CRM Strategy

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
“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
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.
 CRM Strategy & Implementation Model
CRM Readiness Assessment

Process 1: Strategy Development

CRM Project Management

CRM Change Management

ENABLING PROCESSES

Process 2: Process 3: Process 4:

Value Creation Multi-Channel Information
Integration Management

Employee Engagement

Process 5: Performance Assessment

Source: Adrian Payne & Pennie Frow, Customer Relationship Management

 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.
Strategy Development Process

Review

Source: Elijah Ezendu, CRM Strategy

 Customer Asset Audit
Customer
Potential Protect Invest to Invest to Win Damage
(Value to Key Position Protect Limitation
Company)
Counter Invest to Win the Careful
Large Share
Competition Build Opportunity Management
of Wallet
Manage Build Manage the Manage for
Some
potential Profitability Selectively Revenue Revenue

Manage Manage for Manage the Consider

Transactional Profitability Profitability Revenue Divesting

Highly Secure Vulnerable Fragile

Secure
Strength of Relationship
Source: Gartner (Value to Customer)
 CRM Investment Framework

Maintain
Invest
Efficiently High

Claimed Importance

Study/
Trim Invest

Low
Low Real Relevance High

Adapted from Gartner

 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.
Using McKinsey 7S Framework for Testing CRM Strategy

Strategy

Systems Structure

Shared Values/
Subordinate Goals

Staff Skills

Style
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.
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.
 Business Logic Triangle

Business
Strategy
Planning Level

Business Model

Architectural Level

Business Process
Implementation
Level
 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
 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
 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
Branding to Breed Customer Value Proposition

Source: Elijah Ezendu, CRM Strategy

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

Source: Christopher, Payne & Ballantyne, Relationship Marketing

"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
What is Customer-Centricity?

“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
Aligning Organizational Resources

 Personnel
 Operating practices and procedures
 Systems (internal and external)
 Products and services
 Aligning Personnel
• 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
Entrenching Customer-Centricity via
Training cum Internalization

Customer-centricity can be embedded

on organizational processes through
adequate training and modeling of
interdepartmental transactions as
depiction of customer relationships
that require optimization.
 Focus of Training

• Communicating effectively and building

rapport.
• Identifying and exploiting
opportunities.
• Managing complex and taxing
conversations.
• People and communication styles
Requirements for Building Mutually
Profitable Relationships

 Ascertainment of customer’s request

 Ensuring Profitability
 Find out repeatability of transaction
 Determination of feasible term of
relationship.
Voice of The Customer Process

• Obtain customer’s pulse

• Involve the customer
• Analyze information
• Socialize results
• Implement customer-focused
changes
• Respond to the Customer
 How to Obtain Customer’s Pulse

 Survey the Customer

 Interview the Customer
 Get information from customer-facing
personnel
 Observe actions and behaviours of
customers
 Embark on mystery shopping
Three Different Faces of a Customer

• Business decision-maker
• End-user of product or service
• Procurement function
 Customer Survey
Transactional Surveys
Focuses on measuring
customer satisfaction with
individual or collection of
Interaction with firm.
Relationship Surveys
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.
Factors that Aid Collection of Inputs
from Customer-Facing Personnel

• Environment of trust
• Establishing expectations with
personnel
• Managing anecdotes
 Involving Customers
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.
 Analyzing information

Analyze customer feedback Compare to other

and information obtained information held by the firm

Output: Such information include the

i. Positive trends following:
ii. Challenging trends i. Customer demographics
iii. Issues raised by customers ii. Transactional history

This gives rise to development of customer segmentation strategy

 Socialize Result

Top-level reporting Comprehensive

for general report for
awareness sectional,
departmental and
project
action-planning
Steps for Implementing Customer-Focused Changes

• Getting management commitment

• Conducting cross-functional reviews
• Voice of customer tracking and reviews
• Forecasting
Key Performance Indicators Targeted
for Improvement

• Customer Satisfaction
• Customer Retention
• Churn
• Revenue and Profitability
-Overall
-By Customer Segment
-By Customer
• Product/Service Diversity By Customer
 Responding to Customers
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
Other Methods of Updating Customers

 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.
 Common Pitfalls of CRM

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

Traditional Value-Added Customer-Centric

Industry Traditional = Value + Services = Value Proposition
Product Proposition
Truck  Trucks “We sell and service  Financing “We can help you reduce
Manufacturing trucks”  Service life-cycle transportation
costs”

Aerospace  Aerospace “We sell high-  Application/Design “We can reduce your
Components Fasteners performance fasteners” support operational costs”

Utilities Electricity “We provide electricity  Energy asset “We can help you reduce
reliability” maintenance total energy costs”

Chemicals  Lubricants “We sell a wide range of  Usage and “We can increase your
lubricants” application design machine performance and
 Lubricant analysis up-time”

Pharmaceuticals  Drugs “We sell pharmaceuticals”  Product support “We can help you better
 Outcomes-driven manage your patient base”
information database

Source: Booz Allen Hamilton

Developing Customer-Centric Culture

 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).
What is Customer Advocacy?

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.
The Need for Customer Advocacy Function

To steer customers away from veiled gaps,

inefficiencies and organizational
complexities that perturb perception,
thereby managing “customer
experience” effectively.
 Key Skills for Customer Advocates

 Straight-forward and honest

 Interpersonal management and
communication
 Good business sense and judgment
 Organizational navigation
 Executive Presence
 Time management
 Project management
Customer Advocacy Process Framework

 Customer segmentation
 Engagement process
 Escalation process
 Response planning, analysis and execution
 Managing customer experience through
resolution
 Internal management review
Factors to Consider When Crafting Message

 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
 Do’s of Customer Centricity
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
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
 The Seven Characteristics of Customer-Centric Companies
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.
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
Dr. Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise
in HR, OD, Competitive Intelligence, Strategy, Restructuring, Business Development, Sales & Marketing,
Interim Management, CSR, Leadership, Project & Programme Management, Cost Management,
Outsourcing, Franchising, Intellectual Capital, eBusiness, Social Media, Software Architecture, Cloud
Computing, eLearning & International Business. He holds proprietary rights of various systems. He is
currently CEO, Rubiini (UAE); Hon. President, Worldwide Independent Inventors Association; Special
Advisor, RTEAN; Director, MMNA Investments Limited. He had functioned as Chair, International Board
of GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training),
Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management
Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Turnaround
Project Director, Consolidated Business Holdings Limited; Lead Consultant/ Partner, JK Michaels;
Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles),
Fortuna, Gambia & Malta; Director, The Greens; Chief Advisor/Partner, D & E; Vice Chairman, Refined
Shipping; Director of Programmes & Governing Council Member, Institute of Business Development,
Nigeria; Member of TDD Committee, International Association of Software Architects, USA; Member of
Strategic Planning and Implementation Committee, Chartered Institute of Personnel Management of
Nigeria; Adjunct Faculty, Regent Business School, South Africa; Adjunct Faculty, Ladoke Akintola
University of Technology, Nigeria; Editor-in-Chief & Chairman of Editorial Board, Cost Management
Journal; National Executive Council Member, Institute of Internal Auditors of Nigeria; Member, Board of
Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business
Administration and Fellowship of Several Professional Institutes in North America, UK & Nigeria. He is an
author & widely featured speaker in workshops, conferences & retreats. He was involved in developing
Specialist Master’s Degree Course Content for Ladoke Akintola University of Technology (Nigeria) and
Jones International University (USA). He holds Interim Management Assignments on Boards of
Companies as Non-Executive Director.
Thank You