Components Necessary for Successful Implementation of CRM 2.0

CRM 2.0 is meant to be a ongoing conversation of sorts that takes place between the company and each of its customers, as well as between the customers themselves.  The goal is to create a meaningful dialogue as well as a collaboration among all members of this interconnected chain in order to satisfy the needs and wants of everyone involved.  This includes giving the customers what they want while increasing the profits of the company.  
Unlike CRM 1.0, CRM.2.0 also recognizes the value of everyone involved with the customer, from the customer service representative to the salespeople and from the suppliers and the distributors.  In order to create the best possible experience for the customer, everyone must be on the same page and working toward achieving complete customer satisfaction.

Putting the Customer in the Center of it All

At the heart and soul of the CRM 2.0 concept is the belief that the customer must be placed within the center of the business.  In addition, the customer must be viewed as an organized community that must be actively engaged in the processes of the business.  

In order to help place the customer in the center of the business process, a business can utilize a number of strategies.  These include:

1    Creating virtual communities, such as online social networks
2    Utilizing mobile communications
3    Encouraging the development of UGC, or user-generated content
In essence, the goal is to allow customers to help co-design the future of the company.  In order to accomplish this, customers must be looked at as more than just statistical averages with common denominator needs.  In addition, it takes more than just looking at them as individuals.  Rather, the business owner must understand and appreciate the fact that they are interconnected with each other as well as with the business.  

Social networks help make it possible for companies to explore the interconnectedness of their customers.  While customers have always been related to one another in some way or another, the advancements of technology have made it far easier for them to explore this interconnectedness.  With digital networks, customers can build relationships with each other while also making it possible for businesses to better study these relationships.  For this reason, an important component of CRM 2.0 is to encourage networked relationships - such as those found on discussion boards on many web sites - as well as to facilitate and participate in these networks.  Businesses should not expect to manage or guide these networks, but should attempt to learn from them instead.

One way to recognize and respect the interconnectedness of customers is to develop programs that look at the "big picture."  For example, banks have tagged the accounts of family members so their system can recognize that they are related to other customers and cell phone companies are offering family plans for multiple subscribers.  In addition, companies need to recognize the value of even the smallest customers.  After all, a cell phone subscriber that has a prepaid phone and doesn't use it that often may not be brining in much business, but she may be the daughter of a major player in a Fortune 500 corporation.  If she has nothing but good things to say about the cell phone provider, it can go a long way toward landing a new, big account.

Recognizing Individuality
While CRM 2.0 stresses the interconnectedness of customers, it also recognizes that each customer is unique.  This has led to the development of customer segmentation, which is different from market segmentation.  In market segmentation, groups of people are distinguished from other groups.  With customer segmentation, on the other hand, each customer belongs to a certain segment based on a number of attributes.  

By breaking customers down into different segments, marketing and service procedures can be individualized to meet their needs.  In addition, every step in the customer process, from gaining new customers to retaining them, is determined based upon the customer's needs.  In addition, CRM 2.0 recognizes that these needs may change based upon the customer's interactions and, as such, tracking these needs becomes multidimensional.

In order to manage these many different dimensions, companies must adopt micro-segmentation practices.  They are then connecting these segments to the decisions they make.  Social network analysis is one manner by which companies are managing to complete this task.

In order to get the most out of social network analysis, companies must consider a number of factors, including:

1    How many connections does this space have with customers?
2    How much influence does this network have over customers?
3    How can messages be properly focused in order to reach the "right" customers?
The ultimate goal is to create a small ripple in the pool of customers that will be far reaching.  Those companies that believe they can jump into social networks and use them as a means to get a message across to their target market are mistaken.  In fact, these networks generally lose memberships when corporations attempt to move into them and push an agenda upon them.  Rather, the goal of the company should be to listen to the customers within the social network while occasionally making a small ripple by whispering in the right people's ears.

Treating Your Employees Right
With the CRM 2.0 concept, employees are also viewed as "internal customers."  For this reason, they are to be treated in the same interconnected manner as traditional customers.  This means the company must work toward building loyalty and creating relationships on a one-to-one basis.  After all, the performance and attitudes of these employees will directly affect the level of customer satisfaction.  For this reason, an integral component of the CRM 2.0 process is also to work toward building positive employee relationships - both employee/employee and employee/management.

Getting Connected with Suppliers and Distributors
Just as employees need to be happy, so do suppliers.  Suppliers are valuable to the business because they provide the business with the materials it needs to satisfy its customers.  Since distribution partners actually bring the product to the customer, they are an important part of the CRM 2.0 process as well.  Their role is not only to help satisfy the customer but, in many cases, they can help bring information back to the company in order to further improve the product and delivery model currently in place.

Recognize the Value of Sharing
Traditionally, businesses have worked toward gaining complete customer loyalty.  After all, if a customer is loyal to that business's brand, he or she will keep coming back to that business in the future.  While businesses should still work toward achieving customer loyalty, CRM 2.0 recognizes the value of shared loyalty.

With the worldwide economy that has developed, customers are finding that they have more options than ever before.  As such, they are more likely to be tempted by the competition.  For this reason, there are very few customers that can achieve total loyalty and devotion from each of its customers.  

With this new way of thinking, it is accepted that a customer may have two or three brands from which he or she routinely selects from.  For example, the customer may choose from among Sony, Nokia, or JVC products when searching for new electronic devices.  Based on the features each company offers with that product, the customer then selects the one that best suits his or her needs.  

