Diagnostics and Strategy: getting from Here to There

Going from Here to There: using Diagnostics, Facilitation, and Coaching to lay out your roadmap.

As I walked in this morning, I saw a large horse fly resting on the sidewalk. Huge, not particularly attractive: it couldn’t possibly fly. When She (sic!) created flying creatures, people asked what God had been thinking to design the horse fly or the bumblebee. After all we know that God has a grand design and all creation fits into the plan according to Her design. In truth, however, God’s design of bumblebees and horse flies has come under question for centuries. As in: what was She thinking? Or, nothing designed that way can fly. Yet, we know that both creatures do fly and do so well. What works so easily for God does not work as well for humans when it comes to successful planning on how to get to there from here.

Getting from here-to-there is always on everybody’s minds; and, getting from here-to- there is always already a clearly visible destination. Truth is, however: often we get lost on the way. [And, no! I really do not just mean driving directions]. I’m thinking more along the lines of the transformation the US now faces as the Tea Party tries to hold the nation hostage and take its citizens back to the 1787-9 period; or, a lot more simple to solve, how to transform a business into a customer-centered, customer-based business.
The challenges are so immense as to risk hyperbole. The missteps made happen so frequently and predictably that there must be a better way.

We no longer can afford missteps in today’s hyper-competitive, always-on, flat world. No, what we need is a way to assure breakthrough performance and to assure creation of a roadmap that outlines our best chance to arrive at the destination, the desired end-state.
And it really is quite simple to effect best-planning and execution of these crucial transformations. The keys are diagnostics, facilitation, and coaching.

Plans, lucid, readable and comprehensible roadmaps are important, nay vital to success: whether it is a “simple” exercise, such as taking your family of 5 to [you fill-in-the-blanks] for a mini-summer vacation, or (more) complex such as planning for your 24 year old daughter’s dream wedding, or compound-complex as in establishing your firm’s new customer centered and customer focused strategy. (Thinking of plans as a type of sentence construction may be a helpful metaphor).

Distractions, unanticipated events, setbacks, life: all these “things” happen and so our best laid plans somehow end up producing horse flies rather than hummingbirds. Problem is our horse flies don’t fly. Our “success” at planning, unfortunately, does not translate into successful implementation and operational effectiveness.

And, so what?! What now? How can your B2B CRM & CEM strategy be implemented successfully, without a hitch? How do we plan for life to happen and keep on the path. As I began to write this paragraph these 2 phrases surfaced: “Seek first to understand.” “Start with the end in mind.” And, yes, both pieces of advice are apropos of this discussion. Do they give a way to find planning and implementation success? I think they do. And, I think they do because they un-conceal what has been hidden or that which may distract.

What is needed is diagnostics, facilitation, and coaching. The process will clearly define 3 critical areas: 1. Where you are starting from: the point of departure or your “Current State”; 2., Where you intend to end up: your destination or “Desired End-State”; and, 3., the stuff that has to be done, accomplished, solved, etc. so that you can, in fact, get from here to there: “the bridging tasks”.

Unterwegs zu…

Unterwegs zur: Diagnostics, Facilitation, and Coaching for the B2B CRM & CEM Strategists

On the way to ....
As I walked in this morning, I saw a large horse fly resting on the sidewalk. Huge, not particularly attractive: it couldn’t possibly fly. When She (sic!) created flying creatures, people asked what God had been thinking to design the horse fly or the bumblebee. After all we know that God has a grand design and all creation fits into the plan according to Her design. In truth, however, God’s design of bumblebees and horse flies has come under question for centuries. As in: what was She thinking? Or, nothing designed that way can fly. Yet, we know that both creatures do fly and do so well. What works so easily for God does not work as well for humans when it comes to successful planning on how to get to there from here.

Getting from here-to-there is always on everybody’s minds; and, getting from here-to- there is always already a clearly visible destination. Truth is, however: often we get lost on the way. [And, no! I really do not just mean driving directions]. I’m thinking more along the lines of the transformation the US now faces as the Tea Party tries to hold the nation hostage and take its citizens back to the 1787-9 period; or, a lot more simple to solve, how to transform a business into a customer-centered, customer-based business.
The challenges are so immense as to risk hyperbole. The missteps made happen so frequently and predictably that there must be a better way.

