the value of each one through its life cycle?
With what margin do you contribute?
What activity do you do?
How much does it cost to serve him?
What are your referrals?
What is the breadth of your relationship with the company (Number of products)?
What do they need and expect from their relationship with your company?
What do they value and how does their product or service enter their lives?
What problem does it solve for you?
What do you allow them to do?
How do they learn about new products, services or opportunities?
Who do you trust?
What do you trust?
How do you make the purchase decision on the selection of new products or services?
Who are they loyal to?
What are they loyal to?
What do you value most in your relationship with a product, service or company?
The resolution of these questions will allow to design a better experience for the client, identify the stage in which it is in the life cycle and direct a CRM strategy for that client.
Practice Number 2. ESTABLISH A CUSTOMER SEGMENTATION MATRIX
The critical element in understanding the customer is in the concept of segmentation. The ultimate goal is to make the customer believe that the company's employees have a unique and integrated relationship with him and are aware of his needs. This can only be achieved by building a CRM-based business architecture (human resource and technology) that is configured in such a way that each transaction and interaction is built and conducted within a context of what the customer wants and what needs to. In order to create this perception, business rules must be designed that privilege this goal and help strengthen the relationship.Any company that has operated or contracted a “9800” line to handle customer questions understands the importance of establishing decision-making trees to handle customer responses. Therefore, establishing a CRM strategy should consider segmentation at different levels, from the strategic level to the tactical level.
Corporate Segmentation. At the highest management level, the company can identify different types of clients based on a broad concept of needs. This breadth can consider demographic, geographic, or psychographic dimensions. For example, customers can display features that can automatically categorize them into a high level of purchasing potential. For example, in the toy market, families with young children; In the investment fund market, companies with very large investment portfolios.
Value Based Segmentation. A company can segment its customers by the value they have or may have for the company. This valuation can be done by the total value of the income already caused or by means of the margin obtained, and can be measured in the present or calculated in the future. Although it can be correlated with corporate segmentation, this is a means to measure the economic profile of an existing or potential relationship with customers, their profit, transaction value or value during their life cycle as a company customer. Obviously, a large number of variables become important when creating value-based targeting:
Number of times the customer buys the product (at the point of sale, number of orders per month, etc…)
Amount spent on each transaction
Products purchased and margin associated with purchase
Acquisition cost
Service cost
Purchase profile over time (Seasonality, life cycle, etc…)
The segmentation by value allows to know the type of value that can be obtained from the client. Where the client is located today, the vulnerability of losing that client of not taking care of him, his value if he continues to be loyal and the potentiality of increasing his value by developing a closer relationship with him.
Segmentation by life cycle. The dimension of this type of segmentation is critical, because customer expectations and needs vary according to the life cycle that the company goes through. As an example, it can be said that customers require different types of information when they first evaluate a new service or product, than what they need when they have been loyal to a company or a product for a time. Furthermore, customers can migrate to different channels as their relationship with the company matures (via telephone to the website). The company must understand what the customer can do and how it should respond as the relationship deepens.
Behavioral Segmentation. The design of a good customer experience is based on a segmentation that considers existing behaviors, expected behaviors or desired behaviors in the customer. Even when customers have similar needs or demographic profiles, the current purchase, the transaction channel or the behavior during the interaction are important elements for making decisions about targeting and location of Marketing, sales or service initiatives. Unfortunately, typical customers are not trusted to say what they intend to do. Although they want the best for the company, they themselves are not able to predict what they will do at any given time. Fortunately, the past is one of the best predictors for the future, so looking directly,Analyzing information on purchasing behaviors, and even asking customers about what they just did, can be effective ways to identify and differentiate segments based on behavior.
It is seldom prudent to segment customers into each of these dimensions. Instead, the segmentation that is selected should be based on the specific objectives that you want to achieve. If you are considering broad strategic objectives such as defining the segments you will focus on, defining the basic capabilities required, or how customer focused sales, Marketing strategies or service organization will be organized, the segmentation approach must be corporate. If what is required is to define how to migrate customers to a different point of contact or to different channels, to lower the cost of the service or to provide an additional value-added service, behavioral segmentation can be very useful.
For companies that are very determined to develop best segmentation practices, the use of one of these methodologies is important to reach a better understanding of their customers. Like all new business initiatives, it is better to learn to walk before running. Therefore, start with a segmentation scheme that clearly helps you build strengths to address a need of your customer.
