Managing & Delivering CRM
Managing & Delivering CRM
For most companies, today’s CRM strategies reflect a material shift in historical marketing and strategy. And, because organizational structure follows business strategy, CRM impacts organizational design. Two areas have a particular impact on the structure of companies:
the amount and nature of customer data and the processes by which value is added to the data.
how companies compete, especially for those firms that use CRM to compete on scope.
Most companies obviously see solid financial data as important for management, leadership and control. They have a financial department and a Chief Financial Officer (CFO) with custodial responsibility for these financial data, including security and management, and the processes by which value is added. Increasingly, companies are coming to believe that customer data are as important as financial data. Some best-practice firms are establishing custodial responsibility for customer data and value-added processes in the same way that they secure and manage financial data. This responsibility includes managing the customer data warehouse and the approaches that add value to customer data. It can also include mechanisms for providing services from a centralized department to the lines of business in decentralized companies.
Companies competing on scope change their structure frequently as they begin to sell what customers want rather than what the firm has made. This leads some companies to distribute the complementary products or services of others, including customers and competitors, and to sometimes sell their own products and services through others. This can be a marked departure in strategy for those companies that built their businesses through economies of scale. Associated with these changes are new roles and responsibilities for an expanded array of stakeholders and how they interact in the value chain. The challenge for organizational design is to accommodate these changes without disrupting the firm’s existing business.
Because the company competing on scope often has fewer but more important stakeholders, CRM companies are beginning to organize around their stakeholders to create the value each wants. For example, professional services firms have client-service teams for their most important clients with representatives of both the firm and the client on the teams. In another example, a major logistics company has established customer teams that bring together the various processes by which the company interacts with its priority customers. Members of the customer teams are drawn from many areas within the firm, such as marketing, sales, advertising, research, operations and finance, as well as their counterparts from the customer. In this case, the management of the customer team falls to sales, which manages all the processes by which customer value is created – an obviously very different role than the historical role of the sales department.
Implications For Senior Managers
Managers now developing a stakeholder-centric focus for their organizations may find that they now have additional roles and responsibilities. These can include:
Providing a compelling vision to keep the organization focused on CRM strategically, tactically and in real time, continuously and mutually with key stakeholders.
Bringing all customer data together in a single location, aligning processes among stakeholders in the service of the end customer, and smoothly integrating the CRM activities of other executives, lines of business and functional areas.
Selecting among the often competing requests for projects, funds and people, in accordance with the CRM vision, such as the issue of who is promoting the project, what technology can accomplish or whether new or existing customers merit the most attention from CRM.
Helping management and staff at all levels to understand CRM concepts and the firm’s vision for CRM, as well as communicating customer, market and profitability data to describe the firm’s progress as it proceeds on its CRM journey.
Setting expectations to help individuals and groups align their performance with the goals for CRM. Many companies have a large variable component in their compensation structure, for example, which can reward behaviours that run counter to CRM principles. People need to know the link between CRM and their own success or the initiative might be seen as just another program. Among the many aspects of change management organizations typically employ are the recognition of individual and group achievements, and case study successes.
Ensuring that a sufficient flow of people, time, money and knowledge goes to the CRM areas that need these resources.
Ensuring that that financial and operational controls are in place to monitor and improve customer performance and that any trust that might have been extended to any stakeholder under the CRM vision is not abused.
Few firms today are realizing the potential from their often-considerable investments in CRM. In part, this is because it is uncommon for management and staff to embrace CRM as a vision for how the business could be. Seen only as a means to generate more short-term sales, CRM can be little more than a means to efficiently interact with chosen customers with appropriate value propositions. This is not a bad start but there is much more to be accomplished from looking at the best-practices of those companies that have a broader view of CRM and have set out to answer some important questions, such as:
What is the firm’s vision for its relationships with all stakeholders, in addition to key customers?
What new capabilities does the organization need to achieve the CRM vision?
How will tomorrow’s CRM company be structured?
What roles must management take to implement the vision?
What measurements must be used to assess CRM performance?
How should all stakeholders be aligned to create the value end-customers want?
Perhaps no company has yet achieved the full potential for CRM. Considering best practices from a number of firms suggest that opportunities remain for all organizations to achieve better results and deeper relationships with CRM.