We no longer can afford missteps in today’s hyper-competitive, always-on, flat world. No, what we need is a way to assure breakthrough performance and to assure creation of a roadmap that outlines our best chance to arrive at the destination, the desired end-state.
And it really is quite simple to effect best-planning and execution of these crucial transformations. The keys are diagnostics, facilitation, and coaching.

Plans, lucid, readable and comprehensible roadmaps are important, nay vital to success: whether it is a “simple” exercise, such as taking your family of 5 to [you fill-in-the-blanks] for a mini-summer vacation, or (more) complex such as planning for your 24 year old daughter’s dream wedding, or compound-complex as in establishing your firm’s new customer centered and customer focused strategy. (Thinking of plans as a type of sentence construction may be a helpful metaphor).

Distractions, unanticipated events, setbacks, life: all these “things” happen and so our best laid plans somehow end up producing horse flies rather than hummingbirds. Problem is our horse flies don’t fly. Our “success” at planning, unfortunately, does not translate into successful implementation and operational effectiveness.

And, so what?! What now? How can your B2B CRM & CEM strategy be implemented successfully, without a hitch? How do we plan for life to happen and keep on the path. As I began to write this paragraph these 2 phrases surfaced: “Seek first to understand.” “Start with the end in mind.” And, yes, both pieces of advice are apropos of this discussion. Do they give a way to find planning and implementation success? I think they do. And, I think they do because they un-conceal what has been hidden or that which may distract.

What is needed is diagnostics, facilitation, and coaching. The process will clearly define 3 critical areas: 1. Where you are starting from: the point of departure or your “Current State”; 2., Where you intend to end up: your destination or “Desired End-State”; and, 3., the stuff that has to be done, accomplished, solved, etc. so that you can, in fact, get from here to there: “the bridging tasks”.

Unterwegs zur…

B2B Resource Allocation: Optimizing your CRM investment and coverage effectiveness, prt 2

If you watch the kids, they seem to be able to do everything simultaneously and to do so 24/7.
The rest of us have limitations. In business there are resource limitations - we can't do or be everything for everyone.
We live and work in a time in which each of us faces allocation constraints pertaining to use of money, time, and people. Furthermore, the competitive arena we operate in is wholly unlike that of just a few years ago.
Consider this quandary: If you have a million dollars, where do you invest it to maximize your return? How do you approach solving the problem and answering the question correctly.
[Personally, I always liked Len Schlesinger's 2 X 2 matrix he termed "the Marketing Optimization Model"].

The marketer’s Holy Grail is to get the right message, product, and/or service to the right person, at the right time, in the format that customers have indicated they prefer. In fact, this is the primary goal of an optimal allocation model.
An optimal coverage model would also:
• Support a retention – and loyalty-focused, customer-based business design
• Make effective use of the organization’s limited resources
• Make investment decisions based on reciprocal commitment or mutual interdependence of your Ideal, Best customer and channel partners
• Establish integration and synergy across the three functional areas responsible for servicing the customers: i.e., product marketing, sales, and customer service.
Stepping Back: there are two reasons that customer relationship Marketing is so powerful when implemented properly. First, the firm focuses on acquiring the Ideal, best customer, and, second, the company manages its customers as a portfolio of assets – investing its limited resources proportionately to the level of commitment that customers and prospects make to the organization.
My contention is that there is a fairly well-defined path the enterprise can take when analyzing and assessing its allocation challenges. This path is mapped out through the use of the tools, templates, and planning by the data-based, relationship marketer.
Resource allocation must also bring to bear the relationship marketer’s theories about managing the point of contact, managing the customer across their lifecycle of interactions with the company, managing the value of the customer portfolio, and managing knowledge across the company and across the value chain. Fred Reichheld called it “the customer corrridor, graphically illustrated above. In effect, this metaphor illuminates the challenge of resource allocation relative to your customers’ lifecycle relationship with your firm.
Specifically, there is a spectrum, or “continuum of relevant customer contact activities,” that needs to be mapped to create an optimal and effective resource allocation model.
The first step many organizations will need to undertake is to conduct an audit of their marketing, sales, and customer service activities so as to surface the key interdependencies between them, as well as with site logistics. Think of it as “the programming” phase of dealing with an architect. The Master Builder will want to know how you want to live and function in the new space. This is a reflective exercise. The goal is to be in a position to produce cooperation and coordination across and between all functional areas that deal with customers and their issues. We need to:
• Make visible and apparent where integration between the functional areas is necessary
• Make apparent where non-discretionary accountability must reside
• Revisit the current account selection process
• Revisit key account management practices
• Objectively verify whether an account is relationship – or transaction-oriented
• Assess the skills, training, and behavioral components of the relevant customer contact people in each of the functional areas
• Assess degree of cooperative, cross-functional teamwork along with supporting account planning, communications, and contact management tools

