Delivering The Optimized Customer Relationship: Minimized Customer Service Costs with Maximized Customer Satisfaction: Win-Win!

Major Stages of The Customer Relationship Life-cycle

The first step in developing the optimal customer relationship is to define the various major phases in your customer’s journey as they interact with your company (i.e. customer acquisition through customer retirement/closure).

Customer Relationship Life-Cycle Objectives & Segmentation Strategy Considerations

The subsequent steps in the process are to define the phase objectives of each major customer relationship life-cycle stage and to determine the range of customer treatments, by customer segment, that exist within each phase.  In addition, in order to arrive at accurate segmentation definitions, a segmentation approach and method must be defined in order to properly develop distinct and meaningful customer segments groups.

Balancing Customer Service Costs with Customer Needs & Satisfaction

Once customer value segments are properly determined, customer needs and appropriate service levels for those segments can be determined. This is important to delivering cost effective service levels that doesn’t over-deliver to customers and ensures a maximized customer satisfaction level for that particular customer segment group. Equilibrium is achieved when customer service costs are balanced with delivered customer satisfaction and customer value (i.e. a company would not want to expend a great deal to over-deliver to a traditionally frugal customer segment with a negative contribution (value) margin).

Matching Customer Service Delivery Levels to Customer Value

As customers deliver greater value to the company, service and reward levels are adjusted to deliver increasing levels of customer value to maintain market equilibrium and prevent high value customer defection to competitors.

Architect The Cost Effective Customized Customer Experience Across All Touch Points

Each customer touch-point needs to be examined to determine the optimal customer treatment approach for each customer segment that interacts with that particular touch-point. Only then can an econometric model can be developed via a multi-dimensional matrix of customer touch-point, customer value segment and customer relationship life-cycle stage.

Developing The Optimal Customer Relationship across all touch-points, segments, customer life-cycle stages

The final multi-dimensional matrix developed should consist of 4 dimensions (comparable to a Rubik’s Cube) of 1) Customer touch-point; 2) Customer Needs/Preferences; 3) Customer value segment and 4) Customer relationship Life-cycle Stages (CRLS).

Developing the Optimal Customer Relationship Life-cycle

I have found that the best approach to determining the final multi-dimensional matrix developed to be through a series of cross-functional workshops with internal knowledge experts consisting of customer analytics, customer service, marketing, sales, warranty claims (if separate from service) and touch-point subject matter experts like website managers, multi-channel contact center managers, etc.

The above is the structure for determining the optimal customer relationship for each segment group per touch-point as they transit through the customer relationship life-cycle stages. The final outcome is your delivered customer treatment strategy across all touch-points, segments and stages in the customer relationship life-cycle.

The benefit of this requirements definition exercise is minimized customer service cost at a level that just meets (or slightly exceeds) customer expectations such that high levels of customer satisfaction is delivered at the ‘maximum bang for the buck’.

 

The Basic S4 (S**4) Building Blocks to Creating and Implementing an Effective Customer Strategy

4S – Customer Strategy Building Blocks

 

The following blog article will succinctly and effectively answer the following questions as related to developing and deploying an effective customer strategy:

• What are the basic building blocks of an effective customer strategy ecosystem?

• What is the function of each process in this customer delivery ecosystem?

• What are the critical questions that must be answered by each function in this ecosystem?

• How can you develop an effective customer strategy that delivers maximized customer satisfaction simultaneous to maximized profitability?

• What is the checklist to ensuring your customer strategy and delivery is effective?

The Building Blocks of the Customer Strategy Life Cycle

 

Above are the basic building blocks to delivering an effective customer experience.  Each process is designed to work in an ongoing continuous ecosystem (loop) in order to deliver a personalized customer experience that matches the customer’s current and future needs, preferences, etc.

Let’s examine each process and how it supports the overall infrastructure model.

• Segment – the analogy for the segment process is that the more and differentiated customer knowledge you have, the better you will be able separate customers into unique needs groups in order to deliver a unique experience that they truly value.

• Separate – Once you have effectively segmented your customers and prospects into unique needs groups, you can then start to separate them in order to deliver differentiated and 1-on-1 treatments that are uniquely valuable to each of those customer segment groups.

• Satisfy – The next step in the process is to deliver content and programs that deliver value, not only to the needs of the overall segment group, but also delivers value to every customer sub-segment within the overall segment group via program sub-segment delivery structures. This is accomplished by delivering customized 1-to-1 customer programs that effectively leverage the unique customer insights gathered (history, needs, preferences, likes, dislikes, previous pain points, etc.).

