common crm pitfalls and misconceptions about customers
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Common CRM Pitfalls and Misconceptions about Customers. Scott Rogers thinkjar @ jayhawkscot [email protected]. What is CRM?. - PowerPoint PPT PresentationTRANSCRIPT
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“CRM is a complete system that (1) provides a means and method to enhance the experience of the individual customers so that they will remain customers for life, (2) provides both technological and functional means of identifying, capturing, and retaining customers, and (3) provides a unified view of the customer across an enterprise.”
Paul Greenberg, CRM at the Speed of Light, 2001
“CRM is a philosophy and a business strategy, supported by a system and a technology, designed to improve human interactions in a business environment” …”a continuous business initiative, aimed at providing mutually beneficial value”... “what distinguishes CRM and its strategy from all other business strategies is that it starts with the voice of the customer and is determined by the customer value provided and derived.”
Paul Greenberg, CRM at the Speed of Light, 3rd Edition, 2004
What is CRM?
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Pitfalls• Training• Strategy• Data Management• Change Management• Process• Leadership• Metrics/Analytics• Voice of Customer• Satisfaction• Experience
Best Practices• Process• Strategy• Experience• Voice of Customer• Data Management• Metrics/Analytics• Leadership• Engagement• Change Management• Training
Source: Scott Rogers, thinkjar, Review of posts from keyword search of CRM pitfalls and best practices – non-technical and non-implementation focused – 2010-12
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0%
20%
40%
60%
80%
100%
54%
46%
B2CB2B
Source: Scott Rogers, thinkjar, Review of job descriptions for Director and VP level jobs (non-IT) with CRM in job title -2011 to 2012 , n=743
Line Responsibility0%
20%
40%
60%
80%
100%
120%
33%
16%
15%
55%
MarkeingSalesServiceOther
* Multiple categorizations permitted
Nearly 50/50 split between Marketing and all other responsibilities – Sales, Service, Operations/Support, Analytics, etc…
“CRM” Jobs today
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Strategy
Analytics
Data Mgmt
Retention
Behavioral Insights
Loyalty
Training
Voice of Customer
Process Improvements
Competitive Analysis
Experience
Lifetime Value
Satisfaction
Engagement
Customer Centricity
Change Mgmt
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Responsibility Support
Source: Scott Rogers, thinkjar, Review of job descriptions for Director and VP level jobs (non-IT) with CRM in job title -2011 to 2012 , n=743
Key activities and responsibilities
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Despite the plethora of advice about pitfalls and best practices,• the vast majority of companies are not using the words that
show they are focused on the end-results of their strategies• those that are using these words are using company-centric
words (retention – 35%, loyalty – 27% and lifetime value -17%) more often than customer centric words (experience -17%, satisfaction – 12%, customer centricity – 6%)
• In terms of insights, more are focused on the company centric aspect of customer research – behaviors (30%) versus voice of customer/customer research (23%)
Conclusions about “CRM” Jobs today
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“The problem is that for the first 15 or so years of the CRM market people approached CRM in a technology-centric way and an extremely inside out way.”
Laurence Buchanan, 7/2/12, The Customer Revolution
Have we been looking through the wrong end of the binoculars?
CRM
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Apparently, yes….
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More than ¾ of companies have some form of customer
feedback mechanismLess than 10% think their efforts
are stellar
Source: thinkjar VOC Report, 2011
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80 percent of organizations think their customer experiences are good8% of customers agree
source: Bain and Company, Closing the Delivery Gap Report
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“Competitiveness is far more about doing what your customers value than doing what you think you are good at” Clayton Christiensen, The Innovator’s Solution
“Competitiveness is far more about doing what your customers value than doing what you think
you are good at” Clayton Christensen
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it starts with the voice of the customer…
Paul Greenberg, CRM at the Speed of Light, 3rd Edition, 2004
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Customer Mindsets
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What the average American thought a minute of their time was worth US Yankelovich Monitor 2005
the average American’s per capita income= 4.5x
Feedback is Invaluable
PS: (this also explains thinking behind low churn rates…time-onomics over economics)
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Hearing is a physical capability we are born with. Listening and understanding are skills developed throughout a person’s life.
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80014,000
17
the average number of words people use on a regular basis
the number of meanings these words have
the average number of meanings per word
Source: Martin Hill-Wilson, Brainfood Extra, The Art & Skill of Customer Listening
Context Matters
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“Humans and Thinking are like Cats and Swimming – they can do
it if they have to, but it’s very, very hard”
Daniel Kahneman, Nobel Laureate in Economics
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System 1 Thinking• Fast, intuitive, emotional, sometimes irrational, impulsive• Operates automatically, with little or no effort• Unconscious, often behavior precedes attitudes• Can generate surprisingly complex pattern of ideas• Comprises the majority of human thoughts
System 2 Thinking• Slow, deliberate, logical, rational• Operates automatically, with little or no effort• Conscious, focused
Source: Daniel Kahneman, Thinking Fast and Slow, 2011
Human Thought Patterns
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• Familiarity – preferring things you’ve heard about it
• Framing – being overly influenced by the context in which information is presented
• Priming – look for things you’ve been ‘told’ to look for
• Loss aversion – losing £1 hurts more than gaining £1.50
• Hyperbolic discounting – a bird in the hand…
• Salience – being overly influenced by the last piece of information you came across
• Norms and peer pressure – liking what others like
• Obedience – doing what an authority tells you
• Inertia – letting the initial cost of doing something outweigh bigger, longer-term benefits
How we process information
Source: Alan Mitchell, Reinventing Marketing blog, Market’s Very Own Climate Change
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With it…. Without it…
• a sense of loss (when we forgo the benefits of the option not chosen. This leads many people to procrastinate)
• decision anxiety (fear of making the wrong decision)
• decision regret (“Damn! I did make wrong decision!”)
