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Continuous Evaluation& Analytical Insights
Organizational Governance & KPIs
Internal & External Collaboration
Happier & Stronger
Relationships with Customers
Greater Lifetime Customer Value &
Organizational Top-Line &
Bottom-Line Profit
3 Critical Considerations for Investingin or Creating a CRM Strategy
www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Table of contents
www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy” 2
Contextual Definitions –What is CRM? What is Customer Lifetime Value?
Critical ConsiderationsConsideration One: AnalyticsConsideration Two: LeadershipConsideration Three: Collaboration
What Are The Benefits?What’s Next?The Right QuestionsSummary of LearningFinal ThoughtsMessage From The Author
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p5p6-7p8 p9p10 p11p12p13p14-15
www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
What is Customer Relationship Management?
Strategy
TechnologyValue
Customer Relationship Management (CRM) has many definitions, perspectives, and theoretical models. We encourage an approach that promotes CRM as the strategic use of technology to deliver consistent, experientially focused, high quality value to customers in order to build & maintain powerful relationships.
“People will forget what you said. They will forget what you did. But they will never forget how you made them feel.”―Maya Angelou
Contextual Definitions
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Customer Lifetime Value
Understanding Customer Lifetime ValueCustomer Lifetime Value, or CLV, considers a relationship with a customer as more than just a single transaction in time. A customer relationship is one that has a beginning and an end, is two ways, and there is a total value to be gained or lost throughout the relationship. This is your CLV.
Here is a very basic calculation of CLV to illustrate its meaning
You acquire a customer. It costs you $10 in a mass-marketing campaign to reach them & another $50 in variable expenses.
Good news, they bought $50 in goods & services in year 1 of your relationship!
1 year later, they call your support line to ask for help with a product issue. It gets resolved, but the agent spent 1 hour on the line. $15 for the hour to serve them.
At the 2 year mark, you send a marketing promo in the mail. Total cost to reach them in this campaign is $5.
6 months later, they find your promo from earlier & remember how good your customer service is and they buy again, but for much more this time. They spend $200!
At the 3 year mark, they move to another country & can no longer buy from you. Your relationship has ended for now.
CLV Calculation-$10-$50+$50-$15
-$5+$200
$170 CLV
Contextual Definitions
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Continuous Evaluation& Analytical Insights
Collect data and deliver powerful insights that inform your strategy
Customer data is powerful. It can help you increase the value that you deliver, identify patterns that indicate that a customer may leave you, reduce your cost-to-serve, and increase total average spend per customer.
Collecting data about your business processes, workflow efficiencies, and marketing efforts is the ONLY way to improve those efforts. Customer acquisition is just one half of the profit equation – maximizing efficiency on the back end is an incredible way to increase profit.
Customer Info To Track
Average purchase size
Share of wallet
Time between purchases
Preferred contact method
Back End Info To Track
Cost to reach one person
Frequency of campaigns
Total time to serve
Time required to update files
Consideration One: Analytics
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Leadership is needed to perform; KPIs are required to gauge performance
Organizational Governance & KPIs
CRM is not an IT project to be completed by highly skilled techs behind the scenes, only to have a 2 line email summarizing their work sent en masse to the company directory. A CRM project requires buy-in from leadership and a governance structure of accountability to keep the entire organization on the same page about the changes that are coming.When leadership allows the project to be an IT undertaking, the customer will suffer.
The proper identification and use of KPIs are critical to understanding how your CRM shift has impacted the organization.
Project Success
Leadership Buy-In
Accountability
Organizational consistency
KPIsDefined, appropriate,
measurable
Consideration Two: Leadership
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Weak leadership vs strong leadership & poor KPIs vs smart KPIs
Consideration Two: Leadership
Weak Leadership Strong Leadership Poor KPI Selection Smart KPI Selection
× Managers are confusedabout project objectives
× Time is wasted training staff in long, dense formats where info retention is low & re-training will be needed
× IT is tasked with formingcustomer strategy (should be done by client facing personnel or c-suite)
× Lost data (company,collaborators, or customer related)
× Overblown & over budget× Poor customer
experience
✓ Managers know how to lead personnel to each objective
✓ Staff are trained at a pace that will allow them to slowly understand & adopt the new CRM practices more effectively
✓ Senior leadership forms the customer strategy with input from client-facing personnel
✓ All data is retained, backedup, & properly integrated
✓ On time & on budget✓ High value customer
experience
× Expectations of project outcomes are unclear leading to time wasted trying to justify project decisions
× No meaningful way togauge project ROI
× Resources spent frivolously× Entire CRM project may
have been a net negativeon performance
× No way to identify what project element requiresattention
× Overblown & over budget× Poor customer
experience
✓ Expectations are clear and decisions are easier to make
✓ ROI can be calculated on an on-going basis and upon project completion
✓ Resources are spent in asmart, calculated way
✓ CRM project provides immediate & latent benefits
✓ Easier to identify project bottlenecks & correctthem immediately
✓ On time & on budget✓ High value customer
experience
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Internal & external communication infrastructure iscritical when completing a CRM project
Your commitment to CRM is also a commitment to better collaboration across your teams. Regardless of your industry or product, having all teams that interact with each other capable of doing so in a streamlined way will lead to a higher quality customer experience.
There are 3 critical communication channels necessary in an effective CRM strategy: Company, Collaborators, Customers.
Having a 360 degree view, or “single view”, of your customer empowers your teams to be as efficient and effective as possible when servicing or selling.
