Customer Relationship Management (CRM) has become a much-abused buzzword today. While tech companies are pushing SMEs to buy their CRM packages, the big question is whether they are ready to embrace the CRM packages. Which industries tend to be more CRM-ready, and why? Which industries most need a fully integrated CRM programme, and why?
How much CRM is enough is relative. There is a Customer Relationship Management Index developed by some consulting firms to sell their own services. According to them, companies in all industries can use it to measure the extent to which they use true CRM techniques and how they stack up against competitors – clearly meant to lure SMEs to buy their services in the guise of benchmarking!
While CRM is one of marketing's favourite buzzwords, it is also one of the most misused terms. There is little consensus on what CRM actually is, or how it is best executed or measured. The CRM Index might be useful in that sense. When you evaluate the readiness to implement CRM, what are the issues to look for? And these are different when you are implementing and when you are planning.
When people say "implement," they often think about technology but that is not correct as tech is only enabling your CRM programme. You see this pattern in the marketplace where some big technology is introduced, and everybody gets excited about tracking that. Like e-commerce and digitisation.
As for readiness, you need three things: A means of tracking customer information, a system to evaluate customer performance, and the ability to make change happen. Do not just start with one of the above three since you won’t learn much from that. A coordinated means of tracking and capturing customer information is key.
Is there a standard way to identify customers – with one code for one customer, not several – and find an efficient means of capturing data? How can you measure the performance – is it customer-centric or company-centric? It needs to be a little of both. Are you including employee performance too? To get results you need to have an action agenda from the metrics.
In financial services, CRM should be able to shift the focus from a product-by-product basis to single-customer/multiple-product relationships. The more competitive an industry, the more one must differentiate the company. You have to integrate the distinct customer data with the notion of competitiveness to see the early benefits.
Once you decide to differentiate more, you may want to go direct to the customer or through a partner. In some industries, you don't have the luxury of going direct to the customer all the time. Business partners and distributors may have more CRM information. SMEs should not wonder when to embrace CRM but rather should know that whoever figures out the details of distinct customers will have an edge.
It is not easy for some SMEs/industries to implement CRM but they still can learn a lot by doing some steps. I know of a shoe retailer who uses a simple card system for capturing his customer details and preferences – without any tech involvement. If you have the mindset to really know your customer, you will always find ways to learn more. So, try to find the fastest and easiest way to fill those three buckets. Use intuition or some logic to start with those customers who could offer the highest lifetime value.
In many cases involving customer influencers, gatekeepers and customers’ customers will be helpful. Many enterprises are trying to go more and more direct though, perhaps because of the tech company influence.
Things will change much in the next few years for CRM as a discrete marketing initiative. Customers are one key component supported by others. The reason? They are the ones giving you the money. Even investors don't give you money if you are not getting revenue.
We will also see a tighter feedback loop linking the customer and the supporting stakeholders like employees and suppliers for more revenue at a lower cost. Each stakeholder needs to be satisfied and tied back to the customer, tracking the relevant data, identifying metrics to make sure they all have better experiences. Perhaps it is time to move into partner relationship management as well.
There are many disconnected viewpoints out there today. But you will see all those aligning more tightly together into a single approach. Already CRM is aligning with SCM, the CRM principles and employee training are being knitted together and a consolidation of business model parts into some customer-driven strategies.
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