A 2010 Strategy Roadmap for CRM, prt. 1

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2010 Strategy Roadmap for CRM, part 1.

Strategy is choice. Choice tied directly to Mission, Vision, Values, and Purpose. Choice, Selection, Focus and Differentiation are critical components to any successful strategy.

Customer Relationship Management (CRM), is a strategy based on customer focus, on customer knowledge, and on delighting the customer. CRM is real-time, actionable, customer knowledge management. The best CRM approaches are holistic, involving all facets of your business and demonstrating accountability for results. CRM becomes a guiding philosophy and framework for doing business and includes:

• differentiating and optimizing the customer experience
• building customer knowledge to provide value to both the customer and your business
• taking a portfolio management approach to customers –investing in direct proportion to the expected return from each customer, while realizing that not every customer is worth keeping!
• delivering “value “ as defined by the customer - at each point in the customer’s lifecycle and with all of your customer contacts

The single most important set of decisions any business-to-business enterprise can make are those involving selection - of the products and services you will provide, of the customers for whom you will provide them, and of the channels through which you will market them, of the strategy to differentiate your offerings from your competitors.

Sadly, “something like 90% of companies fail to execute strategies effectively.” Often, the failure to realize a strategy success results from taking your eye off the ball. (In other words, something came up and we paid more attention to that blip than to the strategy). Successful strategy execution will/should allow your business to create a sustainable competitive advantage, to optimize its market-coverage models, to optimize its customer portfolio, to anticipate the shifting nature of value, and to realize loyal customers.

One primary constraint to successful execution of your strategy is that virtually every organization has limited resources: time, people, and resources. Choice, focus, and selection are critical. With today’s business intelligence tools, your firm can easily achieve Optimization of the marketplace coverage models - sales, customer service, marketing and channels. 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.

A second realization we must still embrace is that no company can be all things to all people. Your customers represent a portfolio of assets that must be proactively managed in order to maximize shareholder and stakeholder value. As strategists we believe that our best customer investment and market strategy would be to invest our limited resources in direct proportion to the expected return on investment

Again, choice, selection, focus, and purpose must serve as constant monitors. While CRM “implementations” still fail – at disappointing level - to achieve what executives expect, It’s no longer a secret, the evidence is compelling and is well documented, both at the academic level and in practice. A strategy of Enterprise-wide Customer Relationship Management – when successfully implemented , whether in the clouds or on-premise- can achieve impressive results.

The most easily measurable results include:

· Increased sales Effectiveness and Efficiency

· Increased Customer/Employee Satisfaction

· Decreased cost-to-serve

In fact, there are 8 benefits. The EIGHT BENEFITS of successful CRM implementations are well documented. With a well-executed strategic CRM program, you can experience and measure:

1. Increased sales
2. Increased profitability
3. Greater product penetration
4. Growth in customer satisfaction and loyalty
5. Increased employee satisfaction
6. Decreased cost-to-serve
7. Increased retention of the existing customer base during times of economic uncertainty.
8. Increased likelihood of new customer acquisition

These maxims are independent of the enabling technology. Successful strategy implementation has more to do with aligning people, processes, and information (yes, data) to the mission/vision/values/ & purpose of the business, to the strategy, than with what software package or cloud-computing platform chosen.