• Stratify – The last step in this foundational process is to develop program that migrate customers from low value segments to ever increasing higher value segments. The goal of this process to increase customer’s overall spend, overall share of wallet with the company and overall loyalty and brand ‘stickiness’ such that migrating to a competitor and defecting becomes increasingly difficult. In addition, the migration of customer to higher value segments should also increase the customer’s brand advocacy ranking such that there is a correlation between higher value customer segments and their likelihood to be more likely brand super-advocates {see blog on this topic titled “Achieving Market Leadership by Effectively Managing Customer Loyalty and Advocacy ” : Achieving Market Leadership by Effectively Managing Customer Loyalty and Advocacy  }

The 4S Customer Capabilities

 

Critical Questions Answered by Each Process in the Above Customer Delivery Ecosystem:

• Segment – What specific data elements and insights can we leverage or collect to increase our ability to develop unique customer treatment groups.

• Separate – Which customer groups does it make sense to develop and deliver differentiated treatment strategies based on profitability models?

• Satisfy – What are the optimal customer treatment strategies that can simultaneously optimize customer profitability, loyalty, brand advocacy and customer growth objectives?

• Stratify – How do we deliver a progressive and tiered customer program to differentiate ourselves vs. our competitors and grow our market share?

Summary: You might read many complex articles on what a good customer strategy should be based on, but the above basic foundational building blocks are a simple way to start thinking about your customer ecosystem and what corporate capabilities need to be put in place to deliver effective customer and market success.

Customer Emotions that Drive Buying Behavior

Find out why most companies miss the mark in terms of focusing on generating positive customer emotions

Solutions to Problems AND Good Customer Emotions Need to Exist for Long-Term Loyalty

Good products and services are only part of the equation in terms of generating customer repeat business, loyalty, long-term retention

Some Customers Will Work to Destroy Your Business While Others Are Willing Partners in Helping You Grow, Be More Successful

Some customers will actually work to kill your company and brand(s), namely dissenters and defectors, while others will work tirelessly to bolster your sales, reputation, customer acquisition efforts, etc.

Guidelines for Generating Positive Customer Emotions and Relations

It is essential that all of your customer facing team members are representing the company and brand well, and that they adhere to your stated customer principles

Sample Steps to Developing an Environment Where Customers Are Motivated to Buy from Your Company

Your customer facing team members need to develop a customer interaction playbook that is consistent with your brand and customer mantra

Alignment of the customer delivery ‘value chain’ is Crucial

Every aspect of your customer delivery ‘value chain’ needs to be synchronized to deliver a highly consistent and high quality (emotional) experience as rated by your customers

A Chief Customer Officer’s (CCO) role is to Advocate for the Customer within the CxO suite

** Refer to previous blog article on the 5 R’s of customer loyalty – https://goo.gl/L4IA3q

If you rate customer satisfaction and loyalty as a high company priority, then they must be represented by a Chief Customer Officer (CCO) that will truly advocate for customers and set the customer standards that drive positive customer emotions

Summary:  The following points summarize the content of this blog as follows:

• In order to develop customer loyalty you must have both great products and services as well as the ability to generate positive customer emotions (customer delight, feeling connected to the company)

• Segments of your customer base will work to destroy your attempt at market success while others are your partners in helping your company become even more successful.

• In order to drive positive customer emotions and convert your customers into advocates and super-advocates, you must develop an internal customer relations playbook (develop customer vision, code of customer interaction conduct, etc.)

• Every aspect of your customer delivery ‘value chain’ needs to be in-synch in order to deliver an end-to-end superb and fulfilling customer experience

• Every company should have the equivalent of a Chief Customer Officer (CCO) in order to set the customer vision and standards and be the ultimate advocate for all of your customers.

