According to Bain’s Management Tools & Trends report, Customer Relationship Management (CRM) is business’ second most used and preferred amongst 25 management tools. This is second only to Strategic Planning, hence revealing the significant value it provides.
Many organisations are now rigorously updating their CRM systems, much of which is technologically oriented and focused on software selection. However, CRM is fundamentally a set of business capabilities that, once enabled for an organisation, improve customer satisfaction and loyalty, and increase profitability and revenue.
If organisations really want to realise the CRM benefits it is important to look at it from a business capability perspective rather than a software selection and implementation.
What is a business capability?
Business capabilities include the skills, capacity and expertise necessary for a business to perform its core functions, implement its vision and achieve desired organisational outcomes.
Capabilities represent the ways that people and resources are brought together to accomplish work. They are key intangible assets on an organisation (Capitalizing on Capabilities, Harward Business Review, 2004).
Business processes are the methods used by which an organisation provides and leverages such capabilities. When the underpinning software provides correctly aligned solutions and support for capabilities and processes, the organisation becomes highly efficient, maximising its return on investment (ROI) for output of resources, time, and energy.
Rather than focusing on systems, applications or processes alone, which can be transient and therefore volatile, your organisation can gain a stronger position by developing its CRM business capabilities and a transformational roadmap.
What is CRM Capability?
A CRM capability acts as a foundational building block of the organisation’s customer relationship management vision and architecture.
CRM capability map provides a thorough and comprehensive view of where the CRM business is currently at, exposing redundancies and inefficiencies, and allowing you to create a capability-centric CRM transformation roadmap. This will help the organisation move towards its future vision with confidence, clarity, connectedness, and internal strength.
There is room for significant flexibility and customisation when identifying and prioritising CRM capabilities, depending on your company, sector or industry and geographic location.
CRM Capability Areas
Upon review of CRM literature and resources (i.e. Gartner), it appears that CRM capabilities can be divided into five key areas, including Marketing, Sales, Customer Service and Support, Channel, and Core CRM and Analytics.
Marketing Capabilities
- Orchestrate and automate personalised campaigns,
- Target customers and potential customers through a wide range of channels, and
- Monitor and measure the success of marketing initiatives.
Sales & Digital Commerce Capabilities
- Automate, track, and manage pipeline, i.e. prospects and sales opportunities,
- Increase staff engagement and revenue.
Customer Service & Support Capabilities
- Automate, track, and manage customer requests, and
- Resolve customer requests quickly and efficiently, thereby increasing customer satisfaction.
CRM Channel Capabilities
- Create an integrated omnichannel to interact with and engage customers,
- Marketing, Sales and Customer service also use this capability to interact with prospects and customers.
Core CRM and Customer Analytics Capabilities
Core customer management capabilities provide foundational and ongoing support for the three key functions of Marketing, Sales and Customer Service, thereby achieving an integrated and consolidated view of the customer. This provides critical insights into customer behaviour and emerging trends.
In the next article, I’ll show how to use CRM capability mapping to map the current status of the capabilities and plan for future capabilities.
