CRM Applications Enhance Customer Interactions

Every Organization Needs a ‘Niche’ for Developing a CRM Strategy.

Apr 8, 2009

A company known for a high level of customer service or targeting customers for profitability, could use these traits as focal points for developing a CRM application.

The creation and execution of a successful CRM strategy will depend on close examination and rationalization of the relationship between an organization’s vision and business strategy, to determine which areas of strength will be the focus of the CRM development.

Customer Information

One of the common problems many organizations share is integrating customer information. When information is disparate and fragmented, it is difficult to know who the customers are, and the nature of their associations or relationships: are they receiving a high level of service? are they profitable?

This also makes it difficult to capitalize on opportunities to increase customer service, loyalty and profitability. For example, knowing that other family members are also customers provides an opportunity to up-sell or cross-sell products or services, or knowing that a customer uses several sources of interaction with a supplier, can also provide opportunities to enhance the relationship.

Aligning Core Capabilities

Building towards a CRM solution and evaluating the use of customer data, requires analysis and alignment of the following core capabilities:

Successful CRM implementations result from the capability of the organization and its employees to integrate human resources, business processes and technology, and to create differentiation and excellence in service to customers, and to perform all of these functions better than its competitors.

From Product Focus to Customer Centricity

In the e-commerce business world, a customer can switch to a competitor’s product with a click or two on a web page. Customer-centricity in the new business economy-- already the best means to build lasting customer relationships in traditional ways of doing business – becomes absolutely imperative.

The reason for this is that, in general, businesses are launched because of a unique product or service. Initially, the focus is on building that product or developing that service and informing the marketplace of its availability and desirability. When another company eventually begins producing and marketing a similar product, the original company's product focus loses its competitive edge.

Building good products is often easier than building good customer relationships, and although product quality is still important, it is no longer the key to sustainable competitive advantage, where the competition’s products are just as good. In the long term, the organization with the best customer relationship strategy will win out.

Becoming customer-centric, i.e., shifting from marketing products to building lasting customer relationships, is an evolutionary process. It cannot be done overnight and usually requires a major change in corporate culture. A fundamental feature of a fully customer-centric organization is the capability to successfully manage customer knowledge.

Developing On-going Customer Relationships

Product-focused organizations use sales data primarily to report against financial targets. On the other hand, a customer-centric organization stores, analyzes and uses sales, billing, service, support and other data, in an on-going relationship with customers, to accomplish the following objectives:

Customer Value

Transforming customer knowledge into customer value can create a significant competitive advantage. For example, when high value customers are identified, and their needs anticipated, new value is created for them where it did not exist before. Ultimately, customer-centric organizations build customer loyalty, a customer response characteristic which leads to higher profitability.

There are several determinations of ‘customer value’ which organizations can use to categorize customers. Tracking revenues, cost and profitability is not the only way to assess customer value. Value potential, a more advanced method of evaluating customer value, is defined as “the willingness of customers to participate in the creation of products and services, to share information and other resources, and to share control over the design and production of products and services.”

The copyright of the article CRM Applications Enhance Customer Interactions in Customer Relations is owned by Duane Sharp. Permission to republish CRM Applications Enhance Customer Interactions in print or online must be granted by the author in writing.