Strategies for customer relationship management

1. CRM Strategy

2. Learning Objectives
At the end of this course, participants should be able to
do the following:
i. Explain importance of CRM Strategy
ii.Explain CRM development and implementation
iii.Identify methods for aligning CRM Strategy to
business model
iv.Explain Customer Value Added and Customer Loyalty
v. Conduct proper enterprise-wide implementation of
customer-centricity

3. “70% of CRM initiatives fail”
Source: Cap Gemini Ernst & Young
“90% of enterprises cannot show a positive
return on CRM”
Source: META Group
“75% of CRM initiatives fail to substantially
impact the customer experience”
Source: Gartner

4. A CRM Strategy shows the intent of a firm
concerning its customer base, pointing out how
it shall acquire, maintain and retain customers
through improvement in customer value
deliverables as the way to enhance corporate
performance.

5. CRM Strategy & Implementation Model
CRM Readiness Assessment
Process 1: Strategy Development
Employee Engagement
Process 5: Performance Assessment
ENABLING PROCESSES
Process 2:
Value Creation
Process 3:
Multi-Channel
Integration
Process 4:
Information
Management
CRM
Project
Management
CRM
Change
Management
Source: Adrian Payne & Pennie Frow, Customer Relationship Management

6. Strategy Development
This involves development of CRM strategic
options for achieving established CRM
objectives for every targeted segment,
thereafter the best option shall be adopted as
the CRM strategy and the right measures for
performance shall be established.

7. Strategy Development Process
Source: Elijah Ezendu, CRM Strategy
Review

8. Customer Asset Audit
Protect
Position
Invest to Invest to Win
Protect
Damage
Limitation
Counter
Competition
Invest to
Build
Win the
Opportunity
Careful
Management
Manage
Profitability
Build
Selectively
Manage the
Revenue
Manage for
Revenue
Manage
Profitability
Manage for
Profitability
Manage the
Revenue
Consider
Divesting
Key
Large Share
of Wallet
Some
potential
Transactional
Highly
Secure
Secure Vulnerable Fragile
Strength of Relationship
(Value to Customer)
Customer
Potential
(Value to
Company)
Source: Gartner

9. Interoperability of CRM Strategy
The CRM Strategy must have a high level of
interoperability with the Corporate Strategy
and Competitive Strategy of the Business
Portfolio.

10. Using McKinsey 7S Framework for Testing CRM Strategy
Style
Staff
Shared Values/
Subordinate Goals
Structure
Systems
Strategy
Skills

11. Action Points for Testing CRM Strategy
• Examine each of the 7S.
• Identify the key success factors of each ‘S’.
• Ascertain the gap between the elements and
the strategic fit.
• Solution should be either to amend the
elements accordingly or to alter the CRM
strategy.

12. Aligning CRM Strategy to Business Model
It’s imperative to align CRM Strategy to a firm’s
Business Model due to its role. Business
Model is the logic behind value generation.
The Business Model binds Business Strategy
and Business Process together and functions
as link between them. The focus of strategy is
determination of position and codification of
aims and objectives, while business process
captures and implements the strategy.

13. Business
Strategy
Business Model
Business Process
Planning Level
Architectural Level
Implementation
Level
Business Logic Triangle

14. Customer Value Added
“Customer value added approach is based on
providing products and services to customers
that are a greater value than they could
expect from purchases from competitive
companies in similar markets.”
Source: John McKean, Customers Are People

15. The CVA Approach
Customer value added facilitates proper
customer relationship management through
identification the suitable value proposition
which is superior to the whole bundle of
offering from competitors, and ensuring
effective communication of the standard to
customers.
CVA = Perceived worth of a business’s offer
Perceived worth of a competitive offer

16. Steps for Implementing CVA
•
•
•
Identify customer values
Identify competitors’ offers
Build customer values into firm’s offer to obtain
firm’s interim offer
Compare firm’s interim offer to competitors offer
Identify value gaps
Use problem analysis tools to identify root causes
Use quality improvement tools for quality
enhancement in order to set new standard of value
proposition
Source: Elijah Ezendu, CRM Strategy
•
•
•
•

17. Branding to Breed Customer Value Proposition
Source: Elijah Ezendu, CRM Strategy

18. Customer Loyalty
Customer loyalty is aggregation of attitudes and
emotional disposition developed in the course
of interaction with value proposition either
directly or indirectly, such that a customer
would tend to purchase a particular
product/service over and over again.