Win a Customer for Life by Employing the 5 R’s of Customer Loyalty

 

The 5 “R’s” of Customer Loyalty

Ensure Your Company is 5 “R” Customer Compliant

Following the 5 R’s of Customer Loyalty Will Enable Your Company to Attract and Keep Customers for Life

 

Ensure Your Company is Customer R-Reliable

 

Top Steps to Ensuring Your Company is R-Reliable

The First “R” of Customer Loyalty Is Setting High Quality Customer Standards (External) and Goals (Internal) and then Delivering on that Customer Promise for Each and Every Customer Interaction as well as the overall & long-term customer relationship

 

Example of How a Company Demonstrates Customer R-Reliability

 

 

Example of How a Company Demonstrates Customer R-Reliability (continued)

 

 

Ensure Your Company is Customer R-Responsive

 

Top Steps for Your Company to Become Customer R-Responsive

 

The 2nd “R” of Customer Loyalty Is Ensuring That Customer’s Expectations Are Met: Needs, Concerns, Quality, Cycle Time Expectations, etc.

 

Example of How a Company Demonstrates Customer R-Responsiveness

 

Example of How a Company Demonstrates Customer R-Responsiveness (continued)

 

Ensure Your Company is Customer R-Recognizable

 

Top Steps for Your Company to Become Customer R-Recognizable

The 3rd “R” of Customer Loyalty Is Ensuring That Your Brand and Company has Distinctive and Positive Characteristics such that it drives positive emotions (driving repeat business, customer referrals, word-of-mouth adverting, etc. 

 

Example of How a Company Becomes Customer R-Recognizable

 

Example of How a Company Becomes Customer R-Recognizable (continued)

 

Ensure Your Company is R-Relationship Oriented

 

Top Steps for Your Company to Become Customer R-Relationship Oriented

The 4th “R” of Customer Loyalty Is Ensuring That Your Brand and Company develops a high quality and mutually beneficial relationship with your customers based on mutual respect, customer insights, an ongoing and open dialogue and a model that encourages a partnership between your brand & company and your customers 

 

Example of How a Company Demonstrates That It Is Customer R-Relationship Oriented

 

Example of How a Company Demonstrates That It Is Customer R-Relationship Oriented (continued)

 

 

Ensure Your Company is Customer R-Rewarding

 

Top Steps for Your Company to Become Customer R-Rewarding

The 5th “R” of Customer Loyalty Is Ensuring That Your Brand and Company rewards mutually beneficial customer behavior (greater share of wallet, spend, brand partnership activities, etc.) such that it drives further and longer-term customer loyalty.

 

Example of How a Company Demonstrates Customer R-Rewarding

 

Example of How a Company Demonstrates Customer R-Rewarding (continued)

 

Is Your Company Ready to Take the 5 “R” Pledge?

SUMMARY: If you take the pledge above to adhere to the 5 R’s of customer loyalty, you will enhance your ability to attract and retain customers for life. Key to this is developing the capabilities to be best in class for each “R” and ensuring that you are (cost effectively) maintaining a major qualitative advantage in each customer R vs. your competitors.

The Formula for Creating a Positive Chain Reaction with Your Customers and Clients To Win & Keep Them for Life

Introducing the Theory of Customer-Relativity

Theory Of Customer Relativity

Danger – Critical Mass With Your Customers Ahead !

Relativity – Treat Customer Like Family

Treating customers, clients and guests like your close relatives will create lasting customer loyalty lasting many generations.

Memorable Guest Experience Formula

Critical Mass Formula for Customer Excellence

Derived Benefits from the Customer-Relative Relativity Formula

Following the customer theory of relativity formula can net your company a distinctive customer competitive advantage

Family Like Customers

Critical Mass Formula for Customer Excellence

Listen Intently – Family & Customers

Listen intently to your customers for improvement gifts in order to improve upon your product and service delivery

Welcome – Family & Customers

Fulfill Special Requests – Family & Customers

Discovering and fulfilling unmet customer needs is a golden opportunity for you to grow your business

Made to Feel Welcome – Family & Customers

Leveraging gathered insights can help you surprise & delight your customers by anticipating and pre-delivering (without having to be requested) on customer needs and preferences

Gather & Leverage Needs & Preferences to Surprise & Delight Your Guests

Make Your Guests Feel at Home – Family & Customers

Delivering on a company environment that drives a feeling of belonging, contentment, ‘connectedness’ will endear your customers to your company and brand and make them loyal for life

Ensure the end-to-end guest experience ‘chain’ is optimal, memorable, etc.

Mapping, analyzing and applying continuous improvement to the end-to-end guest experience on an ongoing basis will ensure each step of that experience chain is high quality and optimal

Hire & Maintain World-Class (1-in-10,000) Customer Ambassadors who treat customers like family

Summary

Top 3 Keys to Delivering an Exceptional Customer/Client Experience

1. Hire passionate ‘customer ambassadors’ and empower them to drive your customer & client experience. These ambassadors are typically extremely difficult to find and are generally a 1-in-1,000 find, but if you know you have found one when many of your public reviews mention this person by name as delivering exceptional (family like) customer service.

