The Evolution & Growth of CRM

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Organisations today, operate in a tightly knit world of conversations in the form of feedback and criticism coming from every corner - offline and online – through various channels. How to make sense of so much data and make it more organisation-friendly to yield the maximum benefits! This is the first installment of a 3-part whitepaper covering - Evolution and growth of CRM, Multi-channel Integration, and Customer Response Management - attempts to address these questions and more.

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The Evolution & Growth of CRM

  1. 1. customer centriaThe Customer Engagement & Experience Company The Evolution and growth of CRM Date: 14/02/2012 www.customercentria.com
  2. 2. SummaryProgressive customer relationships define the world for todays organisations. Companies in the current state ofaffairs operate in a tightly knit world of conversations in the form of feedback and criticism coming from everycorner - offline and online – through various channels. How do we streamline all this data and make it moreorganisation-friendly to yield the maximum benefits! These answers are what we aspire to achieve from thisThought Paper.The purpose of this Paper is to highlight the need for a Multi-Channel Marketing Framework and ResponseTracking mechanism, all seamlessly tied up, given the current scenario of Marketing Automation, in whateveravatar, being the norm, not the exception. It is essential to have a single customer view, resulting in effective one-to-one marketing dialog with todays tech savvy customers via multiple channels. This Thought paper is dividedinto 3 parts The Evolution and growth of CRM Multi-channel Integration, and Customer Response ManagementThe Evolution and growth of CRM, provides a line of sight into thejourney of the relationship between customer and organisation. Thedocument aims to explain the change, which has taken place not onlyin terms of technology and marketing, but also in terms of lateralthinking on the part of the modern organisation. Destination CRMwas not easy to attain due to various challenges, which started fromquality of information to the way in which information was stored.The second paper, Multi-Channel Integration, provides an in-depthaccount on the approach to a Multi-Channel marketing framework,the challenges organisations typically face during implementationand the organisation wide they would reap once it’s implemented.And in conclusion, Customer Response Management, the last in theseries, emphasises on the criticality of implementing and integratingCustomer Response Management, and the role that CustomerCentria can play, in delivering an end-to-end response managementsolution in a well-integrated Multi-Channel environment. www.customercentria.com
  3. 3. CRM: The EvolutionThe present is incomplete without the past – and that stands true for technology as well. To understand thesignificance and existence of the current marketing strategies and channels, it is imperative to look at the entireevolution of customer-organisation relationship as a tale, contemplating on vital junctures to understand theroute. Let’s start with the Evolution of CRM‘Organisation-Customer Relationship’: As perceived historicallyOnce upon a time, customers needed organisations, but then competition struck, and consumers got empoweredwith the power of choice. Today, businesses depend on people-to-people and business-to-business interactionand the game has changed for many from B2C to C2C. There is no room for obsolete communication channels andout-dated customer management technologies, because the consumers have moved on and it is time formarketers to wake up and smell the coffee.In today’s customer oriented market where strong relationships with the customer is the cornerstone for buildingloyalty and thus ROI, any company, organisation or an institution has to be geared towards a strong frameworksupporting integration of disparate data sources and marketing channels with preferred Customer RelationshipManagement (CRM) solution.‘Integration’ in today’s context is now inextricably linked to the entire marketing operation framework, whichwould include marketing channels, transaction systems, data warehouses/data marts etc. And so, when it comesto leveraging customer data across many disparate sources and opportunities, seamlessly aggregated marketingmachinery is essential for an effectual marketing dialog with customer.In the early 90’s, organisations were apprehensive about Data Warehouse implementationsbecause of common myths like – The merging of current customer data with secondary sources ultimately hurts the customer Customer profiling may lead to more customised service and hence reduced consumer value Data warehouses reduce organisational productivity and hurts organisational image Data warehouse increases waste and harm the environment It’s difficult to find ROI on the Data warehouse Data warehouse requires an engineering approach and hence is resource and time intensive www.customercentria.com
  4. 4. Similarly marketers earlier were apprehensive about using multiple channels when it came to targetedcampaigning because of common myths like – Most loyal customers prefer interacting via one channel Most people buy and shop via one channel Most people do not like direct mails Online marketing cannibalises offline efforts 55 plus audience is not web savvy Becoming a multi-channel company does not require restructuring Each channel is a separate user experienceApparently with ever growing transactional data, organisations felt the need to adhere to a solution, which willprovide clean, transformed and catalogued data for use by managers and other business professionals for datamining, online analytical processing, market research and decision support. Data warehouse was one suchsolution, which when implemented would provide holistic view of the historical data and this is where theevolution of CRM commenced.As organisations started turning towards data warehousing solutions to get a centralised view of historical datacombined from various sources, organisations started to realise that just doing BI and OLAP reporting was notgoing to be enough to achieve what was required to build a marketing dialog with customers build a strongcustomer relationship.This was the time when organisations started feeling the need for establishing a framework, which could leveragethe data warehouse to build strong customer relationship model as OLAP reports analyses resulted in confirminga fact that All customers are not equal, which spurred an evolution of Customer RelationshipManagement.Why the Evolution? Customer Relationship Management (CRM) is a broadly recognised, widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organise, automate, and synchronise business processes — principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. CRM denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology – all work together to increase profitability, and reduce operational costs.