Practice Number 3. DETERMINE HOW YOU WILL LEARN AND OBTAIN THE INFORMATION FROM YOUR CLIENTS
The means of understanding clients are numerous, but at the same time they are time consuming and quite expensive. Some available methods are:
Behavior analysis
Analysis of current purchasing behaviors
Purchase tracking and purchase pattern analysis
Market research
Primary research
Focus groups
Personal or telephone interviews
Quantitative research by phone, mail, internet or in person
Secondary Research
Industry studies
Government Statistics
Guild Information
Published articles
It is not possible to provide an easy and complete guide on the amount of time or money to be invested. Unfortunately, customers are notoriously lazy in saying what they want from the company or what elements of the relationship with the company they value most.
While most businesses claim to have in-depth knowledge of their customers, this knowledge is limited to the traditional seller-buyer relationship. Differentiating from the customer experience means looking at these relationships in a new light, challenging pre-existing assumptions, keeping an open mind, listening to new information, and trying new things. Frequently in the CRM field, a company can get an approximation of what can work by performing three types of analysis focused like this:
Reviewing information on available purchasing behaviors to:
Identify the best clients and describe their profiles.
Identify customers who appear to have potential to deepen the relationship with the company
Carry out quick and easy qualitative research, focus groups to test hypotheses and describe relationship options and scenarios.
Conduct research focused on customer satisfaction to determine if there are opportunities in untapped existing relationships or significant problems that have not been identified.
Fortunately, this is an area where applied research can provide an interesting insight into what really matters to clients. With the selection of a sample of clients, it is very possible to simulate results, without having to invest in very expensive efforts. A wide range of options can be evaluated against actual customer behavior and reactions. The path that the company selects will depend on the product or service offered; Of the group of clients that you want to focus on; The nature of the relationship you want to establish; The state of the life cycle in which most of your customers are; and the type of relationship you want to establish with them.
Practice Number 4. CREATE A UNIQUE MODEL OF INTERACTION FOCUSED ON THE CLIENT'S EXPERIENCE
It is a fact: many companies claim to be "focused" on the customer, but more often than you would like, the dream of the board does not translate into what the customer experiences. The simple truth is that most companies perceive interaction with their customers from the company's point of view. The real first step in aligning your strategy around the customer is to understand how customers interact with the company and the relationship that occurs through these interactions. In this way, a complete identification of the different ways in which customers interact with the company should be initiated. Each of these forms is called a point of contact. These points of contact are the channel of interaction between the client and the company.The development of a map of the company's contact points allows the type of interaction that customers establish with the company to be visualized. Quantifying the volumes of interactions handled by each channel, can lead to interesting revelations about the way of interaction and new ways to increase them. In this way, the erroneous offer of a sales representative about a product guarantee can lead to behaviors or complaints that only appear when the customer requests a service or claims the guarantee. The challenge is to understand the interrelationships between the interactions through the different points of contact and the reasons why customers interact with the company.Quantifying the volumes of interactions handled by each channel, can lead to interesting revelations about the way of interaction and new ways to increase them. In this way, the erroneous offer of a sales representative about a product guarantee can lead to behaviors or complaints that only appear when the customer requests a service or claims the guarantee. The challenge is to understand the interrelationships between the interactions through the different points of contact and the reasons why customers interact with the company.Quantifying the volumes of interactions handled by each channel, can lead to interesting revelations about the way of interaction and new ways to increase them. In this way, the erroneous offer of a sales representative about a product guarantee can lead to behaviors or complaints that only appear when the customer requests a service or claims the guarantee. The challenge is to understand the interrelationships between the interactions through the different points of contact and the reasons why customers interact with the company.Misrepresentation by a sales representative about a product warranty can lead to behaviors or complaints that manifest only when the customer requests a service or claims the warranty. The challenge is to understand the interrelationships between the interactions through the different points of contact and the reasons why customers interact with the company.Misrepresentation by a sales representative about a product warranty can lead to behaviors or complaints that manifest only when the customer requests a service or claims the warranty. The challenge is to understand the interrelationships between the interactions through the different points of contact and the reasons why customers interact with the company.
