CRM adds to business value in tough times

Building a valuable customer relationship and developing customer loyalty is a top priority in business today — but can be difficult to execute without the right approach.

Across all industries, particularly within retail, companies have experienced lower sales due to customers spending less. This presents a substantial challenge for a company committed to remaining customer-centric in these tough times. Most companies have cut costs across the board in order to maintain a positive bottom line in the reduced revenue environment. This has led to a reduction of funding for ongoing or planned projects, even though some of these projects and initiatives remain crucial for a company’s future.

It is more important now than ever before to ensure each project or initiative delivers on KPIs - measured by incremental increase in revenue, risk mitigation or reduction in cost by improving process efficiencies. Customer Relationship Management (CRM) projects usually target at least one of these objectives.

Customers are at the heart of every business; they are the reason for it to exist. As such, it is paramount to give customers the attention they desire and deserve, in spite of the strains businesses are feeling themselves.

It is an acknowledged fact that retaining a customer is far cheaper and easier than the acquisition of a new one. At the same time, it is proven that satisfied customers who recommend a company or its brand (advocates) spend considerably more with this company than customers who dislike the company (antagonists). Both advocates and antagonists tell their communities about their opinions, which results in additional revenue or lost opportunities.

The secret of overcoming the current dour economic climate lies within the existing customer base of a business. This is the best source of continued or increased sales revenues, and to protect margins. It is paramount to keep, maintain and foster existing relationships with customers, which is to say: to be customer-centric and customer-focused.

Customer-centricity is about providing high value to customers. Customers reward companies that provide them with high value with loyalty and often an increase in spending.

In order to be able to be customer-centric, businesses need to know who their customers are, and they need to know their preferences, likes and dislikes. This information enables companies to provide better value to their customers.

The good news is that this information is available and ready for use within most businesses. It needs to be used to identify the most valuable customers and to provide customers with a consistent and positive experience with each interaction and across all channels.

A company that is recognised for delivering value to its customers, will have strengthened their own position when the economy recovers and will be able to jumpstart into the next cycle ahead of the competition.

This can only be done strategically. Therefore, businesses need to devise and execute new CRM strategies or continue their existing ones to actively increase the value of the relationships to their customers. These strategies need to have measurable key objectives. The objectives also need to be broken down into a series of executable projects. By implementing these projects in “bite-sized” increments, each project delivers measurable success early in the process.

The strategies themselves are then implemented with the help of CRM solutions like SAP CRM.

The CRM solutions are invaluable for gaining an improved understanding and to providing continued high value services to customers in order to keep customer satisfaction levels high, if not increasing them. If strategies and tools are well implemented, this will provide additional revenue for the company, while reducing the operational cost to provide a given level of service to your customers.

The approach to developing the businesses’ most valuable asset

For the reasons brought forward before, building a valuable customer relationship and developing customer loyalty is a top priority in business today — but it is a priority that can be difficult to execute without the right approach.

Positive or negative perceptions of businesses are created, during every interaction the customer has with the business.

Well-performing businesses collect and analyse relevant information about all interactions and utilise this knowledge about their customers to develop and improve each individual experience. These businesses concentrate on their most valuable customers – the customers with the highest “lifetime” value.

Savvy businesses realise that being a leader in knowing their customers translates into customer loyalty, buying more products, recommending their products to others and paying a premium price for value. In brief: intimate knowledge of customers is the key to customer loyalty and maximising profits.

Front office functionality – like CRM – is critical to a company’s ability to provide value at every customer touch point; such as direct contact, a catalogue, a call centre, a corporate web site and social networking sites. Just as critical is the tight integration of the front office with the back office and e-business solutions. The e-business solutions are one of the important channels for customers to interact with the company, whereas the ERP in the back office delivers invaluable additional information about the same customer.

Tight integration of systems offers the potential of cost reduction by streamlining processes, in addition to the positive impact on the revenue of modelling customer-centricity into the business. Tightly integrated systems enable interlocking customer-facing and internal business processes to optimally use available resources and data.

While there is no fixed recipe, all it takes is a short series of simple steps to get there. Leading companies:

• Use the data about their customers that they generate with every interaction to build a 360 degree view of their customers. To do this they integrate their customer data from disparate systems into one single, integrated CRM solution, like SAP CRM.

• Demonstrate consistency across channels and their integration of them. Customers are getting more and more information about companies and products, anywhere and anytime. They expect consistent information and corporate behaviour regardless of the channel they use.

• Use the detailed information they have about their customers to segment them appropriately, in order to be able to provide all customers with high value – the right products and services – while focusing on their most valuable customers.

• Ensure that new information is immediately fed into the CRM system in order to be available for the other channels without delay.

Case study

A customer project that was completed in the South Island recently used this time to ensure their customer interface was as simple and integrated as possible to streamline their customers’ experience. This occurred within the context of their very clear CRM strategy.

On conclusion of the project, customers began using the new e-commerce platform to transact the majority of their business as it provided the most comprehensive, convenient and current shop window.

The company in turn now operates highly-targeted campaigns to its customers, enabling a sophistication of CRM that had not been considered possible before. Improved operational efficiencies arose due to being able to maintain product data, especially prices, only once. Further efficiencies arose as customers showed their preference for the web shop, allowing the company to retire legacy sales systems.

The project is regarded as successful by the company, for the primary reason that it increased the top line revenues and reduced the cost of sale.


The time to focus on a CRM strategy that embraces the customer is now.

With a smart and strategic reaction to current economic difficulties, that includes pursuing their CRM goals while containing costs, businesses are able to reap opportunities now and to gain a considerable advantage when the economy turns up. The customer-centric strategy can be implemented step by step using a powerful and scalable integrated CRM system.

This integrated CRM system evolves with the business needs and becomes the cornerstone for gaining customer insights and using this data to maximise profits.

Thomas Wieberneit is the CRM practice manager for Ciber, an implementer of SAP Retail and CRM. Reach him at