Jacqueline Jones, Guest Writer

The development of a customer relationship management (CRM) strategy begins at the senior executive level.

Today, in addition to examining a company's financials to evaluate the viability of companies, Wall Street analysts now routinely look at company's customer equity flow statements.

"Many executives are under the misconception that CRM is principally an IT implementation effort, which explains the vast number of failed implementations," says David Andrade, chief executive of POWERi Technologies, a leading interactive marketing and consultation firm in South Florida.

"If the technology is applied to a faulty business strategy, all that is going to happen is that the company is going to become more efficient at doing the wrong things."

Andrade, a featured speaker at the upcoming CRM seminar on May 11, in Kingston, adds that five years ago, a study conducted by the META group found that 70-75 per cent of all CRM initiatives failed. The results have improved over the years, he says - CRMGuru now reports that 67 per cent of CRM implementations now result in a successful ROI.

Effective delivery

Businesses have shifted to developing strategies that focus on how to effectively deliver products and services across all the customer touch points.

Due to the focus on its growing importance to the business performance, we now see a trend where the CRM has evolved into customer experience management (CEM).

The key for successful implementation of the CRM project lies both in the strategy formulation and execution of the project. This requires unifying and managing each stage of a complex sales process.

Every CEO needs to be able to answer the following questions:

How do we identify which customers and prospects bring us the greatest profit?

How do we build our brand at every customer interaction?

How do we optimally allocate dollars among marketing, sales and operations activities? How do we develop deeper customer relationships than the competition?

Is our customer segmentation robust? Actionable?

How much should we invest to reach our highest value customers?

How can we leverage our customer touch points to provide more value? Increase our customer knowledge?

Which marketing partners and channels are most effective and efficient in building my brand?

"It is no surprise that companies that successfully implement a CRM system are able to become - and enjoy the benefits of being - truly customer-focused organisations," says Andrade.

"Those companies that are able to effectively implement CRM realise results such as increased margins, lower selling costs, increased hit rates (lead-to-order ratio), significantly reduced time preparing and delivering management reports, and happier customers."

Having developed award-winning campaigns for such global brands as Marriott International and Regent, Andrade suggests that the first step of implementing a new CRM system is to determine a strategy.

The business and the implementation strategy should be developed in a manner where ROI goals are carefully crafted.

The intent would be to determine and document the process for rolling out the solution to the user group.

"Understanding the overall project timeline; determining a rollout strategy; and defining the strengths and weaknesses of the company and the individual users all need to be answered prior to initiating a CRM implementation," says Andrade.

He insists that those undertaking this endeavour should resist the temptation to short-circuit his recommended approach, which, he says, represents the minimum considerations necessary for success.

Key component

One of the key components of the strategy is to begin collecting, tracking and analysing customer information.

In the Harvard Business Review article 'Getting Inside the Lives of Your Customers' author Patricia Seybold emphasises the power of creating customer scenarios in order to flesh out opportunities for the development of new and enhanced products and services.

Tesco, a U.K.-based supermarket chain with annual revenues of ?19 billion, launched Tesco Direct - its online sales channel - in late 1996 and, today, it is the world's largest and most profitable internet grocer.

Much of its success can be linked to insights gained by walking through the typical grocery shopper's customer scenario.

Seybold adds further that "Thinking in terms of customer scenarios has always been useful, but the arrival of the Internet makes the technique more powerful than ever."

In industries critical to Jamaica, such as tourism, the Internet is offering new possibilities to track and manipulate information into marketing and sales strategies.

According to Jupiter Research, online travel revenues were US$86 billion in 2006.

In 2007, first-time transactions on the Internet will account for over 54 per cent of all U.S. travel.

Already, 67 per cent of online consumers use the Internet to research and receive travel information; 58 per cent of U.S. Internet users plan vacations online; 82 per cent or 64.8 million online travellers book online.

As the number of successful implementations has increased and the demand for CRM applications continues to grow, the CRM market today offers customers a plethora of options.

Today's CRM solutions cover the gamut from web-based hosted solutions to the more complex tailored solutions that are fully integrated into a company's enterprise resource planning (ERP) application.

The key however, is to build a technical solution that fully supports a well crafted business strategy that is focused on the customer.