8.5. Creating a Strategic Proposal
At the end of the findings assessment, you will have summarized and analyzed everything you have learned through your interviews, surveys, and research. You will have a document summarizing what you learned from each of the four data collection tools. These findings will be used to develop your actual strategic proposal, which includes your recommendations of what should be done and a plan for how to get there.
8.5.1. Strategic Recommendations
The set of strategic recommendations describe where you propose that your company should go. Recommendations are the “what” of your strategy and will cover all of the following:
Scope (information, process, technology and people)
Organization and governance (ownership, standards, customer experience maps)
Common Concepts (definitions, framework)
We will look at each of these recommendations in more detail, but remember that at the strategic planning level, we are still looking down from the 100,000-foot level. The strategic recommendations will be very broad. We will spend time determining the specifics as we work on each individual project.
Scope
Scope sets the boundaries for your efforts. It outlines the information, processes, technology and people that will be included in your CRM program. Of course, there will be impact across the entire company, but the scope (focus, investment) is limited to those people, processes, and so on that directly interact with the customer. At the strategic level, we don't have enough detail to actually build a system, but we can draw a high-level picture of what will be covered by our CRM program. As each project is launched, we will produce a detailed list of actual data elements that we need in each to resolve the current problem or opportunity.
XYZ's strategic results for setting scope are covered in detail when we look at each of the four components in depth in Chapters 11 through 14.
Information at the strategy level is a high-level outline of the stuff that is important for our company to know about. This “stuff” includes:
People—customers, employees
Places—countries, cities
Things—products, equipment, inventory
Ideas/concepts—targets, plans
Process at the strategic level will usually be a list of those marketing, sales, service, and support processes with which a customer interacts directly: order management, customer support, and direct marketing, for example. CRM does not cover R&D or product quality, although these clearly do have a strong influence on the customer experience.
Technology includes all the systems that currently or are planned to support CRM processes and deliver elements of the customer experience.
People include those who work in sales, marketing, customer services, or product support and who are involved in the CRM processes and/or those who interact directly with customers.
The detailed scope for each of these components will be established for each project as the project definition phase is launched.
Organization and Governance
Organization and governance is a critical element of the strategic recommendations. Because CRM impacts multiple functions, you cannot be successful unless you have widespread understanding of and support for your governance plan. Whether it is a single individual or a steering committee, they must have the POWER to make and enforce decisions that impact the customer. Too many times, Chief Customer Officers (CCO) or Steering Committees are identified but are given no authority to enforce their decisions. This kind of figurehead position doing lip service to CRM principles will never lead to successful implementation of a CRM program. The authority given to the individual or group must be real, and it must be accompanied by the responsibility for delivering success.
Organization for CRM can, as I said, come from an individual, a group, or a combination. Because there is seldom a single individual with responsibility for all the CRM functions, most organizations today choose the committee approach. But there is a real danger to the program if the steering council members are not placed high enough in the organization and don't have enough clout to make change happen.
Another danger is that the CCO or the council members are too high in the organization and don't understand enough of what CRM is and what's needed to make realistic decisions and monitor results. Be wary of the emperor with no clothes! As discussed in Chapter 7, this is the best structure for CRM leadership:
A senior executive sponsor with visibility who acts as program champion
A Chief Customer Officer or CRM Council made up of senior functional managers who have authority and responsibility for the program and are highly involved and knowledgeable
A program team that knows the day-to-day details and can raise cross-functional issues to the steering council or CCO
Project teams that do the actual work (Project teams include both IT staff and business people. Their relative project involvement shifts from phase to phase of the CRM cycle.)
The size and complexity of this structure varies dramatically by the size of the company and by the CRM program. Just be sure that you have all three functions covered (sponsor, leadership, working team).
Governance includes all the rules, responsibilities, metrics, and so on that ensure the ongoing success of your CRM program:
Business principles are the bylaws of your CRM program. For each project, you will define specific business rules and company standards that support each principle. At the time you set your strategy, you will have established only high-level principles such those identified by XYZ:
We will know who our customers are.
We will differentiate our customers and treat our best customers best.
We will deliver consistent treatment across all CRM functions.
Responsibility for delivering customer experience needs to be recognized and widely communicated (up-front communication of who is responsible).
Measurements need to be established. At the strategic level, this might be reflected as an increase of overall customer loyalty of a certain percentage.
For each project, you will define specific business rules and company standards that support each strategic principle. Individuals throughout the organization must have the appropriate guidance and training. Specific metrics will be established.
