Since I last wrote, the idea of creativity in business has been swirling around in my mind.

The current economic conditions are driving our customers to think more about WHAT they sell - what are the top products, what else could we sell to existing customers, etc. Trouble is, that thinking really only operates from an internal perspective.  It's much better to ask why customers buy, how & where they do this, what are their expectations of the service wraparound, etc.   In essence, you need to think creatively, albeit Inside the Box of your chosen business environment.

Isn't this obvious ?

Now I know this sounds a bit like a "Business 101" lesson.  Focus on your customers and all that.   However, I still think the day-to-day reality is very different.  In the last week I have talked to a number of prospects who, when asked to think about WHY they want to a process to work a certain way, said "it's what we do here".  Their only frame of reference was an internal one - the customer experience was almost entirely missing.   Indeed, one business had even gone as far to drawing up how they wanted their CRM screens to look - with almost no  reference to the raison d'etre for having the system in the first place. 

Not seeing the wood for the trees, as someone famous once said.   Or, as Ben Goldacre, author of Bad Science notes in his book: "It's more complicated than that"

So, why does this happen ?

I was listening to Russell Ackoff talking on Radio 4's In Business a few weeks back - the programme was replaying an earlier interview.  I was struck by his comment along the lines of "most managers don't have the knowledge and understanding required to deal with complexity ... they tend to look for simple solutions to problems."  I think he is right.  Innovation is hard work, especially if your role in a business is to execute & monitor a strategy.  So effecting a simple solution that appears to deliver results will often suffice.  That is until the results dry up and/or the strategy does not match up to the operating complexity of the real world.

So, what's the answer ?

Ackoff advocates a concept of synthetic thinking - which is thinking about & designing systems that derive behaviour of the parts from the functions required of the whole.   At its most basic, that means thinking about your customer's journey through your entire business & aiming for a joined-up approach.  This, I believe, is inextricably linked to my previous thoughts on employee engagement.  In a knowledge-based econony, your most valuable capital is tied up in employee's heads.  They probably have the answers to the intricate details of various stages of the customer journey - joining up these answers will shed light on the complex systems within a business. 

That should allow you to drive innovation from within, delivering a clearer view of the world in which your business operates & how best to focus your efforts.

My last post focused on employee engagement & how that intersects with a CRM strategy.  In particular, I made a strong point that every CRM strategy needs to be company-wide & have employees at its' heart. 

A few readers commented on that post and the previous, musing on how social media, through a CRM strategy, engages employees.  And, more to the point, why it matters.

It used to be that outlets such as the media - by nature of their reach & audience numbers - held real influencing power.  Now, with personal narratives everywhere, the power of influence is becoming democratised.  Everybody can be influential through tools like  blogs, Twitter, etc, and can influence a company's reputation in the marketplace. 

The world has fundamentally changed -  influence, it could be argued, is becoming the future of media itself. But, as Seth Godin recently noted in his blog, the reality is "you can't control what people are saying about you. What you can do is organize that speech. You can organize it by highlighting the good stuff and rationally responding to the not-so-good stuff"

So, organising that speech means enabling your company's ecosystem (staff, partners, customers, etc.) to communicate in an authentic and transparent manner.  Having a set of CRM-based tools to help them manage communication is essential, as is a corporate strategy that understands and works in the ecosystem. 

Organising the speech becomes the management of reputation (the credibility that you have) and is a natural extension of brand management.   However, rather than the old view of "official corporate communications", it's people that are being influential.  This change is is shifting what we see & how we view the world.  It's that important.

And, once again, you need a CRM strategy that "gets" social media & the power of influence.

-= David

Last time, I wrote about how & where social media interacts with a business' CRM strategy.

For this post, I wanted to move into an area of great personal interest to me - executing a CRM strategy so that everybody really "gets it".  In particular, I wanted to focus on employee engagement & how that intersects with a CRM strategy.

By way of background ...

The world in which we transact is increasingly frictionless - sourcing & buying from alternative suppliers is as easy as a few mouse-clicks.  So, in order to stay competitive and/or differentiate themselves, many companies choose to compete with knowledge-based skills - e.g. delivering service excellence to acquire & retain customers.

