Laying out the B2B CRM Roadmap , part III

The Determinants
What is needed is a framework for determining how to allocate resources. There are a great many steps involved, yet, in some ways, creating this framework is much like connecting the dots. Below are some types of information that may be required to build an effective allocation model:
• Company strategy and vision
• Target market
• Customer and market reach
• Definition of customer
• Go-to-market mechanism
• Activity based costing (or economic value added) analysis of the marketing, sales, and service processes
• Analysis of current and required customer knowledge, customer economics, and the technologies used to connect with customers
• Map of current market coverage with number of accounts (targeted, actual, and potential) by territory
• Understanding of account segment membership
• An account contact matrix model
• An account valuation/weighted potential model
• A volume/margin/duration model (to manage customer equity)
• Results from qualitative, directional research that includes marketing, sales, service, and the end-user customer (plus channels[s], if applicable)
• Data about customers: e.g., customer cycles (buying, budgeting, forecasting), number of contacts per site, key influencers by site in the complex selling decision, etc.
• Accurate time/responsibility mapping for field sales and service personnel
• The right set of metrics
Although the preceding list looks more like a laundry list than a practical approach, we can, in practice, proceed from the point of accumulating this knowledge to crafting an actionable coverage and resource allocation model for the company

The Building Blocks
The primary building block for moving forward will be an analysis of the current portfolio of your customers. Combining the knowledge acquired from the steps identified above together with the results of an analysis of the economics of sales, customer service, marketing and channel coverage, takes us to the point of crafting a final resource allocation model. One practical tool is to create a customer pyramid which analyzes value. (see familiar Rubik’s cube, illustrates both the architecture of the marketing database and the model for account penetration and cross selling. In other words, it emphasizes that the single biggest win from data-based marketing comes from penetration of existing accounts. The marketing database needs to track individuals by buyer group or functional need at the site level within the enterprise. The x-axis represents the functional areas within your customer’s organization. The y-axis allows you to track the value of the relationship with your customer (from suspect to target to trial buyer to buyer to apostle). The z-axis portrays the locations or street addresses of your customer’s various site locations.
And, while the marketing databases can be used to acquire customers, a much more profitable use for the marketing database comes from account penetration. This is, selling more products to additional buyers and selling additional products and services to all buyers.
In order to have a holistic view of the sales and marketing system, a closed-loop feedback system must exist. It is well represented by the familiar household funnel. We can use it to discuss the flow of data in a direct response, opportunity/lead management environment. The top half of the diagram portrays the flow and accumulation of the information, while the lower half shows the interaction with your sales group and channel partners. We can visually map the transfer of knowledge that can take place in an effective process of managing leads and opportunities.
Metrics is an additional benefit of using this graphic. One set of metrics measures the effectiveness of the communications stream. The second set of metrics measures the field’s effectiveness.
Keep in mind what relationship marketing is not – it is not direct mail nor is it telemarketing. It is the integration of all contact media to effect a measurable response that simultaneously manages the point of contact with the value chain.
The contact matrix, then, is a simplistic, activity-based costing model that incorporates three variables:
1. Account valuation or grading
2. Cost per contact medium
3. Cost of doing business as a percentage of revenue (E:R) by grade level and in total
Several things are worth consideration. Previously, direct marketers have judged success on a responsive rate. But response rate alone is a destructive measure that belies the workings of your marketing system. The preferred, more constructive, and more holistic measure is to examine the effectiveness of sales leverage to generate a return, balanced across all contact media. In other words, the contact matrix allows management a simple framework for managing cost to serve.