Common Concepts
Common concepts are how we develop a common understanding of our current state and future direction. These common concepts provide us with a common vision and language for understanding where we're going, where we are, how we plan to get from here to there, and a consistent way to understand our progress.
Definitions are a critical element of your CRM program because they will make up a common language to describe CRM that everyone in your company understands. We discussed the importance of a common language in Chapter 2 when we created the definition of CRM that we have used throughout this book. Remember, if you don't all agree on what CRM is, you can never be sure that your approach is understood and supported. At the strategy level, you may reach agreement on only a few definitions, such as those shown in Table 8-9.
| Definition | Purpose |
|---|---|
| CRM | You must define the basis of a common understanding and common expectations for what your company means by CRM if you want your project to succeed. |
| Customer (prospect/suspect?) | Everyone knows what is included in the term “customer.” It's the C in CRM. |
| Customer segments | You must identify the important groups of customers (a single person, buyers of certain products, a group of customers with similar characteristics, etc.) that your company wants to treat independent of one another. |
| Customer life cycle | You must determine whether your customer life cycle represents your internal perspective (such as market, sell, support) or your customer's perspective (e.g., consider, purchase, etc.) |
| Touch points | You must define what a touch point is and which ones are important to you. |
As one example, XYZ decided on a very simple new framework for customer segmentation that it believed was a much better match for how they wanted to manage relationships.
Customer segments had traditionally been defined based on industry. One of the issues raised during strategic planning was that they don't actually do anything differently based on industry segments. There had been an earlier plan to customize solutions as well as sales and marketing campaigns to target a vertical industry. But that plan was never put into practice. As a result of the strategic plan, they have three global customer segments. XYZ assigns its customers to global segments based on the criteria in Table 8-10.
Using these new segments, XYZ was able to define its goal customer experience maps by customer segment. Figure 8-9 shows XYZ's customer experience map for its named customers. It shows both the touch points that will be used for named accounts and the experience standards that will be monitored to ensure that the appropriate level of experience is delivered.
Figure 8-9. The named accounts customer experience map
Using the information from the customer and competitive survey, as well as our own internal knowledge, we can define what types of experiences we want to deliver to different customer segments as seen in Figure 8-9. Reviewing and approving the experience standards is one of the responsibilities of the Steering Committee.
We create these and other definitions so we have a common way of describing and understanding what is being worked on. As you begin project work, you will develop common definitions of more detailed items such as Revenue, Cost of Sales, etc. You will build a dictionary of CRM terms that mean the same thing across your entire organization. This means that, eventually, when anyone looks at any report, they really understand what each detail means.
Does this mean that all your business people must learn about data modeling? No, it doesn't mean that. But it does mean that the business can't completely delegate decisions to IT; they have to retain ownership of the key data and what they mean because the business is where the knowledge is. Information Technology can help you define the framework and maintain the dictionary, and, of course, they must build any new databases to match.
The CRM framework is the image that brings all these elements together. It shows the relationship between the customer and the life cycle at the center, with touch points and CRM organizations organized around them. It is built to identify which of all these CRM program alternatives are relevant to your business and your customers. Figure 8-10 shows XYZ Corporation's CRM framework.
Figure 8-10. XYZ Corporation's CRM framework
Your internal interviews will reveal which concepts have little common understanding across your company. These will be the most important concepts needing clear and well-communicated clarification.
8.5.2. The Plan
The three planning tools (priorities, roadmap, and risk assessment) are built on the results collected during the assessments. Your CRM strategic plan will be built around a project roadmap, governed by your business priorities, and supplemented by a risk reduction strategy. Your plan will include these three elements: project priorities, project roadmap, and project risk plan.
Project Priorities
The Gap and Priorities diagram we saw in Figure 8-7 is the first piece of input we will use to develop our priorities. We want to start with an issue or opportunity in an area that has high customer importance and in which we are in a weak competitive position. Business importance is another key factor.
Generally, we'll uncover four or five areas that meet these criteria. Of course, an actual project must be focused narrowly enough that it can be completed in six to nine months, but we aren't yet at that stage. It is unlikely that we would be able to solve an entire business issue in such a short time frame, so for now we will just prioritize the business areas. If the business priorities aren't immediately obvious (often, they are) a good method for resolving differences of opinion is for the CRM council or other knowledge constituents to vote. Here are a couple of good mechanisms for making these kinds of prioritization:
N/3 Test: Everyone is given the same number of votes. The number is determined by dividing the number of items by three (15 items = 5 votes each; 5 items = 2 votes each). The knowledgeable voters can cast their votes any way they wish: all for one candidate, spread evenly across several, or whatever.