Created the map of contact points, the next step is to join it to the segmentation of customers based on the behavior that each one has at each point of contact. In this way, the ability to focus on clients is acquired based on the way they act, and not on a preconceived notion of their demographic group. Combining the contact points with this segmentation model identifies a visible route of where the implementation of the CRM effort should go.
Practice Number 5. DEFINE HOW TO CAPTURE CRITICAL INFORMATION OF THE CLIENT
Due to advances in business organizations and technology, there is now greater skill in capturing customer information than was available a few years ago. This is both bad and good news. The good news is that we can now capture a wealth of customer information and use it to build a better relationship. The bad news is that there is too much information now and most of it is not important. To establish a CRM process, you should avoid the temptation to “boil the ocean” and try to capture the right information about customers. In the fight to capture information, you should try to answer a series of questions that allow you to identify at what point in the life cycle the client is,regarding the company.
Who is the client?
What stage of its life cycle is it in?
Why are you interacting with us today?
What products and services are you interested in?
What products and services have you bought from us?
What kind of problems have you experienced?
What are your preferences?
How has it been answered?
When was the last interaction and for how long?
Obviously, it is impossible to capture all this information in a single contact, but if every interaction with the customer is used as an opportunity to learn more about him, the information is collected and added in a short time. Furthermore, marketing tactics should be focused on collecting this type of information. With the proper motivation and offered the opportunity, the client himself will tell us about his needs and preferences. But we must be prepared to capture the correct information at each point of contact.
There are two types of information to collect about customers, behavioral information and preference information. Behavioral information is the transactional information that is observed when the customer interacts with the company. The information of preferences is that which the clients provide about themselves, through surveys and profiles. In general, the company has information on customer behavior since it started its business with it, in the form of product registration, purchase orders, invoices, payments, shipments, etc… This is the way to collect the largest amount of customer information, and generally this information is the first to be reviewed to understand the customer.With this same information, you should try to build the (though incomplete) life cycle model, the customer value model, and the cross-sell model. With the analysis of this information, the company is able to improve the perceived income of each client and is where the CRM effort should start.
With the advent of the Internet, an additional type of behavioral information has been created called observational information. This information allows us to analyze the content that the client is looking for, the way of browsing, the topics that interest them, the way in which they respond to the information and the type of information that they request from the pages they visit. From this type of information, an analogy can be made as if that customer arrived at our point of sale, and analyze what interests him, what he looks at, what is tested, what he puts in his shopping cart, what he buys. In case nobody likes to be followed and they take note of what he is doing and that is why the observation should be non-obstructive. Using available technology and the right technique, we can very quietly collect the information we need,as we let the client navigate around us in peace. All observations collected in a single visit are added to create a session profile. The session profile helps us manage the moment of truth by giving us the reason why the client is visiting our page today. The real challenge about capturing information is; What observations to collect? If it was to capture every "click" on every page, you would be trying to "boil the ocean" again. This is why the customer life cycle model and the history of customer interactions with the company must be known, therefore a model must be designed that captures the following information:All observations collected in a single visit are added to create a session profile. The session profile helps us manage the moment of truth by giving us the reason why the client is visiting our page today. The real challenge about capturing information is; What observations to collect? If it was to capture every "click" on every page, you would be trying to "boil the ocean" again. This is why the customer life cycle model and the history of customer interactions with the company must be known, therefore a model must be designed that captures the following information:All observations collected in a single visit are added to create a session profile. The session profile helps us manage the moment of truth by giving us the reason why the client is visiting our page today. The real challenge about capturing information is; What observations to collect? If it was to capture every "click" on every page, you would be trying to "boil the ocean" again. This is why the customer life cycle model and the history of customer interactions with the company must be known, therefore a model must be designed that captures the following information:The session profile helps us manage the moment of truth by giving us the reason why the client is visiting our page today. The real challenge about capturing information is; What observations to collect? If it was to capture every "click" on every page, you would be trying to "boil the ocean" again. This is why the customer life cycle model and the history of customer interactions with the company must be known, therefore a model must be designed that captures the following information:The session profile helps us manage the moment of truth by giving us the reason why the client is visiting our page today. The real challenge about capturing information is; What observations to collect? If it was to capture every "click" on every page, you would be trying to "boil the ocean" again. This is why the customer life cycle model and the history of customer interactions with the company must be known, therefore a model must be designed that captures the following information:This is why the customer life cycle model and the history of customer interactions with the company must be known, therefore a model must be designed that captures the following information:This is why the customer life cycle model and the history of customer interactions with the company must be known, therefore a model must be designed that captures the following information:
- Who is the visitor, if it is anonymous or is it registered? If it is registered, in which part of the life cycle is it? What is the purpose of this visit: Information, tour, purchase? What products and services did the visitor look at? What type of products or services did you put in your shopping cart? Which of these did you actually buy? When did the session take place and how long did it last?
