Below is an article that I wrote for newsletter earlier this year. I thought it worthwhile to re-post here, not only since it's still relevant, but also due to a tie in to a post on Microsoft Dynamics blog, "" earlier this month. Also, with a new upcoming version release of , it's worthwhile to read the post below and related blog article if you're considering a solution for the first time, or if you're considering migrating from another CRM solution to Microsoft Dynamics CRM 2011.
Considering a CRM solution for the first time? Are you unhappy with your current CRM system and interested in migrating to a new solution? Or, do you simply need to enhance your existing solution to support your business requirements? Look no further....we'll provide guiding principles for you to consider before taking any steps.
Definition of CRM - So what is CRM? Simply put, CRM is putting customers at the center of the business. Today it is more important than ever to define and build stronger relationships with customers since they can now “talk” to hundreds of people at a time through the power of social media, making it easier for positive and negative messages to spread quickly.
With the support of technology, the goal of CRM is to have a 360-degree view of the customer which will enable you to improve the quality and satisfaction of each customer interaction and maximize the profitability of your customer relationships... a win/win for both you and your customers. Depending on how you look at it, CRM can be employed at different levels within companies. It can be leveraged at the organizational level (ideally). It can be leveraged at a customer-facing level - anything having to do with customer interactions – i.e. marketing, sales and service. Or it can be leveraged at a highly functional level, such as in a call center within a sales force, etc. While CRM can be viewed on many different levels, we choose to view CRM at the strategic level – in other words, from an organizational perspective since this powerful solution impacts everyone within the company.
Conceptually, CRM is similar to customer loyalty and relationship marketing in that the goal is to move customers from a transactional interaction to an emotional relationship. The two components most often missing from loyalty and relationship marketing are: a) technology and b) the management of relationships with other members of the business network: affiliates, branches, employees etc. - i.e. recognizing your customer as a customer regardless of the channel.
Ensuring Success with CRM - Owing to its roots as an IT solution back in the early ‘90’s, many companies are under the misconception that CRM is principally an IT implementation. Put quite simply, if technology is used as a “band aid” for a faulty business strategy, the result is that the company will quickly become adept at doing the same wrong things. If the core business strategy isn’t first defined and articulated, failure will occur. CRM should be viewed as a strategy vs. a process -- get the business strategy right first. As mentioned under “The Evolution of Demand Generation” in , first decide which customers or segments to target. Develop sensible customer acquisition, retention and development plans. Sort out the channel strategy first (direct or indirect) then sort out which products, services, bundles of value to offer the chosen customers. Once that's in place, then start looking to IT to select and support the chosen CRM solution -- but not until then.
Above we recommended putting the customer at the heart of your business. As mentioned under “Know Thy Customer” in “CRM Trends”, part of that process involves developing a "relationship" with your customer, but how that relationship is defined varies from customer to customer. As the CRM marketer, it is up to you to find out what's important to that customer. At the end of the day, you want to be able to answer the question: "What’s the ‘one thing’ that is distinctive about your customer relationships? As we are in a business of one sort or another, our goal, is to have CRM help us acquire, grow and retain profitable customer relationships to create a sustainable competitive advantage.
Using CRM to Build Loyalty - Without a doubt, customer loyalty is a key driver of profitability. Creating customer loyalty must be an integral part of your organization's strategy - particularly in a time of industry consolidation. Understanding customers' requirements is fundamental to business success.
The most important basis for strategy development, however, is a thorough understanding of what drives customer loyalty and how strong those drivers are. Great service and customer recommendations alone are not sufficient for relationships. If you give poor service you won't have a relationship. And if you give great service, you might not have a relationship if you don't take care of that relationship, knowing your customers' preferences. It is essential to have a solid grasp of which factors in your business relationship with your customers are most important to them. Listen to your customers and then begin developing your CRM strategy because if you don't satisfy your customers, they won't come back.
To sum up:
1. CRM is a strategy, not an IT project
2. CRM should provide a 360-degree view of your customer
3. CRM’s capabilities should be leveraged to affect the customer experience
4. CRM results should be quantifiable and provide a tangible return on investment (ROI)
5. Technology is a means, not an end
by Green Beacon Solutions,