Rather than expecting to have complete loyalty from its customers, the company following the CRM 2.0 model recognizes the value of sharing while trying to maintain the largest share of that customer's loyalty.

Using Technology to its Fullest

In order to develop the right CRM 2.0 for an individual business, there are a number of requirements that must be met for it to be a success.  Among these requirements is the development of certain types of software and other uses of technology.  This includes:

1    Development of customer agent support software
2    Development of customer interaction systems such as an interactive website and automated phone systems
3    Development of statistical analysis software, including social network analysis software
4    Development of software to manage specific marketing campaigns
5    Development of interactive chat software that can provide life help and additional support to web site visitors
6    Development of a database to store and retrieve customer information
This software must be able to meet the needs of various divisions within the organization, including Sales, Distribution, Marketing, Customer Service, and Support divisions.  Each of these divisions must be able to share information regarding partners, prospects, customers, employees, and competitors.  In this way, all of the dealings with the customer can be properly managed - from the point when the customer is a prospect to when customer places an order.  This software should be able to capture automated alerts on lead data as well as share and manage the information as it moves throughout the sales pipleline.

With the help of software, many of the needs and duties of those employed within these divisions can be automated.  This allows the process to be completed more efficiently while also allowing the employees within these divisions to focus more on other aspects of their duties.  In addition, the software helps to standardize the methods used when handling stakeholders, which allows for improved customer relations.  This helps increase revenue as more sales are completed and less customers are lost.

When creating and selecting software to be used in the CRM 2.0 process, it is essential to include the IT department in the decision making process.  It is not uncommon for executives to become disgruntled when the software or hardware does not work properly, only to later admit that the IT department was not included in the decision making process.  Not only will the IT department be able to predict potential problems and prevent them before they happen, including them in the decision making process is one of the first steps toward adopting the CRM 2.0 philosophy in which everyone is a stakeholder whose input is valued.

Components to Include in CRM 2.0
In addition to the development of various forms of software to help assist in the CRM 2.0 process, there are a number of other components that must be included in order to successfully implement the CRM 2.0 philosophy.  First, it must include the three major aspects of CRM.  These include:

1    Operational CRM - Operational CRM involves automating customer support processes, including those utilized by the marketing, sales, and service divisions of the organization.  The interactions these divisions have with customers must be added to the contact history of the customer so that other staff members can obtain the information whenever necessary.  As such, the customer can interact with various people within the company without needing to explain what has taken place each time he or she speaks with some one.  CRM software can help with creating and maintaining a database that can be added to and accessed by all of those that come in contact with customers.

2    Collaborative CRM - Collaborative CRM involves any time that direct communication with customers take place, other than when sales or service representatives interact with the customer.  This type of CRM is sometimes referred to as "self service" because it includes when the customer uses the Internet, email, or automated telephone systems to gain information or to complete actions.  The main objective of collaborative CRM is to improve the level of service while simultaneously reducing costs.  Again, technology plays a major role in that the advancements of the Internet are utilized to help provide interactive screens for customers as well as simple email systems.  Similarly, voice recognition systems are often used to help customers more actively engage in automated telephone "conversations."
3    Analytical CRM - Analytical CRM involves analyzing the data that has been gathered in regard to customers.  With the help of this data, the company can create marketing campaigns that will more effectively reach their target market.  They can also work at achieving better customer retention rates and can work toward making better decisions regarding their services or products.  For example, the data analysis may indicate that prices need to be changed or that new products need to be introduced.  Again, predictive analytics software can help a business more effectively analyze trends and make predictions to guide their decision-making process.
Despite its heavy reliance on technology, it is important to note that CRM 2.0 is not all about technology.  In fact, the use of technology is not the goal of CRM 2.0.  This is different from CRM 1.0, during which time many businesses worked under the misguided notion that the goal was to use technology as much as possible.  Rather than guiding the CRM 2.0 process, technology is meant to be a tool that is used to better allow customers to guide the process instead.

Perhaps one of the biggest obstacles that businesses will face when implementing CRM 2.0 is not the development of technology, but rather the training of those involved in the process.  In order to be implemented properly, everyone working with the business must be aware of his or her role within the process as well as his or her importance to the company.  From the lowest paid stockperson to the highest paid executive, everyone involved has an important role in building customer relationships and in increasing customer satisfaction because all customers - including "internal customers" - are interconnected in some way.

For this reason, companies must work toward breaking down barriers between the various divisions within the company.  Rather than the sales division looking at its department as "my department," they must learn to look at it as "our department" and must recognize the value of communicating and interacting with the marketing division, the IT department, and every other division within the company.  Breaking down these walls can be quite difficult in businesses where the divisions have been long-standing.

In order to break down the walls, businesses need to look at more than just purchasing and installing various types of software and hardware.  Rather, they need to also focus on training their staff and on implementing teambuilding strategies that will help each division understand and appreciate the value of the other divisions.  A free flow of communication must also be encouraged in order to make sure all divisions are on the "same page."  It is important that management models this behavior and includes the staff in decision making processes and properly communicates - through both words and actions - the value of the staff.  

CRM 2.0 is a still-evolving philosophy that pushes CRM 1.0 to the next level.  While some businesses are still trying to master the philosophy behind CRM 1.0, others are ready to push forward to the next level of customer commitment, management, and satisfaction.  Even those still working on CRM 1.0, however, can begin to forge forward on some of the less costly aspects of CRM 2.0.  By doing so, they will put themselves ahead of the competition and put themselves in a better position to take control of a larger portion of the market.