Harnessing knowledge-based skills means having engaged employees - employees that are willing to invest the discretionary effort to see that their organisation succeeds.   Indeed, a Journal of Applied Psychology article concluded that, “… employee satisfaction and engagement are related to meaningful business outcomes at a magnitude that is important to many organisations.”

So, what does engagement mean to employees ?  

Well, it's an evolving area of study, with many views & approaches.  However, there are a number of outcomes that speak to me as being connected with CRM. 
Let's consider a few:

1. Employees need to clearly understand the VISION of a company - what are the goals & how are they measured ?  
2. Employees need to feel their INPUT matters to that vision - that, where appropriate, they can help establish processes to facilitate goal achievement. 
3. Employees value & wish to exercise some element of CONTROL over the flow & pace of their jobs. 
4. And, within that control employees want to ensure they collaborate, working with trust & co- operation right across the company.

So, what does engagement mean in the context of a CRM strategy ?  

In my many years of watching CRM initiatives, the best implementations are where three key points are addressed. 

• The requirements of the CRM implementation are directly & visibly linked to a company's goals.  Be it one department or an entire organisation, the outcomes that define "CRM system success" are obviously connected to a set of company KPIs, and visible to all.
• Intended CRM users have direct input to the way the CRM system is to work.  That means involvement from the initial accquisition (scoping requirements, being involved in demonstrations, etc), through to the implementation cycle & then on to "champion" roles within the organisation. 
• Finally, where employees are willing to invest the discretionary effort, they need access to the right resources to do their job. 

As most business processes typically cross more than one department, enabling "good CRM" in just one department, scuppers any discretionary effort by one team. With that, collaboration falters & a typical customer journey is interrupted, with subsequent damage to brand value a distinct possibility.

To me, it's obvious.  Any CRM strategy needs to be company-wide & have employees at its' heart. 
Anything less just dilutes strategic effort & spend.

-= David

Last week, I was out with Larry Ritter, SVP & GM of CRM Applications, talking to the UK press about the "Social Media meets CRM" story. 

During the day, we spoke to Marketing Direct, Joel Harrison of B2B Magazine and Stuart Lauchlan of mycustomer.com. Conversations ranged from "how these social media outlets make money" to "what do they offer the business community" and "what Sage was offering to leverage Social Media in their products". Larry had a nice story on "Information Finding You" which I'd encourage you to read on DestinationCRM.

Following that tour, I thought it useful to write a short piece, just to set the scene for some deeper conversations on this site & to enhance some material we are doing with the imminent release of ACT!2010.

First there were personal websites. Then blogging sites like Wordpress & Blogger became the publishing tool of choice. Now, with hundreds of sites like Facebook, YouTube (etc) offering "online homes" to millions of people, personal narratives are everywhere. These "Social media" outlets offer content created by people, for people. It gives everyone an opportunity to share their thoughts, experiences & profiles using free tools such as blogs, podcasts and video sharing.

So, what's this got to do with the customer-relationship software & a business' customer strategy ?

Let's start with the customer-relationship software first. Customer-relationship software is likely to be used to help lead prospecting activities. Capturing names & supporting information (product needs, preferences,etc.) is at the very heart of CRM software. However, access to more of a prospect's interests & background from the information available on through Social Media outlets can be extremely useful.

Information such as:

• What topics are important to them?
• Who else are they talking to?
• What are they saying about experiences (products & more) that matter to them ?

You can add this information into a CRM system, enriching prospect records as part of building customer relations. That's converting time spent on social media sites into chances for more revenue. And, with a little more effort, information from these sites can be fed directly into a CRM system - be that ACT!, Sage CRM or SalesLogix. Information that can help inform & improve direct marketing activities, ensuring a focussed message is delivered during contacts with prospects & customers.

Relating Social media to a business' customer strategy - listening for & managing the content.

Investment in CRM software is key to customer retention strategy. But without social media interaction, a business' can only "know" about the conversations had directly. What happens when those customers talk about a business in other forums - blogs, forums, social networking sites, etc ?

