CRM - Concepts & Considerations 110210

CRM:
concepts &
considerations

February 2010

content in the context of the audience
1 // COMMERCIAL IN CONFIDENCE // © IDEAGARDEN 2010
www.ideagarden.com.au

Customer loyalty is not about how customers
demonstrate their loyalty to us, it is about how
we demonstrate our loyalty to them.

Sir Ian MacLaurin, Former Chairman, Tesco


Some misconceptions

•  CRM is a marketing database

•  CRM is a marketing process

•  CRM is an IT issue

•  CRM is about loyalty schemes

•  CRM can be implemented by any company


Definitions:

CRM is the core business strategy that
integrates internal processes and functions, and external
networks, to create and deliver value to
targeted customers at a profit. It is grounded in high-quality
customer data and enabled by IT (Source: Buttle)


…really?


…from this….
Then….


…and now

…to this….

Customer management delivers
on businesses 3 core issues:

1. Competitive differentiation

2. Customer intimacy

3. Return on customer investment


The purpose of business is create and keep
a customer ... to do that, you have to do
those things that will make people want to
do business with you. All other truths on
this subject are merely derivative.

Peter Drucker


CRM is a strategy,
not a tactic.


Interestingly, in many cases corporate
customer management strategy involves
removing personalised service to deliver a
more personalised service…..


Customer engagement / management
strategies cannot exist in a bubble….

…they co-exist with other business and
marketing strategies


We now deal with the
digital consumer –
and they are totally
connected which will
impact management
strategy…..


"Technology has given consumers an option to tune businesses out, and tune
each other in….

...on the flip side, technology has given businesses an opportunity to gain
greater customer insights at a lower cost."
Forrester research director Chris Charron


http://www.flickr.com/photos/jm3/98030303


You have to understand the DNA of
your customers


Participation
rather than presentation


From simple beginnings, technology
advancement has led to ways we can
connect with customers outside of the
retail / face to face environment…..


… behaviours became more observable
and communities started to form – that
made selling products and services more
focused - perhaps....


…but what do we choose?


segments began to form…..


Segmentation:

What brings people together, not
what sets them apart.


… channels broadened and things got
closer and opportunities abound....


“world” of mouth influences customer
management activities


… strategies focused on the replicable....


…but is it differentiation?


… business became too focused on
acquisition – at any cost....


…and one of the most important things missing….


…was really understanding customers….


Source: Hugh MacLeod - @gapingvoid


People want to be connected


Some fundamental considerations


What defines a good CRM strategy?

•  You need to identify and define what makes your customers successful

•  Create a customer based culture within your organization

•  Track any and all correspondence with the customer and prospects

•  Develop and clearly define strategy for dealing with customer complaints

•  Define and adopt measurements that accurately determine customer
response to a product or service.


Foundations of a CRM Strategy

•  Determine the business goals that can be supported/delivered by CRM
activities.

•  Increasing the profit from each customer

•  Increasing the acceptance of new products by the customer base

•  Increasing customer satisfaction

•  Improving response rates to campaigns

•  Decreasing costs in campaign development and time to market

•  Decrease number of employees and time to develop marketing activities

•  Improve the percentage of customer migrating through the value chain


CRM Strategy considerations

•  Rewards and recognition •  Loyalty programs

•  Transactions to relationships •  Personalisation

•  Profit as segmentation •  Customisation

•  CRM as a brand builder •  Cross- selling

•  Achieving customer intimacy •  Up-selling

•  Online customer management •  Migration downward

•  Service levels – “tiering”


Defining success metrics

•  Depending upon the industry and category of the business, there are a range
of metrics that should be considered to assist determine the success of CRM
activities.

•  These can include:

•  Customer profit contribution, cost per acquisition, cost to serve

•  Product penetration

•  Life time value @ customer level

•  Value creation

•  Referral and recommendations

•  Segment profit contribution


How can a strategic customer management
focus become part of your DNA?


…areas to consider….


What’s your
Organisations
definition of CRM?


Objectives & Goals


What customer need
are you meeting?


What’s the strategy to
build & leverage
customer data?


How will you engage,
encourage & reward
participation?


And finally – take time to look at the
program from a customers perspective


Thanks

email: phil@ideagarden.com.au
Twitter: twitter.com/phillipsmith
LinkedIn: www.linkedin.com/philsprofile

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www.ideagarden.com.au

CRM - Concepts & Considerations 110210

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