6.4 The CRM planning phase

6.4 The CRM planning phase

As noted previously, CRM is not an event, but a process that is evolutionary in nature and that requires a road map to guide organizations through the many alternative routes that could be taken. Following that road map involves a concerted effort from several organizational components: people, processes, culture, and technology.

An overview of the CRM planning phase will assist call center personnel to understand the complexity of developing a corporate CRM strategy, and give them some insight into the call center role.

There are four key elements in the development of a CRM road map, and they need to be approached in the following order:

  • Analyzing the current state of customer interactions

  • Predicting the future course of customer interactions

  • Developing the Plan of Action to meet the predicted future course

  • Building and presenting the business case to secure CRM project funding

Analyzing the current state of customer interactions and associated historical customer data will determine where the enterprise is along the path to its CRM objectives. Examples of questions about current customer relations that need to be answered are: Does the organization track and manage each customer as a single entity or do individual sales offices maintain their own set of customer records? Is customer database information accurate and up-to-date? An early assessment of these elements of the business operation will highlight customer administration procedures that may need to be changed to take advantage of the new CRM strategy. (see Figure 6.10)

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Figure 6.10: Accessing detailed customer information.

The CRM plan of action

One of the first requirements for the CRM Plan of Action is establishing priorities of functionality, which breaks the CRM development process down into two phases: establishing a list of essential features and developing a list of optional features. This approach to planning—adding functionality in a modular way—is consistent with the modular approach adopted by many CRM hardware and software vendors. Taking a building-block approach to incorporating functionality will also assist in developing the CRM Plan of Action and in the subsequent design and deployment of the CRM solution.

The following organizational elements must be included in the CRM Plan of Action:

  • Call/contact center management

  • The IT department

  • Other departments and resources that will be impacted by the CRM strategy

All corporate departments must participate in the planning, including the user community, executive sponsors, and others. Participation may involve providing design inputs, taking part in pilot tests of the system, or helping to train others to use it during the system rollout.

Also included in the Plan of Action will be target time frames and expected project milestones in the form of reporting dates to meet management expectations. The plan should mesh with the business case so that requests for resources—people, time, and money—are linked to anticipated business benefits. The business case should describe a rationale for investing in CRM. It should include information about what competitors are doing, how such a system supports the company's strategy, and the expected qualitative and quantitative benefits, including return on investment (ROI). Although ROI is a significant benefit of CRM over the long term, financial or quantitative benefits do not represent the complete picture. Among the other, more or less tangible, but not easily tracked benefits of a well-executed CRM strategy are the following:

  • More sales per customer

  • Lower cost of sales

  • More referral sales

  • Higher profitability

Selecting the technology solutions

As noted previously, many enterprises believe that a large-scale CRM technology deployment is the only solution to their problems. However, the right technological enablers for an organization are those that solve the organization's business problems as they are identified during the CRM planning stage. Some of the solutions may be

  • Improving call center telephony infrastructure

  • Enabling customer/contact center calls over the Web

  • Deploying or enhancing data warehouse or data mart information to collect and analyze customer and market data

  • Improving customer relationships through customer-facing e-business

During the evolution of CRM over the past several years, a number of CRM projects failed to deliver projected results because companies seized on technology as an immediate solution to enhanced customer relations rather than modify their corporate culture. In those organizations that took the "technology is the key" route to CRM and were unable to devise a successful CRM strategy, the people, the support systems, and the processes—including the corporate culture—were not ready to manage the new technology and to apply proven principles of CRM to their day-to-day operations.

Technology is a significant element in the CRM mix; however, selecting the best enabling technologies for CRM solutions must be based on solid business practices and readiness to implement. Selection of both tools and vendors, is a critical process, but goals and metrics must be established to measure the effect of the tools.

Changing the focus

In the past, large and small organizations have not needed to formalize their customer relationships by means of a definable customer strategy to achieve successful relations with their customers. In the new era, in which the customer reigns supreme, businesses must change their focus to ensure that customer relationship practices maximize customer benefit.

When a business knows its customers and targets its communications to their specific interests and shopping behaviors, the result is increased revenues and loyal, long-term customers. This is the power of one-to-one CRM. If the CRM strategy does not focus on individual customer's transactions, both in the process of segmentation and in the contact strategy, it will not be successful. Tracking the transactional details of a customer's purchase allows the most effective communication possible. With CRM, the benefit of the commercial relationship with each individual customer can be maximized. Today, based on practices that evolved in the retail industry, every business can, for example, effectively define a customer's needs without incremental cost or complexity. Following these practices accomplishes the following objectives:

  • Achieve more effective merchandise buying and planning and faster inventory turnover

  • Maximize return on marketing dollars by targeting customers with selected promotions

  • Minimize the number of transactions at sale prices by creating customized triggers that stimulate buying at full price

  • Easily attract new customers whose tastes and preferences relate to those of selected current customers

  • Design more efficient stores, with designs based on customer cross-shopping behavior

  • Ensure each customer buys more and remains a customer for life