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Creating a customer-centric company is the smartest decision of a CEO

21 March 2016 12:00 am - 0     - {{hitsCtrl.values.hits}}

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At its core, Customer Relationship Management (CRM) is about acquiring customers, knowing them well, providing services and anticipating their needs. However, a problem with CRM is that it means different things to different people and therefore companies approach CRM differently, e.g., some may view CRM as a technology tool while others may view it as an essential part of business.


When companies consider implementing customer relationship management programs, they usually focus on how they best want to control customer information and keep a strong focus on customer. However, one of the things that they might not ask themselves is what the customers think of CRM. Most customers like it, but there are always some who do not. Companies need to identify this fact and take caution.  


There are also different types of CRM styles, which means that some kinds of the programs will do much more than others will. This is important, because the needs of one company might be very different from the needs of another company. This being the case, choosing the right type of program is about what the company needs - but it really should include some thoughts about what the customers want and need, as well.

Customers who are not happy with a company will likely not return, and many customers also do not want to deal with aggravation when they call or go online. They want to take care of their question or problem quickly and efficiently. By paying attention to what customers and potential customers have to say and by taking those suggestions and actually using them when possible, your company can perform much better than the competition.

This is an advantage to the company and also to the customers who shop there, because a successful business has enough proficient employees to help with questions and concerns. Eventually, your company can keep the prices at a level that the customer does not mind paying.


In order this scenario to happen, several key aspects of your company will need to undergo significant change in order to support and foster CRM transformation.
The CRM Business Transformation consists of five interrelated aspects of change:
1. Business focus
2. Organizational structure
3. Business metrics
4. Customer interaction
5. Technology
Becoming a customer-centric company is truly a transformation that involves tremendous change. It is not an evolution; it is not a gradual shift and does not happen naturally. These stages are not mutually exclusive; progression does not entail abandoning any previous stage. Rather, it is a matter of shifting resources and emphasis.
 

1.Refocus the company to be customer-centric
The concept of a customer-centric company has been around for some time, but traditional companies are realizing that there is a big difference between talking the talk (about customer centricity) and actually walking the walk. Just focusing on call centre experience and publishing info-graphics on customer commitment are not sufficient to win critical mindshare in this new economy of digitally empowered customers. 


Today’s customers are few clicks or an app download away from trying new services and switching several years’ worth of loyalty. The entire organizational structure needs to be reimagined to better deliver digital services to customers of today and tomorrow — anytime and anywhere. Renewed focus on delighting customers has become a core driver for change initiatives in many large companies.
Transforming the business focus of a company essentially equates to a company’s adoption of the customer-focused paradigm. The business focus needs to center around the question, “What do our customers need, and how can we meet those needs?” 


The focus today may be on: (1) Products. The company may focus on how it can make a better product or otherwise expand its product line.  (2) Sales. The company may focus heavily on the sales channel, and overemphasize the importance of having “feet on the street” as the key to its success. (3) Channels. Likewise, the company may put its channel strategy—that is, management of multiple channels—above all else. (4) Marketing. While a marketing focus may seem to be a step in the right direction, many companies become trapped in marketing tactics; the focus is on the marketing rather than the customer. (5) Service. As with marketing, a focus on service is certainly intuitive and can benefit customers greatly. However, a focus on service can lead to very operational, tactical thinking, and cloud the bigger picture.
This business focus transformation - focusing on customers - is critical to the success of any CRM initiative. If the company only takes a secondary or tertiary interest in its customers, its CRM efforts are guaranteed to fail.
 

2.Transform Organizational Structure 
Changing the organizational structure of a company goes hand-in-hand with the change in business focus. Most companies today are organized around: (1) Products, with product managers driving business decisions, (2) Places, with regional, branch, or store-specific management structures, (3) Promotions, with departments responsible for specific media or marketing efforts. This model is particularly common in direct marketing businesses, (4) Channels, with retail, e-commerce, and/or other specific channel structures, (5) Contacts, with the business organized around functional interactions with customers. There may be customer acquisition, cross-sell, retention, and reactivation departments


The transformation to a customer-focused company should lead to a management structure that’s organized around your customers, with teams responsible for all interactions with different segments of customers. This is a major hurdle for most companies, because it often means augmenting the existing product or channel structure with customer management staff and additional headcount.
 

3.Transform Business Metrics 
A business metric is a quantifiable measure companies use to track, monitor and assess the success or failure of various business processes. The main goal of measuring business metrics is to track cost management, but the overall point of employing them is to communicate a company’s progression toward certain long- and short-term objectives. This often requires the input of key stakeholders in the business as to which metrics matter to them.


Metrics are an integral part of the transformation process. Some companies integrate data analytics after the scope of transformation is defined or after specific milestones are reached.
However, metrics should be established before the start of transformation. In fact, the best practice is to start with metrics, looking at the outcomes that you’re trying to achieve, and then work backwards. It’s not a good idea to build the solution first and then decide how to measure success.
Transforming the company’s business metrics is a by-product of the changes that result from the business focus and organizational structure changes. Therefore, the transformation progresses as follows: (a) Focusing on product performance is the most natural first step, in keeping with a product-focused company with product management structures. (b)  Place performance essentially equates to measures and comparisons of productivity and profitability across regions or territories. (c)  Program performance is the focus of many marketing and sales groups, with measures of productivity and profitability tied to each campaign.


The emphasis may shift to customer revenues, meaning the immediate-term productivity of each customer. Customer satisfaction measurement equates to rudimentary monitoring of the customer experience.


The final stage, customer lifetime value and loyalty transfers your primary focus to the ultimate question of customer relationships. This takes a long-term view of the impact that all interactions can have on customer behaviors and the impact that those behaviors can have on your bottom line.

(Next week - Customer interaction and technology)

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