2. Adopt a customer/client first set of policies and practices that empower your entire team to make right any customer perceived imperfection, unmet need, etc. in the delivery of your products and/or services. This is similar of how you would go out of your way to ensure your relatives are comfortable when visiting as guests.

3. To support #2 above, develop a listening & learning system to collect, retain and then deliver on expressed customer/client needs, wishes, preferences, etc. Ritz-Carlton does this extremely well with their guests and it shows in terms of attained customer satisfaction levels.

Summary:

By employing an E=MC² formula and treating your customers comparable to your relatives, you will create a positive chain reaction experience unlike any other and enable your company to leapfrog your competitors. This formula has worked for numerous companies employing those 1-in-a-thousand customer ambassadors who care about customer with all their heart as they do they own relatives.

Measuring Marketing ROI vs. Measuring Customer Value & Equity

Hierarchy of Marketing ROI Analysis (Levels 1-4)

In this blog we cover the following topics:

1. The four (4) levels of sophistication in measuring marketing and customer ROI
2. The three traditional levels of marketing ROI that focus on spend vs. return
3. The calculations for measuring campaign ROI, Brand ROI and Customer Spend ROI
4. Why measuring customer value and equity is a far better measure than traditional marketing ROI
5. How Customer Value and Equity Covers the Measurement of ALL customer facing activity – marketing, PR, sales, customer service, community relations, etc.
6. What your company needs to do to increase its sophistication of measuring market and customer insights

The following chart depicts the capability levels for measuring market ROI and customer value.

Level 1: Campaign centric ROI is the measurement, at a campaign level, of campaign costs vs. campaign return (customer spend vs. campaign return)

Level 2: Brand Centric ROI is the measurement, at a brand level, of brand return for all conducted campaigns (roll up of campaign ROI to a brand level)

Level 3: Customer Spend ROI is the sum of all brand and all brand campaign ROI at a customer level.

Levels of Marketing ROI Measurement (Levels 1-4)

The following chart defines the first three levels of marketing ROI and points out the pros and cons for utilizing each method. The downfall for all three methods, as indicated at the bottom of the chart, is that they rely on historical spend vs. forward looking measures as are found in Level 4 – Customer Value and Equity Measures.

Traditional Marketing & Customer ROI Methods (Levels 1-3)

The following chart depicts the calculations for determining campaign level and brand level ROI that, if done correctly, should roll up to a customer level (Level 3 – Customer Spend ROI). The detailed definition of the highest level (Level 4 – Customer Value & Equity) is covered just below in this blog.

Levels 1 – 3 Focus on Spend vs. Customer Value and Equity

The following chart defines the components of Level 4 ROI analysis – “Customer Value and Equity”.  This level includes the roll-up for Customer Spend ROI, but also includes insights that predict customer future behavior as well as defining how valuable the customer is to the company beyond what they spend.

For example, a customer who is referring 2-3 customers to the company per week, participating in customer focus groups is a far more valuable customer than another customer with equal spend with your company.  

Similar to company stock value, the measurement of customer value and equity is a far more robust way to measure the value of the customer base, how likely they are to remain a loyal customer, etc. 

Customer Value & Equity Calculations, as shown below includes several different indices such as Customer Contribution Index (CCI), Customer Perception Index (CPI), Customer Referral Index (CRI) and Customer Loyalty Index (CLI). These indices help determine the overall health of the customer base vs. merely customer spend as is associated with levels 1-3 (spend focused).

Customer Value and equity calculations take into account the level 1-3 spend ROI measures, but utilizes a balanced scorecard approach in that the indices above are weighted against the spend vs. ROI measures. For example, if Brand A has a high ROI but also has a bunch of irate customers unwilling to partner and participate in brand activities, then this is indicative of a brand that, while doing well now, will experience a great deal of future customer churn, negative social comments, brand tarnishing, etc.

Level 4 Marketing ROI Analysis – Customer Value & Equity

The following chart further defines the difference between focusing on spend ROI analysis vs. focusing on customer value and equity.

Value of Focusing on Customer Value & Equity

The last chart provides some real examples of the difference between focusing on spend ROI analysis vs. focusing on customer value and equity.