Investing time in monitoring these social media outlets provides an opportunity to ‘listen in’ to the conversations being discussed. This means gaining an understanding of customers & benefiting from insights within their communities. Further, with many business' getting more than half of their customers through word of mouth, staying tuned in & monitoring the flow of conversation leads to insights about other prospects & encourages information flow within these networks.

"Listening in" also offers a chance to improve customer relations when things go wrong for a customer. By tuning in to all the relevant conversations, chances of finding unhappy customers quickly and addressing their issues before they do serious damage to a brand are dramatically improved .

An investment in CRM software is only partially realised without a matching customer strategy. Harnessing Social Media is an essential part of a business' customer strategy & key to keeping customers.

Next time - More & more companies choose to deliver knowledge-based services in order to stay competitive and/or differentiate themselves. Knowledge-based services means having engaged employees - employees that are willing to invest the discretionary effort to see that the organisation succeeds. When a business measures key competencies by the "people they have", what does engagement mean to a CRM strategy ?

Many companies are feeling the strain of current economic conditions.  This strain often increases pressure on the "selling part" of a business.  Business owners are looking for innovations from the sales team to "find" the revenue.  The trouble is enthusiasm for new innovations is often low when working in tough times - it's just a push to "find the deals".  Planning for & executing best practices or innovations goes by the wayside.

So, articulating the benefits of a proposition is a key skill.   It's not enough to say "here's a great CRM tool, where can we make it fit ?"   It is all about proving where software can make a difference - in terms that really matter - Increasing Revenue, Avoiding Costs or Improving Service.   Returns that can be shown to be objective, detailed and quantifiable. 

Linking back to some of my thinking in previous "cheese moving" and "remembering your proposition" posts now, more than ever, is the time to be measured.  How do you make sure you think in terms of benefits ?

Understand the current processes in a company.  How long do typical activities take to complete ?   How many steps & people are involved ?  What does that add up to in time (& money) ?   How can they be improved  - looking not just at direct costs but also the risks of lost or incorrect steps along the way.  Now think about CRM tools & how they can improve upon the current situation.  What is that worth to a buyer - in terms that really matter - Increasing Revenue, Avoiding Costs or Improving Service ? 

Shape your conversations to those discussions.  Talk about the returns, the money saved or the value created.  The return that will "keep on giving" each & every day.  Show a tangible return on investment, with real savings that can be measured in months, not years.  Help the company commit to a well defined project that demonstrates tangible improvements to current processes.  And be sure to engage the "selling part" of the business - find a group of salespeople willing to innovate to achieve for themselves and ultimately, their company.

Be prepared to be measured.

-= David

Last week, we ran another of our "Articulating the CRM Proposition" courses.  Delivered to our partners located in the Midlands area of the UK, the course is designed for attendees - new & old when it comes to CRM - to understand how to identify & map a strategic business case for CRM to their prospects.

During one of the breaks, a conversation started on the differences between "operational" versus "analytical" CRM - what these terms meant & why are they important.

Fortunately, I recently came across a fellow CRM practitioner based in Australia.  Francis Buttle, a visiting Adjunct Professor at Macquarie Graduate School of Management in Sydney, works in areas of CRM and Service Organization Management. He's recently released a book that I think is a very clear & comprehensive study of CRM. In particular, he sets out four major perspectives on CRM: strategic, operational, analytical and collaborative. 

I think it's good for all of us to remember how CRM needs can "appear" within organisations and, consequently, the way these needs should be addressed.  Francis' book does a great job at summarising different CRM needs, so I thought I would share some of his top-level ideas.

Strategic CRM
A customer-centric business strategy that aims at winning & keeping profitable customers. Typically, customer information is collected, shared and applied across the  business - delivering "customer-centricity". Sometimes the CRM initiative aims to shape employee behaviours such that they enhance customer satisfaction and retention.

The challenge, as Francis points out, is that customer-centricity is often at odds with other chosen company strategies such as "product excellence" (customers choose products with the best quality, performance or features) or "efficiency excellence" (customers choose lowest price products).   Nevertheless, in today's world, customer-centricity is a key feature of many CRM initiatives.

