Customer Relationship Management Strategy

1. Session 3
CRM Strategy, Customer Centricity & CRM
Models for Relationship Building

2. Chapter Objectives
• Building blocks of CRM
• CRM Strategy
• Customer Centricity
• CRM Models

3. 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.
Objective of CRM Strategy

4. Building Blocks of CRM
• Vision
• Strategy
• Valued Customer Experience
• Organizational Collaboration
• Processes
• Information Technology

5. 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.

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

7. 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.

8. “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?

9. •
•
•
•
Customer Satisfaction Customer
Retention Churn
Revenue and Profitability
-Overall
-By Customer Segment
-By Customer
Key Performance Indicators
Targeted for
Improvement

10. Customer
Legacy
OSS
HR Custom
CIF
ERP CIF
SCM
Custom
SAP
ERP
Custom
ERP
Legacy
Division A Division B Division C
 Disconnected channels
 Fragmented data: No
total view of the
customer
 Inconsistent, inefficient
customer-facing
business processes
 Lack of real-time
business and customer
insight
 Un-integrated systems:
No single face to the
customer
FromOrganizationalSilos…

11. Legacy
OSS
HR Custom
SAP ERP CIF SCM
Process and Data Integration
Division A Division B Division C
Business Intelligence and Analytics
Sales, Marketing, Service Best Practices
Multichannel
Customer
…ToTheCustomer-DrivenEnterprise

12. …To The Extended Customer-Driven Enterprise

13. …To The Extended Customer-Driven Enterprise

14. 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.
iii. 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.
iv. 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.
v. They create a competitively irrefutable 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

16. The IDIC model was developed by Peppers & Rogers and
the model suggests that companies should take four actions
in order to build closer one-to-one relationships with
customers:
•Identify who your customers are and build a deep
understanding of them;
•Differentiate your customers to identify which customers
have most value now and which offer most for the future;
•Interact with customers to ensure that you understand
customer expectations and their relationships with other
suppliers or brands;
Customize the offer and communications to ensure that the
expectations of customers are met.
1. The IDIC Model.

18. Francis Buttle’s 2004 model has an end goal represented by enhanced
customer profitability that can be attained by :
•primary stages represented by customer portfolio analysis, customer
intimacy, network development (SCOPE), value proposition
development , and managing the customer lifecycle;
•supporting conditions of leadership and culture, data and IT, people,
and processes to enable CRM strategy to function effectively and
efficiently
2. BUTTLE’S Value Chain Model.
SCOPE consist of Supplier, Customer (belong to the focal firms), Owner and Investor, Partners, Employee.
Management in networks is both about managing individual relationships and managing clusters of
relationships. Partner in value delivery are agents, brokers, management contractors, consortia, franchisees,
licensees

19. The model’s authors (Hewson et at, 2002) prefer to describe their model as a customer
management model, omitting the word ‘relationship’. At the heart of the model they depict a
series of activities that companies need to perform in order to acquire and retain customers. The
model features people performing processes and using technology to assist in those activities.
3. The QCI Model: Quality Competitive
Index

20. The fourth comprehensive model was developed by Adrian Payne in 2006. This model
clearly identifies five core processes in CRM: the strategy development process, the
value creation process, the multichannel integration process, the performance
assessment process and the information management process. The first two represent
strategic CRM; the multichannel integration process represents operational CRM; the
information management process is analytical CRM.
4. Payne’s Five-Process Model.

21. 5. The Conceptual Model
The conceptual framework was developed by Dasai el al (2007) in which
consideration is driven towards competitive CRM performance from both
internal and external perspectives. The dynamic capability for CRM is the key
source for competitive CRM performance considering the rapidly changing
nature of the business environment today which erodes the values of existing
competencies

22. 6. The Forrester Model
The Forrester CRM model 2008 is grouped into four types such as: Strategy; Process,
Technology; and People. The model produced results in the findings on over
hundreds of companies using CRM as strategically, thorough analysis of over number
of vendors’ solutions providers and also with discussion with about numerous
consultants. For firms willing to kick-start their CRM programs or for those that are
finding it tough to get best out of their CRM programs after it has been launched.
Also, the performance scorecard highlights the criteria used by companies to
measure the overall performance using CRM.

23. The final comprehensive CRM model comes from Gartner Inc. the leading IT
research and advisory company that employs some 1200 research analysts and
consultants in 75 countries, and has a significant place in CRM research.
7. The Gartner Competency Model.

24. 8. Gartner’s CRM Maturity Model

25. “70% of CRM initiativesfail”
Source:CapGeminiErnst&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