Market-at-risk Analysis

The Quality movement in the US came to the forefront in the mid-80's. Satisfaction and loyalty became the next banners brought into the battle. Today it appears as though satisfaction and loyalty have slipped to a lower focus of attention. Corporate social responsibility, corporate reputation, and customer experience management are more "top-of-mind" than at any time in my career.
Yes, customer satisfaction is still important. In fact a new "standard" for reporting satisfaction has emerged. Borne from Fred Reichheld's ground-breaking studies while at Harvard, Net Promoter can be a powerful tool and quite a number of firms have chosen Net Promoter as their scoring mechanism.

If you want to find out exactly where to concentrate your efforts to improve and or fix issues ready to your company's product, delivery, and service issues: Market-at-risk analysis is the way to go!
Developed by John Goodman and brought to the marketplace and placed under its scrutiny and spot-light by TARP (quality firm, not asset relief), Market-at-risk analysis allows your firm to stack rank the 10 or so top reasons why customers will not buy from you or why they won't refer or why they will DEFECT as soon as they can.
Stack ranking by economic impact caused to your business : fix it and win big!

thought starter #1: define your customers & measure the value of your marketing database

Thought-starter #1: define your customers & measure the value of your marketing database

One issue organizations often struggle with is “how to measure the value of investments made in its marketing database”. Let’s see if we can build a simple, yet practical, evaluation framework for the marketing database in your company. This approach I believe focuses more on process, information management and outcomes, and this approach is more actionable than traditional ROI measures

In today’s business environment, the highest deliverable value of your contact marketing database is the ability it gives you to target, segment and grade[1] your existing customers. Ideally, this repository of facts, through efforts to enrich the data, is transformed into a customer knowledge platform. The insight given from studying the database then is used to direct our customer[2] loyalty and retention efforts.

In the 21^st century marketing world, cutting-edge business-to-business marketing database efforts will measure at least these four dimensions:

a. external service values: i.e., what are the 3,4, or 5 primary reasons customers buy

b. why we lose customers (defection analysis)

c. operational database performance

d. social interaction and customer insight

The best of the best marketing databases in the ’80s and’90s demonstrated their excellence when measured against operational deliverables and measurements. Today, the world-class marketing database looks at why our customers buy (external service value), where/how we stand to lose them, its operational performance, and, finally, real-time, actionable research into the customer’s mind-set and definition of value.

Today we have richer information: for many of us an overwhelming richness of data & information. Our data mining tools are incredibly sophisticated. Overlay upon overlay of data can give us greater insight than ever before. In general this approach is given the umbrella title of “business intelligence”.

Easier said than done? Not really. You can gather this information initially through investigative research, and then subsequently maintain it through the ongoing contact your customer management center has with your customers, prospects and defectors, using phone, email, and social media. You can then interpret this marketing data to target, to segment and to grade your customers, sharing the data synthesis both inside your organization and with your channel partners to ensure you’re making needed improvements.

In order to add the greatest power to these efforts, you first must define your customer. Yes, define a customer, your customer! The definition of customer is the touchstone upon which all else rests. Without the definition, none of the other steps can take place, and none of this theory can touch ground and add value to your operations and its success.

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[1] Grading does not refer to assigning customers “grades” as our teachers did; rather grading is a valuation process, which allows you to optimize your market coverage approach and to manage the limited resources your firm has in direct proportion to the expected returns on that investment. At its center, this approach looks at customer, prospects, & defectors as the portfolio of assets that must be managed proactively.

[2] Essentially the same holds true for partner management initiatives as well.

A Few Thoughts on Customer Equity: the 20-200 Rule

The value of our business is the sum of the value of all our customer relationships

The value of your company is equal to the sum of all the revenue from all of your customers. Not exactly the textbook definition. Your CFO, without much grumbling, will allow it, however. Most of us are aware of Paretto’s Law, which would suggest that 80% of your profits come from 20% of your customers. A more startling rule is what Kaplan and Cooper call “20/200 Rule.” 20% of our customers return 200% of our profits. While you recover from the shock this statement presents – and, it is verifiable! – it is more important that we realize that there are proven fact-based approaches that lay down a roadmap that allows you to optimize your customers and mitigate the rules.

