Crm strategy contributes to business value in tough times
CRM Strategy Contributes toBusiness Value in Tough Times!Difficult times ask for balancing short- and long term needsByThomas WieberneitNational ManagerCIBER CRM Consulting Practice in New Zealand and Australia CIBER Whitepaper
2 CRM Strategy Contributes to Business Value in Tough Times! There is no doubt that the global economy is in a serious downturn. New Zealand in particular is officially in a state of recession that has lasted now for more than 5 quarters. Given this constraint and the uncertainty which comes with it, how are businesses choosing to invest in their own infrastructure to maintain revenues and margins? Difficult times ask for balancing short- Customer centricity is about providing high value to customers. Customers reward companies that and long term needs provide them with high value with loyalty and often Across all industries, particularly within retail, an increase in spending. companies have experienced lower sales due to customers spending less. Most companies have In order to be able to be customer-centric, cut costs across the board in order to maintain businesses need to know who their customers are, a positive bottom line in the reduced revenue and they need to know their preferences, likes and environment. This has led to a reduction of funding dislikes. This information enables companies to for ongoing or planned projects, even though some provide better value to their customers. of these projects and initiatives remain crucial for a company’s future. The good news is that this information is available and ready for use within most businesses. It It is more important now than ever before to needs to be used to identify the most valuable ensure each project or initiative delivers on KPI’s customers and to provide customers efficiently - measured by incremental increase in revenue, with a consistent and positive experience with risk mitigation or reduction in cost by improving each interaction and across all channels. process efficiencies. Customer Relationship Management (CRM) projects usually target at least A company that is recognized for delivering value one of these objectives. to its customers will have strengthened their own position when the economy recovers and will be Customers are at the heart of every business; able to jumpstart into the next cycle ahead of the they are the only reason for it to exist. Consequently competition. it is paramount to give customers the attention they desire and deserve, in spite of the strains This can only be done strategically. Therefore businesses are feeling themselves. businesses need to devise and execute new or continue their existing CRM strategies to actively It is a well known fact that retaining a customer increase the value of the relationships to is far cheaper and easier than the acquisition their customers. These strategies need to have of a new one. At the same time it is proven that measurable key objectives. These objectives satisfied customers who recommend a company also need to be broken down into a series of or its brand (advocates) spend considerably more executable projects that support these objectives. with this company than customers who dislike By implementing these projects in “bite-sized” the company (antagonists). Both advocates and increments, each project delivers measurable antagonists tell their communities about their success early in the process. opinions, which results in additional revenue or lost opportunities. The strategies themselves are then implemented with the help of CRM solutions like SAP CRM. The secret of overcoming the current economic challenges lies within the existing customer CRM solutions are of invaluable help in gaining an base of a business. This is the best source of improved understanding and providing continued continued or increased sales revenues, and to high value services to customers in order to keep protect margins. It is paramount to keep, maintain customer satisfaction levels high, if not increasing and foster existing relationships with customers, in them. If strategies and tools are well implemented, other words: to be customer-centric and customer- this will turn into additional revenues for the focused. company, while reducing the operational cost to provide a given level of service to your customers.
CIBER, Inc. 3Executing the CRM strategy that a company has While there is no fixed recipe, all it takes is abuilt instead of reducing efforts in this area offers short series of simple steps to get there. Leadingthe possibility of setting itself apart from the companiescompetition. And this happens exactly at the time • Use the data about their customers that theythe competitors reduce their commitment to their generate with every interaction to build a 360customers. degree view of their customers. To do this they integrate their customer data from disparateThe approach to developing the systems into one single, integrated CRM solution, like SAP CRM.business’s most valuable asset • Demonstrate consistency across andFor the reasons brought forward before, building integration of channels. Customers are gettinga valuable customer relationship and developing more and more information about companiescustomer loyalty is a top priority in business today and products, anywhere and anytime. They— but it is a priority that can be difficult to execute expect consistent information and corporatewithout the right approach. behaviour regardless of the channel they use. • Use the detailed information they havePerceptions of businesses are created, positive about their customers to segment themor negative, during every interaction the customer appropriately in order to be able to provide allhas with the business. customers with high value – the right products and services – while focusing on their mostLeading businesses therefore collect and analyse valuable customersrelevant information about all interactions veryeffectively and apply this knowledge about their • Ensure that new information is immediately fedcustomers to develop and improve each customer’s into the CRM system in order to be availableexperience. These businesses concentrate on their for the other channels without delay.most valuable customers – the customers with thehighest lifetime value. Conclusion The time to focus on a CRM strategy that embracesThey know that being a leader in knowing their the customer is now.customers translates into customers stayinglonger, buying more, recommending their products With a smart and strategic reaction to currentto others, and paying a premium price for value. In economic difficulties, that includes pursuing theirbrief: intimate knowledge of customers is the key CRM goals while containing costs, businessesto customer loyalty and maximising profits. are able to reap opportunities now and to gain a considerable advantage when the economyFront office functionality – like CRM – is critical turns up. The customer centric strategy can beto a company’s ability to provide value at every implemented step by step using a powerful andcustomer touch point, like direct contact, scalable integrated CRM solution.catalogue, call centre, corporate web site, andothers like social networking sites, which become This integrated CRM solution evolves with theincreasingly more important. Just as critical is the business needs and becomes the cornerstone fortight integration of the front office with the back gaining customer insights and using this data tooffice and e-business solutions. The e-business maximise profits.solutions are one of the important channels forcustomers to interact with the company whereasthe ERP in the back office delivers invaluableadditional information about the same customer.Tight integration of systems offers the potentialof cost reduction by streamlining processes inaddition to the positive impact on the revenue ofmodelling customer centricity into the business.Tightly integrated systems enable interlockingcustomer facing and internal business processesto optimally use available resources and data.
CRM Strategy Contributes to Business Value in Tough Times! CIBER, Inc. 4 About The Author Thomas Wieberneit is an executive with more than 15 years of leadership experience in consulting, software industry and in the armed forces. He is responsible for building and driving the CRM consulting practice for CIBER in New Zealand and Australia. Before joining CIBER Thomas held various leadership positions in SAP’s CRM development organization for more than 10 years where he contributed to shaping and developing SAP’s CRM solution. He is an expert in CRM, in distributed software development and the introduction and application of agile development methods in enterprise scale projects If you would like to see how Thomas and his team at CIBER can help facilitate a customer centric CRM strategy in your company, please get in touch with us at CIBER on 09 968 2935 or by email on Thomas.email@example.com. Please also visit our website on www.ciber.co.nz for more information.