crm and customer centricity

8/3/2019 CRM and Customer Centricity

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* FootnoteSource: Source 1

AGENDA

• CRM and customer centricity?

• CRM – some definitions• Best practices and pitfalls



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What is CRM?

CRM is not just a piece of software, nor is it aglorified customer address book. Effective CRM is abroad collaboration between marketing, sales,customer service, and IT to reevaluate and optimizehow a company interacts with its customers.

There is no single definition of CRM, and individuals& companies will have different views of CRMdepending on their background and industries

It is crucial for us to define what CRM means for us,and how we will use it to achieve customer centricity



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3

THERE ARE MANY WORKING DEFINITIONS FOR CRM

Source: Literature search

“CRM is a business strategy that helpsorganizations cope with three of today’smost urgent business imperatives:

generating new growth, attainingoperational excellence, and enhancingcompetitive agility "

– SAP

“Simply put, a CRM solution is anything that helps you develop, maintain, or improve your customer relationships”

– Entellium

“CRM is a comprehensive way to manage therelationship with your customers , includingpotential customers, for long-lasting and mutualbenefit. More specifically, modern CRM systemsenable you to capture information surroundingcustomer interactions and integrate it with everycustomer-related function and data point”

– Salesforce.com

“CRM is a company-wide business strategy designed toreduce costs and increase profitability by solidifyingcustomer loyalty. True CRM brings together informationfrom all data sources within an organization (and

where appropriate, from outside the organization) to giveone, holistic view of each customer in real time”

– CRM Magazine

“CRM is a broad term that covers concepts used byorganizations to manage their relationships with prospectsand customers, including collecting, storing, and analyzingpertinent, detailed information. CRM brings together information from all areas of a company (sales, marketing,customer service, and management departments) to providea complete view of each customer ”

– Oncontact Software

“CRM is both a business strategy and a set of discretesoftware and technologies whose goal is to reducecosts, increase revenue, identify new opportunities and

channels for expansion, and improve customer value,satisfaction, profitability, and retention”

– Oracle Corporation



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WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT?

Core CRM beliefs

• View every customer interaction as aopportunity: offer the right product to theright person at the right time

• Take holistic view of all the customer valuedrivers levers from acquisition to

retention• Focus on the highest ROI activities by

measuring customer lifetime value andanalyzing marketing campaigns

– Focus on high-priority segments – Underpromote to low-priority segments

• Lead with strategy and operations anddeploy marketing-led IT investments

• Deliver the “right” customer experience ,which is consistent with brand promises,and creates true customer advocates



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Customer

Increasedsales per customer

Lower costto sell and

service

Higher retention

Larger customer

base

Customer Service

• Service requests• Order management• Escalations• Differentiated treatment

by customer segmentIT

• Software packages ( SAP)• Data management

(storage and integrity)• Analytical tools (e.g., BI)

Marketing

• Segmentation• Customer analytics

• Customer insights

• Campaigns/promotions

• Customer valuemodeling

Sales

• Account management• Lead management• Sales coverage design

• Sales forecasting/pipeline mgmt• Incentives

CRM REACHES ACROSS MULTIPLE FUNCTIONS AND DELIVERSSIGNIFICANT IMPROVEMENTS IN PROFITABILITY



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EXERCISE: THINK OF YOURSELF AS A CUSTOMER . . .

Name two or three companies that do agood job selling to you as a consumer

• Why do you think they do a good job?

• What do they know about you?

• When did you first become a customer?



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EXERCISE: HOW WERE THESE COMPANIES GOOD AT CRM?

• What are the different ways they interact with you?

• How frequently do they interact with you?

• Have they sold you more things over time or sold youthings you didn’t realize you wanted?

• Within this category, do they have an increasingshare of your wallet?

• Do they keep you coming back even though their price may be a little higher?



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KEY ELEMENTS OF A SUCCESSFUL CRM PROGRAM

. . . by studying winners acrossa variety of sectorsWe’ve identified key CRM elements …

Retail banking

Credit cards

Wireless

Auto Service

Source: Customer Life-cycle Management practice

Practicalcustomer segmentation

Quantified lifetime

value of customer

Differentiatedtreatment bysegment

Superior customer dataanalysis

Optimizedcustomer value

Focusedcustomer retention & loyalty

Tailored &differentiatedservice offerings

Continuouspilot/testing

Overarching CRM Strategy

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INVESTING IN CRM REQUIRES CLEAR VIEWPOINT ON VALUE CREATION,AND IS MUCH MORE THAN A TECHNOLOGY TOOL

WinningCRM

program

WinningCRM

program

4. Customer service

3. Marketing2. Sales

1. CRM Strategy

5. Rigorous performance management and metrics

6. Systems and technology

What is the objective?Where will the clientcreate value?

