The philosophy behind implementing a CRM strategy is that companies can create and better utilize customer knowledge to drive sales increase. Your website contains and receives daily a large amount of data from potential leads and customers. Building an electronic customer relationship management strategy is key to staying competitive in the market, there lies a huge opportunity to get to know just who your customers are. New technologies have emerged to generate insight about customers from the companies’ websites.
Analytical CRM is the most appropriate start since it concerns technologies like data warehousing or data mining that provide us with customer knowledge that drives strategic decisions. In an ideal scenario, customer data should be accessible and used by all departments, especially marketing. Good CRM allows us to send different communication and personalized marketing to our customers and helps with their retention.
In the figure below, is a proposition of an innovative strategy that aims indirectly to increase process efficiency in order to improve customer experience and create value.
Your CRM is to be derived from the overall company’s mission statement and vision. Research suggests that modern-day companies need to pay less attention to the numbers of sales and more to customer lifetime value (Rust et al, 2010). A vision statement is in nature an abstract text that summarizes a long-term organizational goal and acts as a reference point to all the company’s stakeholders. Research by Kantabutra and Avery confirms that vision statements that work have the seven characteristics; Conciseness, Clarity, Abstractness, Challenge, Future orientation, Stability and Inspiration (Kantabutra, Avery, 2010). The CRM vision should also state clearly the value the company brings in comparison to its competitors.
Developing a customer database
- Defining the database functions and information sources
What information is needed to be collected and processed? To obtain the best answer to the latter question is organizing focus groups with key agents in marketing, sales, operational managers and other departments. Each is interested in a specific type and set of data related to the nature of their functions. The different types of data can be internal, external, structured and unstructured data, about customers, for customers …etc.
A lack of coherence and sharing of customer data may result in poor quality of the data thus a misleading analysis. It is crucial to have the correct information to be able to make the right decisions. The organization needs to be aware of the importance of full transparency when it comes to sharing, using and maintaining internal customer data (Peltier et al .2012). To achieve the highest quality of data and to have a complete view of the customers’ expectations. Verhoef et al suggest in their research paper that collection and utilization of data should be generated from various points of contact touchpoints and channels.
The next step after gathering the data and determining a source, in this case, the company’s website on which the sale will happen, comes establishing a set of variables and attributes on which the analysis will be based. Chan et al researched the costumer’s potentiality to buy on an online store by combining CRM and bargaining strategy on the website. This is how it works: when a potential customer entered the online store, the data related to their profile is retrieved from the database, if it’s a new customer, the online behavior is then stored. The data is updated in real-time which allows an electronic agent to provide the necessary information on the product the customer is looking at. The conversion rate and their potentiality are then calculated by the set of predetermined attributes. The value of this tactic is to inform and retain customers who score high in the potentiality to buy from the site. (Chan et al, 2007)
A common misconception about eCRM is that it is an IT solution. It is important to note that a software can do little compared to what all units of the organization aligned can generate. Your organization can choose to either develop its own CRM software or buy a ready-to-use one from an external entity, and there are a lot out there that one can choose from. An internally developed software can be very tailored and specific but will need a long time to be ready, a skillful IT team and fixed investment. An external CRM software comes as a robust alternative since it can be implemented in a matter of weeks and comes with many features and intelligent automation. The suitability of the software selected in the benchmark is critical, depending on how much the company is willing to change to fit the design of the software or not. For an ‘out of the box’ implementation, your company has to adapt to the software’s functionality. Another scenario that may deliver a successful outcome, would be a customized tool that requires some development and implemented by system integrators with experience in that particular software of industry with questionable experience. (Foss et al, 2008)
Analytics and insight :
After integrating the data from different departments then filtering it (i.e. removing duplications and useless data), we can use several methods to analyze it.
Data mining is a powerful tool in determining relationships and patterns in customer behavior and preferences and using that to gain competitive advantage. It can answer the following questions and many others frequently so you can track your business health and progress without a lot of effort.
- What marketing channel your customers respond to the most?
- Are your customers familiar with your products?
- Where is most of the traffic on your website generated from?
- What should your next offer be and to whom?
- How much time does it take to deliver after online order?
Contemporary analytics methods can be used alternatively in appropriate situations (See figure below), it is advised to have a standardized corporate method to generate consistent analytics. The first one and most widely used method is descriptive analytics or reporting which examines the present state of an organization in a way that brings to light changes, improvement, patterns, and exceptions. Contrary to Predictive analytics which is used to generate forecasts about the business performance
The third type is Inquisitive analytics is about using data to either allow or deny business decision making and proposals. Prescriptive analytics is valuable when running internal random audits to boost optimization and customer service levels and reducing default expenses. The last method, pre-emptive analytics, is preventive and allows the organization to be proactive and act on events that may influence business performance (ie risk mitigation).
Is it mapping the online customer journey on the website again? Or the architecture and design of the online store? is it the return policy? Or the fees for shipping?
A process is how activities are completed inside an organization. Process reengineering is a radical change in how things are done. In some cases, organizations find that processes just need to be simplified. (Colin, 1995). In the figure below, a clear differentiation between the two techniques.
Whatever insight was generated from the previous step, it is important to identify what needs attention and act upon it immediately. Process mapping is also a widely used tool to determine which areas can be tackled first. In many of the packages that come with the software acquisition and development, comes a workflow functionality that can be used for process mapping. Agile companies are what survive in the current business environment.
In their book Customer relationship management, Buttle and Maklan define knowledge management as the “practice of gathering, organizing, storing, interpreting, distributing and judiciously applying knowledge to fulfill the customer management goals and objectives of the organization”
As I mentioned earlier, centralized data brings important knowledge to the company and create a long-term competitive advantage in the market. Knowledge management systems can be IT tools integrated or matched with the CRM software. Process-based knowledge management systems are a technique that can deliver automated and organized solutions. Its role is to centralize information from different operational systems into one and help change management initiatives. Although this process is not dependent on the human resources of the organization, they play an essential role in developing and utilizing this knowledge. Your company can gather information from its production, supply chain and quality for example in one KMS that is directly connected to the CRM to ensure that its system process is monitored and knowledge is generated and also to be able to detect opportunities for improvements.
I am the founder of Agnita UK- a startup dedicated to introducing the latest technology in education. I am a laureate of Al Akhawayn University in HRD and Certifed in Project management by the PMI. After 3 years of work experience in Casablanca, I am currently pursuing a master’s in Marketing and Data science in Oxford and working with Oxford Brookes University to promote entrepreneurship amongst graduates. I spend my free time getting lost in psychology books, traveling and perfecting coding skills.