Back in the day I worked in entperprise corporate America. At the drop of a hat, they would think nothing of spending millions on a team of management consultants to find areas for improvement. Fortunately, middle market companies don’t often make that mistake (and survive).
I’ll never forget my days in banking. I worked for one of the largest bank holding companies in country, and I was part of a number of due diligence teams during the acquisition surge. Hundreds of people trying to figure out how this bank would fit in. But the scariest thing had to be the strategic planning process we went through, the sole stated purpose of which was to improve the efficiency ratio. Guess what. A year after I left the efficiency ratio hadn’t budged!
My primary responsibilities were projects designed to integrate a myriad of credit cultures gained from acquisition activity. However, our leaders were more interested in quick fixes that affected short term stock prices. So, the would willing spend millions on consulting that addressed important trimming around the edge issues like free coffee and requiring each manager to cut x percent of their staff. This was in response to the losses of the last real estate crisis (yes, it’s happened before). Essentially, the focus was on everything but the real problem.
In a lot of cases, the term Strategic Planning has been hijacked for use in initiatives designed to manipulate short term outcomes. It’s usually a pruning exercise and not the precise and deep scalpel effort that’s really needed for the long term. The quality consultants out there are always under pressure for these short-term fixes. There’s really nothing strategic about it.
In the CRM realm, strategic planning involves realigning your business to be customer-centric, enhancing customer loyalty in the process. You have to do this, or we’re not talking about CRM. Don’t let me stories about strategic planning failures deter you. There are some very simple steps you can follow that will get you on the right course.
The CRM Strategy – This is the main ingredient to a successful CRM initiative because it explains how your company will interact with customers going forward. You can’t simply install software an pray for success. The software needs a purpose.
Analyze Your Situation – You need to know where you are today before you can figure out the road to where you want it to be tomorrow. Be realistic!
Identify CRM Benefits – Clearly identify the knowledge you will gain and how you will apply this knowledge (about your customers) through its collection in your CRM software and customer database.
Quantify CRM Benefits – Once the benefits have been defined, you must determine what the economic impact will be to your bottom line. Without this, you will not know the appropriate level of investment to make.
Quantify CRM Costs – Your CFO will be far more likely to write a check if you can detail the financial benefits as well as the financial costs. The return on investment is critical in making a major go/no go decision.
Manage CRM Risk – Any investment done right is underwritten. This is the process of assessing and mitigating risk. If a plan to manage risk is not detailed, your ROI justification will lack substance…and most likely be wrong.
Implementing the CRM Strategy – Finally, the CRM strategy has to be implemented to take effect. This part may include software, but first you have to get the humans on board. Implementation of software is only a part of the process.
CRM Metrics – A high level view of CRM metrics that will help you better understand success or failure and also areas for opportunity going forward