CRM is muchmore than anIT system, itis a way of

doingbusiness

1 Identify value-creation levers andtargets

2 “Activate” CRM across sales,marketing, and customer service

processes

Drive change management to ensure success ininitial implementation and ongoing sustainability

3

VolumeVolume

Fromexistingcustomers

Fromexistingcustomers

From newcustomersFrom newcustomers

Up-sellUp-sell

Cross-sellCross-sell

Capture/penetrateCapture/penetrate

Enter newmarketsEnter newmarkets

RetentionRetention

PricePrice

XIncreaserevenueIncreaserevenue

PricemgmtPricemgmt

Customer value

drivers

Customer value

drivers

ReducecostsReducecosts

–



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AGENDA

• What is CRM?

• How can CRM lead to customer centricity?

• Best practices and pitfalls



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Customer centricity is critical in the cement and concretemarkets of the future

1. Complex Heat MapDifferent marketsegments and hotspots emerging

Which segments doyou prioritise ?

2. Growing fight for share of wallet Higher competitiveintensity with rise of regional players

How do you build loyalty amongsttargeted customers?

3. Volatile marginsContinued cycleof over and undersupply

How do you manageportfolio to haveleast volatility ?



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What is Customer centricity?

…Not about …but is about

“Winning every customer”

“Delighting customer at allcost”

“FMCG style branding/ heavysegmentation”

“30 small projects, somemargin dilutive”

“Sustained margins frompurposeful choice of profitable(and more stable ) customersegments throughdifferentiated product-services delivered through

tailored business models byan engaged team ”



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CRM is the best enabler for Customer Centricity

Aligned view on whatwinning with

customers means

1. Prioritiseportfolio of customers

based on granularunderstanding of profitability and

volatility

2. Differentiate profitablythrough a platform of value

propositions

3. Deliver these valuepropositions throughtailored business

models

4. Enable through process, capability and

mindset shifts

Who?

What?

How?

Provides a robust factbase to drive alignment

Allows meaningful segmentationof thousands of customers,

channel partners and influencers

Generates data & insights at acustomer level which allows

identification of winning valueproposition

Provides performance feedback,and enables assignment of right

person to each customer segment



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AGENDA

• What is CRM?

• How can CRM lead to customer centricity?

• Best practices and pitfalls



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BEST PRACTICES AND PITFALLS OF CRM IMPLEMENTATIONS(1 of 2)

Successful approaches Common pitfalls and mistakes

• Solutions driven: Using specific problems or opportunities to create initiatives with well-defined and measurable goals

• Capabilities driven: Attempting to install anarray of capabilities in the hope that they willimprove performance without quantifying theexpected returns

• Customer oriented: Using CRM to enablecustomer value-driven product, pricing, andchannel campaigns

• Product-oriented: Using CRM to run a fewproduct-driven campaigns without prioritizingby potential value

• Fitting the strategy to CRM by trying tobuild business objectives based on CRMsystems

• Fitting CRM to the strategy by using strategicgoals to identify key issues, design high-impactinitiatives, and rigorously assess how CRM cansupport these

Strategy

• Actively gaining sales-force buy-in throughroadshows, involvement in design process, andincentives

• Aggressively managing behavioral change from the top down to ensure commitment andquality

• Hoping for change and that use of the newsystem will bring about the necessarychanges in sales practices

• Managers playing key role by enforcingbehavioral change via meetings, monitoring,reports, and metrics

• Assuming the sales force willautomatically buy in without persuasion

• Managers on the sideline believing CRM isonly for sales reps and sales support

People



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BEST PRACTICES AND PITFALLS OF CRM IMPLEMENTATIONS (2 of 2)

Successful approaches Common pitfalls and mistakes

Execution

• Redesigning organizational processes to fitthe core CRM system and the new CRMapproach

• Sequence phases based on priority of businessobjectives and value drivers

• Patient learning: Realizing CRM is an ongoing,iterative learning process (typically a few monthsper initiative, one to two years for “fulltransformation”)

• Starting small with few tactical (e.g., three-

month), high-impact initiatives rolled out to asubset of reps that leverage existing technology

• Sales group leading the change fromthe top down

• Rollout program based on availability andhierarchy of software modules

• Over-customizing the CRM system untilit replicates the old processes andapproach

• Impatient frustration: Expecting too manyor the wrong things and becomingfrustrated by early setbacks (70% of companies report little or no impact)

• Doing it all with a “big bang” approach to

attack too many unprioritized issues

• IT group leading the change bottom-up ,usually with poor coordination with businessstrategy and sales

• Getting the “other pieces” right by focusing

on training, support, and adoption as well asinstallation and design

• Focusing only on technology

implementation without accompanyingorganizational/process changes

crm and customer centricity

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