Performing a CRM Analysis Basics Focus on some things your software vendor may want you to avoid Before you can do anything else effectively, you need to perform a CRM analysis of your company (Customer Relationship Management). This is not a knee jerk reaction to a few questions. This is a serious, thoughtful and realistic evaluation of where your company exists in its CRM evolution.

CRM Introspection

The first thing you need to do is understand your industry. I'm sure you're well aware of how your company is doing within it, but do you know how your market(s) are performing in general? Is your market on the rise or in decline? What are your customers telling you about future acquisitions of products you sell? Are there any third party resources analyzing or commenting on your market? What are they saying?

The next thing, which is crucial, is to understand what your competition is doing. You should have a solid understanding of the marketing approach(es) used by your competition.

Have you been tracking how your customers react to it?

In other words, whether you win or lose, have you collected data about the pricing and service they are offering and what your customers, or lost prospects, say about it. If you have this information you should be comparing it to your own positioning. Do you have a well defined approach that you use to make this comparison in your CRM analysis?

Your CRM analysis should now become more introspective in that you need to determine how prepared your company is to move forward. For instance, do you have a chief (CEO,CFO,CIO,CTO,CSO, etc; aka C-Level) level resource driving your customer relationship initiatives? This is very important if you hope to institute a corporate-wide vision. Do the departments and divisions within your organization currently work well together? Do they work together at all? Have you had any previous cross-selling or cross-functional successes that you can look to?

Finally, do you currently have a customer database? Or, do you have many customer databases? I can tell you from my experience that if you have many such databases, you probably don't know your customers very well. If you do have only one shared customer database, what is your honest answer to this question? "How well do you know your customers?" Your CRM Analysis needs to start here.

CRM Analysis and Your CRM Evolution

The next step is to determine, on your own or with some help, your position on the CRM evolutionary scale. This is important to know because implementing both a CRM vision and CRM software can be overwhelming. Not only for the implementation team, but for the end user participants. I won't even mention the pain your customers could go through if you stutter or fail.

Therefore, it's appropriate to assess where your company resides so that you can take the next appropriate step. If you try to bite off more than you can chew you will be disappointed with the results

If your company has not started collecting customer data, it would be fairly silly to invest time and money into developing business intelligence tools or marketing automation. These will be useful only when you know what you're trying to accomplish with them. I'm afraid that won't happen until you've collected, and analyzed, the necessary data so can determine how to proceed with your initiative.

Customer? What Customer?

It's very possible you don't know who your customers are. I don't say that to upset you, but hopefully to enlighten you. If you are a product-centric company where various departments or product lines seldom work together, do not share a customer database, execute independent marketing and sales initiatives and talk about product performance versus customer performance; then you don't know your customer.

Yes, there is something wrong with this, but it's OK now you're aware it's a problem. However, let's not rush to fix everything so quickly. You need to take one step at a time. And the next step for your company is to begin building a customer database along with sales and marketing processes. Customer tracking is an important piece of this puzzle.

OK, Products aren't everything

Your CRM Analysis now leads you to realize that you have customers and that they have value to you. You just may not know how to make the most of that yet. So, you've begun to figure out which are most profitable to you.  While this is becoming straight forward within each product group, it is still challenging to do across your entire company because you cannot get a complete picture of each relationship.

This is when you need to begin tightening up the relationships between product groups. Communication is key and sales and marketing processes should begin to be coordinated. To achieve these results, customer data must move toward centralization, or tighter integration between databases must be achieved.

Customers are Everything!

Now you're really starting to get it. Now that you've begun a more strategic coordination between your product lines, it's time to begin measuring the results of your enlightenment.  You do this by measuring customer satisfaction with the determination to meet, or beat, your competitors.

Because of your CRM analysis, it's now possible to tie your compensation models to customer satisfaction levels. However, you should now be striving to tie your incentives to customer-focused initiatives while continuing to improve sales processes, marketing processes, data integration and total cooperation between departments.

My Customers Deserve More Value

You finally know why your customers buy your product(s). So know you're trying to identify how to deliver value to specific customers. You are now differentiating between customer segments and treating these segments differently to enhance your competitive advantage.

While you might now be very close to a company-wide view of your customers, you are still not using it to its fullest.  You need to spend more time analyzing your best customers in order to refine your sales and marketing processes. and the technology behind them.

What do my Customers Need?

At this point, you are very serious about retaining your existing customers and you are gaining success with this. Your CRM analysis as led to increased margins because your cost of acquiring customers is dropping. It's always less expensive to get a repeat sale; but it's also true that you now know what your customers need so you can drop the cost of carrying products that are unimportant to your customers. You can also get more money for the products they can't do without!

When you get to this point much of your time is dedicated to using the data you've gathered to generate information that will help you determine, and drive, customer behavior.  Now you're ready to develop products and services that meet the needs of specific customers. How do you think your customer will like that?

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