5.2. Developing Your CRM Strategy

The first major step in building a successful CRM program is Phase 1:

PHASE 1—DEVELOP A STRATEGY

There is no clearer early indicator of failure than starting (or maybe worse—finishing!) a CRM project without knowing where you are heading. This is the number one reason that CRM projects do not succeed. The no-plans approach usually results from the “quick-fix” or “silver bullet” mentality that is so common. Remember, it doesn't work that way—not for anybody—no matter what anyone promises you.

A strategic plan allows you to take the small steps that are more likely to be successful, while ensuring that each one takes you in the direction of your ultimate goal. Like sailing, we may have to tack in one direction or another, not always directly toward port. But at least we know we're continuing to sail in the right direction and not steering a course that is taking us away from where we want to be. This plan is like a civil engineer's design for a railroad. Unless we have a plan, we're going to end up like the two characters in Figure 5-3, and our customers will be just as sorry as the first engineer who tries to drive a train down this track!

This is exactly the result if different parts of your organization begin independent CRM projects one piece at a time without an overall strategy. Without this clear and common understanding of what you want out of your efforts, you'll end up with fragmented bits that don't fit together. Then you'll have to tear down some or all of what you built in order to deliver a truly integrated customer experience.

It is the strategic plan that, like a blueprint, allows you to implement in small, manageable chunks because it ensures that the chunks will fit together. The plan allows you to identify what's most important, get started, have a success, and benefit from what you have already built while continuing to add functionality another chunk at a time. CRM is using processes, information, people, and technology to manage and improve relationships with your customers. There is no predetermined “right” set of chunks that you must build.

Another important outcome from your strategic planning effort is getting widespread participation, input, visibility, understanding, and support for both the long-term strategy and immediate priorities. Every functional area has different needs and priorities. If the stakeholders know the reasons why their requirements aren't the first to be addressed and when their requirements are scheduled to occur, they will be more supportive of your entire plan. Of course, visible progress is also necessary, or all the underground projects will certainly start up again. This is the reason we will undertake small projects leading to quick successes, and why we must make our progress visible through continuous communication.

Some organizations shy away from strategic planning because they think it will slow things down. They just want to get started. Yes, it does take time and effort. But if you spend too much time, you are wasting resources and probably getting stuck in analysis paralysis. The purpose of a strategic plan is to develop a fairly high-level view of your goals and objectives that lets you get started quickly but with a commonly understood goal in mind. The benefits far outweigh the time invested.

KEY IDEA Even for the largest companies, the strategic planning methodology should never take more than a few months. With good tools, a good methodology, good participation, and good support, it should take no more than six to eight weeks.

The strategy and planning phase of the CRM life cycle encompasses surveys of key internal and external stakeholders. It produces a set of documents much like architectural blueprints.

5.2.1. Process Steps

As always, we must start with an understanding of the company's current business situation. No CRM effort can ever be successful if it is not aligned with your company's top strategies and priorities. Also, be sure to look outside the organization. Understanding customer expectations and your relative position against your competitors is critical. Why would you tackle an area in which you're already as good as or better than your competition, and your customers don't care very much anyway? Table 5-1 shows the main steps for the strategic planning phase.

Table 5-1. The Strategic Planning Process

Step	Purpose	Participants
Collect Data	Ensure that the CRM program is aligned with company strategy. Discover what customers think about your current performance. What do they want more of? What makes it difficult to do business with you? How do you compare to competitors? Understand all the customer project and functional silos that currently exist.	Company Executives and Sales, Marketing, Service, and Support management Employees who interact directly with customers Customers
Assess Findings	Identify business strategies, risks, and opportunities that will influence your CRM program. Identify gaps between the goal and today's reality. Define high-level customer segments.	Project team Impacted business function representatives Information Technology
Create a Proposal	Define a common vision and language about what CRM is for your company. Ensure that key constituents understand and support the strategy.	Project team Sign-off from sponsor, key executives, and business managers
Transition: Launch Project	Select the best project to tackle first (or next). Determine scope, schedule, and resources.	Project team Sign-off from sponsor, key executives, and business managers

We also need to get an idea of what CRM efforts are already going on in the various CRM functions. What are the official and unofficial projects already underway to support sales, marketing, customer service, and product support organizations? Finding this out is critical because money is often limited and must be focused on the organization's key priorities. But it can be a political nightmare because many people fear that their pet project will be taken over or canceled. In fact, this may happen for many good reasons. In Chapter 8, we will discuss ways to get this information without causing projects to go deeper underground; at that time, we will also cover the strategic planning phase in detail.

5.2.2. What You'll Get

At the end of Phase 1, you will have completed the strategic plan as the blueprint for building your project. You will have defined a high-level view of the information, process, technology, and people requirements of your program. You will know how the overall program will be organized and supported, and you will have determined a consistent view of your CRM vision as well as a language to describe it that everyone understands. You will also have identified the priorities that will determine which projects to do next, the timing of future projects, and the risks you face so you can prepare for them. Time and again throughout each project life cycle, you will need to refer to these key documents.

At the end of each project, you will start the next cycle by evaluating the current blueprints, which allows you to enhance and refine them based on what you've accomplished, what's changed for your business, and what you've learned.

5.2.3. Transition: Launch Project

In Phase 1, we take a high-level look at the overall organization, marketplace, and technology situation and identify the project with which we'll begin. In the transition step to Phase 2, we focus on one small area—that business problem, issue, or opportunity that is most important to address first. Because the CRM program sounds so big and broad, we will be looking at ways to identify and prioritize small chunks that can yield quick success and build on each other to deliver your overall goal. These projects will:

• Be completed in a matter of months (before anyone can lose interest)

• Move the organization toward the desired goal (not in the wrong direction)

• Yield a visible and measurable result (which must be communicated widely)

• Build on previous success (show continuous progress and avoid rework)

We defined CRM program earlier; now let's understand what we mean by CRM project.

DEFINITIONS A CRM project is a well-defined effort with specific deliverables, due dates, and cost. To ensure success, a project must produce valuable and measurable results, but it must also be small enough to complete within a business sponsor's attention span.

We are about to launch our first project. The business functions that own or are affected by the project are the primary participants and contributors, but it's important for Information Technology to be involved also. When the IT department participates in the launch, they learn lots of information that will enable them to understand what really needs to be done to deliver a successful project.

Now, we will dig into much greater detail than we did during Phase 1. We must really understand exactly what the business problem is that we are solving and what the real business needs are, identify specific risks and critical success factors, and so on. This is the reason we can afford to spend just a short time getting a rough idea of our end goal during the strategy phase (thus, completing it quicker). We delve into much more detail as we plan and launch the project. Completing agonizingly detailed studies of all your possible CRM requirements as part of the strategic plan is really a waste of time. So much of the detailed requirements would change by the time you got to them that you would have to do it all again anyway. Worse yet, it's likely to keep you from ever getting started doing the real work. So we move to the infrastructure development phase by digging deeply into the true business needs and defining the project scope, time line, and resources.