Last year, amid a booming economy, experts preached about the empowerment of consumers and the merits of personalized treatments. They led the charge that had companies investing millions of dollars in customer relationship management infrastructure because it would yield returns tenfold.
Companies decided investing in personalization and treating customers more as individuals would develop customer loyalty and strong relationships that would give them an advantage over competitors. Today, amid an economic slowdown, companies may be wondering whether investing in CRM was wise.
CRM has not lived up to its promise – yet. But the money companies spent on building CRM infrastructure was not wasted.
Companies must adjust their strategy to make existing CRM investments drive the bottom line. Loyal and growing relationships are good, but they do not necessarily generate the return on investment companies crave. Personalizing treatment of customers also is good, but if it is based on a limited view of the customer, companies may spend more than they earn.
To achieve a positive ROI, companies need to stop managing customer relationships and start managing customer value. The first step: connecting interaction channels and using customer data to determine the next best course of action to drive each customer to his highest potential value.
Analysts agree. In a recent report, Gartner Inc., Stamford, CT, predicted, “Through 2005, enterprises able to synchronize customer-facing interactions across channels will outperform competitors with siloed channels by 20 percent.”
Individual silos of information are no longer sufficient for a profit-focused organization, making it crucial to ensure customer relationships are built through consistent interactions across the company.
By connecting customer channels and analyzing each customer interaction, companies will be able to achieve five things paramount to driving their bottom line:
• Link disparate CRM systems that sit in different channels in real time to gather information that will provide a single view of the customer.
• Analyze the information gathered to produce communications that strengthen profitable customer relationships.
• Offer an enterprisewide view that maps each customer’s path to profitability.
• Execute the proper communication strategy to move each customer toward greater profit, customer satisfaction and loyalty.
• Measure the results to determine the effectiveness of each offer or treatment across all channels.
While a single view of a customer is important, it is equally important that customers are given a single view of the company, as a customer’s relationship will become more loyal and profitable when his experience is consistent.
Most organizations bought their CRM infrastructure from multiple vendors that do not share information, preventing a single view of each customer. If customers have to reintroduce themselves each time they choose a different channel of interaction with a company, there is a risk of frustrating them and causing an rise in abandonment rates.
In addition, without up-to-the-second knowledge of customer behavior on other channels, companies miss the opportunity to maximize customer relationships and drive profitability.
Simply put, the best indicator of a customer’s needs is his most recent interaction.
When a customer hits a Web site, then calls the same company a few minutes later (a typical behavior), the scripts and offers served up for the call center representative must be based on analysis of the customer’s most recent behavior on the Web. That behavior may indicate a fundamental change in how to drive profitable action by that customer, so not knowing about it misses the opportunity to earn more business and can result in interactions that alienate the customer and cause abandonment. If a customer changes his mind when speaking with the representative, a new offer should be generated that corresponds to the change in the state of mind of the customer. Only with up-to-the-second customer information based on a complete view can companies consistently drive profitable customer behavior.
Companies that have invested in call center scripts, Web personalization, personalized e-mail, customer profiles for front-line personnel and direct mail have made critical first steps. However, these channels must be smart enough to drive an ongoing, relevant dialogue with customers to increase ROI.
By analyzing data gathered across all interaction channels and using it to serve timely, relevant offers to the most profitable customers, CRM’s promise will be fulfilled.