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The Evolution and growth of CRM

Date: 14/02/2012

The Evolution and growth of CRM

Multi-channel Integration, and

Customer Response Management

Summary

Progressive customer relationships define the world for today's organisations. Companies in the current state of

affairs operate in a tightly knit world of conversations in the form of feedback and criticism coming from every

corner - offline and online – through various channels. How do we streamline all this data and make it more

organisation-friendly to yield the maximum benefits! These answers are what we aspire to achieve from this

Thought Paper.

The purpose of this Paper is to highlight the need for a Multi-Channel Marketing Framework and Response

Tracking mechanism, all seamlessly tied up, given the current scenario of Marketing Automation, in whatever

avatar, being the norm, not the exception. It is essential to have a single customer view, resulting in effective one-

to-one marketing dialog with today's tech savvy customers via multiple channels. This Thought paper is divided

into 3 parts

The Evolution and growth of CRM, provides a line of sight into the

journey of the relationship between customer and organisation. The

document aims to explain the change, which has taken place not only

in terms of technology and marketing, but also in terms of lateral

thinking on the part of the modern organisation. Destination CRM

was not easy to attain due to various challenges, which started from

quality of information to the way in which information was stored.

The second paper, Multi-Channel Integration, provides an in-depth

account on the approach to a Multi-Channel marketing framework,

the challenges organisations typically face during implementation

and the organisation wide they would reap once it’s implemented.

And in conclusion, Customer Response Management, the last in the

series, emphasises on the criticality of implementing and integrating

Customer Response Management, and the role that Customer

Centria can play, in delivering an end-to-end response management

solution in a well-integrated Multi-Channel environment.

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CRM: The Evolution

The present is incomplete without the past – and that stands true for technology as well. To understand the

significance and existence of the current marketing strategies and channels, it is imperative to look at the entire

evolution of customer-organisation relationship as a tale, contemplating on vital junctures to understand the

route. Let’s start with the Evolution of CRM

Once upon a time, customers needed organisations, but then competition struck, and consumers got empowered

with the power of choice. Today, businesses depend on people-to-people and business-to-business interaction

and the game has changed for many from B2C to C2C. There is no room for obsolete communication channels and

out-dated customer management technologies, because the consumers have moved on and it is time for

marketers to wake up and smell the coffee.

In today’s customer oriented market where strong relationships with the customer is the cornerstone for building

loyalty and thus ROI, any company, organisation or an institution has to be geared towards a strong framework

supporting integration of disparate data sources and marketing channels with preferred Customer Relationship

Management (CRM) solution.

‘Integration’ in today’s context is now inextricably linked to the entire marketing operation framework, which

would include marketing channels, transaction systems, data warehouses/data marts etc. And so, when it comes

to leveraging customer data across many disparate sources and opportunities, seamlessly aggregated marketing

machinery is essential for an effectual marketing dialog with customer.

In the early 90’s, organisations were apprehensive about Data Warehouse implementations

because of common myths like –

‘Organisation-Customer Relationship’: As perceived historically

The merging of current customer data with secondary sources ultimately hurts the

customer

Customer profiling may lead to more customised service and hence reduced consumer

value

Data warehouses reduce organisational productivity and hurts organisational image

Data warehouse increases waste and harm the environment

It’s difficult to find ROI on the Data warehouse

Data warehouse requires an engineering approach and hence is resource and time

intensive

Similarly marketers earlier were apprehensive about using multiple channels when it came to targeted

campaigning because of common myths like –

Apparently with ever growing transactional data, organisations felt the need to adhere to a solution, which will

provide clean, transformed and catalogued data for use by managers and other business professionals for data

mining, online analytical processing, market research and decision support. Data warehouse was one such

solution, which when implemented would provide holistic view of the historical data and this is where the

evolution of CRM commenced.

As organisations started turning towards data warehousing solutions to get a centralised view of historical data

combined from various sources, organisations started to realise that just doing BI and OLAP reporting was not

going to be enough to achieve what was required to build a marketing dialog with customers build a strong

customer relationship.

This was the time when organisations started feeling the need for establishing a framework, which could leverage

the data warehouse to build strong customer relationship model as OLAP reports analyses resulted in confirming

a fact that 'All customers are not equal', which spurred an evolution of 'Customer Relationship

Management'.

Customer Relationship Management (CRM) is a broadly

recognised, widely implemented strategy for managing a company’s

interactions with customers, clients and sales prospects. It involves

using technology to organise, automate, and synchronise business

processes — principally sales activities, but also those for marketing,

customer service, and technical support. The overall goals are to find,

attract, and win new clients, nurture and retain those the company

already has, entice former clients back into the fold, and reduce the costs

of marketing and client service. CRM denotes a company-wide business

strategy embracing all client-facing departments and even beyond.

When an implementation is effective, people, processes, and

technology – all work together to increase profitability, and reduce

operational costs.

Most loyal customers prefer interacting via one channel

Most people buy and shop via one channel

Most people do not like direct mails

Online marketing cannibalises offline efforts

55 plus audience is not web savvy

Becoming a multi-channel company does not require restructuring

Each channel is a separate user experience

Why the Evolution?

Thus for a CRM to evolve, data warehouse have become core component of doing business, as well as building

block for a corporate CRM strategy. This technology is a prerequisite for the level of one-on-one customer

relationships that can turn information into a company's most important resource.

Data storage

Database queries

Value analysis

Mathematical models for predictive analysis

Analytics

CRM and the Data Warehouse

The key challenge for business today is implementing an information infrastructure that enables rapid responses

to competitive pressures and the capability to survive into the future.

