|
CRM's changing face comes
from proven actions
To achieve success you must create integration, fascination, personalization—and execution.
by Ronald S. Swift
The new face and opportunity for customer relationship management (CRM) is about information, integration and alignment. This requires successful organizations to cultivate a strategy in which all business functions are customer-driven.
It also means the enterprise data warehouse holds a central role, as it is the only way to consistently integrate all customer data into a 360-degree view of the customer. This means all customer data—including current and past transactions, interactions, behaviors and responses—is integrated at the most granular level. From this holistic view of the customer, insight can be gained regarding the significance, relevance and timing of offers, enabling customer management to be driven by the organization's knowledge of its customers.
|
Figure 1
|
|
The new face of CRM requires current, fully integrated, granular, detailed customer information
available across all business lines.
|
How does this look in the real world? Not long ago, a Taiwanese financial services giant embraced a monster marketing challenge: how to improve cross-selling among its 6 million customers, spread across eight subsidiaries, while increasing sales effectiveness.
The answer was to deepen the relationships with those customers and make more relevant offers that addressed the needs of individuals. This required the company to change how it managed its marketing process. It needed parallel, highly targeted campaigns that fed optimized leads to all sales channels. These offers were to be driven by analytical insight into individual needs. Of course, the solution would require a high degree of automation and intelligence and a means of simplifying the complexity.
The firm met its objective by adopting a new customer management strategy and employing CRM solutions that have proven to be money in the bank. Assets under management have risen 30%. Telemarketing conversion rates have jumped 20%; marketing costs have fallen 40% below the competition. The firm also clearly identified a veritable goldmine of sales opportunities: the 10% of its customers who contributed a whopping 85% of total revenue.
What was the key to success? An integrated Teradata Warehouse with an integrated relationship management solution focused on the customer. This new perspective helped the company boost business by providing a more comprehensive, integrated view of its customers and the automation to drive relevant and timely offers that are significant to the customer (not only to the company).
A two-way mirror
For years, businesses tried to use CRM to get closer to customers and devise better ways to find, satisfy and keep them. Sometimes companies limited themselves by focusing purely on CRM automation and productivity while lacking an emphasis on detailed information and insight. Management also limited itself by focusing CRM only on specific tasks or on particular parts of the business. These methods subsequently limited CRM's potential.
Now more savvy companies are empowering their organizations with an enterprise view of the customer—and, equally important, providing the customer with a panoramic view of the enterprise. They are aligning functions such as merchandising and finance with a customer-centric view, asking questions such as: "Do we have the right products for our best customers?" and "Do we understand the profit drivers for most customers?" This new face of CRM requires that the actions of all business units be focused and coordinated on what's best for the customer.
Focusing on alignment drives effectiveness and synchronization
The essential CRM infrastructure requires alignment, integration and restraint. Having information that is consistent and accessible across the business creates unlimited opportunities, but the information must be protected for security and privacy reasons, as well as emotional and relationship reasons.
An effective strategy requires the firm to control the communication environment by asking some key questions, in order to manage specific elements of success across the business:
 | Is there a significant need for this communication? Is it useful? |
| Is the communication delivered to the customer really relevant? Would a customer recognize that his preferences and history were being respected? |
| Is this the right time for the customer? Would the customer think: "Thanks for mentioning that. I was thinking about it; it's timely"? |
These elements drive a customer-centric business. In contemporary media, terms like CEO (customer experience optimization) and CEM (customer experience management) are used to describe the new CRM focus. These acronyms boil down to two simple principles: knowing your customer and being consistent.
Making customer knowledge accessible and usable
Today's leaders use powerful data warehouses providing 24/7 access to a centralized pool of customer data that has a depth and breadth of information about those people that competitors can't match. They can also couple their data warehouse with more dynamic CRM software, offering swift analysis of the data pouring into the company from all customers and expanding the power of CRM out to all customer touch points.
Smart companies know that developing and maintaining a deep relationship with their customers may be the only sustainable advantage they have. Products and services can be replicated and pricing can be matched—but there is no way to match the history and experience of a customer.
This information—all of the past interactions and experiences with each customer, integrated across the business—allows a company to anticipate. Just like a friend who can sense what you are thinking, insight allows a company to be prepared and even proactive. The old face of CRM was automating repetitive activities. The new face is about insight-driven interactions.
|
Figure 2
|
|
A holistic view of the customer enables businesses to get the right products or services to the
right customers at the right time in the appropriate way.
|
Seizing opportunities to gain high return on customers (ROC)
CRM enables businesses to communicate better with each customer, to get the right products or services to the right ones at the right time in the right way. Knowing the differences between customers and knowing how to service them profitably and to their satisfaction are key challenges. If it doesn't meet these challenges, a business risks mediocrity, irrelevancy or bankruptcy.
Creating an organization nimble enough to anticipate customers' needs is critical as well. For example, let's say a banking customer makes an unusually large deposit into his checking account. What do you do? First, reflect on the relationship. Is this unusual for the customer? Is this significant? Your history may indicate that this is a cross-sell opportunity for an investment product or even a mortgage.
Then, examine the relationship. Review the customer's response history with past offers. Does he often respond to advice or does he seem to prefer a product description? Are there other higher-priority offers on the table? Is there an outstanding service issue or complaint? All of these factors can determine relevance and prioritization.
Finally, if your offer represents a relevant and significant opportunity that is personalized for the individual, at what time do you communicate the offer? The offer should be scheduled accordingly to have maximum impact and not be delayed in time.
There could be hundreds of these kinds of "events" with millions of customers and multiple options for actions to be taken. Your total CRM solution must provide granular detail to address individual customer behaviors and include the history with the company. It must be automated to deal with complexity and large volumes, but insight-driven, and it must integrate many areas of the business and align their objectives.
Technology provides meaningful actions that pay off
A properly implemented and focused CRM implementation delivers a significant return on investment. It cuts marketing costs while sharpening advertising messages and reducing customer complaints. It can also increase retention, sales and profits, and it provides a winning edge by helping companies treat customers better.
There is a huge risk, however, if you implement an unsuitable technology or if the technology doesn't scale, if your solutions are limited to certain departments and thus reinforce the silo problem. Meanwhile, solutions that only support specific communication channels ignore the complete relationship. Ask yourself: Are we choosing a CRM system in order to address a specific problem or are we doing this to differentiate ourselves from our competitors and drive value for our customers? The key measures will be how deep the insight is and how quickly it is acted upon across the business.
Such questions pay off. In the case of the financial firm mentioned earlier, implementing Teradata CRM resulted in an 850% return on the total technology investment. With such a potential for return from the proper CRM system implementation, it is little wonder that 960 executives in a recent Bain & Co. survey picked CRM as their second-most popular management tool, behind strategic planning.
Amid ever-changing customer needs, integrated, analytical, customer-focused CRM is assisting firms to be profitable and agile enough to stay ahead of speeding competitors. Smart companies are employing CRM in new, more powerful ways to serve customers better. And we can see the faces smiling on both sides of the relationship. T
Ronald S. Swift is vice president of cross-industry solutions marketing for Teradata. He is an internationally known consultant, author, luminary and strategist who assists hundreds of clients on five continents in achieving their business goals. Contact him at ron.swift@teradata-ncr.com.
© Teradata Magazine-March 2006
back to top
|
Quick Links
Print
Send to colleague
PDF
E-mail us