There are computer programs on the market that allow programming lines in HTML or XML to be identified, called lighthouses, to be collected when a user visits them or touches them with the cursor. These lines are strategically located within the content and as an action (a click on a hyperlink, etc…) they are added according to some content guidelines that lead to the context of creating the session profile. Content must be a specific product, or a product category, an advertisement, a promotion, an editorial, or a subscription to something.
Knowing the customer and their location in the life cycle, this information allows to "intuit" what that customer is needing and therefore proactively induce a purchase.
With this new information, the company is advancing in defined CRM techniques. The comparison of the information present in the company databases with that collected by observation gives us a behavioral profile and allows us to define the state of the life cycle in which the client is, we can identify the readiness for the making purchasing decisions, which we could not see before. In the same way, purchasing behaviors can be identified, the abandonment of shopping carts with items not purchased, which offers the opportunity to offer them again under a new personalized marketing strategy. This is where CRM efforts should be directed.
Historically, companies' marketing focus has been on behavioral information, for the ease of capturing it. The preferential information is carried out by private firms that conduct market research, surveys or research in Focus groups, which is very expensive. This type of information, in addition to being expensive, is incomplete (sample), anonymous (it has no connection with current clients) and aggregated. But the most serious thing is that it is delivered in documents that are stored to collect dust in the filing cabinets of the marketing departments. With the advent of the Internet and e-mail, surveys can be conducted and preferential information can be collected very cheaply. Marketing research and surveys, if designed correctly,They can obtain for the company an individual flow of information from each client in each contact point that it uses, centralizing the information and making it available to the company to produce a closer and personalized relationship. But what kind of information should be collected? You must know the moment of the customer's life cycle with the company.The holy grail of customer insight is knowing why you buy. If we get to know the answer to this question, we will have a competitive advantage to attract more current customers, attract more customers (with the same profile that we now know) and retain them.
It is now that this valuable information has been gathered, and it must be decided how it will be used to build better and more profitable customer relationships.
Practice Number 6. ANALYZE THE MARKETING OPPORTUNITIES AND THE INTELLIGENCE OF CUSTOMERS
What is the difference between data, information and intelligence? Data is the structural unit of all business information and business intelligence. Data is raw data about customers, the market and the size of the business. These facts are dimensioned in sales reports by comparing sales volumes against time periods. Business information serves purposes but focuses on the past, and the saving phrase of investment companies can be applied to it »The performance of our portfolio in the past is not a guarantee of future results». When people in companies read the reports, they can deduce what happened in the past and therefore infer what will happen in the future, but with a very small degree of certainty of what will happen.Most of the business information produced is a very big WHAT? Understanding that the past alone is not a sufficient guarantee. Therefore, the production of business information that can predict what will happen tomorrow is required to make better decisions about it, and business intelligence information is needed to allow decisions to be made on how to build more profitable relationships with our customers.To make better decisions about it and business intelligence information is needed to make decisions about how to build more profitable relationships with our customers.To make better decisions about it and business intelligence information is needed to make decisions about how to build more profitable relationships with our customers.
To define the components of business intelligence within the organizational architecture and within the framework of the CRM strategy, it is required to define segmentation models and opportunity models. The former provide the company with specific pieces of customer information; such as the value of the customer during her life and the stage of the life cycle in which the customer is. Opportunity models are predictive models that they use to direct marketing tactics for customer acquisition, growth, and retention.
There are many types of customer segmentation models and they generally vary according to industry or type of business. The most important models to develop to implement a CRM strategy are:
Customer behavior or use. The customer behavior models are built based on the customer behavior information and are developed according to the information that is collected in the market and that was described in the previous section. This model provides information on the types of products and services that the client demands or uses, the frequency of purchase and the quantities that he purchases.
Customer value. Customer value models are built with simple algorithms and intersected with transactional and account information. Most value models are based on sales, income or profitability levels and are based on the company's objectives. A more advanced model could predict future value models.
