I often think back to my days in banking, especially when the topic of strategic planning comes up. Every time they felt they needed to become more efficient, they would hire a team of consultants. I would never suggest that approach for a middle market company.
Back when I worked in banking, I was with one of the largest bank holding companies around. I participated in a number of strategic processes like due diligence review of potential acquisitions. Between the attempts at stealth, the compressed time frames, the lack of sleep and the poor coordination, the outcome was a crap shoot. Maybe the scarier thing was the money they wasted on internal strategic improvements. I was a part of one such effort, managed by external consultants, where the stated goal was to improve the efficiency ratio. A year after I left, the ratio was the same or worse.
While I was working on projects designed to integrate credit cultures across new acquisitions, in effect an internal relationship management program, the executives were on the hunt for quick stock up-ticks. To date that, they spent millions on an army of consultants leading to everything from the removal of free coffee to layoffs across board. I'm not going to mention the tie-in to the last real estate market crisis because that would be too obvious. But not to the strategic thinkers.
So, my experience with a strategic planning process leads me to see shallow opportunities to cut costs, when the real problems are deeper and elsewhere. I respect consultants that work in this field. Especially the creative ones. The problem is that too often, the pressure on everyone is short term in nature, like the stock price. Tell me, what is strategic about short term improvements?
In the CRM realm, strategic planning involves realigning your business to be customer-centric, enhancing customer loyalty in the process. You have to do this, or we're not talking about CRM. Don't let me stories about strategic planning failures deter you. There are some very simple steps you can follow that will get you on the right course.
Create a CRM Strategy - Without a CRM strategy, there is no guiding corporate wide vision for how you will interface with customers. This is a key component which works in conjunction with your functional CRM initiative (the technology). It takes both to succeed.
Analyze Your Situation - You need to know where you are today before you can figure out the road to where you want it to be tomorrow. Be realistic!
Identify CRM Benefits - Clearly identify the knowledge you will gain and how you will apply this knowledge (about your customers) through its collection in your CRM software and customer database.
Quantify the Benefits - Once you know how you will benefit from the change, you need to know how much you will benefit. This helps to prioritize, and it also helps with your financial investment justification.
Quantify CRM Costs - Your CFO will be far more likely to write a check if you can detail the financial benefits as well as the financial costs. The return on investment is critical in making a major go/no go decision.
Manage The Risk - Any time there's risk involved, it needs to be managed. In the financial world it's called underwriting. Your CRM initiative has risk as well, all of it with financial impact. The actual "risk" could be as simple as low user acceptance.
CRM Implementation - The last thing you must address is how you plan to implement your CRM strategy. I'm not just talking about implementing the software! Their is a human process that factors into a successful CRM initiative as well. Actually, it's bigger than the software in my opinion.
CRM Metrics - A high level view of CRM metrics that will help you better understand success or failure and also areas for opportunity going forward - 15266
Back when I worked in banking, I was with one of the largest bank holding companies around. I participated in a number of strategic processes like due diligence review of potential acquisitions. Between the attempts at stealth, the compressed time frames, the lack of sleep and the poor coordination, the outcome was a crap shoot. Maybe the scarier thing was the money they wasted on internal strategic improvements. I was a part of one such effort, managed by external consultants, where the stated goal was to improve the efficiency ratio. A year after I left, the ratio was the same or worse.
While I was working on projects designed to integrate credit cultures across new acquisitions, in effect an internal relationship management program, the executives were on the hunt for quick stock up-ticks. To date that, they spent millions on an army of consultants leading to everything from the removal of free coffee to layoffs across board. I'm not going to mention the tie-in to the last real estate market crisis because that would be too obvious. But not to the strategic thinkers.
So, my experience with a strategic planning process leads me to see shallow opportunities to cut costs, when the real problems are deeper and elsewhere. I respect consultants that work in this field. Especially the creative ones. The problem is that too often, the pressure on everyone is short term in nature, like the stock price. Tell me, what is strategic about short term improvements?
In the CRM realm, strategic planning involves realigning your business to be customer-centric, enhancing customer loyalty in the process. You have to do this, or we're not talking about CRM. Don't let me stories about strategic planning failures deter you. There are some very simple steps you can follow that will get you on the right course.
Create a CRM Strategy - Without a CRM strategy, there is no guiding corporate wide vision for how you will interface with customers. This is a key component which works in conjunction with your functional CRM initiative (the technology). It takes both to succeed.
Analyze Your Situation - You need to know where you are today before you can figure out the road to where you want it to be tomorrow. Be realistic!
Identify CRM Benefits - Clearly identify the knowledge you will gain and how you will apply this knowledge (about your customers) through its collection in your CRM software and customer database.
Quantify the Benefits - Once you know how you will benefit from the change, you need to know how much you will benefit. This helps to prioritize, and it also helps with your financial investment justification.
Quantify CRM Costs - Your CFO will be far more likely to write a check if you can detail the financial benefits as well as the financial costs. The return on investment is critical in making a major go/no go decision.
Manage The Risk - Any time there's risk involved, it needs to be managed. In the financial world it's called underwriting. Your CRM initiative has risk as well, all of it with financial impact. The actual "risk" could be as simple as low user acceptance.
CRM Implementation - The last thing you must address is how you plan to implement your CRM strategy. I'm not just talking about implementing the software! Their is a human process that factors into a successful CRM initiative as well. Actually, it's bigger than the software in my opinion.
CRM Metrics - A high level view of CRM metrics that will help you better understand success or failure and also areas for opportunity going forward - 15266
About the Author:
Mike Boysen is an experienced CRM consulting and creator of Effective CRM Consulting. You can read more about the strategic planning process at his website