  5. 5. CRM and the Data WarehouseThe key challenge for business today is implementing an information infrastructure that enables rapid responsesto competitive pressures and the capability to survive into the future.Corporate strategies that impact customer relationships, and the management and application of customer datato business operation - CRM for short - are dependent on an information superstructure comprised of varioustechnologies that enable organisations to store, access, analyse, and manipulate vast amounts of customer data.Most organisations with large numbers of customers to manage, frequently in the thousands or millions, requirea combination of sophisticated technologies to implement CRM.One of the major contributing technology areas to CRM is ‘Data Warehouse’, which facilitate handling of a rangeof CRM-oriented functions like – Data storage Database queries Value analysis Mathematical models for predictive analysis AnalyticsThus for a CRM to evolve, data warehouse have become core component of doing business, as well as buildingblock for a corporate CRM strategy. This technology is a prerequisite for the level of one-on-one customerrelationships that can turn information into a companys most important resource.
  6. 6. CRM and Marketing AutomationOnce CRM took shape post evolution, the next challenge was to have a framework, which will use CRM to providethe automation and analytical insight to move more prospect relationships into customer relationships andretain existing customer relationships.A typical CRM roadmap will have following milestones – 1 Analysis of the current state of customer interactions 2 Predicting the future course of customer interactions 3 Developing the plan of action to meet the predicted future course 4 Building and presenting the business case to secure CRM project fundingTo attain the above roadmap, need for a Marketing Automation System was felt to provide the following benefit Increased marketing effectiveness Deliver more sales ready-leads to sales teams Nurture prospects so they move through the channel faster Measure the marketing influence on opportunities in the focus Provide marketing accountability and ROI Ensure that marketing only adds validated, standardised data into the CRM
  7. 7. All this can be achieved via focussed Marketing Campaigns that are measurable, leverage cleaner, richer data and produce predictably great results. Marketing automation not only brings efficiency through automation and effectiveness through better execution, it also brings a new level of measurability to marketing. Marketing Automation solution brings the unprecedented ability to define business rules to connect marketing campaigns and programs to sales opportunities, so the precise impact of marketing on the business results can be measured. With the costs entered into the campaign definition, one can even measure the ROI and cost per lead/contact. Marketing Automation software is a powerful tool that can help an organisation to become more efficient, conduct successful marketing campaigns, reach the most profitable customers, build long-lasting relationships, better understand product and market dynamics, and measure the productivity of marketing operations. Marketing Automation — at its most fundamental level was developed to help marketers better target and execute one-to-one communication with key prospects within the context of demand generation efforts, simultaneously orchestrating and tracking marketing resources against this activity. CRM consolidates a great deal of information about prospects and customers; however, it provides virtually no framework or tools for true nurturing of earlier-stage prospects, and it definitely is not a communication platform. Marketing automation leverages CRM and addresses these gaps, but it then presents new capabilities for marketers that enable them to take their demand generation programs to the next level.Marketing automation softwares unique design helps manage relationships with the past, present and futureclients, consultants, contractors, and even competitors, to ensure that no opportunity for acquiring a new projectis overlooked. There are five core areas of functionality that are essential for any good marketing automationsystem. All the five are listed below – 1 Contact Data Integration 2 Response Management 3 Lead Management 4 Campaign Automation 5 Marketing Business Intelligence
  8. 8. Marketing Automation and Marketing ChannelsNow that marketing automation gained prominence and campaign management became inevitable, thechallenge for organisations was identifying the best way of communicating with the customers so that they get theright offers at the right time and that would have happened without reaching customers via predominant mediumcalled Channel.With the advent of technology and ease of using it, today there are various channels to reach customers based ontheir preference and liking for a particular channel.Some of the most commonly used channels today include Email, SMS, Call Centre (Inbound and Outbound),Direct Mailers, Print Media, TV, Radio, Billing Systems, POS, and ATM etc. All channels are not applicable to allverticals, but most of them would have some channels in common for e.g. an Email, SMS or Call Centre.Leveraging the potential of existing channels to their maximum capacity and ability was the next challengeorganisations faced, as the modern customer was very particular about the communication and its mode as well.Selecting the most preferred channel for the target customers was top priority, as a varied choice ofcommunication channels also meant intelligent decision-making on part of the marketers. This is where theCampaign Management component of Marketing Automation plays an important role, running campaigns thatresult in data enrichment and address the right customers.
  9. 9. The evolution of marketing channels enabled personalised communication in various ways for e.g. Promotions,Personalised offers, Anniversary/Birthday Wishes, Loyalty related updates and lots more. The idea was to keep intouch with the customer, and at the same time encourage him to buy what he likes and also what he/she mightlike. This approach led to a communication revolution, as organisations adopted Channel Marketing Strategiesthat allowed organisations to make choice of channels based on following factors:For organisations, channels have became the next big medium to reach their consumers – a tool with the power tomotivate and inspire their existing customers to buy their products and prospective customers to consider theirbrands. Channel strategy includes recommendations for both identifying and managing channel partners.Channel marketing is a dynamic and complex arena where mistakes can prove costly and extremely difficult tocorrect.To formulate and execute a channel strategy, organisations must follow these steps: 1 Understand the channels that are available. 2 Identify the need, based on organisations objectives and the preferences of customers. 3 Generate a list of likely channel partners. 4 Recruit channel partners to work with. 5 Manage the channel partners on an on-going basis.
  10. 10. Bottomline:We saw the evolution of CRM from a Data Warehouse to its smart utilisation for implementing MarketingAutomation. With the growing acceptance of CRM and Marketing Automation, organisations opted for Multi-Channel Campaigns, and some obvious questions popped up: Are you engaging your audience with targeted, relevant and personalised content? Are you delivering your message through your customer’s preferred media?In the next paper, we will dig deeper into the dynamics of a Multi-channel integration, and explore the elementsthat help define a strong multi-channel framework.

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