Resource Allocation for the B2B CRM Practitioner

It’s no longer a secret. The evidence is compelling. It is well documented, both at the academic level and in practice. Enterprise-wide Customer Relationship Management (CRM and CEM) – when properly implemented - can achieve impressive results. The primary results:
• Increased sales Effectiveness and Efficiency
* Increased Profits
* Increase in customers served and products placed within customer accounts
• Increased Customer/Employee Satisfaction
• Decreased cost-to-serve
The second “secret” is that virtually every organization has limited resources: People, Money, Time.
Optimization of the respective coverage models - sales, customer service, marketing and channels - still has not been exhaustively studied. The models and tools of the eCRM practitioner provide almost a dot-to-dot like template with which to assure coverage optimization and hence optimal use of the firm’s limited resources.
The third “secret” is that our customers represent a portfolio of assets that we must proactively manage in order to maximize shareholder and stakeholder value.
Whether the resource is time, money, or people, the optimal allocation of resources is a critical issue, a critical challenge, for almost every business organization. Since no enterprise has unlimited resources, it is worth investigating how customer relationship marketing models can provide a critical key to unlock the answer to this problem.

In no functional area of business is this resource allocation problem more true than in sales, marketing, and servicing customers and/or prospects. In fact, the search for the optimal allocation of resources in these functional areas is something akin to the search for the Holy Grail.


In business-to-business marketing the characteristics of the target customer group can commonly be depicted visually as a pyramid, with the largest accounts at the top of the pyramid, and moving down through a group of middle accounts trying to grow larger and support the pyramid are "minor" accounts.
The pyramid graphically shows how, in most mature, competitive industries, the sales function (together with service and product marketing) is faced with:
• Price and margin pressure at the top of the pyramid, where the size of the targeted accounts is the largest
• Margin (cost-to-serve) pressures at the bottom of the pyramid, where the largest number of accounts exist
• An eventual overabundance of competition – once all your competitors realize where you are making your money - in the middle, where the most profit is initially available
• A shrinking middle layer

If, as has been suggested for the last 15 plus years, we elevate Customer Relationship Management, as core strategy, and Sales to a strategic boardroom issue, we can create the greatest synergy by applying the models of customer relationship marketing, customer insight, and knowledge management to the problem of resource allocation.
One Observation
In addition to the five key inevitable outcomes that result from a well-executed customer relationship marketing competence, other implicit problems are remedied:
• Increased sales
• Increased service levels
• Increased customer and employee satisfaction
• Increased customer and employee retention
• Decreased cost to serve
• Faster product introduction, i.e., speed to market
• More controlled management of product migration by targeted segment
• Decreased cost of doing business as a percentage of sales, i.e., sales expense to revenue ratio (E:R)
The Thesis
The planning tools, operational models, feedback loops, and performance metrics of relationship marketing
are templates that create optimal resource allocation and coverage models. What we have created and replicated across multiple firms in the B2B realm is a roadmap for optimizing the allocation of resources, together with the attendant analysis and implementation.