The recession is forcing companies to rethink how they do CRM. Gone are the 'big-iron' CRM projects of yesterday with multi-million budgets, inflexible two-year project plans and ROIs that were little better than inspired guesswork. In their place is a new approach to CRM, based upon running projects as internal corporate ventures [1] that deliver tangible results, at low cost, within 100 days.
To make internal venturing work for CRM, it needs to be based upon three parts, each of which supports the others.
- Proven CRM Theory - The first part is a thorough understanding of proven CRM theory. This provides a robust platform upon which to build an internal venture project. Without this platform, it is all too easy just to copy other companies' CRM projects without understanding how they need changing to suit your company's unique capabilities. Proven CRM theory provides the know what.
- Detailed CRM Practice - The second part is detailed experience implementing CRM projects and operating them afterwards. This provides a practical framework for planning the CRM project, piloting it in stages, implementing it and then operating it afterwards. But experience by itself is not enough. You also need to understand enough CRM theory to know how to adapt experience with other companies to your own situation, particularly during planning and early piloting. Getting it right at the beginning will mean that you don't have to significantly change the project later on, when it is much more disruptive and costly to do so. Detailed CRM Practice provides the know how.
- A 100 Day Project Plan - The final part is a 100 day project plan, setting out how you will implement CRM and start delivering tangible results within 100 days. Obviously, you can't deliver an enterprise-wide CRM programme, e.g. telco Billing & Collection, in 100 days. But you can break larger programmes down into smaller 100 day projects that you can more easily manage for results And by results I mean delivering project milestones, on-time, in-full, to-budget. Only by running projects as internal ventures can you ensure delivery of results, with whatever resources are available, at a minimum cost. A 100 day project plan provides the CRM blueprint to get started.
So how do 100 day projects work in practice?
Recently, I directed a small team that implemented Customer Lifecycle Management (CLM) for a national operating company of a major mobile telecoms provider, all within 100 days. The lifecycle of the 100-day project was broken down into five stages:
- First 10 Days - Feasibility - The first 10 days should be spent understanding the company’s current CRM capabilities, who the key resource holders are and planning the project milestones and costs in detail. The time should also be spend arranging for critical data required later in the project to be available just in time. One of the biggest problems in CLM projects is data not being available when required.
- Days 11-50 - Soft Pilot - The next 40 days should be spent developing and running a ‘soft pilot’ of CLM for the highest priority target customers. This includes gathering data, developing propensity models for e.g. customers likely to churn, creating attractive propositions, programming the campaign management system, developing marketing communications, arranging fulfilment for customers that respond and of course, reporting results. The idea of a soft pilot is that the CLM capabilities are tested manually to ensure that everything works as intended. Inevitably, some things don’t and soft piloting gives you the chance to fix them before they are automated in the next stage.
- Days 51-70 - Hard Pilot - The next 20 days should be spend automating the soft pilot once it is working smoothly and repeating the soft pilot process for next the highest priority target customers. Once the soft pilot from the previous stage has been run smoothly without any problems a number of times, it can be automated. This includes automating data feeds, customer scoring by the propensity models, offer selection for customers, the whole campaign delivery and fulfilment process and reporting. Early results should also be examined in detail and changes made to targeting, offers and communications to hopefully improve results. The soft pilot process should also be repeated for the next highest priority target customers. You may have decided that retaining customers likely to churn is the highest priority. These customers would have been soft piloted in the previous stage and hard piloted in this one. The next higest priority might be customers you think are likely to increase in value, or to take up a particular product. They would be soft piloted in this stage prior to being hard piloted in the next one.
- Days 71-100 - Implementation - The last 30 days should be spent hard piloting the next highest priority target customers from the previous stage and standardising the whole CLM process across the business. In the previous two stages, the CLM process has been systematically tested and automated across prioroty customers. In this stage, the process is standardised across the business so that it becomes daily business for all staff operating it in the future. This includes measuring, monitoring and managing the business by the results delivered. As this will form the basis for all future CLM activities, it is essential that this stage is carried out by the company staff who will operate CLM in the future. It can be challenging to get operational staff to change their emphasis from doing activities to delivering results, but it is essential if CLM is to deliver the results expected of it. Customers' behaviour is continuously changing and CLM needs to continuously change with it.
- Post 100 Days - Kaizen - The post 100 day period should be spend further standardising the CLM process and in improving all aspects of CLM. This includes, improving the results of individual campaigns, improving underperforming propensity models and improving the operation of CLM. Although lean processes should be implemented automatically during CLM's development, the pressures of managing internal ventures with a 100 day target mean that this is not always possible. Just applying lean thinking to business processes can reduce non-value-adding costs by up to 20-40% and process cycle-time by a similar amount.
This project delivered multi-million Euros of annual incremental revenue, on a total customer base of less than 5 million and a targeted customer base much smaller still. All for a total outlay of less than Euro 250,000. And all up and running by the telco's own staff within 100 days. You can work out the ROI for yourself.
Find Out More, Get the Presentation
I have presented and run whole day workshops showing how 'You Can Do CLM in 100 Days' at a number of Telecoms CRM conferences over the past year. Send me an email to graham(dot)hill(at)web(dot)de if you would like me to send you the full presentation.
Graham Hill
Customer-driven Innovator
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Further Reading:
Graham Hill, Piloting is Critical for Successful CRM Technology Implementation [1]