Consideration Three: Collaboration
Internal & External Collaboration
Company
Sales lead documentation
Service levels & compliance
Order tracking & fulfilment
Performance & productivity reporting
Employee communication cross-department
Collaborators
Vendor pricing & service notes
Scheduling meetings or presentations with partners
Feeding referral leads directly into a pipeline
Instantaneous messaging
Order fulfilment & inventory levels
Customers
Case management
Self-help options (chatbot, touch tone phone menu)
Customer engagement centres
Social media response team
Omni channel (email, phone, social, web, in-person)
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Summary of Immediate & latent benefitsWhat Are The Benefits?
Continuous Evaluation& Analytical Insights
Organizational Governance & KPIs
Internal & External Collaboration
Immediate Benefits Latent Benefits
• Identify business processes that arebottlenecks for productivity
• No more guesswork involved withidentifying what works & what doesn’t
• Clear expectations are set for leadership & accountability istransparent to all stakeholders
• Success is clearly identified & tracked to calculate ROI
• Teams are more agile & can support each other when servicing or selling
• Collaborators are “kept-in-the-loop”
• Customers feel heard & satisfied
• Predicting customer churn patterns(what actions they take before deciding to leave)
• Identifying the next best offer in ahighly personalized way
• Organization has complete buy-in (top-down & laterally)
• Critical issues in performance areidentified in the early stages before becoming problems
• The customer becomes THE talkingpoint of every conversation your organization has
• Your customer’s experience is high quality, replicable, & consistent
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
What’s Next?
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Do you currently practice CRM?
Are you industry leading in sales revenue, customer retention, & satisfaction?
Well done! Keep doing what you’re doing
Do you have a CRM department who looks after your CRM tech and/or strategy?
Reconsider your KPIs & the strategy being used to achieve company objectives.
Potentially seek out a CRM consultant if your team feels unprepared to achieve its goals. A new platform may be necessary
Hire a CRM consultant to review your current CRM strategy & make
recommendations. A new platform may be necessary
What is the ratio of customer relationships to customer support staff you anticipate
having over the next 5 years?
How large is your organization?
You require a robust CRM platform & strategy. Strongly consider hiring a CRM
consulting team & implement a major CRM project
Consider a low cost or free CRM platform & hire a consultant to assist with sales,
retention, & satisfaction strategy to optimize efforts
You may not need any additional CRM tech. Excel or a free CRM software may suffice in organizing your relationships
Yes
No
Yes
No
Yes
No
10+ customer relationships per support staff
Fewer than 10 customer relationships per support staff
Enterprise
Small ormedium
Follow this decision tree to identify your next step
www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Questions to ask your CRM consultant about project implementation
The Right Questions
• What is the financial risk? What do we stand to lose?
• How many customers do we expect will experience service disruption?
• What can cause a project delay? Have we scoped out all necessary functionalities?
• Is it better for my organization’s CRM to be cloud-based or on-site? How does this impact risk?
What are the risks?
• How long will the project take to implement and how long before we see increases in performance?
• What will our company teams be able to do after implementation that they couldn’t do before?
• What will my customer touchpoints look like?
• What is my customer’s journey? Will they be more satisfied than before?
What are the
expected outcomes?
✓ Risk management plan✓ History of past
implementations or testimonials
✓ A list of who is involved in project implementation on your company side & on the consulting side
✓A list of project deliverables✓Scope of technical,
functional, process, &organizational requirements
✓ Illustration of the expected inbound & outboundcustomer journey
Critical questions to ask before accepting a CRM project or consultant team
Items to request before executing the project
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Here is what we covered & what you learned from this guide
Summary of Learning
CR
M D
efin
itio
ns What is CRM?
What is customer lifetime value?
How does technology support CRM?
An
aly
tics What can you
do with analytics?
What customer data is relevant?
What internal data should be tracked?
Org
an
iza
tio
na
l Go
vern
an
ce What are the benefits of creating a governance structure for project execution?
How do KPIs factor into measuring success?
Inte
rna
l & E
xter
na
l Co
lla
bo
rati
on What type of
communication is required to serve your customer?
What are the benefits of having cross-department communication channels?
Ris
ks &
Pro
ject
Ou
tco
mes What should
you ask your CRM team or consultant to properly identify risks?
What project outcomes should you outline before getting started?
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Unleashing the power & potential of CRM requires strategy, patience, & a desire to exceed your customer’s expectations
Final Thoughts
We’ve covered just a fraction of what is involved in putting together a CRM strategy & selecting a CRM platform.
The truth is that as technology improves & customers change, CRM practices too will evolve overtime. If nothing else, what you ought to understand about CRM is that it exists to serve your customers - not to build your bottom line.
Thankfully, a well executed strategy to serve your customers will inevitably lead to increased profits, lower cost to serve, and an empowered experience for customers & company personnel alike.
“The price of greatness is responsibility.” ― Winston Churchill.
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www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
Message from the author
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Hi! Thanks for reading this brief guide on CRM and some of the risks, benefits, and things to consider when deciding on a project.
We didn’t cover all the bases here. It would be impossible to get through allfundamental material in just 13 pages. But consider this a jumping off point.
I do hope it was helpful in building some of the foundational knowledge required.
Please note that CRM practices are subject to change in the future, but much of what was shared here will remain constant so long as companies care to serve their customers & build relationships with them.
Do you have questions or feedback? Please email your thoughts to [email protected]
www.davidrashty.com | “3 Critical Considerations for Investing in or Creating a CRM Strategy”
About the author
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David Rashty is a marketing professional located in the GTA. He has extensive experience in the retail, construction, and financial service industries.
His greatest strength is his storytelling. Combining this skill with his business acumen, knowledge of sales & marketing, and dedication to connecting with people, David has helped countless students & professionals alike reach their marketing & business goals.
David lives with his partner Laura in Toronto. They occasionally borrow the family dog on weekends for long walks & hikes.
Do you have questions or feedback? Please email your thoughts to [email protected]