Examples of Differences Between Spend ROI
Focus vs. Customer Value & Equity Focus

The bottom line here is that if you are focusing on Level 1-3 ROI calculations, you have a short-term and myopic view of the health and value of your customer base and are missing the strategic and longer-term insights that enable you to determine customer, company and brand future value and earnings.

Any company thinking about acquiring another should perform this robust customer diagnostic to determine if they are inheriting a group of angry/upset customers that will defect after a merger or a set of extremely valuable customers with positive customer equity who will take the stock value of the merged company to the stratosphere.

Contact me to find out how to move past traditional marketing ROI measurement and how to evolve into developing more robust customer value and equity insights for your company.  

Blow Away Your Competition by Replacing Your Old CRM Program with the New Customer Relevant Relationship Management (CRRM) Model – Part 2: The Necessary Components.

1) Introduction:

In my previous blog, I covered what the new Customer Relevant Relationship Model (CRRM) is and the benefits of adopting this new model. In this blog, I will cover the components of the new CRRM model and what you need to put in place to make this new model a reality.

Ever wonder why companies like ESPN, Apple, Google, Zynga, Amazon, and Marriott dominate their respective markets? The reason is that they are ‘Customer First’ organizations and are passionate about listening to, understanding and then delighting their customers based on leveraging true customer insights. They treat their customers as business partners vs. commodities and include them in many critical decision making processes. They get this new CRRM model. Why/how ? – Read the rest of this blog to find out…

The differences between the old CRM model and how these companies are embracing the newer CRRM model are depicted in the following chart:

The Old CRM Model vs. New CRRM Model – Customers as Business Partners

2) Customers are fed up with old Dictatorial Management Style & Want to be Empowered as Business Partners

Customers and stakeholders today are longing for a company to partner with them and include them in the corporate decision making process.  These same constituencies are sick and tired of political, corporate, and other organizations making unilateral decisions for them that are really not in-line with their needs,  wants, etc. The backlash from this unwanted dictatorial management style of some companies can be seen in the Bank of America fee customer rebellion, the customer backlash from Netflix deciding to  split their company without first consulting with their customers and HPs initial decision to exit the computer market.

3) Components of the New CRRM Model:

In order to progress your organization from the old CRM model to the new CRRM  model, a few key essentials must be put in place and are as follows:

A. New CRRM Model that includes the 360° Cultivation of Customer & Market Insights.  This model enables a 360° view of all customer and market insights including customer feedback, preferences, likes, dislikes, social sentiment, competitor activity, etc. This new model takes your insights to an entirely new level whereby you are now enabled to delight customers, stakeholders and stockholders by having insights that are light-years ahead of insights provided by a traditional CRM model.

B. Customer First Culture driven by management that is passionate about their customers including a set of customer first principles and guidelines developed by company leaders

C. Customer Ratings & Feedback Structure that will identify areas where you will collect customer 360° feedback from customer and stakeholder interactions

D. Customer Feedback & Preferences Cultivation Process and corresponding infrastructure in order to allow your customers to continually rate how well you are serving them

E. Customer Health Scorecard that provides real-time insights on how well the customers, stakeholders and stockholders perceives you as serving them as well as insights into a Continuous Customer Improvement Process (CCIP) that enables you to continually improve your customer perceptions, satisfaction, brand loyalty, etc.

These components can apply to large enterprises as well as Small to Medium Businesses (SMBs).

The following graphics are all sample components from the list above (A-D) that need to be put in place to enable this new CRRM Model.

New CRRM Model – 360° Cultivation of Customer & Market Insights

 3A) The above chart “New CRRM Model – 360 Cultivation of Customer & Market Insights” demonstrates the new insights model that must be put in place to deliver world-class stakeholder and customer programs.

These enhanced insights will enable you to deliver products and services that delight your customers, stakeholders and stockholders as well as enable you to leapfrog the competition in terms of market share if they continue to rely on their antiquated CRM data and analytics insights only model. 

For Small to Medium sized Businesses (SMBs), some of the insights do not apply, but the following charts (3B-3E) most certainly apply and can be tracked via simple Microsoft Excel spreadsheets.

CRRM Customer First Policies & Organizational Principles

3B) The above chart “CRRM Organizational Guiding Principles” demonstrates the principles that must be in-place to be customer first culture. This culture is driven by management that is passionate about their customers and governs the company around a set of customer first policies.

