Julian Casson discusses the importance of embedding CRM capability into the very core of the business strategy to drive sustainable competitive advantage ….
Corporate strategy is made of a mission, a vision, values and goals. It aims to return maximum value to the company through its value chain by exploiting competitive advantages.
A CRM is an application that gathers and uses customer data in order to interact in the most efficient way with the customer. Most customer relationship management systems (CRM), such as Salesforce, are made of three pillars: Marketing, Sales and Service.
Being cheaper or providing a better product are just two ways to develop a competitive advantage. According to academics, competitive advantage can be achieved through superior customer responsiveness, superior efficiency, superior quality or superior innovation.
And so, here’s my point …
Superior customer responsiveness can be achieved by having a better knowledge of your customers. Building an enhanced 360° vision of the customer will help you position what really matters for them and help you provide customised products and services they actually need. This is all about gathering the right information from customers and making the most of it. Superior customer responsiveness also requires short response times and quality after-sales service, both can be implemented with a powerful CRM application in the cloud.
Superior efficiency is basically generating more outputs from less inputs, this is usually (but not always) achieved by lowering costs to increase profits. Efficiency can be achieved by implementing CRM features which provide economies of scale and scope. The key strategy here is to focus on automation and self-service. Systems heavily supplied in workflows and offering standard services will help cut operating costs. Self-help desks, chatbots and community forums will provide customer services for the most common requests without involving agent time.
Superior quality can involve a better quality in customer relation (cutting the cost due to poor quality using better management) and/or a better quality in the product delivered (adding more value to the product using additional services). A CRM interconnected with other corporate systems will give a full vision of the business thereby helping sales and service teams to ensure a better follow-up of requests so customers don’t have to chase anymore on the same matter. CRM systems also can offer additional services that will increase product quality. This is the case when implementing IoT (Internet of Things) which provides customers with live information on their product or its environment so maintenance and replacement orders can automatically be suggested.
Superior innovation can involve a process or product innovation and both can lead to lowering costs and/or improving products. A CRM with strong capabilities to quickly launch new web and mobile applications will support corporate innovations by being very reactive. New features like Big Data Analytics and AI (Artificial Intelligence) natively embodied in CRM systems bring prediction and next action recommendation capabilities. This can help foreseeing bespoke customer journeys, focusing on the opportunities that matter the most, anticipating issues before they occur and endless other innovative applications that you can build depending on your business and corporate strategy.
Offering cheaper or higher quality products and services are strategies to grow your business. Both can lead to Customer Loyalty which is one of the most important assets for a company as it retains customers and increases the profit per customer. Having a relevant customer relationship management strategy will generate customer loyalty fully aligned to your business strategy and reinforce your corporate strategy.