How to create a powerful CRM vision

Gene Alvarez outlines how companies should go about crafting their vision for CRM

Some enterprises are often caught up in daily operational battles and view the creation of a CRM vision as a ‘nice to have’ accomplishment, while others view it as a critical factor to their success.

However, enterprises that take the former position are often caught off guard and lose customers to enterprises that adopt the latter position.

The creation of a CRM vision should not be dismissed. It is essential to successfully practicing CRM principles that deliver increased market share, wallet share, revenue, margins, and customer retention and loyalty.

Creating a CRM vision involves a customer-focused experience that is delivered to an individual or organization. The experience should provide the customer with value, satisfy their needs, and foster a tighter relationship between the enterprise and the customer.

A CRM vision must span the customer life cycle and all points of interaction, and it must use the customer experience as the impetus for the vision. A lack of vision will result in limited improvements that are often isolated within a business process. The vision needs to look holistically across the customer life cycle, from selection and acquisition to retention and cross-sell, and bring about decisive change. For example, improvements made to selling a cellular service may increase sales, while poor customer service during the life of the subscription can lead to the loss of customers.

Gartner has defined five components that are critical to an enterprise's CRM vision:

Create strong leadership

A CRM vision begins with a strong leadership team that understands how future trends will affect the market. This team understands how customers' experiences with the enterprise drive sales and create repeat business.

Individuals that comprise the leadership team should be innovative and flexible, as well as resourceful and creative. Key members should include a sponsor (providing the board-level backing), a program manager (capable of managing multiple initiatives at the same time, with a record of on-time, on-budget activities) and a popular advocate (with a significant background in the organization who is well-connected and well-liked; this individual should be at an executive level position and should not be politically threatening to the board). The advocate would be a solid choice for chairing the leadership team.

The leadership team is also responsible for creating and communicating the company personality to employees. If this is not done, employees will use their own perceived company personality as their guide during customer interactions. Additionally, the leadership team is responsible for establishing and maintaining all the other components of the vision. The team cannot simply communicate the vision to the lower levels of the organization without championing and clarifying it; this could lead to fragmented, decentralized implementations of the CRM vision at individual business units, disconnected CRM strategies and initiatives, and poor customer treatment overall.

The leadership team's composition is as important to successful CRM as the team's tasks in developing a CRM vision. Often, only one leader from sales, marketing or customer service is deemed as ‘knowing all’ about the customer. However, without representation from all three organizations, the vision will not capture the complete life cycle and customer treatment. The leadership team should also include:

• A representative from operations to ensure that the company can deliver the vision
• The CEO to oversee the team and cast the tie-breaking vote as the fifth member

Create a corporate personality

Customers interact with enterprises every day and expect certain types of behavior from enterprises based on past interactions, peer information and perspectives that have shaped the corporation's image. Therefore, the leadership of an enterprise must take control of its corporate personality instead of letting it become a de facto process driven by customers' reactions to treatment.

An enterprise's CRM vision must clearly establish and communicate the model company personality to all employees at all levels, not just to those who interact directly with customers.

Additionally, direct channels, such as the Web, must support this by leveraging branding and delivering matching functionality that supports the company personality.

Create a model customer experience

The customer experience is the most important piece of the CRM initiative. Therefore, an enterprise should have a model of what the customer experience is, and consistently monitor it for updates to reflect changing market trends. For example, fast-food chains regularly monitor service times and introduce improvements to those service times because ‘fast’ is what is promised as a customer experience. However, other promised aspects of the customer experience, such as quality, must not be sacrificed for the objective of speed. Instead, organizations must take a holistic approach to creating their model customer experience.

Communicate the guiding principles for a customer-centric enterprise

When creating a CRM vision, there are four guiding principles for successful customer-centric strategies:

• Extend the depth and breadth of relationships to achieve a larger share of the customer relationship
• Reduce delivery channel costs and create barriers to entry for competition
• Reinforce the brand
• Create customer satisfaction and loyalty

Establish a supportive corporate culture

Employees often save customer relationships when business processes and technology fail to meet customer expectations (for example, blocking a credit card accidentally because the data mining technology discovered a risk from someone shopping for clothes outside the customer's home state).

Employees often discover the flaws in a company's CRM implementation and can take corrective actions. Therefore, no CRM vision is complete without a vision for rewarding, educating and mobilizing employees to support and execute on all these CRM principles.

Employees should be rewarded for delivering the model customer experience and for reporting problems to the enterprise that occur with customers at any point of interaction. By creating a culture that rewards and promotes employees, enterprises can correct business processes, policies and systems to continually improve the overall customer experience.

Most failed CRM visions do not include or minimize employees' contributions to the customer experience. Enterprises' leadership must actively work to create a culture that is customer focused and in line with the above components. Creating this culture can be extremely difficult for low-cost (commodity) providers because their relationships with customers are based on having the lowest prices, not on customer service. Conversely, customer-intimate organizations may already be executing on this component. However, no organization should leave a customer centric attitude out of its company culture, regardless of its business model.

Note: Gartner defines CRM as “a business strategy that maximizes profitability, revenue and customer satisfaction by organizing around customer segments, fostering behavior that satisfies customers and implementing customer-centric processes.”

The author is a research vice president, Gartner