Operational CRM
Typically focuses on the automation of customer-facing processes such as marketing, selling and customer service. In the case of marketing, it's usually about applying technology to marketing processes, using customer-related data to develop, execute and evaluate targeted communications and offers. In the case of selling, operational CRM is often linked to efforts to improve and standardize the selling process.  These initiatives can help understand & drive standard behaviours around activities such as lead generation & qualification, needs identification, proposal generation, proposal presentation, objection handling & sale closing.

Analytical CRM
This approach focuses on the mining of customer-related data for strategic or tactical purposes. It's all about the capture, storage, extraction & using of customer-related data, with data found in enterprise-wide repositories: sales data (purchase history), financial data (payment history,credit score), marketing data (campaign response information) and service data.   This data, overlaid with third party information (e.g. geodemographic & lifestyle data) allows companies to derive answers to questions such as: Who are our most valuable customers? In what sector do they exist? What else might they buy? (etc.)

Collaborative CRM
This approach applies technology across organizational boundaries with a view to optimising interactions between company, partners and customers.  It's often described as the alignment of normally separate enterprises in a supply chain for the profitable identification, attraction, retention and development of customers.  A simple example would be co-marketing, joint new product development and/or joint market research when large consumer food products manufacturers work together in bringing a new product to market.

So, as we say to attendees on our own course, CRM is not just a software tool.   It's not about just database marketing.  It's not just a sales contact tool. It's not a service management offering.   And, it's certainly not an IT issue.   It's a business strategy.   Understanding your customer's strategic aim is critical in shaping your response & articulating your product proposition.

-= David

http://www.elsevierdirect.com/product.jsp?isbn=9781856175227&dmnum=AUQ5

The April 23rd seminar with Management Today was very interesting - in a number of ways. 

Firstly, it was a fabulous venue for a briefing - One Alfred Place in Bloomsbury, filled with sofas & deep armchairs - was a stunning contemporary setting for our 35 guests.

Secondly, the assembled crowd contributed to a fascinating three hours.

We were there to discuss whether staying close & connected is the key to fighting off the worst of these recessionary times.  Chaired by Management Today's Matthew Gwyner, I was joined on the panel by Caroline Plumb, CEO of Fresh Minds and Stefan Stern, Management Writer (Financial Times & Management Today, among others).  

With the conversation centering around the "new world" of social media, my 10 minute opener argued that new communication platforms such as Twitter, Facebook et al. cannot be ignored.  If you want to manage your reputation & guide advocacy in the public ether, you simply must be using the tools and leveraging these platforms.  Unsurprisingly, my piece concluded that you must have the right CRM tools & strategy in place, so that those people charged with communicating via these platforms have access to relevant customer data - both for understanding & tracking the information.

The open forum discussion that followed talked of external collaborative networks often being smarter than just people within an organisation.  Which really struck a chord with me - I believe CRM practices are essential to deliver good best customer experience.  We all know what's it like when you ring a call centre, go through elaborate identification routines, only to be passed off to another person and have to run through the whole routine again.  It's tedious and seeds the beginnings of a poor customer experience.

Layering in CRM systems (to share data) and principles (e.g. how to perform "soft handovers" ) really make the difference in a customer's experience.  It also empowers people to work together - collaborating internally - despite different departments goals, data sets and KPIs.   Organisations are increasingly competing on knowledge-based differentiators (beyond product features).   So, the wide range of business & technical disciplines that form the human capital inside these organisations are more likely to work together if they appreciate the fundamentals of work delivered.  Having the systems & processes in place makes it easier to empower people to deliver the experience required.

On April 23, I am taking part in a breakfast seminar (in association with Management Today) in West London, where we’ll be debating whether the ‘connectedness’ of the modern business world is a blessing or a curse. 

From my perspective, many communications are still "too broad" and "pushed" to customers, despite the promise of opting in to only relevant material.  Good application of customer experience (and the accompanying technology) should make it easier to be relevant & engaging to customers.

