Why CRM is crucial during the global economic downturn?

By MSD Consulting

Recession is a critical test of how resilient the business is to maintain its profitability and liquidity. In a time of uncertainty, smart companies can find opportunities and grow their market share by adopting and implementing Customer Relationship Management (CRM) tactical strategies that would get results in 3 to 6 months.

The tactical strategy focus and priorities are different from an organization to another. For some organizations the focus during a recession could be to retain profitable customer relationship. For other organizations having strong liquidity position the focus could be acquisition of new business and to immediately benefit from the acquired customers. While focusing on CRM quick wins and short-term benefits, the long-term vision should be maintained to enable a structured phased approach that aligns with the current business objectives and is flexible, reliable and scalable to future changes.

CRM should also be complemented by the implementation of Business Intelligence (BI) and Business Process and Performance Management (BPPM). At the heart of a BI system are the operational data store, enterprise data warehouse and data marts that supply the integrated, clean and consistent data for CRM analytic tools. The insights and good understanding of large sets of interactions helps confirming the assumptions used in business decisions, prevents false assumptions from being applied and helps making sense of CRM analytical tools. Analytical applications are becoming increasingly important to organizations trying to find a competitive advantage in a tight economy.

An integrated CRM solution that integrate efficiently with BI, BPPM, enterprise data warehouse and data marts goes beyond sales, marketing and customer-service applications. It extends into BI, analytics, hosted applications, mobile capabilities and much more. It involves the implementation of a single integrated system, which will allow an organization to effectively and consistently manage prospects and customers, regardless of where the interaction takes place. This spans outside sales, call centers, telemarketing operations, direct marketing and Internet applications. It also equips your customer-facing staff with current, comprehensive product, special offer, shipping data and lets them resolve customer concerns efficiently in a single call or other means of communication. In addition, it helps you understand which customers, services, and products create most revenue, so you can capitalize early on any new opportunities.

CRM Methodology
CRM is not just a technology solution. It is a methodology that aligns a CRM tool, its customization and implementation with the organization's business objectives. In order to successfully implement CRM, it is recommended to follow the following steps:

1. Define your business objectives
2. Define the critical success factors
3. Define the key performance indicators
4. Select the tool

CRM Business Objectives
To ensure that the ROI are achieved while implementing or enhancing a CRM initiative, the key business objectives must be clearly defined. The most common CRM business objectives are:

1. Maximize sales productivity.
2. Maximize marketing effectiveness.
3. Maximize customer service quality.
4. Increase the organization strategic competencies and knowledge.
5. Increase employee satisfaction and commitment.

The business objectives should be prioritized to achieve some quick wins and realize short-term results to keep the momentum of the CRM longer-term objectives. The key business objectives must have Critical Success Factors (CSFs) identified against each objective or across them. CSFs must be (SMART): Specific, Measurable, Achievable, Realistic, Time-related. CSFs must be measured using well defined metrics (Key Performance Indicators - KPIs) linked to the business CRM strategy that drives CRM performance throughout the organization (like a CRM Scorecard).

Critical Success Factors (CSFs)
1. Maintain profitable customer relationships
2. Increase revenue per customer segment
3. Increase number of newly acquired customers
4. Improve products customization to customer needs
5. Align marketing, sales and service with enterprise-level goals
6. Increase lead generation
7. Reduce cost per lead
8. Increase access, accuracy and timeliness of customer data across all channels
9. Improve customer service quality
10. Reduce customer complaints
11. Improve competencies in core CRM processes and functions
12. Master use of customer data, knowledge management and BI
13. Increase staff satisfaction, retention and commitment

Key Performance Indicators (KPIs)
If you can't measure it, you can't manage it. The real promise of CRM and BI solutions is to help firms measure what they want rather than wanting what they can measure.

Maintain profitable customer relationships
1. Profitable customer relationships regularly identified
2. Desirable customers who are at risk of leaving are regularly identified
3. Ability to analyze those customers' transactions to predict behavior
4. Ability to timely customize products' offers and services that match the customer's behavior to maintain the profitable customer relationships
5. The best customers are insulated from the competition
6. Increased tailored interactions in real time to generate early warnings of new opportunities
7. Can set unique criteria for triggers based on time, events and behavior
8. Improved cross-selling

Increase revenue per customer segment
1. Ability to analyze patterns to acquire similar profitable customer
2. Increase sales per segment by predicting customer-segment behavior
3. Increase the effectiveness of the investment across segments (re-evaluate vertical strategy as the recession hits some customer segments harder than others)

Increase number of newly acquired customers
1. Increased ability to benefit from the acquired customers immediatel
2. Maximize profitability by adjusting pricing strategies to counter competition and win sales

Improve products customization to customer needs
1. Increased ROI in advertising and other promotions by understanding the media and channels mix that optimizes returns
2. Prioritizing highest value opportunities

Align marketing, sales and service with enterprise-level goals and performance management
1. Mobilize resources around customer relationships rather than product or merchandise groups
2. Increased resource utilization to achieve the business objectives and for greatest advantage
3. Increased efficiency of the marketing delivery systems