Corporate strategies that impact customer relationships, and the management and application of customer data

to business operation - CRM for short - are dependent on an information superstructure comprised of various

technologies that enable organisations to store, access, analyse, and manipulate vast amounts of customer data.

Most organisations with large numbers of customers to manage, frequently in the thousands or millions, require

a combination of sophisticated technologies to implement CRM.

One of the major contributing technology areas to CRM is ‘Data Warehouse’, which facilitate handling of a range

of CRM-oriented functions like –

Building and presenting the business case to secure CRM project funding

1 Analysis of the current state of customer interactions

2 Predicting the future course of customer interactions

3 Developing the plan of action to meet the predicted future course

4

CRM and Marketing Automation

Once CRM took shape post evolution, the next challenge was to have a framework, which will use CRM to provide

the automation and analytical insight to move more prospect relationships into customer relationships and

retain existing customer relationships.

A typical CRM roadmap will have following milestones –

To attain the above roadmap, need for a 'Marketing Automation System' was felt to provide the following benefit

Increased marketing effectiveness

Deliver more sales ready-leads to sales teams

Nurture prospects so they move through the channel faster

Measure the marketing influence on opportunities in the focus

Provide marketing accountability and ROI

Ensure that marketing only adds validated, standardised data into the CRM

5 Marketing Business IntelligenceCampaign Automation4

3 Lead Management2 Response Management1 Contact Data Integration

All this can be achieved via focussed 'Marketing Campaigns' that are measurable, leverage cleaner, richer data

and produce predictably great results. Marketing automation not only brings efficiency through automation and

effectiveness through better execution, it also brings a new level of measurability to marketing.

Marketing Automation solution brings the unprecedented ability to define business rules to connect marketing

campaigns and programs to sales opportunities, so the precise impact of marketing on the business results can be

measured. With the costs entered into the campaign definition, one can even measure the ROI and cost per

lead/contact.

Marketing Automation software is a powerful tool that can help an organisation to become more efficient,

conduct successful marketing campaigns, reach the most profitable customers, build long-lasting relationships,

better understand product and market dynamics, and measure the productivity of marketing operations.

Marketing Automation — at its most fundamental level was developed to help marketers' better target and

execute one-to-one communication with key prospects within the context of demand generation efforts,

simultaneously orchestrating and tracking marketing resources against this activity. CRM consolidates a great

deal of information about prospects and customers; however, it provides virtually no framework or tools for true

nurturing of earlier-stage prospects, and it definitely is not a communication platform. Marketing automation

leverages CRM and addresses these gaps, but it then presents new capabilities for marketers that enable them to

take their demand generation programs to the next level.

Marketing automation software's unique design helps manage relationships with the past, present and future

clients, consultants, contractors, and even competitors, to ensure that no opportunity for acquiring a new project

is overlooked. There are five core areas of functionality that are essential for any good marketing automation

system. All the five are listed below –

Marketing Automation and Marketing Channels

Now that marketing automation gained prominence and campaign management became inevitable, the

challenge for organisations was identifying the best way of communicating with the customers so that they get the

right offers at the right time and that would have happened without reaching customers via predominant medium

called 'Channel'.

With the advent of technology and ease of using it, today there are various channels to reach customers based on

their preference and liking for a particular channel.

Some of the most commonly used channels today include Email, SMS, Call Centre (Inbound and Outbound),

Direct Mailers, Print Media, TV, Radio, Billing Systems, POS, and ATM etc. All channels are not applicable to all

verticals, but most of them would have some channels in common for e.g. an Email, SMS or Call Centre.

Leveraging the potential of existing channels to their maximum capacity and ability was the next challenge

organisations faced, as the modern customer was very particular about the communication and its mode as well.

Selecting the most preferred channel for the target customers was top priority, as a varied choice of

communication channels also meant intelligent decision-making on part of the marketers. This is where the

Campaign Management component of Marketing Automation plays an important role, running campaigns that

result in data enrichment and address the right customers.

Recruit channel partners to work with.

1 Understand the channels that are available.

2 Identify the need, based on organisation's objectives and the preferences

of customers.

3 Generate a list of likely channel partners.

4

5 Manage the channel partners on an on-going basis.

The evolution of marketing channels enabled personalised communication in various ways for e.g. Promotions,

Personalised offers, Anniversary/Birthday Wishes, Loyalty related updates and lots more. The idea was to keep in

touch with the customer, and at the same time encourage him to buy what he likes and also what he/she 'might'

like. This approach led to a communication revolution, as organisations adopted Channel Marketing Strategies

that allowed organisations to make choice of channels based on following factors:

For organisations, channels have became the next big medium to reach their consumers – a tool with the power to

motivate and inspire their existing customers to buy their products and prospective customers to consider their

brands. Channel strategy includes recommendations for both identifying and managing channel partners.

Channel marketing is a dynamic and complex arena where mistakes can prove costly and extremely difficult to

correct.

To formulate and execute a channel strategy, organisations must follow these steps:

Bottomline:

We saw the evolution of CRM from a Data Warehouse to its smart utilisation for implementing Marketing

Automation. With the growing acceptance of CRM and Marketing Automation, organisations opted for Multi-

Channel Campaigns, and some obvious questions popped up:

In the next paper, we will dig deeper into the dynamics of a Multi-channel integration, and explore the elements

that help define a strong multi-channel framework.

Are you engaging your audience with targeted, relevant and personalised content?

Are you delivering your message through your customer’s preferred media?