• fear of decision-regret (sometimes, we’re so worried about making the wrong decision that we end up making no decision at all. Tragically, the bigger the decision the more likely this is to happen
Choice is good, but has its costs
Source: Barry Schwartz, The Paradox of Choice
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• Buy the one I know I like (decisions based on experience)• Buy what I bought last time (reduce research costs and risk)• Buy the one I always buy (habit + research and risk reduction)• Buy the one I’ve heard of (risk reduction)• Buy the ones my friends recommend (research and risk reduction +
peer pressure)• Buy the cheapest (value and/or necessity)• Buy the most expensive (quality, status seeking, special occasion)• Buy somewhere in between (‘hedge my bets’)• Buy the one that’s easiest to buy (convenience, hassle reduction)• Buy the one with the biggest discount (value, bargain hunting)• Buy the one I like the look of (impulse, aesthetics)
Coping with Choice
Source: Alan Mitchell, Reinventing Marketing blog, Market’s Very Own Climate Change
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Beliefs & Values
Hurdles (time, resources, space…)
Constraints(expectations, memories, fears, perceptions…)
Influences, Impulses…
CONTEXT
Consideration Sets
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MemoryMemory
Prior Experiences / Events /
Conversations
Post Experiences / Events / Conversations
TIME
EVENT
Perceptions
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Source: Value-in-use and exchange value: Irene Ng
Value Perception
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Customer lens Company lens
Rational loyalty• Rewards/Perks
Irrational loyalty• Habit/inertia• Convenience• Familiarity• Lack of Alternatives• Fear of change• Risk Aversion
Affinity loyalty• Belonging• Connectedness• Emotional bond
• Locked-in• Repeat purchases driven
by:• Something• Product preference• Brand preference• Incentives• Strong emotional
bond• Increased interaction
with the brand
Loyalty
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Customer lens Company lens
• Willingness to share or invest precious resources (time, information, attention) in exchange for preferential treatment
• Emotional bond with brand/company
• 4 types: mutually beneficial, parasitic, predator/prey and competitive
• Series of interactions or transactions over time
• Preferential commitment to a brand/company
• Strong emotional bond with brand/company
• Building step to lifetime value
• Willingness to share or invest precious resources (time, information, attention)
Relationship
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Customer lens Company lens
• Result of outcome of perceived performance versus expectations (of
product/service/interaction, etc), filtered by time,
memory and post-experience environmental
factors• System 1 thinking• Static point in time
assessment
• A silver bullet metric• Key building block for
loyalty• Emotional measure of
outcome of experience with touchpoints
Satisfaction
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Customer lens Company lens
• My perception of the experience is my
reality• Perceptions are
unique• Perceptions are
influenced by other pre-and post
experience factors, some of which have
nothing to do with the experience
• Perceptions are influenced by expectations
• Sum of every touchpoint• Sensory stimuli and
emotions generated while using product/service
• Impact of touchpoints on rational and emotional needs and expectations of customer
Experience
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Customer lens Company lens
• Defined by the customer
• Influenced by company, friends,
family, peers, reviews, etc…• Sum of all perceptions,
associations and attitudes held by
customer
• Differentiator• Market asset created
by marketing• Reputation• Emotional bond with
customer• Sum of all perceptions,
associations and attitudes held by customer
• Measure of NPV of future revenues
• Premium pricing potential
Brand
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Bond
Advantage
Performance
Relevance
Presence
Emotions
Interaction w/Org
Tech. Performance
Process/Support
Core
Brand Pyramid
Customer Satisfaction Pyramid
Company lens versus Customer lens
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Emotions
Interaction w/Org
Tech. Performance
Process/Support
Core
Customer Satisfaction Pyramid
the essence of what we offer
the infrastructure that supports and enhances the core
how well we perform on product and process promises
how people are served and treated
how we make them feel
Source: James Barnes, Secrets of Customer Relationship Management, 2001
“Things that the company and its employees provide and do at each level take on progressively more importance in terms of their influence on customer satisfaction…addressing progressively higher-order customer needs, similar to human needs in general as described by Maslow…and adding progressively more value for the customer.”
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Job(s) to be done
Value in use
Investigation Awareness Intent Purchase Support
Customer Shopping/Experience Journey
Customer Value Journey
Value Journey
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“CRM is a philosophy and a business strategy, supported by a system….
• which starts with the voice of the customer• Provides a means and method to enhance the experience• Aimed at providing mutually beneficial value
Paul Greenberg, CRM at the Speed of Light
What is CRM?
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“..a Customer does not value a relationship with the company, but mostly values the outcome generated from the experience of using your product or service…”
Wim Rampen, Social CRM – What Relationships Shoud You Care For and Why, 2/2/10
What is CRM?
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Understanding what customers value / want / need
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• Understanding the customer’s needs and values is critical to success - it’s their successful outcomes that matter
• “Your product/service is a means to an end, and thus, they are creating value WITH the product, not FROM the product” (Wim Rampen)
• Understanding the customer’s mindsets and perceptions are critical to crafting strategies and processes to improve the experience from their standpoint
• Attitude (or sentiment) does not always equal behavior. Identify when they do and don’t and develop strategies and tactics accordingly.
• There are NO single, silver bullet metrics for satisfaction (CSAT, NPS, etc) or loyalty (or customer effort) that will help you grow and improve your business. Why customers do what they do is not that simple!
• Measure what is important to the customer (outcomes, etc), not just what is important to you. Measure what you can take actions on, and those that have true cause and effect relationships.
• “Your customer may not always be right, but your customer is always your customer, and therefore, should be cherished.”
Liz Kislik,what your customer should and shouldn’t have to do for you
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