19. Ladder of Loyalty
Partner
Advocate
Supporter
Client
Purchaser
Prospect
Source: Christopher, Payne & Ballantyne, Relationship Marketing
▪
▪
▪
▪
▪
▪ Partner: Someone who has the relationship of
partner with you.
Advocate: Someone who actively
recommends you to others, who does your
marketing for you.
Supporter: Someone who likes your
organisation, but only supports you passively.
Client: Someone who has done business with
you on a repeat basis but may be negative, or
at best neutral, towards your organisation.
Purchaser: Someone who has done business
just once with your organisation.
Prospect: Someone whom you believe may be
persuaded to do business with you.

20. "There are ducks, and there are eagles. The
ducks run around the ground quacking all the
time, stating rules, following orders, doing
what they are told and often pecking at other
ducks. Eagles soar high above to get the best
perspective and decide what is best for the
customer."
- Ken Blanchard, Leading at a Higher Level

21. “Customer-centricity involves aligning
organizational resources for effectively
responding to the ever-changing needs of
customers, while building mutually
profitable relationships.”
- Craig Bailey & Kurt Jensen
What is Customer-Centricity?

22. ✓
✓
✓
✓
Personnel
Operating practices and procedures
Systems (internal and external)
Products and services
Aligning Organizational Resources

23. • Recognizing and rewarding customer-centric
behaviour.
Training every staff on customer-centricity.
Ensuring that decision-making hinges on
customers.
Using communication tools and techniques
for highlighting the firm’s progress in
customer-centricity
•
•
•
Aligning Personnel

24. Customer-centricity can be embedded
on organizational processes through
adequate training and modeling of
interdepartmental transactions as
depiction of customer relationships
that require optimization.
Entrenching Customer-Centricity via
Training cum Internalization

25. • Communicating effectively and
building rapport.
Identifying and exploiting
opportunities.
Managing complex and taxing
conversations.
People and communication styles
•
•
•
Focus of Training

26. ✓Ascertainment of customer’s request
✓Ensuring Profitability
✓Find out repeatability of transaction
✓Determination of feasible term
of relationship.
Requirements for Building Mutually
Profitable Relationships

27. •
•
•
•
•
Obtain customer’s pulse
Involve the customer
Analyze information
Socialize results
Implement customer-focused
changes
Respond to the Customer
•
Voice of The Customer Process

28. ✓Survey the Customer
✓Interview the Customer
✓Get information from customer-facing
personnel
✓Observe actions and behaviours
of customers
✓Embark on mystery shopping
How to Obtain Customer’s Pulse

29. •
•
•
Business decision-maker
End-user of product or service
Procurement function
Three Different Faces of a Customer

30. Customer Survey
Transactional Surveys Relationship Surveys
Focuses on measuring
customer satisfaction with
individual or collection of
Interaction with firm.
Focuses on all aspects
of the firm such as
• Marketing
• Product Management
• Service and Support
• Sales/Account Management
• Engineering/Development
• Professional Services
• Training and Education
• Accounting/Finance
Survey on many individuals in
customer’s firm.

