Unit 3: Planning for CRM

CRM Planning

By: Reshmith K
CRM planning refers to the strategic process of organizing, implementing, and managing a
Customer Relationship Management (CRM) system within an organization. This involves
determining the objectives of the CRM system, identifying the needs and preferences of
customers, selecting appropriate technologies, designing workflows, and outlining strategies
for data collection, analysis, and utilization. Essentially, CRM planning aims to optimize
interactions with customers throughout their lifecycle, enhancing customer satisfaction,
retention, and ultimately, the organization's profitability.

Steps in CRM Planning

1. Building Customer Centricity:

• Cultural Shift: Foster a culture within the organization that prioritizes customer needs
and satisfaction above all else.
• Customer Understanding: Encourage employees to empathize with customers and
understand their pain points, preferences, and expectations.
• Cross-Functional Collaboration: Break down silos between departments and promote
collaboration to ensure a unified approach to serving customers.
2. Setting CRM Objectives:
• Specificity: Ensure that CRM objectives are clear, specific, and measurable. For
example, increasing customer retention by 15% within the next year.
• Alignment: Align CRM objectives with broader business goals and strategies to ensure
that CRM efforts contribute to overall organizational success.
• Realism: Set objectives that are achievable within the given timeframe and resources
available to the organization.
3. Defining Data Requirements:
• Identify Data Sources: Determine where relevant customer data resides within the
organization, including databases, CRM systems, marketing platforms, and customer
feedback channels.
• Data Quality Standards: Establish standards for data accuracy, completeness, and
consistency to ensure that the information used for CRM activities is reliable and
actionable.
• Compliance: Ensure that data collection and storage practices comply with relevant
regulations, such as GDPR or CCPA, to protect customer privacy and data security.
4. Planning for Coordination:
• Stakeholder Alignment: Align stakeholders from different departments and levels of
the organization to ensure a shared vision and commitment to CRM objectives.
• Communication Channels: Establish clear channels of communication and
collaboration to facilitate coordination among departments involved in CRM activities.
 • Conflict Resolution: Anticipate and address potential conflicts or disagreements that
may arise during the coordination process, and develop mechanisms for resolving them
effectively.
5. Planning for CRM Project Team:
• Skills Assessment: Identify the skills and expertises required for successful CRM
implementation, and assemble a project team with diverse talents and capabilities.
• Role Definition: Clearly define roles and responsibilities within the project team to
ensure clarity and accountability.
• Training and Development: Provide training and support to team members to enhance
their CRM knowledge and skills and ensure they are equipped to carry out their roles
effectively.
6. Designing Plan of Action:
• Goal Breakdown: Break down CRM objectives into actionable steps and tasks that
need to be completed to achieve them.
• Timeline and Milestones: Establish a timeline with specific milestones and deadlines
to track progress and ensure timely completion of CRM activities.
• Resource Allocation: Allocate resources, including budget, personnel, and technology,
to support the implementation of the CRM plan.
7. Planning Desired Output:
• Outcome Definition: Clearly define the desired outcomes and results that the
organization aims to achieve through CRM efforts, such as increased customer
satisfaction or higher customer lifetime value.
• Key Performance Indicators (KPIs): Identify relevant KPIs to measure progress
towards CRM objectives and track the impact of CRM activities on business
performance.
• Measurement and Evaluation: Develop a framework for measuring and evaluating
the success of CRM initiatives against established KPIs and benchmarks.
8. Relevant Issues While Planning for Output:
• Change Management: Anticipate resistance to change from employees and
stakeholders and develop strategies to address it effectively through communication,
training, and support.
• Data Governance: Address issues related to data governance, including data quality,
integrity, and security, to ensure that CRM activities are based on accurate and reliable
information.
• Technology Integration: Consider challenges related to integrating CRM systems with
existing technologies and processes within the organization, and develop plans to
overcome them.

By meticulously addressing each of these steps and considerations, organizations can develop
a comprehensive CRM plan that is tailored to their specific needs and objectives, ultimately
leading to improved customer relationships and business outcomes.
 Elements of CRM Plan

1. Business Objectives:
Clearly define the business goals the CRM plan aims to achieve, such as increasing sales
revenue, improving customer satisfaction, or enhancing retention rates.
2. Customer Analysis:
Conduct comprehensive analysis to understand customer demographics, preferences,
behaviours, and needs. Segment customers based on these insights to tailor CRM strategies
effectively.
3. CRM Strategy:
Outline the overarching strategy for managing customer relationships, including approaches
for acquisition, retention, and maximizing customer value. Define the customer journey and
touch points to guide interactions.
4. Data Management Plan:
Specify how customer data will be collected, stored, analyzed, and utilized to support CRM
activities. Establish data governance policies to ensure data quality, security, and compliance.
5. Performance Measurement:
Define key performance indicators (KPIs) and metrics to track the success of CRM initiatives
and measure progress towards business objectives. Establish reporting mechanisms for
monitoring and evaluating CRM performance.

CRM Strategy

A CRM strategy is a comprehensive plan outlining how an organization will manage its
relationships with current and potential customers to achieve its business objectives. It involves
defining the approaches, processes, and technologies that will be used to acquire, retain, and
maximize the value of customers.

A CRM strategy typically includes identifying target customer segments, designing customer
interactions and touch points, implementing CRM tools and systems, and aligning
organizational resources to deliver consistent and personalized experiences throughout the
customer journey. The ultimate goal of a CRM strategy is to build strong and profitable
relationships with customers, leading to increased customer satisfaction, loyalty, and business
growth.

