The 6 Things Your CRM Strategy Must Do


  • CRM and CRM software – not the same thing.
  • Customer Relationship Management (CRM) is a business strategy aimed and growing mutually beneficial and profitable customer relationships at scale.
  • CRM software enables that strategy. It's the technology that brings process automation to the customer life cycle activities, such as targeting, acquiring, growing and retaining customers.
  • Without strategy, the technology is aimless. Without strategy, most companies incur random acts of customer engagement and activities that either fail to achieve the most important business outcomes, or at best take a trial and error approach, and a much longer route.
  • Without technology, the strategy lacks management, automation, information reporting and scale.
Johnny Grow Revenue Growth Consulting

The Inseparable Link Between CRM Strategy and CRM Software

The top cited reason for CRM failure or disappointing results is a poor or missing CRM strategy. A prior post shared a 3 step CRM strategy framework. This post will drill down to the strategy's most essential requirements.

Reaching a new destination is best done with a map. The strategy is a lot like a map. You need to understand where you are starting from, where you want to go, and invest in some planning to plot the shortest route to get there.

Shortchange your planning, and your strategy adopts a trial and error approach, which is certain to incur some wrong turns and detours that result in questionable leadership, a more chaotic execution and the waste of valuable time and resources.

I find strategy is about 5 percent of the journey to CRM success. That said, it is a precursor to everything that comes after. Great execution doesn't get you anywhere if your strategy is wrong. But a solid strategy leaves the remaining 95% of the journey to be tackled with clarity of focus, reduced guesswork and measurable execution.

Depending on your company's customer strategy – whether you have one or not, or if it's shallow or complete – the same technology investment will yield wildly different payback.

To ensure success and maximize your payback, your CRM strategy should do six things.

CRM Strategy Design

Align with your corporate strategy

CRM becomes strategic when it directly supports your company's top priorities. Most company strategies include things like achieving double digit revenue growth, realizing a customer-centric culture, delivering unique customer experiences and the like. If your technology is not designed to directly aid these objectives, then it's not strategic, and probably relegated to delivering departmental efficiencies or incremental cost savings.

A strategy is not an implementation plan. It's the pursuit of prioritized business outcomes that create value and differentiation. It should be thought of as engineering user, customer and business outcomes. These outcomes often include methods to acquire, grow and retain more customers. Business outcomes without supporting methods are little more than wish lists. That's why objectives such as increasing customer loyalty, decreasing customer churn or growing customer revenue must include the next level of executional detail.

Most businesses don't have a top priority of getting an application to run correctly. So if your implementation goal is focused on little more than getting the software operational, or your objectives are expressed as software features and functions, it's probably more of an IT project than anything that will increase revenue from customers, decrease the costs to acquire, serve and retain them, or otherwise grow the company. When CRM software fails to align with the company's top priorities, it struggles to gain executive sponsorship and user adoption, and is rarely sustainable.


Align with your customers top priorities

Your strategy identifies your target audiences and prioritized business and customer outcomes.

Most executive teams got the memo they must become customer-centric to survive and thrive. Customer experience (CX) leaders grow revenue faster than CX laggards, drive higher brand preference, and can charge more for their products and services (source: Forrester, Improving Customer Experience Through Business Discipline Drives Growth.) Unfortunately, while 80% of companies believe they deliver 'superior experiences,' research from Bain shows only 8% of customers agree (source: Bain & Company, Customer-Led Growth diagnostic questionnaire.)

While 80% of companies believe they deliver superior experiences, research shows only 8% of customers agree. Source: Bain & Company

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Saying your company is customer-centric does not make it so. Virtually every company says its customer centric, but most are self-centric. Self-centric companies define Customer Relationship Management from an inside-out perspective, that is solely from the company's perspective, and thereby craft a strategy or objectives designed to serve only the company's interests. Customer-centric companies define CRM with an outside-in perspective, which means defining what successful customer relationships look like from the customers' perspective, and then craft their strategy designed to achieve those objectives.

Customer top priorities change in each phase of the purchase cycle and over time. Methods to understand customer top priorities include gathering customer intelligence, performing customer segmentation, harvesting insights for customer personas, capturing voice of the customer (VoC), measuring satisfaction (NPS or CSAT) and calculating customer health scores.

Customers are not homogenous, so their top priorities and preferences must be recorded as part of the 360° view and applied to deliver relevant, personalized and contextual communications, offers and engagement. If your CRM isn't designed to deliver on your customers' priorities and preferences, then it's not going to contribute to improved customer relationships or value derived from customers.

Growing mutually rewarding customer relationships creates a connection that can withstand disruptive technologies, competitor encroachment and the erosion of other competitive advantages.


Optimize your business processes

Too often, CRM systems are implemented as systems of oppression, using software as a surveillance tool to micromanage the sales or customer support staff. While staff measurement for continuous improvement is valid, if this is your first goal for a customer relationship management system then it is non-strategic, likely to incur user adoption challenges and deliver scarcely little ROI.