Can new forms of connectedness (email + social networking mediums) prove to be a crucial factor in our recovery?  If so, how do we make sure our customers get the CRM story & implement appropriate solutions ?

-= David

Just a short post now that I am back, after a week away chasing the sun in Cornwall ...

Sage UK marketing have secured a double page editorial in the Spring edition of Director of Finance.  The magazine, which lands on 15,000 FD’s desks this week, speaks of the imperative of investing in a CRM system during a downturn. 

We are all hoping the article both supports the Sage brand & generates good leads for the business. 

In scanning the DoF site, I notice that targeted customer activities is not a new subject - a January article noted that "a joined up approach to one-to-one communications with customers and prospects seems to be key to effective marketing in a slow economy"

Let's hope we can build on that momentum with our Director of Finance (http://www.dofonline.co.uk/) readers

More next week

-= David

The last couple of posts focussed on awareness of why people buy CRM solutions & the value they wish returned from an implementation.

As this blog exists in the realm of the development partner community, I thought it useful to "follow the story" - ensuring that the implementation effort is linked to the business benefits.

By way of reminder, investing in a CRM project is typically about solving business needs.  Ideally, these needs should be addressed through measurable objectives AND exhibit a payback on investment within a reasonable period.  In good selling encounters, a situation is explored (e.g. what the customer does), problems uncovered (e.g. how difficult is it for your business to identify your top 10 customers), a series of implication questions put (e.g. do you know how much it costs your company to lose one of your top 10 customers) and then a series needs payoff questions put (e.g. how would it help your business to keep all your top 10 customers).   This is a classic sales methodology, known as SPIN, which was developed by a gentleman called Neil Rackham in the late 1980's.

It is my experience that in many organisations the selling part of the business is often disconnected from the implementation part.  So, when the software is sold & the time comes to install & build, the implementation team are somewhat in the dark about what to deliver.   Implementation teams who understand the concepts of SPIN selling are better able to move a sale into implementation. Why ?  Sales teams that execute SPIN type methodology will uncover & document measurable business needs.  These documented needs can be handed over to the implementation team, perhaps as part of some sort of "scoping" or "business analysis" phase.  Doing so should ensure the implementation process is more tightly coupled to the sales process.

It’s about ensuring that a process of deriving & demonstrating customer needs is logically linked to implementing that system in practice.

Using this approach will position Sage & its partners as quality providers of CRM consultancy services, strengthening the engagement process as early as possible & increasing sales as a result.

Over the last week several people have asked my thoughts on how CRM propositions need to reflect the changing times.   A couple of threads have been running around in my head, so let's see if I can bring them together.

Firstly - I attended a Gartner CRM Summit in the UK last week.  The message from speakers & attendees was loud & clear.   In the current environment, with customers concerned about redundancy & saving money, a business' proposition needs to be effective in meeting those concerns through a sharpened & relevant offer.   In tough times, customers are looking to get the best value from suppliers.  Yet business have similar challenges - they are looking to get better value from their own activities, reducing costs where possible & seeking new efficiencies.

So, what's the solution ?   A business needs to improve operational effectiveness & bring customer centricity to the forefront.  They can be achieved through Customer Experience Management (CEM) programmes.  With CEOs and finance staff watching every element of spending, any CRM/proposition needs to focus on short programmes of work that are cost effective & nimble - ideally, delivering ROI within 1 quarter.

Secondly - a couple of articles on psychology crossed my path this week, both reflecting on the human tendencies to "move position" based on the most subtle of influences.   Steve Martin, co-author of "Yes! 50 Secrets from the Science of Persuasion" suggests that moving a person from saying "yes" to following through on their committments can be tough.  However, people can be persuaded to move in a new direction simply by asking them to imagine & describe the future assuming they had moved.  Try that approach when building a case for the importance of a CRM / CEM programme in a company - what does their future look like ?

Along a similar line, Richard Thaler & Cass R. Sunstein, authors of the book "Nudge", advocate the concept of gentle suggestions - "nudges" - to help people make better choices, perhaps without even realising they have been influenced.  It's all about gettng a picture painted in people's minds.  In our case, it's all "Talking About Customers" and the experience you want them to have.

