What is CRM? The term Customer Relationship Management means many things to many people within retail marketing. Some think of it as a group of complex technology systems that will magically aggregate all their customer interactions into digestible, actionable, and straightforward insights.While others view CRM as an “owned” channel strategy–essentially, boiling the term down to Email and SMS customer targeting strategies. Regardless of how it’s defined the one universal truth is that the “C” in CRM is the essential component.

To fully realize the benefit of any CRM application the foundation must be grounded in a desire to define and understand the customer.

Why is customer understanding critical?

Customer knowledge is the roadmap that allows CRM strategists to accomplish their desired outcomes–identify their best customers, retain them with optimal investment, make them better customers over time, acquire more customers that look and behave in the same way, and identify and implement the experiences that truly matter to them—essentially achieving the perfect balance between resource output and maximized results.

To achieve this “CRM Nirvana,” organizations must become obsessed with implementing a customer knowledge framework.  Implementing this structure properly necessitates that organizations understand data is complicated and therefore a Crawl, Walk, Run approach is requisite.

Crawl: Conduct a Customer Data Assessment

With all the CRM miracle “tech” solutions currently being marketed it’s no wonder that retail customer strategy teams are lost in the quagmire and desperately searching for a practical approach to organizing large sums of customer data into usable and digestible datasetsthat will allow for near-term wins while providing longer term direction.

First, and here is where the controversy begins, sourcing and implementing a CRM technology solution is not the place to start. The optimal technology solution like all aspects of CRM strategy must be based on a clear understanding of what needs to be accomplished.What are the defined customer goals and objectives?

To achieve this “CRM Nirvana,” organizations must become obsessed with implementing a customer knowledge framework.  Implementing this structure properly necessitates that organizations understand data is complicated and therefore a Crawl, Walk, Run approach is requisite”

To achieve this level of preciseness around desired outcomes requires a grasp of what you currently have in terms of customer data and what shape it’s in. Therefore, a data assessment is the place to start.

1. Define your customer data sources

    a. What type of data is available?

    b. Where does the data exist? Identify source systems and who owns / manages the data

    c. Are there access roadblocks?

2. Pull data into a centralized database / warehouse

3. Perform data hygiene protocols

4. Evaluate data efficacy

   a. Are there missing data elements?

   b. Are there challenges that hinder how the data can be applied? 

Walk: Develop a CRM Framework

Once the data assessment has been concluded next establish your CRM framework. This framework dictates ongoing data management, considers how best to integrate, and structure the data and outlines a needs-based approach to new tools and technology.  It is within this framework that the CRM strategy team should begin to define the data objectives and be moving towards achieving a baseline customer understanding analysis.

1. Set up and put data governance guardrails in place.  Governance dictates who had access and the ability to change data.  It establishes a standardized understanding of the data (think data dictionary) and it records the data origin

2. Define data objectives – What needs to be measured?  What questions need to be answered?

3. Develop a strategy to fill any critical data gaps

Run: Optimize Toward a Comprehensive Data Strategy

The goal of the run phase is to implement a comprehensive data strategy leading to a fully integrated customer view.

Indicators that an organization is ready to “run” are the following:

1. CRM strategy teams have a deep understanding of the existing data

2. Strategists are sharing out both Descriptive (What Happened?) and Diagnostic (Why Did it Happen?) insights

3. Target profiles and segments have been determined and socialized

The focus is now shifting towards putting in place all the identified solutions needed to move the organization into an advanced state of data maturity. Achieving this level of data maturity benefits the enterprise through Predictive Analytics and Modeling (What Will Happen? /What is The Best That Could Happen?) and supporting proactive decision-making.  

The key requirements needed for this phase are:

1. Fully integrated data and technology systems

2. Enterprise-wide adoption of a “customer first” approach for the development of business strategies

To influence an organization to this level of investment and commitment, CRM strategy leaders must demonstrate what customer data means, why the organization should care and how the organization benefits. Analyses, data modeling, and performance metrics should be shared across the enterprise, confirming the business gains realized through applied customer data. CRM teams partner with Digital Marketing to illustrate how first-party data has become the new gold standard for optimizing media investments. Customer analytics and performance metrics support integrated go-to-market efforts. Merchant teams are provided with customer-level product learnings that influence category investments, and real estate partners learn how to use profile performance data and market segmentation to identify optimal store locations.

Working across the enterprise through a phased approach, customer strategists must continually demonstrate how focusing on the ‘C’ in CRM is the foundation for driving lasting business success.