Customer Life Cycle. The customer life cycle model is based on the concepts that we have already discussed throughout this article. The purpose of this model is to locate each client within the stages defined by the company in its relationship with the client and which represent the state of relations with each of the clients. The model is built based on customer behavior information and is combined with the rules that the company defines for its products and services, the purchase and repurchase cycles, to define the states of the life cycle. Important measurement indices can be added to the model, such as conversion rates (actual sales / purchases) and time cycles between the different stages of the life cycle.
Customer needs. Segmentation based on customer needs is a more advanced form of model and requires preferential information. This type of model goes further on the indicators built on what customers buy, to try to pinpoint what customers want. The goal is to try to get closer to that Holy Grail; Why do these customers buy from us? What is the actual value of the relationship? and What is the perception of the exchange of value for which you buy?
Demographic and Geographic. These types of models are produced using information purchased from third parties. By combining this information with other types of segmentation, interesting data is obtained. Retailer companies use this type of information religiously.
The first three models are in the "A, B, C" of CRM. Profitable relationships can be successfully built with these basic models. Imagine that you are in an environment where you can answer the following questions:
- What products do they buy from you? How often? How much do they buy from you? What is the current value of each client? What is its potential value? What stage of the life cycle is each customer in? How fast has this relationship moved?
Opportunity models allow us to define what kind of tactics should be executed to reach different clients or segments. The organization of these predictive models can be organized by goals that must include three categories: Acquisition, Growth and Retention. The basic segmentation models for CRM include:
Acquisition. Customer acquisition modeling is a little different because you are not working on current customer databases. Instead, the existing database is being used to build desirable customer profiles, which allow for increasing current customers. With these defined profiles, we are looking for database providers that, by mining data, find clients compatible with the desired profiles or to use advertising that brings new clients.
Increase. Growth models are the most common type of opportunity model. The basic premise of this model is the growth of the value of the client, increasing the number of products and services in each purchase or decreasing the repurchase cycle, that is, selling the same amount of product but more often. The best example is cross selling. This model is built using purchasing information and creating statistical associations between products that are purchased together. If there is a strong correlation between Product A and Product B, each time the customer orders Product A, the company should offer Product B.
Retention. Retention models can be described as a specialized extension of the life cycle model, which seeks to prevent the loss of customers. Depending on the company's perspective, these models can be defined as loyalty models. These types of models use behavioral information and combine it with the life cycle model to identify patterns of customers who have left the company in the past, seeking to predict which customers might leave the company in the near future. By building this model, tactics, usually called customer loyalty programs, can be developed that can prevent customer loss.
Opportunity models are like computerized smart pumps that help attract, grow and retain customers. With profiling, a cross-selling model, and a loyalty and loyalty program, you can target a host of marketing tactics that deliver positive results and whose results can be measured against margins and profitability. The following questions can now be answered:
- How are my best clients and where can I find more? What is the next best offer I can make to my current clients? Based on their value, which clients do I want to keep?
Most companies do not have the skills to do business intelligence. The most common mistake that companies that want to manage a CRM strategy make is to build gigantic data warehouses to be able to do data mining. These types of projects focus on technology and do not place too much emphasis on business objectives (attract, grow and retain customers). Consequently, the results are almost always disappointing, the projects run aground, there are no measurable results and money is lost. To avoid this catastrophe, each model must be built by the company. In each model, the company will define the parameters for the construction of information, the variables that are important to it and that it is interested in measuring, crossing or creating. If we can identify the most tempting offer for a client,It will do if it is tied up in a database that cannot be easily accessed. Business intelligence results should be delivered to marketing people so that it is easy to develop tactics, create messages, allocate budgets, and build business rules to execute strategies in the easiest and most cost-effective manner possible. Once the package is ready, the launch can be made through all the contact points that these types of clients use to communicate by the company and that are actually used by the clients.allocate budgets and build business rules to execute strategies in the easiest and most profitable way possible. Once the package is ready, the launch can be made through all the contact points that these types of clients use to communicate by the company and that are actually used by the clients.allocate budgets and build business rules to execute strategies in the easiest and most profitable way possible. Once the package is ready, the launch can be made through all the contact points that these types of clients use to communicate by the company and that are actually used by the clients.