Sample Enterprise CRRM Customer Rating & Feedback Structure

3C) The above chart “Enterprise CRRM Customer Rating & Feedback Structure” illustrates a sample structure (will vary for each type of business) whereby customer feedback and preferences will be cultivated in order to develop 360° insights into customer needs, wants, likes, etc.

Enterprise CRRM Customer Feedback & Preferences Cultivation Process

3D) The above chart “CRRM Customer Ratings & Feedback Cultivation Process” illustrates a how customer feedback and preferences will be cultivated in order to develop 360° insights into customer needs, wants, likes, etc.

Sample Enterprise CRRM Customer Scorecard Ratings Visualization

3E) The above chart “Enterprise CRRM Customer Scorecard Ratings Visualization” illustrates a how customer feedback and preferences ratings will be visually represented in a scorecard. 

Sample Enterprise CRRM Customer Scorecard Metrics

3E-2) The above chart “Enterprise CRRM Customer Scorecard” illustrates a how customer feedback and preferences ratings will be rolled up into an analytical scorecard that provides insights into customer trends,  customer feedback, customer issues, core customer strengths and weaknesses, etc. 

This scorecard can also be used to manage a Continuous Customer Improvement Process (CCIP) that continually drives improvements to customer perceptions, ratings, satisfaction, etc. 

Sample Scorecard for “Shopping Experience”

The above depicts how analytics and metrics would be maintained for a business who had a retail or wholesale shopping function.

Sample Shopping Experience Scorecard – #2

Robust Scorecard Analytics and Metrics should support Customer Trend Identification and Root Cause Analysis for Customer Issues.

Sample Branding & Public Relations Scorecard

Sample Public Relations Scorecard Above gives you insights into how well your company and brands are perceived by customers, stakeholders, stockholders, etc.

Sample Customer Service Scorecard

Sample Customer Scorecard Above from Customer Service tells how well you are serving your customers.

Sample Marketing Scorecard

Sample Marketing Scorecard Above Gives you insights into how well your Marketing Efforts are resonating with your customers.

Sample Product Management Scorecard

The Sample Product Management Scorecard above gives you insights into how well perceived your products and services are with customers and prospects.

4) Company & Customer Benefits of Adopting the CRRM Model:

By treating customers as business partners (vs. commodities) and including them in the corporate decision making process, as well as allowing them to rate how well you are serving them from an array of customer facing areas, companies can reap huge rewards including the following:

1. Better insights into the types of products and services customers want & need

2. Fiercely loyal customers who feel part of the corporate team

3. Customers who are most likely to spend more, be retained longer and purchase at premium prices with higher profit margins

4. Customers who are very likely to be brand advocates and refer others to your company, brands, and services.

5. Customers who feel connected to the company and empowered to improve company operations

The following are actual customer comments from those who have participated in a customer feedback program to help shape products & services:

“I feel like xyz company cares about me since they ask my opinion”

“Finally a company that listens to us”

“It is so refreshing to have a company ask you your opinions on products and services vs. ramming something down our throats that we don’t like”

“Wow – this is fun. I enjoy providing my opinion”

“As silly as this might sound, xyz company is the only company that ever asked me what I wanted”

“In my opinion, xyz company is much more progressive than their competitors by seeking consumer opinions, what matters to them, etc.

 5) Conclusion:

More dynamic companies like Goodle, Zynga, Amazon, etc. are inviting customers to become part of the corporate decision making process and empowering them to provide feedback, insights and rate company operations in order to drive continous customer improvements. Companies who adopt this new CRRM model whereby company management is democratized by including stakeholders and customers into the decision making process will reap the rewards of ever higher customer acquisition, retention and spend – leading to ever higher profits and share price.

Blow Away Your Competition by Replacing Your Old CRM Program with the New Customer Relevant Relationship Management (CRRM) Model

Blow Away Your Competition by Replacing Your Old CRM Program with a more effective Customer Relevant Relationship Management (CRRM) Model

1)               Introduction

1. Do you have a robust CRM program in-place, but you feel you are still missing the mark in terms of delivering what your customers really want & need?
2. Is your organization at risk of making market decisions that can cause a backlash and mass defection by your customers like the Bank of America $5 fee decision or the Netflix business split decision?
3. Do you have volumes of consumer data and analytics, but sales are declining or flat and customers are churning at an increasing rate?
4. Do you feel you could improve the quantity and quality of your customer insights including ascertaining critical consumer needs, preferences, likes/dislikes, interests, preferred communication channel for you to contact them, preferred timing and frequency for you to communicate with them, etc?

