Tampa, FL January 10, 2003 Few mid-market companies have a full-fledged customer relationship management (CRM) program in place, but a focus on tactics rather than strategy is leaving many of these companies unprepared to meet their customers' needs, according to a CRM consultant.
Shannon Yost, director of customer solutions at consulting service Tribridge, estimates that just 10 percent of mid-market companies have developed a CRM strategy, while concerns about the cost of developing a strategy have deterred many others. As a result, mid-market companies tend to focus on tactics rather than on complete strategies, achieving minimal results.
"Mid-market companies, possibly more than any other segment, need to invest in a comprehensive strategy," Yost says. "Implementing tactic after tactic on a piecemeal basis results in an expensive process and falls short of reaching the goal of gaining the complete view of the customer and their interactions with a company."
The investment that a company makes in acquiring a good customer must result in a long-term relationship for that investment to be profitable, and a proper CRM program can help accomplish that, the consultant argues.
"Believing they are in survival mode, many companies are focusing their energies on gaining and maintaining a satisfied, loyal customer base," says Yost. "By developing a dynamic CRM strategy, they will be much better positioned to understand, anticipate and meet customer needs."
In implementing a CRM strategy, Yost suggests businesses follow a clear process that includes:
" Customer assessment: Evaluate the current customer experience, from both customer and employee perspectives, including channel partners to ensure all touch points with the customer are considered. Set clear customer relationship goals to determine where the customer experience deviates from expectations.
" Process and procedure improvement: Identify and improve mission-critical business processes based on the results of the customer assessment.
" Selection and implementation of CRM technology: Define technology needs that support improved processes and identify tools that meet those needs.
" Alignment of customer touch points with CRM goals: Ensure that people are equipped with the training and attitude to provide the desired customer experience.
Although businesses often concentrate on the technology aspects, CRM actually is a much broader strategy that focuses on all areas in which the company interacts and maintains relationships with its customers.
The bottom line, Yost asserts, is that CRM should empower staff with knowledge, allowing them to provide better service, quicker response and improved customer satisfaction. Hitting all the touch points of the customer relationship, a good CRM strategy should allow sales and marketing staff to analyze data and target more effectively, as well as giving service employees the information they need to provide better service.
"This is where the technology proves most effective," Yost says. "Through the ability to 'slice and dice' information, it provides a quicker, more sophisticated way to deliver CRM and use the resulting information for better business decisions."
In terms of evaluating the return on investment in a CRM program, Yost cautions against establishing the wrong criteria. "Although many expect CRM to drive revenue, it may often yield a more qualitative, subjective result," she says. Factors to be considered include retention of top-tier customers, acquisition of new top-tier customers and measurements of customer satisfaction and loyalty.
Shannon Yost, director of customer solutions at consulting service Tribridge, estimates that just 10 percent of mid-market companies have developed a CRM strategy, while concerns about the cost of developing a strategy have deterred many others. As a result, mid-market companies tend to focus on tactics rather than on complete strategies, achieving minimal results.
"Mid-market companies, possibly more than any other segment, need to invest in a comprehensive strategy," Yost says. "Implementing tactic after tactic on a piecemeal basis results in an expensive process and falls short of reaching the goal of gaining the complete view of the customer and their interactions with a company."
The investment that a company makes in acquiring a good customer must result in a long-term relationship for that investment to be profitable, and a proper CRM program can help accomplish that, the consultant argues.
"Believing they are in survival mode, many companies are focusing their energies on gaining and maintaining a satisfied, loyal customer base," says Yost. "By developing a dynamic CRM strategy, they will be much better positioned to understand, anticipate and meet customer needs."
In implementing a CRM strategy, Yost suggests businesses follow a clear process that includes:
" Customer assessment: Evaluate the current customer experience, from both customer and employee perspectives, including channel partners to ensure all touch points with the customer are considered. Set clear customer relationship goals to determine where the customer experience deviates from expectations.
" Process and procedure improvement: Identify and improve mission-critical business processes based on the results of the customer assessment.
" Selection and implementation of CRM technology: Define technology needs that support improved processes and identify tools that meet those needs.
" Alignment of customer touch points with CRM goals: Ensure that people are equipped with the training and attitude to provide the desired customer experience.
Although businesses often concentrate on the technology aspects, CRM actually is a much broader strategy that focuses on all areas in which the company interacts and maintains relationships with its customers.
The bottom line, Yost asserts, is that CRM should empower staff with knowledge, allowing them to provide better service, quicker response and improved customer satisfaction. Hitting all the touch points of the customer relationship, a good CRM strategy should allow sales and marketing staff to analyze data and target more effectively, as well as giving service employees the information they need to provide better service.
"This is where the technology proves most effective," Yost says. "Through the ability to 'slice and dice' information, it provides a quicker, more sophisticated way to deliver CRM and use the resulting information for better business decisions."
In terms of evaluating the return on investment in a CRM program, Yost cautions against establishing the wrong criteria. "Although many expect CRM to drive revenue, it may often yield a more qualitative, subjective result," she says. Factors to be considered include retention of top-tier customers, acquisition of new top-tier customers and measurements of customer satisfaction and loyalty.