Like your other assets managed in your portfolio, your customers can be viewed as a portfolio of assets, which you can manage proactively. Successful management of your customer portfolio brings a serie s of cascading benefits to your firm. The primary benefits are your ability to maximize shareholder and stakeholder value; and your ability to optimize your “market coverage strategy.” The latter benefit is vital, since virtually every organization has limited resources. So it is critically important to invest those limited resource in direct proportion to the return we expect to receive from our investment in our primary assets - our customers.

Needs-based Segmentation revisited, part 2

In the previous posting I spoke about "the toolkit" we use for needs-based segmentation: targeting, segmentation and grading. Targeting, Segmentation and Grading (or, Valuation) are three of the most powerful weapons in any business' arsenal. This “toolkit” is comparable to open-source code. Constructed theoretically over the last 15 + years by integrated databased sales and marketing masters, this approach recognizes that: a. No firm can be all things to all people b. The value of the firm is equal to the sum of all the customers with whom it does business (and yes, your CFO will accept this!). c. All firms are constrained by resource limitations: people, time, money, etc d. It makes compelling sense to invest your sales, marketing, channel management, and customer service dollars and effort in direct proportion to the expected return on that investment e. Especially in tough economic times, investing in customer relationship management and customer experience management positions a firm for competitive uniqueness as business improves Accordingly, actionable segmentation to promote selectivity and wiser investment decisions is one of the most valuable applications for your marketing database and your CRM/CEM initiatives. Until quite recently, more business communications than not aimed at customers and prospects(present and potential) tended to address them as a great, undifferentiated mass…because there was really no practical way to do otherwise. It was the “We can be all things to all people” approach. Obviously, no business can survive and flourish if it attempts that approach. Limited resources: people, time, money need to be invested in direct proportion to the limited resources that can be applied – and accordingly, this is where targeting, segmentation and grading come into play. Today, computer and business intelligence advances have made it easy and practical to break down the companies in your market universe just about as finely as you like, according to whatever factors you choose. Recognizing the fact that not all customers are created equal, it also allows you to target your limited resources toward those that are most potentially valuable to you. It gives you a practical alternative, and the next best thing, to one-on-one communication. The technique is called needs-based segmentation – the segmentation strategy of choice, since it is needs that drive market behavior. This is the clustering of customers (and later, prospects) according to common sets of needs and purchasing behavior…as these relate to your organization’s external service values…then dividing your customer list into one or more segments, each consisting of a group of customers who share a common set of needs, and a way of doing business.

revisiting: Actionable, needs-based segmentation

Decisions, decisions, decision. Targeting, Segmentation and Grading are three of the more important decisions any company can make. In fact, Targeting, Segmentation and Grading (i.e., the valuation of customers, prospects and the “universe” from which to choose) are the primary building blocks of an effective CRM and CEM (customer experience management) strategy. These actionable steps represent conscious management decisions based upon business intelligence, corporate memory, and the on-going strategy of the business plan. “Being in Business” necessitates making decisions. The single most important set of decisions any business-to-business enterprise can make are those involving selection - of the products and services you will provide, of the customers for whom you will provide them, and of the channels through which you will market them, differentiation, sourcing, profitability, etc. Segmentation is at the heart of this selection process. I originally presented this idea of actionable needs-based segmentation more than10 years ago. I want to reiterate the validity of this approach and present some simple tools with which to put these principles into action, while recognizing the need to incorporate the additional insight available to us today as a result of new channels such as social media and the heightening of social responsibility. This “toolkit” is comparable to open-source code. Constructed theoretically over the last 15 + years by integrated databased sales and marketing masters, this approach recognizes that: a. No firm can be all things to all people b. The value of the firm is equal to the sum of all the customers with whom it does business (and yes, your CFO will accept this!). c. All firms are constrained by resource limitations: people, time, money, etc d. It makes compelling sense to invest your sales, marketing, channel management, and customer service dollars and effort in direct proportion to the expected return on that investment e. Especially in tough economic times, investing in customer relationship management and customer experience management positions a firm for competitive uniqueness as business improves Accordingly, actionable segmentation to promote selectivity and wiser investment decisions is one of the most valuable applications for your marketing database and your CRM/CEM initiatives.