Practice Number 7. PROVIDE MARKETING TACTICS TO CLOSE THE GAP AND ENSURE THE CLIENT'S EXPERIENCE
Now the discussion takes us from Planning Headquarters to the CRM Command Center. It is here that products and / or services, channels, and marketing people come together to create strategies and tactics to build profitable customer relationships.
In this way, the principles that summarize the planning of a CRM strategy can be summarized as follows:
The CRM strategy is guided by business intelligence:
Personalized treatment. Use of information from customer profiles at the individual or segment level to differentiate the treatment to be given to each customer.
Life cycle of the client - company relationship. Building the customer life cycle model to develop marketing tactics designed to mobilize the customer towards the most profitable segments and stages of the built life cycle and improve the relationship.
Orientation towards business rules. The use of customer profiles and business intelligence, within planned marketing tactics to allow the automation of the analysis of customer interactions across all contact points, in order to produce relevant marketing actions and in real time.
Closing the gap. Design of all marketing tactics so that they follow a structural process aimed at closing deals. Development, execution, measurement and refinement or correction.
Customer Map and Customer Rating Card. Strengthening of the customer map and the customer rating card to allow measurement of the effectiveness of the CRM strategy.
A CRM strategy requires proactive planning and execution:
Relationship Planning. Design of strategic relationship plans that specify the goals of the relationships by segments and define the marketing tactics necessary to achieve the defined goals.
Interaction planning. Development of tactical interaction plans to anticipate the client's need and to carry out the necessary actions in a relevant and proactive manner.
A CRM strategy requires the company to manage "the moments of Truth":
Real time. The use of the Internet and high technology in the other contact points to better manage each of the customer's interactions at the "moment of truth."
Penetration. Integration of all contact points used by customers and the rest of the organizational structure to ensure a consistent customer experience throughout the company.
To operate under these principles, the CRM strategy implementation team must use a series of specialized applications and tools that ensure compliance with the assigned responsibility, these include:
Access to information. During the implementation of the CRM strategy, specific types of business intelligence will be used to determine the best ways to "move" customers through the life cycle in order to maximize profitability and margins. The need to use these tools is dictated by specific needs. The most important recommendation is to avoid improvisation, the CRM command center is a very busy place to make such mistakes. To achieve success and define the type of relationships you want to build with customers, the CRM command center requires tools to access company information to:
To generate new types of reports and build searches
Access standardized reports
OLAP
Unlimited access to the Internet
Listing management. Listing management is a critical interface between the business intelligence environment and the planning environment. As the CRM Strategy implementation team defines the customer relationship strategies to be established and marketing tactics, they will need to generate customer listings based on segmentation criteria. The listing management component should provide the following functions:
- Listing generation based on the different criteria Listing qualification and code assignment Listing sampling, listing separation and selection Listing listing Removal of garbage
Campaign Management. Campaign management is an area that marketing people handle very well. The fundamental principle of direct marketing is test, test, test, then measure and refine. In order to test, the programs must be defined and they must be perfectly organized. It is recommended to create a campaign management system with a hierarchical structure of the Campaign, Program and Cell or cell type.
The Campaign is the top tier and manages a series of programs (tactics) designed to achieve a set of marketing goals. A good example may be «2002 Customer Loyalty Campaign», here the company establishes the measurement elements and allocates a budget to retain profitable customers during 2002.
A program is a specific marketing tactic within a campaign. An example could be “Coupon Program that rewards Customer Loyalty”. The program defines most of the content on the marketing tactic to use, including the offer, the message, the means to use, the segments to attack, etc…
The most refined level is the Test Cell or Cell. Its purpose is to test the effectiveness of the program or a component of the program. The components most tested by marketing people and requiring the most testing for refinement are the offer, the list, and the "creative." Marketing people will test these components using different versions of offers, lists and "creative" messages in different combinations each. The trick to testing is to keep it as simple as possible, not creating too many combinations and isolating the component to be tested. The cells must have an associated response code that allows the measurement of the result, its rapid identification and the degree of success obtained. This is how "the gap is closed."
A Campaign management tool is used by marketing people to design, develop, manage and monitor campaigns from the start and at all levels. The tool contains or should be able to be associated with databases of past or current campaigns that allow to measure the effectiveness of the campaign by comparison. This tool must be very friendly since the support is for marketing people and not for systems technicians. Campaign management is the heart of the Command Center for the implementation of the CRM strategy.
