PRINCIPLES OF CRM:

CRM is much desired and enjoyable trip to arrive at a desired destination for the businesses. Though there is no magic formula for effective CRM, but there are certain guiding principles for CRM to function effectively. The following are the principles of CRM.

1. Start with a Strategic Customer Focus:

The Companies identify who they are and what the vision is and try to consider from strategic customer perspective. They try to consider and define the following three distinct criteria:

• If they generate revenue for the organization
• If they make the decision to acquire a particular product/service and
• If they are the “beneficiaries” of that product /service.

The criteria of buying is compared to the micro and macro environments  and evaluated to choose a fine tune  strategy.

2. Match Strategic Customers to Organizational competence:

Sustainable competitive advantage is achieved when organizational competencies are matched to customer profile .The organizations have the choice of three broad strategies:

• Product leadership
• Operational Excellence
• Customer Intimacy

In today’s consumption led economy, customer expertise is one of the best bets for permanent organizational advantage.

3. Adopt a set of CRM Strategy Drivers:

The customer strategic drivers have to be set depending on the business objectives. The following combination of drivers is set.

• Strategic Customer Acquisition(“get”)
• Customer Loyalty development (“keep”)
• Business Extension with existing customers (“Grow”)
• Value creation through customer experience management
• Diversification of new products and services to new customers
• Provision of tailored and customized  or total solutions
• Revenue or Profit, Market share or customer share.
• Mass Marketing, One to One Marketing or Direct Marketing etc
• The direction, focus and positioning of the strategies will affect
• Organizational policies and practices
• Business processes and implementation
• People and performance measurements
• Customer preferences and so on.

4. “Tangibilize” Vision and Strategies:

Vision is a broad statement of purpose and direction. Strategies are made up of specific, short to mid term goals. Very often, vision becomes blurred or distorted as they are passed down because misunderstanding and disagreements can occur regarding goals, roles and procedures. To prevent the vision from being a “NATO” (No Action Talk Only), it must be consciously, explicitly and systematically communicated to key shareholders, business partners, channels, customer and team members laterally and down the line. The organization may make mission in any functional areas (Marketing, Finance, Human Resources, Information Technology) of the management .The vision is translated into actionable tasks, people are able to relate to their roles and responsibilities identify their duties and  contribute for organization’s CRM vision effectively

5. Re-organize Metrics:

The following CRM metrics are set-

• Employee participation in CRM and usage
• Strategic Customer Acquisition
• Customer consolidation, retention and defection rates
• Brand impact
• Customer satisfaction ratings and loyalty ratings
• Customer knowledge
• Customer Entanglement
• Learning Relationships

These metrics are linked to business metrics such as revenue cost efficiency, Cross sell/Up sell rate, Market Share, Mind Share Customer share and profitability. They help to assemble the resources required and prepare an achievable CRM Roadmap.

Thus, the following CRM strategies and solutions have to be borne in mind for overall

• CRM success
• CRM is not software purchase, it is a strategy
• CRM must fit the way you work-Today and Tomorrow                                                               
• Business benefits and return on investment in CRM should be properly defined and measured
• Total cost of Ownership should determine carefully.
• Right Partner should be selected for successful CRM solutions.