31. •
•
Environment of trust
Establishing expectations with
personnel
Managing anecdotes
•
Factors that Aid Collection of Inputs
from Customer-Facing Personnel

32. This can be done by means of the following:
1. Focus Group: For obtaining information through
discussion with a group of participants, taking
cognizance of commonality in demographics,
attitudes or purchase patterns.
2. Customer Board of Advisors: For holding
periodic meetings with selected number of
senior executives from firm’s customer
database. Factors that determine selection of
customers include strategic importance, level of
complexity/sophistication in use of products or
service, diversity of industries which the firm
represents.
Involving Customers

33. Analyzing information
Analyze customer feedback
and information obtained
Output:
i. Positive trends
ii. Challenging trends
iii. Issues raised by customers
Compare to other
information held by the firm
Such information include the
following:
i. Customer demographics
ii. Transactional history
This gives rise to development of customer segmentation strategy

34. Top-level reporting
for general
awareness
Comprehensive
report for
sectional,
departmental and
project
action-planning
Socialize Result

35. •
•
•
•
Getting management commitment
Conducting cross-functional reviews
Voice of customer tracking and reviews
Forecasting
Steps for Implementing Customer-Focused Changes

36. •
•
•
•
Customer Satisfaction
Customer Retention
Churn
Revenue and Profitability
-Overall
-By Customer Segment
-By Customer
Product/Service Diversity By Customer
•
Key Performance Indicators Targeted
for Improvement

37. 1. Immediate Response
i. Establishment of criteria for ‘immediacy’.
ii. Implementing ‘immediacy’ team.
iii. Management reporting.
2. Responding with Account Strategies
The six steps for implementing Account Strategies:
i. Record account-specific results
ii. Involve senior management in customer experience.
iii. Prepare for customer review meeting
iv. Engage customer in meeting
v. Inform the organization and respond resourcefully.
vi. Continue the process
Responding to Customers

38. ➢Newsletter
➢E-mail
➢Website
➢E-zine
➢Instituting the update as a component of firm’s
account management practices
➢Using interactive sessions of forum or board of
advisors.
➢Responding immediately to participants during
survey.
Other Methods of Updating Customers

39. ➢Accepted as a technical instead of business problem
➢Using a top-down approach
➢Non-involvement of senior management
➢Lack of focus on areas of high adoption
➢Driven by IT department instead of Sales, Marketing
and Service.
➢Absence of a cross-functional implementation team
➢Biting more than one can chew
➢Organizational unpreparedness
Common Pitfalls of CRM

40. Feature
Customer Orientation
Product-Focused
▪ Discrete transaction at a point in time
▪ Event-oriented marketing
▪ Narrow Focus
Customer-Centric
▪ Customer life-cycle orientation
▪Work with customer to solve both immediate and
long term issues
▪ Build customer understanding at each interaction
Solution Mindset ➢Narrow distribution of customer value
proposition
➢Off-the-shelf products
➢Top-down design
➢Broad definition of customer value proposition
➢Bundles that combines products, services and
knowledge
➢Bottom-up, designed on the front lines
Advice Orientation ▪ Perceived as outsider selling in
▪ Push product
▪ Transactional relationship
▪ Individual to individual
▪ Working as an insider
▪ Solutions focus
▪ Advisory relationship
▪ Team-based selling
Customer Interface ➢Centrally driven
➢Limited decision-making power in field
➢Incentives based on product economics and
individual performance
▪ “One size fits all” processes
▪ Customization adds complexity
➢Innovation and authority at the front line with
customer
➢Incentives based on customer economics and
team performance
Business Processes ▪ Tailored business streams
▪ Balance between customization and complexity
▪ Complexity isolated within the system
➢Cross-organizational teaming
➢Joint credit
➢High degree of organizational trust
Organizational Linkages
& Metrics
➢Rigid organizational boundaries
➢Organizational silos control resources
➢Limited trust across organizational
boundaries
From Product-Focused to Customer Centric Firm
Source: Booz Allen Hamilton

