What’s Your Customer Strategy?
This question may seem easier to answer than it actually is. In fact, in some organizations different constituents may see customer strategy completely differently. Some executives may be focusing on cost cutting while others are aiming to boost brand equity. According to Gartner managing vice president Scott Nelson, companies need to select one primary strategy and stick with it. Sure, you may cut costs while deepening customer relationships, but ultimately, if building relationships is your primary aim, it will take you down a different path of strategy, tactics, processes, and even technologies than cost cutting would.
During a presentation at this week’s Gartner CRM Summit, Nelson shared advice on the best way to create a successful CRM strategy. To begin, he said, select your focus. Is it to deepen customer relationships, cut costs, enhance brand equity, or perhaps grow revenue? Choose one as your primary focus so you know how to move forward. Keep in mind, he said, that you need to consider not only where you are today, but also where do you want to go with your strategy. Leave room to evolve over time.
Nelson also suggested keeping in mind these seven considerations:
1. The best CRM strategy is one that reflects your specific business.
2. Use all of Gartner’s eight building blocks as a guide (vision, strategy, valued customer experience, organizational collaboration, processes, information, technology, metrics). The focus on and maturity of each of these areas will evolve or time, but be sure include them all in your approach.
3. Understand how your industry’s approach to customers in general will impact your own CRM-related decisions.
4. Think in terms of incremental improvement, not just the “finished” strategy.
5. Start with what you have in place; don’t wait for everything to be “perfect” or you’ll never move forward.
6. CRM is not “once and done.” Business changes, customers change; you need to adapt your strategy accordingly.
7. Keep in mind the growing power of today’s customer and the impact it’s having on business. You need to listen to your customers and take action.
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Hi Ginger
Scott is right. But it is not a new insight. Research published in the Journal of Marketing over five years ago showed that companies who focussed on cost cutting, or revenue growth, performed better than ones that tried to focus on both at the same time. The two diametric opposites requre different mindsets, capabilities and so forth to succeed. Trying to do both just confuses people.
I also agree with Scott's suggestions too, although they again are not new. The most glaring omission from the list is an understanding of how different CRM capabilituies drive value creation in the business. This is an essential input into strategy and is used to balance the three forces of meeting customer requirements (delivering value to customers), building CRM delivery capabilities (a key cost driver) and creating economic profit (delivering value to shareholders).
Most approaches to CRM I have seen mistakenly leave any considerations of value drivers and value creation to post-strategy implementation planning, particularly the business case. No wonder the majority of CRM projects don't create value!
Graham Hill
Independent CRM Consultant
Interim CRM Manager