As CRM moves from hype to reality, many mainstream organizations are finally biting the bullet and putting together a CRM strategy. It’s easy to say the word strategy, fairly easy to put together a strategy team, pretty easy to get buy-in that a strategy is needed and not too difficult to spell. However, the actual creation of the strategy is very elusive, and nailing the right deliverables, the right areas to investigate and the right approach is extremely difficult. This article provides a broad framework that many companies could use when embarking on such an initiative.


The drivers of creating a CRM strategy are varied. There are a handful of specific situations that propel organizations to develop a CRM strategy.

Multiple Marketing Departments or Divisions

Multiple areas of an organization marketing to the same customer base can lead to problems. Many times this acts as the catalyst for the move from product-centric to customer- centric. When organizations are aligned by product, they typically encounter uncoordinated marketing. Customers receive various offers from the different product lines with potentially conflicting messages. Customers then feel like they have to make a decision between one offer or another instead of being incented to get both.

Multiplying Touchpoints

Companies are finding that touchpoints with their customers are rapidly multiplying, though banks and other financial services may be getting hit the hardest. The Web, kiosks, call centers, sales, wireless, e-mail, etc. are only a few of these new channels. As individual business professionals, we feel this effect as well. How many of you have voice mail at the office, at home, on your cell phone and on your pager? Add that to 40+ e-mails a day (possibly across multiple e-mail addresses) and the act of checking and responding to messages can be an eight-hour day in and of itself. When you multiply your numbers by the hundreds of thousands your organization encounters, the results are staggering.

Nobody is Using the Data Warehouse

Many data warehouses have a solid architecture, data quality and work quite well. Why aren’t they being leveraged? CRM efforts can help resurrect the energy and purpose behind the data warehouse.

Several Databases

Along with multiple marketing departments, organizations may have multiple databases – be they marketing databases or otherwise. Multiple databases cause the same issues as multiple marketing departments. Holistic views of the customer are difficult, limiting the creativity behind retention and loyalty programs.

Happy Days are Coming to an End

Caused by globalization, the Web or customer demand, some organizations believe that they are starting to see "the end of the gravy train." As firms start having trouble acquiring new customers and customer attrition increases, mass marketing no longer generates the required results. Instead of relying on customers to proactively generate more revenue, organizations start looking at CRM as a possible answer.

An Approach

CRM is now touted as the promised land for generating revenue and raising customer satisfaction. But companies must keep in mind that CRM is cross-functional, enterprise-wide and possibly mission-critical. Not easy stuff. What does CRM really mean? How do we get started? Which technologies do we use? What are the root causes of our problems? Do we merge or purge? Do we go to a conference or seminar? Should we read a book? Or, in the words of Bill Murray playing Hercules on Saturday Night Live, "There are much smaller rocks I could lift. That big rock looks heavy."

To help simplify matters, we can divide CRM into five elements. Companies that master all five elements can win the big CRM game. Analyzing the issues, prioritizing the problems and recommending solutions within each of these five elements will help design a CRM strategy.

Strategic Navigation

This section of analysis covers an organization’s industry, strategy regarding customers, competitive context and the understanding of customer behavior as well as the marketing tactics used to elicit this behavior. In this first element, we can audit whether a firm’s general direction will support CRM or if a shift in focus may be needed. Central to the concept of strategy is the customer equation. The customer equation helps us evaluate the value of each customer or, at least, groups of customers. The customer equations lead to segmentation activities which result in responses such as differential treatment and service.

Customer Interaction

This section of analysis covers how customers proactively and reactively interact with the organization. The investigation should help companies understand the database marketing process and how the firm reaches out and touches its customer (as well as all the other touchpoints that the customer proactively uses).

The purpose of this element is to understand the consistency of customer treatment across channels, how different customer segments are treated and how initiatives are coordinated among different channels.

Core Processes

The process section looks at back- and front-office processing and looks for places where customer information or customer differentiation could add value. These processes are typically areas such as manufacturing, inventory, customer service or billing. A common example is the way Dell or Saturn knows the customer belonging to each product as it goes down the assembly line.

Information Infrastructure

You didn’t think we would leave technology out, did you? Information infrastructure looks at all of the customer facing, decision support and back-office systems to understand level of integration, technology, support of personalization during customer contact, quality of the data and data that is captured and used.

The purpose of this element is to determine if the current systems can support the business requirements generated from the core process, strategic navigation and customer interaction elements.

Organizational Support Structures

Say it with me. "Changing a company is hard." One more time. "Changing a company is hard." Implementing new technology can sometimes seem simple in comparison with changing people’s behavior or the status quo.

The purpose of the organizational support structures element is to understand if the organizational structure, decision-making process, training programs and possibly incentive programs can support the business requirements generated from the core process, strategic navigation and customer interaction.


At the end of the day, what should an organization enjoy from its CRM strategy project? It should have a good understand of where customer information is, how it is going to be used and how it might flow through an integrated CRM environment (from source to data warehouse and out to the touchpoints). It should have an understanding of what technology is going to be used and how the systems relate to one another (lots of PowerPoint and Visio diagrams are always good). Top business priorities need to be agreed upon by all of the stakeholders. Most important, a road map is needed to show how the organization will get "there" from "here." Combining the other deliverables, this plan should show the functionality, technology, time line and cost to make a CRM system a reality.


Since these types of strategy initiatives are more of a discovery project without technical deliverables, they have their own set of issues:

  • Never- ending paralysis is the number one issue for these types of projects. In the beginning, the key players should agree on a deadline, the deliverables and the level of detail of those deliverables. Though the organization must be holistically investigated, common mistakes during this phase include creating the entire physical data model based on every source system and every field, trying to map every field in every source system to the new data warehouse or never-ending technology evaluations and RFPs.
  • Lack of understanding how the project will move from the strategy phase to implementation. Who is going to write the check? Who can verify that the ROI is genuine? Who is the champion?
  • Setting up a program management office that creates a process that will break ties during disagreements pertaining to priority, definitions or technology.

Without up-front planning and holistically looking at CRM – across the entire enterprise – companies run the danger of designing themselves into a corner. However, enterprises are big and sometimes ugly. The key is to bite off something manageable, manage scope and create business value. Good luck.

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