Increase lead generation
1. Increase the efficiency of campaign management
2. Better selection of products and solutions to be offered (exploit competitors' relative weaknesses to invest in products that increases mindshare among competitors' customers)
3. Increase opportunities to show short-term payback
4. Collaborate with partners and customers
5. Increased capabilities of measuring multiple campaigns simultaneously and predicting, for any given mix of campaigns, which products should be marketed to customer segments or to each individual customer

Reduce cost per lead
1. Implemented permanent cost-cutting programs
2. Increased capability of measuring the cost of multiple campaigns simultaneously

Increase access, accuracy and timeliness of customer data across all channels.
1. Create a unified customer view across all channels
2. Provide an easy way of uploading and analyzing customer database (detailed transactions). That also includes customer calls and communications.
3. Analyze customer transactions across all business units (marketing, sales and customer service)
4. Apply forward-thinking and more accurate predictive analytics to drive profitable customer relationships
5. Translate analytic insight into action using BI and ensure that everyone can access the customer data to perform their functions more effectively and provide consistent customer service across the entire organization

Improve customer service quality
1. Customer satisfaction, loyalty and referrals are increased
2. Customer service across all channels is consistent
3. Customer surveys showing increased number of happy customers. In a recession, 95% of profits come from 5% of customers
4. Increased optimization of customer care operation and focus on value added services
5. Engage in "one-to-one" dialogs
6. Ensure that the customer's basic expectations are met

Reduce customer complaints
1. Understand how to transform a customer's grievance into a positive experience
2. Re-connect with customers

Improve competencies in core CRM processes and functions
1. Streamlining processes across the organization
2. Integrated marketing intelligence
3. Reduce the corporate misalignment

Master use of customer data, knowledge management and BI
1. Transform customer data into profit (customer intelligence)
2. Provide the insights needed to enhance the mutual value of customer interactions
3. Analyze the market trends, customer (behavior, retention, acquisition, profitability, cross-sell and up-sell) strategies and market intelligence during similar previous economic situations using BI using the CRM analytic tools
4. Optimization of the use of predictive analysis, forward-thinking and BI
5. Integrate data mining and campaign management software
6. Non-financial data can predict future profitability
7. Support of real-time and batch decisions
8. Utilizes Enterprise Data Warehouse and Operational Data
9. Integration of both relational information and unstructured content

Increase staff satisfaction, retention and commitment
1. Regular surveys show increase in staff satisfaction
2. Benchmarks show above average staff retention
3. Introduced incentives (linked to KPIs) have increased the staff commitment

Select the CRM tool
IT is recommended to try the selected CRM tool/solution for a while using your organization data and environment to better assess its suitability. However, the following high-level criteria can be used while selecting or benchmarking your CRM tool/solution:
1. The elapsed time for implementation in production
2. If the product is 100% web based
3. Automates customer support and helpdesk functions
4. Manages marketing campaigns
5. Automates sales force activities
6. Can automatically append text from a chat session into a support ticket
7. Can broadcast message to everyone using the system
8. Integrates with the organization staff directory (email and network identification)
9. Allows look and feel customization to match company website
10. Supports customer-specific branding with multiple end user interfaces
11. Supports import and export of external file formats XML, Tab-delimited ASCII and Spread-sheet
12. Supports synchronization with the organization email, contacts and calendar
13. Flexible for customization and extensibility
14. Supports easy and fast creation of custom fields for all tables
15. Allows administrators to easily and promptly create new custom tables and relationships between tables
16. Allows unlimited number of teams or user groups
17. Allows users to belong to more than one team or user group
18. Supports field level user security
19. Support email management and the creation of outgoing emails (HTML and other formats)
20. Supports emailing reports at specified times each day/week/month to a specific subscribers list
21. Provides reports in HTML, graphical charts or spreadsheet formats
22. Creates custom business rules and workflow using graphical drag and drop workflow editor
23. Supports multiple concurrent languages and provides double byte languages support
24. Supports custom ticket type
25. Provides full text search by word, phrase and complex boolean using any combination of fields
26. Can show tickets submitted by particular company or individual
27. Can save and reuse custom searches
28. Supports multiple work shifts
29. Allows multiple files to be attached to a ticket
30. Can search text in attached files
31. Allows configuration of maximum field size for all text fields
32. Allows data to be sorted on any combination of fields
33. Allows creation and saving of custom views by users for user or group use
34. Allows end users to login, submit and review tickets online
35. Can prohibit end users from seeing others' tickets
36. Can enable end users to see tickets from other people at their company
37. Can easily create FAQs from customer-submitted tickets
38. Supports self registration to allow potential customers to submit a ticket
39. Supports automatic ticket generation from incoming e-mail and automatic responses
40. Supports ticket update by email
41. Supports automatic emails for resolved tickets
42. Supports automatic notification of staff members via email, mobile or pager
43. Online presentations to multiple viewers
44. Supports separate tables for prospects and customers
45. Supports creation of different user types with different fields
46. Provides easy way to convert prospects to customers
47. Supports off-line mode should the system or network be down followed by synchronization
48. Can collect leads through online self-registration
49. Supports HTML email campaign to all users of a particular type or all people found by a custom search
50. Supports personalized mass email
51. Supports mass emails (sending 10000 emails or more from the system)
52. Permits tracking of email campaign results
53. Provides reports showing the response rates in text and graphical formats

Contact details:
Muhammad Dahroug, Managing Director
T: +97165576128, E: mdahroug@msdconsulting.ae