Integration a challenge to developing and executing CRM strategy

The major challenge in developing and executing a customer relationship management (CRM) strategy is the ability for organizations to effectively use this new tool. Many believe that capturing customer and marketing data is CRM. But in reality, this is just the...

The major challenge in developing and executing a customer relationship management (CRM) strategy is the ability for organizations to effectively use this new tool. Many believe that capturing customer and marketing data is CRM. But in reality, this is just the first step. It’s the communication based on that first step that really adds value for the organization. And it’s the ability to use this intelligence across all consumer touch points that really leads to improved customer satisfaction, increased loyalty and improved market share. CRM is a multi-channel value enabler – own the data and you own the customer.

Just so you know, CRM started with contact management, a sales tool that placed all points of contact and communication in one place. It then evolved into sales force automation (SFA), which essentially provided additional tools and increased automation to the sales team trying to close the deal. Now, we have CRM. It includes all the tools, technologies and business procedures necessary to attract and retain customers, prospects and business partners. It utilizes any and all technologies, processes and procedures to facilitate or support the sales and marketing functions in their ability to better speak to relevant customers.

One of those technologies is the Web, and not surprisingly, some of the best practitioners are Web endeavours.

Think about E*TRADE Canada for a minute. It effectively knows everyone who has ever taken action from one of its ads, be they banners, newspaper, TV or email correspondence. It knows exactly what offer motivated that person to take action from an ad, where that person is in the sign-up process, where that individual fell off the sign-up process and a likely offer to re-initiate that individual back into the sign-up process. E*TRADE Canada has created a science to effectively (and successfully) manage its customer acquisition funnel. And it is beginning to do the same with customer retention, offering relevant promotional and communication offers to specific individuals based on their trading history, the value of their trading history, and therefore their projected value over the course of a long-term relationship.

E*TRADE Canada could not have come this far without a shared vision, originating at the top. CRM is an investment in strategy, resources, technology and training. Without senior-level commitment, CRM becomes a functionally owned process, instead of a philosophically new way of doing business. And without this change in mindset throughout an organization, CRM will be used in isolation amongst the few, instead of a wholly adopted process amongst the many. E*TRADE Canada has mastered this vision and demonstrates it throughout its organization. Which leads to yet another challenge – the need for cross-functional integration.

CRM forces functional disciplines to work together. It dictates integration as it touches and physically affects almost all functional areas – sales, marketing, technology, research, financial, product development – across coordination, communication, implementation and future planning challenges. Think about Grocerygateway for a minute. If it wasn’t integrated, then it wouldn’t know enough about me to know that I bought diapers this week and therefore must have a baby in the house. So it couldn’t send me targeted promotions trying to get me to buy other baby products. And it wouldn’t be listening to my requests for it to add new baby product lines to its roster so that I could buy more. And it couldn’t track my life cycle, offering me relevant products and promotions based on my progression through the life cycle. And they…, you get it.

CRM begins with a business philosophy that aligns company activities around customer needs. It develops into a sound strategy producing measurable results. It remains flexible in order to overcome challenges as they arise. And it continues to evolve as the consumer forces a better practice on us all.

Emily Rayson and Rob Sandler are both VP, co-managing director at GreyInteractive. (E*TRADE Canada is a GreyInteractive client.)