Management of Business Rules and Customer Profiles. The final piece of the structural component of planning is the management of business rules. Business rules are the newest tool for marketing people and have grown in importance due to the Internet's ability to deliver marketing offers and purchase messages in real time. A CRM strategy uses business rules to help manage "moments of truth" at the point of contact with the customer. For many years, call centers have used business rules. For example, the management of a Call Center provides its representatives with dialogue scripts that should be used under certain circumstances. These rules use a basic construction: »If the client says or does this ___, we must say or do this ____».In the same way, the sales team uses it to cross-sell: "If the customer buys product A, then you must offer product C." In this CRM context, business rules are an extension of the marketing program. To measure the effectiveness of business rules, they must be tested in test cells and assigned response codes.
The automation of business rules is used for conducting business on the Internet. A tool that automatically manages business rules can optimize the effectiveness of interactions at customer contact points. Automation is semantically constructed and consists of simple and clear conditions and actions that are very similar to the illustrated example of cross selling. The business rules, and the resulting information that was built during the business intelligence and customer segmentation phase, are necessary to assemble the support necessary for the execution of the business rules correctly. The key element to integrate all this information is the Customer Profile. This provides the correct customer information, at the right time,through all contact points. The customer profile contains the necessary subset of information about the customer, which is present in the database and which provides the framework that puts the conditional elements within the defined business rules. In this way, the customer profile should not contain more or less information than is necessary to handle the "moments of truth". Thus, the management of customer profiles is directly related to the management of business rules.The client profile must not contain more or less information than is necessary to handle the "moments of truth". Thus, the management of customer profiles is directly related to the management of business rules.The client profile must not contain more or less information than is necessary to handle the "moments of truth". Thus, the management of customer profiles is directly related to the management of business rules.
Practice Number 8. EXECUTE THE BUSINESS PLAN AND MARKETING TACTICS
This component of the implementation of a CRM strategy focuses on the launch and execution of marketing tactics and / or business rules at all customer contact points. Due to the convergent nature of the implementation of a CRM strategy, it is necessary to introduce it as a general rule despite the fact that at each point of contact with customers there are a series of characteristics that handle them in a very particular way. Therefore, despite the particularities, a company standard is built that must be used in all the applications that are handled at the customer contact points.
Two conditions must be met for the launch of business rules throughout the company and its points of contact with customers: The first is that there must be an official document with all the contents of the customer profiles, the profiles of sessions with customers and business rules. The second is that in each system that manages a point of contact with clients, there must be an interface based on the proposed document that transfers all the information to the necessary format for its execution.
There are also four requirements that CRM applications must satisfy:
- Real-time access to customer profiles defined in the planning phase. Real-time access to session profiles defined in the information capture phase. Real-time action execution of business rules based on proven conditions against Information contained within session and client profiles. Capture of business rules response codes in real time.
The rules that define these requirements are simple. When a customer initiates an interaction with the company, they must be able to access the existing customer profile or create a new customer profile. Second, a session profile must be created and built throughout the interaction. After the customer has taken actions within the interaction, the conditions of the business rules should be tested. If the conditions of the business rules are met, they are executed. Finally, the information is captured even when the client has not responded to the action. It is understood that compliance with these requirements is easier to establish than to implement and comply with them, but this is the goal.It must be remembered that the success of your company lies in its ability to respond to the demands made by its customers and to do better than the competition. For these reasons and the difficulty in implementing these requirements, many authors believe that CRM is still in its initial phase. This does not mean that it is not an important strategy and it is not a reason to postpone the start of actions to implement it. Its growing importance and the trend of its growth allows us to infer that those who achieve the objective will obtain the much sought after Holy Grail of marketing, which is a competitive advantage difficult to match.
Practice Number 9. CLOSE THE GAP
Now that this journey around a successful implementation of a CRM strategy has been completed, it is not yet complete. Like all closure systems, after executing what has been built, the results must be measured and the necessary corrections must be made, based on what has been learned. To support learning, a tool is required to quickly summarize the effectiveness of efforts made in the world of CRM. We call this tool the customer rating card.