100 Dollar Test: Everyone is given a hundred dollars to spend. They can put all the money on one item or spread the money across several items (the distribution does not have to be in equal amounts).
The candidates are prioritized in the order of votes or dollars received. I have found the N/3 Test to be most successful because the number of votes allowed varies with the number of items to prioritized. In addition, there are fewer voting units to cast, so there is a stronger likelihood of real choices being made. Others prefer the idea that the voters are making a financial investment in their decisions. Either works just fine.
Next, we'll look at the system inventory. What projects are currently underway or planned in the near term? Identify the projects that map to the highlighted cells in the gaps and priorities diagram in Figure 8-7, and corral them into your overall CRM effort. If work has already been started in a key area, try to build on it instead of throwing everything away. It's surprising that so many programs are launched on the basis of reinventing everything. This is a waste of time and money and significantly alienates those involved in the project. After you have identified where you want to be, it is surprising how many current projects can actually be channeled in the right direction with a little analysis and effort. Of course, if there are investments being made in areas that are not important to your customers, you should take a serious look at them. Table 8-11 shows the results of XYZ's program prioritization efforts.
| Project Area | Issue | Priority Votes |
|---|---|---|
| A. MyXYZ: Personalized customer web sites | We sell CRM solutions, but don't use them. We make it difficult to do business with us. | 8 |
| B. Consistent customer identification | Can't recognize customers across all touch points. Don't know who they are. | 5 |
| C. SFA: Sales Force Automation | Current infrastructure doesn't support growth targets. Need to improve Sales Force productivity. | 2 |
| D. Inside Sales Integration | Execute on channel strategy. Customers are confused by our multiple channels with different messages | 1 |
| E. Identify most valuable customers | We don't know who our most valuable (profitable) customers are. | 0 |
Now that we've identified our initial priorities, we need build a roadmap that shows what we expect the first few projects to be and when they are likely to be launched.
Project Roadmap
Our first project should be one that is important, given the criteria above, but not strategically critical. Picking a mission critical starting point is too big a risk when you are just getting started. Scope the project to be completed in about six months or less. Six months gives you the ability to deliver a proof of concept. A proof of concept delivers real results (unlike a prototype, which is just a mock up) based on real data. It delivers real (if limited) functionality and can be put into use immediately, making a foundation for adding features and functionality. A project of this length is the perfect size for proving that your approach works without the risk that you never get done or that the business or sponsorship has changed before you can finish. If you can select a project that is already underway, that is an additional benefit, but you may need to scope it down to be sure that you can deliver something useful in six months.
Your roadmap lets people know when future elements are planned and the six-month scope allows you to deliver quick wins. This is critical to setting realistic expectations throughout the company. Your strategic direction and the CRM cycle ensure that each project leads you toward your desired goal and checks for changes to the goal before launching the next project. Know where to start, what comes next, and when it will happen. If you've identified projects that are likely to be canceled, you'll have more leverage if you deliver a quick win. Figure 8-11 shows XYZ's tentative project roadmap for the first year of its CRM program.
Figure 8-11. XYZ Corporation's project roadmap
The project roadmap is especially important for organizations that have low congruence around the direction and priorities of their CRM programs. There is another useful device for improving project cohesiveness. It's important to create an identity for major elements of the new CRM program.
The team decided to name the new customer master for its purpose: electronic customer identification or El Cid (yes, cute acronyms are very popular). This internal brand name for the system or project (often with some associated logo) gives the organization a shorthand way of identifying and referring to the project. I'm sure you all have one or two of coffee mugs that are similar to the one in Figure 8-12.
Figure 8-12. El Cid Internal Brand Identity
It helps team members come together around the common program goal. And, of course, it's the reason that many of us will never have to buy another T-shirt again.
Risk Reduction Plan
The risk reduction plan allows us to be prepared in advance to eliminate or reduce the threat of common as well as company-specific risks to our CRM Program. Table 8-12 lists the key risks identified by XYZ Corporation and the strategies it established to address each of these risks.
We also will have to identify who is responsible for implementing each strategy and when. Are some so critical that we want to take some steps up front? Are there others that can wait until we see signs of the problem arising? You'll answer all these questions as part of your risk prevention plan.
Now that we have completed our CRM strategy, we are ready to start building our infrastructure by launching our first project.
| Program Risks | Applicable Strategies | Strategies |
|---|---|---|
| Lack of sponsorship, leadership | 1, 2, 3, 4, 8 |
|
| No formal planning method | 4, 7, 8 | |
| Lack of consistent processes | 5, 7 | |
| Organizational silos | 3, 1, 2, 7, 8 | |
| Technology | 6, 5 |