CRM Strategy Development Process

The CRM strategy development process involves several key steps, each of which contributes
to the creation of a comprehensive plan for managing customer relationships effectively. Here's
a detailed breakdown of the process:

1. Assessment of Current State:

• Evaluate the organization's current customer relationship management practices,
including existing strategies, processes, and technologies.
 • Identify strengths, weaknesses, opportunities, and threats (SWOT analysis) related to
CRM.
• Gather feedback from employees, stakeholders, and customers to gain insights into
current challenges and areas for improvement.
2. Define Business Objectives:
• Clearly articulate the business goals and objectives that the CRM strategy aims to
achieve.
• Align CRM objectives with broader organizational goals, such as increasing revenue,
improving customer satisfaction, or enhancing market share.
• Ensure that objectives are specific, measurable, achievable, relevant, and time-bound
(SMART criteria).
3. Customer Analysis:
• Conduct a thorough analysis of customer demographics, preferences, behaviours, and
needs.
• Segment customers based on relevant criteria (e.g., industry, geography, purchasing
behavior) to personalize interactions and tailor CRM strategies effectively.
• Identify key customer touch points and moments of truth throughout the customer
journey.
4. Strategy Formulation:
• Develop a holistic CRM strategy that outlines the approach for acquiring, retaining, and
maximizing the value of customers.
• Define the strategic pillars or principles that will guide CRM activities, such as
customer-centricity, personalization, and continuous improvement.
• Determine the mix of CRM initiatives and tactics that will be employed to achieve
business objectives, considering both inbound and outbound strategies.
5. Technology Evaluation and Selection:
• Assess the organization's current CRM technology stack and capabilities.
• Identify gaps and requirements for new or upgraded CRM systems and tools.
• Evaluate CRM software vendors and solutions based on criteria such as functionality,
scalability, integration capabilities, and cost.
• Select the CRM platform that best aligns with the organization's needs and objectives.
6. Data Management Plan:
• Develop a plan for collecting, storing, analyzing, and leveraging customer data to
support CRM initiatives.
• Establish data governance policies and procedures to ensure data quality, security, and
compliance with regulations (e.g., GDPR, CCPA).
• Define data integration requirements to enable seamless data flow across systems and
departments.
7. Implementation Roadmap:
• Create a detailed roadmap for implementing the CRM strategy, including timelines,
milestones, and resource allocations.
• Prioritize CRM initiatives based on their potential impact and alignment with business
objectives.
 • Define roles and responsibilities for stakeholders involved in CRM implementation,
including project teams, vendors, and external partners.
8. Training and Change Management:
• Develop training programs and resources to equip employees with the knowledge and
skills needed to use CRM tools effectively.
• Communicate the CRM strategy and its benefits to employees at all levels of the
organization.
• Implement change management processes to address resistance to change and foster a
culture of collaboration and continuous improvement.
9. Measurement and Monitoring:
• Define key performance indicators (KPIs) and metrics to track the success of CRM
initiatives and measure progress towards business objectives.
• Establish reporting mechanisms and dashboards to monitor CRM performance in real-
time and identify areas for optimization.
• Conduct regular reviews and assessments to evaluate the effectiveness of the CRM
strategy and make adjustments as needed.
10. Continuous Improvement:
• Foster a culture of continuous improvement by soliciting feedback from employees,
stakeholders, and customers.
• Analyze performance data and insights to identify trends, patterns, and opportunities
for innovation.
• Iterate on the CRM strategy and initiatives based on lessons learned and evolving
business needs to ensure long-term success.

By following these steps, organizations can develop a robust CRM strategy that aligns with
their business objectives, enhances customer relationships, and drives sustainable growth.

Customer Strategy Grid

 The Customer Strategy Grid, popularized by Don Peppers and Martha Rogers in their book
"Managing Customer Relationships: A Strategic Framework," is a strategic framework that
helps businesses categorize their customers based on two dimensions: their current value to the
company and their potential for future value. It classifies customers into four quadrants:

1. Strangers:
• These are customers with low current value to the company and low potential for future
value.
• They represent minimal short-term revenue and are unlikely to become significant long-
term customers.
• Strategies for strangers may involve minimal investment in marketing or relationship-
building efforts.

2. Barnacles:
• Barnacles are customers with high current value to the company but low potential for
future value.
• They contribute significant revenue in the short term but are unlikely to grow or
increase their value over time.
• Strategies for barnacles may involve maintaining the relationship while minimizing
investment to prevent them from becoming unprofitable.
3. Butterflies:
• Butterflies are customers with low current value to the company but high potential for
future value.
• They may not contribute much revenue initially, but they have the potential to grow
into valuable customers over time.
• Strategies for butterflies involve investing in nurturing and developing the relationship
to increase their value in the future.
4. True Friends:
• True friends are customers with high current value to the company and high potential
for future value.
• They are valuable both in the short term and the long term, representing the most
profitable customer segment.
• Strategies for true friends involve prioritizing and investing in maintaining and
deepening the relationship to maximize their value over time.

The Customer Strategy Grid helps businesses allocate resources effectively by guiding them to
focus their efforts on customers with the greatest potential for long-term profitability while
managing less valuable customers to minimize costs and risks. It encourages businesses to
adopt a customer-centric approach and tailor their strategies and tactics to meet the specific
needs and characteristics of each customer segment.