Putting the P Into e-CRM

EnterpriseAppsToday.com Staff

Updated · Dec 18, 2001

By Chris McTiernan

One thing that amazes me about our reliance on software to help us is the expectation that somehow software is the solution when, in fact, software is a tool that helps us — people — achieve a solution.

Using any tool effectively requires some degree of competency on the part of the user and some degree of applicability to the object on which the tool is to be used. There are not a lot of CFOs out there using frying pans to do loan amortization and analysis, if you get my drift.

The Power of P(eople)

One of the most overlooked aspects of any customer relationship management (CRM) strategy is the people on each end of the equation. Sure, we talk about being customer focused, but to what extent do we think that purchasing software to help manage relationships will make us so? And to what extent do we think we can rely on the existing skills that employees have to execute on a CRM strategy? I have owned a copy of Quicken for three years, and I still live hand-to-mouth. Trust me, it is a frightening reality.

The point is that value in the relationship is based on the input from each person involved. The tool should enable that relationship, not develop it all by itself.

So, let's take a look at some of the skills necessary for better managing relationships with our customers. This list is certainly not definitive or exhaustive; there are other skills that will be specific to your organization and industry. In other words, don't use this list to write job requirements for a CRM analyst or marketing manager. Use it as a starting point.

Customer Acquisition and Retention Planning

A core objective of most CRM efforts is to increase the success of customer-acquisition efforts or to reduce the cost of such efforts. While employees with direct marketing backgrounds are usually a good fit for that task, challenge those employees to transcend the calculating tactics of direct marketing by integrating best practices from that realm with those of long-term customer life-cycle planning. Encourage employees to think of each interaction with the customer as adding a building block, not making a sale.

Customer Segmentation

Whether your CRM efforts are focused on customer service, personalization, merchandising, or marketing messaging, defining what is the right communication to a specific customer under specific circumstances is a challenge. Defining customer clusters or customer segments is a critical step to being able to do this.

Don't expect a piece of software to solve all your challenges here. Even if software dynamically segments users, you still need to define attributes and build predictive models.

While many tools on the market offer clustering and segmentation capabilities, it helps to have those tools used by people experienced in analyzing data, developing segmentation models, and defining customer attributes.

Knowledge of Corporate Product and Service Offerings

Correctly delivering products and services to customers requires correlating customer needs with the products and services available. Whether you are selling chemicals or infrastructure services, make sure those who are managing CRM efforts are well versed in both marketing and products.

Understanding of Technology

No one expects folks working in the CRM realm to have spent years in IT learning how to develop applications or design system architecture. However, understanding how technology works and its limitations, and how it can be used in the context of the entire organization, is a critical skill. Finding people with such a mixed skill set (technical and marketing savvy) can be challenging, but having people in charge of CRM who don't have a technical competency will likely create more challenges.

Also, look for people who understand how to use the Internet to deliver products and services to customers. Not all things should be delivered via the Web, and not all interactions should occur on the Web. All too often, features are built because it is possible to build them — not because there is a need or demand for them. Make sure that those responsible for your CRM efforts understand the difference and can demonstrate the impact of certain features on customer relationships.

What Have You Been Doing?

I'll admit that I have focused more on technology, solutions, and
approaches in the past few months while ignoring the people aspect of
CRM. I doubt that I am alone in having done so, though.

Chris McTiernan has been developing, implementing, and managing e-business solutions for the past four years. As a senior member of NOVO's E-Business Strategy and Planning Group, Chris partners with clients to define e-business strategies and operational plans. He has played a lead role in planning and leading the development of several highly successful Internet ventures for NOVO's Fortune 500 and dot-com clientele.

Chris began his Internet career at BigBook, the leading online Yellow Pages at the time, managing advertising services. He later worked with CNET, helping to build the online publisher's advertising services department, serving on the development team for Snap! (now NBCi), and assisting in implementing the company's first e-commerce partnerships.

Reprinted from ClickZ.

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