The Client Qualification Card contains the key performance indices of the CRM process that is being implemented. The continuous use of this card allows creating a directional guide that the company can use to refine its planning and correct its tactics, optimizing the performance of the CRM strategy. The card must be built specifically for the business and industry in which the company operates and must contain measures similar to those listed below:
- Total Clients, Margin Revenue and Profits Total Clients, Margin Revenue and Profits by Segment Total Clients, Margin Revenue and Profits by Life Cycle Status Revenue, Response Rate and Conversion by Marketing Program New Clients and Lost Clients by Time Span Movement and Conversion Rate within the life cycle Unique visits, response and conversion rates per website and referral total calls, response and conversion rate per call center and per representative Average purchase order size
Due to the importance of the customer scorecard and to illustrate how it fits into the process, it has been described once all the practices for implementing a CRM strategy have been outlined and established.
SUMMARY
The best practices that can be performed in the implementation of a CRM strategy have been covered.
For the management of "moments of truth", it was emphasized that all points of contact with clients must provide:
Access to a consistent, accurate and updated view of the client and associated with the session and client profiles.
Visual access to the history of all the interactions of each of the clients
Access to all transactions and functions
Ability to execute business rules guided by events or profiles
Ability to capture specific customer information and responses
Agile response time
What type of information has been identified is important to the CRM strategy. Focusing on this specific information eliminates the danger of "boiling the ocean" and provides quick access to building profitable customer relationships. Using, as a guide, the customer life cycle with the company is identified, the behavioral and preference information necessary to support the CRM strategy is identified. Behavioral information includes transactional and observational information. Observational information is the newest form of behavioral information and can be obtained by capturing customer browsing information on our web pages.
The two most beneficial types of business intelligence for a CRM strategy have been established, the segmentation and opportunity models. However, five models have been proposed that include the behavior model, the life cycle model, the customer value model, the customer needs model and the customer demographic model. Segmentation models provide internal customer information. Three types of opportunity models have been proposed that are used to produce marketing tactics that maximize the return on investment made in the CRM strategy, and they are customer acquisition models, customer growth models either in number or due to an increase in the volume of clients or due to an increase in sales in each current client and the client retention model.The economic importance of focusing on these models rather than building gigantic data warehouses was highlighted. These principles include the personalized treatment of customers, using the customer life cycle model with the company as a guide, applying defined business rules and closing the gap to perform measurements and refine strategies and actions. In the same way, four basic types of planning tools were defined for the implementation of a CRM strategy:applying defined business rules and closing the gap to make measurements and refine strategies and actions. In the same way, four basic types of planning tools were defined for the implementation of a CRM strategy:applying defined business rules and closing the gap to make measurements and refine strategies and actions. In the same way, four basic types of planning tools were defined for the implementation of a CRM strategy:
- Access to information Management of lists Management of Campaigns Management of customer profiles and business rules.
The special requirements for the launch and execution of a CRM strategy were defined through all the customer contact points of the company. There are two requirements for launch:
Publication of customer profiles, sessions and business rules
Open and closed interfaces of exchange between the planning elements and each of the systems that are managed at the company's contact points.
There are four requirements for execution:
- Real-time access to customer profiles Real-time access to session profiles Real-time execution of business rules Real-time capture of business rule response codes
Due to the difficulty that arises in fulfilling the requirements and that it is very easy to understand them but it is very difficult to implement them, some authors doubt the maturity of the CRM strategy, however it is proposed as a business strategy that provides a comparative advantage difficult to attack.
Finally, the use of the customer rating card is proposed to measure the effectiveness of the strategy and to improve and provide feedback on processes to improve performance.
Remember that your CRM strategy is unique, it can only be built from within the company, it must be supported by all levels within the company and it requires radical changes in the company's philosophy, business strategy and corporate culture.
Good luck in implementing the CRM strategy and building profitable relationships with your clients.
BIBLIOGRAPHY
- Acquiring your existing Customers. Robin D. Green. Xchange inc. 2001 Aligning for CRM Success. Onix Software corp.Building a Great Customer Experience, to Develop Brand, Increase Loyalty and Grow Revenues. Mark Hurst. Creative Good inc. 2002.Creating Profitable Relationships. Valerie Peck. Peppers and Rogers Group. 2002CRM The New millennium Strategy and Practice. Dialogues. 2001 Ernst & Young, The Second Annual Ernst & Young Internet Shopping Study, 1999. Stats, eCommerce: Retail Shopping Report, January 1999.