A more strategic approach is to first define your customer facing processes using journey maps. Then follow by documenting your As-Is processes. Expert designers do not begin searching for improvements until they have thoroughly defined the real problems. As Einstein once said, "If I had 20 days to solve a problem, I would take 19 days to define it."

Business Process Design

Once the real problems are diagnosed and prioritized it's time to design your To-Be processes and show how to remove friction from processes, eliminate non-value-added steps or activities, and deliver improved user, customer and business outcomes. From my experience of having done this for three decades, I've found the Component Business Model (CBM) works best for process design in large companies and Agile Value Stream Mapping works best in mid-size companies.

To-Be processes should also consider adoption of CRM best practices such as sales processes which increase sales win rates, marketing methods which generate the highest conversions and service techniques which result in the lowest cost and highest satisfaction.


Improve your products or services

Many company executives think they know what their customers want. I find that most are partially right. Their inaccuracy lies in subconsciously inflicting their personal bias, believing customers are all the same, thinking customer wants are static or that all customer wants translate into willingness to pay. Small inaccuracies in customer preferences for your products and services result in large losses in sales and customer tenure.

CRM technologies can engage customers to create better products and services. Customers will tell you what they want, and how to improve your products or services, if you ask them. You also need to record the feedback by customer segment and prioritize or align with product roadmaps.

Brands that collaborate with customers during product design, manufacturing, distribution, service and returns create more valuable products and services. We're in the age of the social customer. Customers want to provide input to their brands. That input is valuable in steering the business to produce products and services that are enthusiastically embraced by customers and producing customers that make repeat purchases with their suppliers.

CRM apps can apply social engagement tools for customer input, crowd sourcing tools and portals for customer collaboration, self-service processes for customer empowerment, virtual agents or bots for 24x7 communication and automated surveys for any or every type of customer engagement.

Failing to verify exactly what different customer segments want at different points in their supplier relationships creates a cascading effect that degrades product R&D, marketing offers, sales effectiveness, services delivery and customer experience objectives. The negative financial impact incurred in any one of these areas is a significant loss than generally goes undetected by most business leaders. If your CRM program is not telling you how to build better products or services, you are missing a big opportunity.


Help staff make better decisions

Customer intelligence, including customer segments, personas, insights and journeys, can deliver real-time prescriptive recommendations and information reporting to improve decision making and affect outcomes.

The application's Business Intelligence (BI) tools should be designed to deliver the right information to the right decision maker at the right time. I typically create prioritized information-based use cases to determine the biggest upsides, and so I can start small and evolve.

At a minimum, BI tools should deliver actionable information to staff (i.e., role-based dashboards with prioritized actions), real-time deviation reporting (i.e., notification alerts), performance reporting (with benchmarks and trends), and business process reporting that drives continuous process improvement. With maturity and data accumulation, BI tools will also permit predictive analytics.


Transform data into information

Research shows that companies which implement CRM software in a vacuum – that is without an accompanying strategy – use less than 10% of their data. Data is an asset if used and an unproductive expense if not. Every person, process and decision in your company is improved with more relevant data.

If the data is correctly captured, the technology can apply data to deliver differentiated customer experiences, score leads or sale opportunities, identify actions that improve sales win rates, identify content that improves customer service responses, measure customer health, or flag customers in decline or at risk of churn. The system can answer simple but often unanswered questions such as what 20% of customers generate 75% of my margins and profits? Or what 20% of customers deliver 80% of the referrals that result in new sales? Or what 5-10% of customers contribute negative profits?

But to answer these questions, we must be able to capture and convert data into information, and deliver that information to a person for action. The applications can do this, but it's not out-of-the-box functionality.

Customer Experience Data Transformation

The most successful companies are defined by their ability to collect and curate the right data, use data to create differentiating products, services and customer experiences, and apply analytics to make insights actionable at every customer engagement or decision point.

With enough data the company can create models for what-if analysis and predictive analytics. Converting data to actionable information is a complex undertaking for sure, which is why those who succeed will achieve competitive advantage over those who don't.

The Point is This

You can implement a CRM application without an accompanying strategy, but three things are likely to happen.

First, the implementation effort will incur a more random pursuit of business objectives as compared to a prioritized pursuit based on benefit or payback.

Second, you are very likely to incur a trial-and-error approach that increases deployment time, decreases user confidence and delays or forgoes the most meaningful company and customer benefits.

And third, your project results will revert from strategic goals such as increased customer acquisitions, customer share and customer retention to tactical goals such as getting data into a new system, measuring staff activities or producing a pipeline report – possibly valid goals – but goals that do little to nothing to improve customer relationships or the company's business priorities. And if your CRM software does not improve your customer relationships, you miss the point of Customer Relationship Management.