If you can say “Yes” to any of these questions, the rest of this post is a MUST READ for you and it is time to consider this more effective CRRM Model to replace your outdated CRM Model.

2)               CRM vs. CRRM Model Overview

The following diagram depicts the major differences between the old CRM Model and the new CRRM Model including the problems associated with the old CRM model and benefits of the newer CRRM model.

Old CRM Model vs. Customer Relevant Relationship Management (CRRM)

Old CRM Model (left above):

1. Relies on historical data and analytics to determine what customers need, want, etc. by the analysis of sales history, types of products purchased, categories of products purchased, views on websites, stores visited, etc.
2. Customer activity information is a proxy to what customers really want and need. Example, you will seldom learn that a customer hates an in-store or web experience through this proxy for what they are wanting, feeling, needing, disliking, etc.
3. Companies are unlikely to gain insights into the impact that any future company decisions will have on customer loyalty, retention, acquisition.

New CRRM Model (right above):

1. Takes a more direct approach with customers and utilizes a systemic querying method to ascertain exactly what customer want/need/prefer/etc.
2. Embraces customer councils, customer forums, customer voting to drive future content, interactions, product/service offerings, etc.
3. Activity solicits ratings from customers on many aspects (marketing materials, web experience, in-store experience, product usability, quality of customer service, etc.) regarding the health of the overall customer relationship and continually asks “How well are we managing our relationship”

3)               Example of CRM Model Gaps

To illustrate how companies are struggling to really determine the real needs of their customers, I took selected comments from interactions with senior CRM executives from major US Corporations based on consulting engagements, job interviews, speaking to them in passing, etc. The following charts are their actual verbatim comments as well as my read on their CRM gap that prevents them from developing world-class relationships with their customers.

Traditional CRM Programs:

1. Organizational culture, operations, and go-to-market strategy does not put the customer and real customer insights into the center of CRM operations
2. Relies on data, analytics, and customer history to drive on-going customer interactions.
3. Puts the organization at extreme risk of missing the boat from a customer’s perspective – real needs, wants, concerns, preferences, experiences, etc.
4. Companies that rely on this model are at-risk of customer defections, decreased customer spend/loyalty, etc.

New CRRM Model – with Customers In The Center of Customer Operations

New CRRM Program:

1. The organizational culture, operations, and go-to-market strategy puts the customer and real customer insights into the center of CRM operations rather than rely on the proxies of what customers want, i.e. data, analytics, and customer history.
2. The customer becomes the actual judge, ‘rater’ of whether you are delivering quality, value and a good relationship to them.
3. The customer is put in charge of CRM operations and enables a bi-directional and on-going dialog with the customer whereby they tell you their real needs, wants, concerns, preferences, experiences, etc.
4. Companies that rely on this model are more likely to develop products, services, offers, communications that delight the customer and whereby they are more loyal, greater brand advocates, and likely to refer your company to their friends as a company who listens, cares and empowers their customers.

6)             Companies That ‘Get ‘CRRM

The following are samples of companies that, in my opinion, get the CRRM model and details how/why each of them get this new go-to-market customer model.

Companies That ‘Get’ CRRM – 1 of 2

Companies That Get CRRM – 2 of 2

Phrases That Describe Companies who ‘Get’ the New CRRM Model

1. We don’t hide behind data and analytics to drive our customer & CRM operations, but rather we ask our customers what they want.
2. We are eager to ask our most disgruntled customers how we can improve our relationship with them and to determine who to improve our go-to-market strategy
3. Before we make any major market-facing decisions, we ask a cross-segment of our customers what they think about each of our proposed decisions and then ask them how to improve upon how these changes are implemented so we ensure a continued delighted customer base.

The bottom line of this post is that, if your company relies less on historical data and analytics to determine what customer want and actually builds methods, processes, and systems to put the customer in charge of rating CRM operations in order to provide you with ongoing and valuable real insights (needs, wants, likes dislikes, preferences, concerns, etc.), the customers will feel more valued and connected with your brands. The benefit of adopting this new CRRM model will be more loyal, empowered and delighted customers who will be brand advocates and brand referrers that will increase shareholder and company value.

As I have now built this new CRRM model for several major US brands, my next blog post will be on ‘how to’ develop this capability at the enterprise level.