41. Solutions Advance Customer Value Proposition
Source: Booz Allen Hamilton
Traditional Value-Added Customer-Centric
Industry Traditional = Value + Services = Value Proposition
Product
▪ Trucks
Proposition
“We sell and service
trucks”
Truck
Manufacturing
Aerospace
Components
▪Aerospace
Fasteners
“We sell high-
performance fasteners”
Utilities ▪ Electricity “We provide electricity
reliability”
Chemicals ▪ Lubricants “We sell a wide range of
lubricants”
Pharmaceuticals ▪ Drugs “We sell pharmaceuticals”
▪ Financing
▪ Service
“We can help you reduce
life-cycle transportation
costs”
▪Application/Design
support
“We can reduce your
operational costs”
▪Energy asset
maintenance
“We can help you reduce
total energy costs”
▪Usage and
application design
▪ Lubricant analysis
“We can increase your
machine performance and
up-time”
▪ Product support
▪Outcomes-driven
information database
“We can help you better
manage your patient base”

42. ✓Put employees in the customers’ shoes
✓Put employees in the shoes of a
particular colleague
✓Review your habits and attitude
✓Be evaluated in a 360-degree approach
by colleagues you frequently deal with
(through a random selection).
Developing Customer-Centric Culture

43. It’s a cross-functional role empowered
to marshal organizational resources
to resolve troublesome customer
issues and identify root cause while
balancing the financial realities and
strategic goals of the company.
What is Customer Advocacy?

44. To steer customers away from veiled gaps,
inefficiencies and organizational
complexities that perturb perception,
thereby managing “customer
experience” effectively.
The Need for Customer Advocacy Function

45. ➢Straight-forward and honest
➢Interpersonal management
and communication
➢Good business sense and
judgment
➢Organizational navigation
➢Executive Presence
➢Time management
Key Skills for Customer Advocates

46. ➢Customer segmentation
➢Engagement process
➢Escalation process
➢Response planning, analysis and execution
➢Managing customer experience
through resolution
➢Internal management review
Customer Advocacy Process Framework

47. ➢Ensure your communication stands alone
➢Consider the audience
➢Read it “as if” you were the recipient
➢Acknowledge the “bigger picture”
➢Special handling procedures
when emotionally charged
Factors to Consider When Crafting Message

48. Do’s of Customer Centricity Don’ts of Customer Centricity
Expect a brand new mission statement to make
you a customer-centric company
Overcomplicate the segmentation
Reorganize too often and for the sake of it
Expect technology to build customer
relationships for you
Throw out the old performance measures
Confuse behaviours and attitudes with needs
Rely on the customers past buying patterns
Allow anyone in the company to say (or think)
“this is not my job/responsibility”
Assume that your project/ programme were
completed, you ‘got there’
Think of loyalty as the tenure of a customer
(duration of the relationship)
Limit your change management efforts to the
marketing, sales and customer service functions
1. Adjust your mission and vision statement
2. Segment your customer base
3.Align your organization structure with the
segmented customer view
4. Make good use of technology
5. Create new performance measures
6.Study the behaviours, attitudes and
demographics of your customers
7.Try to understand the true value of your
customers
8.Empower employees, particularly customer-
facing staff for proactive relationship-building
9.Set clear goals for achieving a defined state
of customer centricity by a certain point in time
10.Encourage and seek to create customer
loyalty
11.Communicate and engage all stakeholders
in the process

49. The Seven Characteristics of Customer-Centric Companies
iii.
i. They conceive of themselves not as a group of products, services, territories, or
functions, but as a portfolio of customers.
ii. They know how much money they make or lose with each of their customers or
customer segments, and they understand why.
They understand the different needs of different customers and group them into
operational customer segments and sub-segments based on common needs. They
thrill their customers by delivering knockout value propositions that competitors
cannot match.
iv. They continually innovate by evolving their customer segments and sub-segments, and
improve their value propositions as customer needs change.
v. They organize their businesses into customer segment business units to establish clear
ownership of the customer experience and accountability for the financial performance
of each customer business unit.
vi. They create a competitively unassailable customer innovation advantage based on a
customer R&D model grounded in continual experimentation at key customer touch
points.
vii. They understand in precise analytic terms exactly how their different customer
relationships contribute to or subtract from the total value of the firm; because they
manage their customer portfolio on this basis, they know what to manage and where
to invest in order to create sustainable, profitable growth and drive outstanding share
price performance over time.
Source: Wharton Business School

50. Thank You