Successful CRM: Ask Yourself the 5 Key Questions
Putting the customer first: it’s a tried and true strategy adopted by a wide variety of businesses to achieve long-term success. Value the customer and they will value you.
A close, reciprocal customer relationship was long a staple of doing business through the early-20th century. Think of Jimmy Stewart in “It’s a Wonderful Life”, the ultimate Hollywood story on the impact of a great customer relationship. But with the introduction of mass production and mass communication, post-World War II businesses’ profits were driven by the math of scale. It was not until the mid-1990s when authors Don Peppers and Martha Rogers reestablished the importance of the customer in the profit equation with their book The One to One Future: Building Relationships One Customer at a Time (1993) – and in doing so, launched today’s CRM revolution.
The idea of CRM quickly took hold with corporate leadership, but the promise of returns from “one-to-one marketing” was predicated on investment in a new technology platform that enabled an enterprise’s understanding of their customers at an individual level: an investment that required significant resources and unproven ROI. Thousands of CRM technology companies emerged, and billions of dollars were spent to deliver on the elusive promise. In 2013, Gartner, Inc. reported that the CRM software market had exceeded $20 billion. With the advent of social media, cloud computing, and the growth of the Internet of Things (IoT) marketplace, the pace of technology investment is increasing faster than ever before. Big Data is the talk of the town, and yet, who knows what data is real and useful and what is not?
CRM success does not start with technology or platform. It starts with a defined CRM culture and strategy that drives technology and prevents over-investment, with a focus instead on the pragmatic development of capabilities that are aligned with a company’s objectives and customer expectations. Customer Relationship Management is not meant to be Customer Data Management.
"How many of us bought that VCR with every feature under the sun, only to realize that all we needed was one with a record and play button?"
Having worked across numerous industries, I have found that if you truly understand your customers’ level of interaction and how you can affect that interaction, you have the foundation of a solid CRM strategy.
Customer demands and expectations are higher than ever before, as is the number of devices and channels they engage in. It can be a challenge to effectively manage a customer relationship if you don’t know who your customer is and where they are. In spite of this, businesses are looking to implement broad “omni-channel” CRM campaigns. Where “digital” used to be synonymous with a desktop personal computer, we now must consider mobile phones, tablets, digital television, and social media platforms in our CRM conversation. Data on-boarding, device identification, beacons, customer recognition/ linking technology and marketing attribution companies are rapidly entering the landscape to better manage all these new touchpoints. These new technologies are essential, but like every new technology, they can be costly if misused.
In thinking about any CRM-related investment, there are five key questions that should guide your decisions. The answers will help you understand where in your customer’s journey you need to engage them, what data you need to be capturing and using, how much you need to invest in the speed of technology, and what channels of engagement you need to be working in:
•> What behavior are you trying to drive with your customer?•> What decision by you must be made to drive that customer behavior?
•> What information is needed and when is it needed to drive that decision?
•> Where do you interact with the customer to affect behavior?
•> And finally, what is the impact to the bottom line of driving that behavior?
If you cannot clearly answer these questions, beware of “sexy” software that may seduce you into an investment that you will soon regret or see as wasted dollars. I recently heard that half of all digital media spend ended up in the hands of the myriad technology companies supporting CRM platforms, versus the media serving the message or the companies paying the bill. I cannot attest to the accuracy of the statement, but I do believe that media spend inefficiency will get worse if companies are not careful and pragmatic.
As Voltaire is credited with saying, “perfect is the enemy of good.” Companies and businesses of all kinds must engage in the evolving CRM world, and a ‘good enough’ technology platform – without the fancy bells and whistles – will accomplish the objectives. How many of us bought that VCR with every feature under the sun, only to realize that all we needed was one with a record and play button?
To determine the best strategy for your CRM efforts, ask yourself the five key questions. And when the world changes again and the next CRM investment is required, ask and answer them again. The CRM journey is neverending and must be constantly reevaluated. The platform is likely to change over time and should be invested in wisely, but with a strong strategy and culture in place, success is within reach.
See Also: Top CRM Solution Companies