The world is going through a period of change.   Boom & bust cycles are a fact of life but this time, some say, it is unprecedented change.  Fundamental assumptions are changing & continue to do so.  Arguably, unlike previous recessionary times, these changes are happening faster & reaching further in an increasingly connected world.

Thinking about these changes, I was reminded of the 1998 book "Who Moved my Cheese ?" by Spencer Johnson.  Told in the style of a parable, it describes change and the reactions by mice & "little people" in their hunt for cheese.  The essence of the story is how to anticipate, react & enjoy the change.

In their attempts to both explain & illustrate the current world situation, much of the media talk about "the cheese being moved" but leave us all unsure as to where the cheese will end up.  Attending both trade shows & a Gartner briefing here in London got me thinking - the enormous value of CRM techniques & solutions in "looking for the cheese".

Gartner suggested this week that the key theme of 2009 is "thrift".  From a business perspective, that means priorities are focused on cutting operating costs & looking for business process improvement wins.  What a perfect opportunity for a CRM solution ! 

Can a CRM initiative help reduce costs & improve service ? Yes it can.  It's the right time to study good PROCESS and SERVICE examples - benchmarking the best (within and outside similar industries) and then improving those inefficiencies inside a typical business.  It's all about the experience of a customer as they "travel" through a business, working to improve the journey & reducing the internal costs.

In similar terms, knowing customers is more important than ever.  Bringing together data into one system & using analytical tools enables better understanding of customers.    Who are they  ?  What do they buy ?  Who has stopped buying & why ?   It's all about knowing where your cheese might be heading.  And, from a customer perspective, being more intelligent with offers means offering better value, delivering more relevant offers & offering smarter service.   Sharpening the business value proposition to keep customers for longer.

Reducing costs & improve effectiveness in operations - it's certainly been a key theme of the "Articulating the CRM Proposition" training course I deliver for UK partners.  And in times we live in today, it's more relevant than ever before.

Next time  - why sharpening a proposition involves more than just the CRM product.  

The UK's leading conference for marketers & related disciplines kicks off this week in London. Technology for Marketing, or TFM as it is colloquially known, is at Earls Court Exhibition centre this week. (www.t-f-m.co.uk)) In 2008, over 900 visitors attended the presentations in the CRM & Customer Experience Theatre. I know my session was quite literally standing room only, so with both Duncan Wood & myself speaking this year, we are hoping for similar success. I know we have had a good return on investment over the years we have been here - our partners (who take "pods" on our stand space) concur. I am looking forward to hearing what customers & exhibitors are talking about this year at TFM

Here in the UK, the global downturn has brought the challenges of business failure into the everyday media.  Nowhere has this downturn been more apparent than among small and mid-sized businesses (SMBs) - Sage UK's traditional heartland.   Smaller businesses have seen a slowing customer demand & evaporating lines of credit.   Their reaction ?  For many, it means moving to a defensive mode; cutting IT projects & waiting until things improve. 

However, for those businesses with foresight & the ability to invest, now is the time to safeguard revenues & profitability, looking particularly within their customer base.  Focussing on "fundamentals" of CRM allows businesses to drive efficiencies - be that better internal processes or making more of their data ("what they know"), helping them navigate the challenging market conditions.

These turbulent times could actually present new opportunities for companies that invest wisely in information technologies.  And, as a recent whitepaper from Sage Technologies suggests "the ‘cost of doing nothing’ in respect of addressing your internal activities, is significant".

Here in the UK, we continue to work with customers & partners, helping them understand why the implementation of a CRM system is so much more than just "contact management" and "sales force" tools.  In particular, for the CRM component that comes with our mid market Sage200 suite, our big push is education about what CRM can add to the backoffice (accounts) story.  Through material in UK publications like Director of Finance and Management Today, we are speaking to decision makers about the power of an integrated solution in "knowing your customer"

I urge you, as a member of Sage CRM community, to always lead the conversation with prospects and ask the question - "how can CRM help them be a better business ?"

-= David

Sage CRM Evangelist
Sage UK