Practise What You Preach

On this Gandhi Jayanti day enterprises should remember that their customers always come first. Every company preaches that mantra but how many actually practice what they preach in their vision and values?

Most business-to-business firms use some form of customer relationship management packages even if in some crude form. Surprisingly, the customer (or client) is not always a driving force in business-to-business Client/Customer Relationship Management (CRM) processes. The CRM is typically driven by the CIO or Sales Dept, giving the spotlight to technology, and sales automation.

However, that approach misses the key purpose of CRM, which is to foster more enduring relations with clients that result in increased profitability for the firm in the long term.

B2B marketers can take a few steps to move the process from what it is to what it should be.

First, let us examine the main components of the CRM process, including what I call enablers and actualisers. Enablers include the front-end technology, automation and systems that allow firms to establish one-to-one relationships with clients. Enablers are necessary but not by themselves sufficient to CRM’s success. Applications providers and CRM consulting firms often treat CRM first as a technological issue, taking a “build it and they will come” philosophy that approach has resulted in well-documented failures in CRM implementation.

Actualisers, combined with enablers, help bring meaningful change to the organisation. Actualisers include the needed organisational and cultural change, CRM training, alignment of business strategy with competencies, hiring decisions and deployment practices, and marketing applications. Actualisers stretch beyond the bounds of the traditional marketing discipline; however, the marketing functions’ responsibility is to ensure that the customer gets center stage.

Marketers can take the following key steps to put the customer first when developing B2B CRM processes:

1. Make sure that technology is driven by real client needs and not as perceived by internal folks. Get information on the client relationship requirements before the company buys expensive CRM software; make sure what the company aligns with the customers’ needs. Marketers should get answers to the following questions: What are the key factors to customer satisfaction and customer loyalty? How well do we perform against the competition on key satisfiers? What information requirements are needed to enhance performance on the key satisfiers?

2. Clients must be segmented by value to effectively allocate marketing resources. Client longevity and profitability are two useful measures of value to use in segmentation; client revenues may be a useful measure of value, but only if prices and the cost of service delivery remain similar by size of client. (That is, if larger clients get bigger price discounts than smaller clients, or require higher service levels, the firm may find that its most valuable clients are the smaller ones.) Once tiers are established, marketers can append industry type, employee size and geographical information to client records in order to identify lucrative sub-segments.

3. Turn one-way messages into dialogues. Marketers use direct and indirect media with clients. Direct (human contact) communications include telemarketing, service support, telephone operators, trade shows, user groups, speaking engagements and face-to-face sales. Indirect (nonhuman contact) communications include advertising, direct marketing, brochures, PR and Web sites. The CRM fosters more targeted and knowledgeable direct contact with clients to build stronger relationships.

For example, let’s assume that clients are ranked and segmented into four priority tiers based on profitability. Marketers can use that information to allocate communications spending.

In this connection, the following two steps will help you decide:

n Identify and prioritise the direct and indirect marketing tactics that will strengthen client relationships. These might include client reward systems to encourage longevity, special “members-only” website content, e-newsletters, e-news alerts, thought leadership events and different account management attention for valued clients.

n Assign marketing resources to each client sub-segment depending on its value to the enterprise. A tactical matrix can be developed where the client tiers, ranked by value, are listed down the left-hand column and the direct and indirect tactics assigned to each tier are shown across the rows.

4. Finally, measure results. If the desired results are not achieved, marketers may have to redo competitive performance research, re-assess competencies and redeploy talent, and make the needed adjustments in step three.

Marketers play a key role in making CRM a success at their organisations. By performing all these steps, marketers can help ensure that they remain on top in keeping customers first in everything they do.

(The author spearheads execution and innovation for clients @CustomerLab)