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03.26.09 Understanding Customers' Needs Begins With Lean CRM  By Jim Berkowitz Here is a synopsis of an excellent article by Graham Hill, a Partner with Strategyn UK, How to Increase Profitability and Reduce Costs with Lean CRM: Companies are making deep cuts in anything that isn't nailed to the floor but they can only cut costs so far before they start to damage their ability to remain a viable business. So the $64,000 question is: What can companies realistically do today to survive the recession and to thrive once it is over? One answer is to give themselves a lean CRM makeover. This article is based, in part, on my experiences implementing lean CRM at Toyota, which eventually led to me becoming interim head of CRM for Toyota Financial Services for over a year. Solving the lean mystery There is a lot of magic and mystery surrounding lean, yet it is based upon five simple principles that really work wonders. These are the backbone of Lean CRM too... 1. Understand what customers really value Sounds blindingly obvious doesn't it? Yet, most companies don't know what their customers really value because they never ask them. Instead, they use analytics to try and find customers with a high likelihood of buying their current products. The result is that 99% or more of their marketing is ignored by customers, 80% of new products fail on introduction and 60% fail on reintroduction. Lean CRM starts with a thorough understanding of customers' needs, through the jobs customers are trying to do and the outcomes they desire from doing them. Using a combination of qualitative interviews and observing how customers undertake jobs, followed by a quantitative survey to validate the jobs and desired outcomes with a larger group of customers, you can discover what customers really value and how satisfied they are with your value delivery. This is the starting point, not only for lean CRM, but also for customer-driven innovation that can raise the innovation success rate from an 80% failure rate to an 80% success rate.
2. Map the value delivery process Once you understand what customers value, you should follow the value stream from the customer through your company and map the value delivery process. This is different from the process mapping that you are used to. Rather than just look at the processes, value stream mapping looks at them from the perspective of whether and how they create value for customers - and if not, whether they enable other processes to create value for them. It may come as quite a surprise to find that up to 40% of the activities in even recently re-engineered processes may still be non-value-adding. It goes without saying that these wasteful activities should be removed as soon as possible. 3. Let value flow direct to customers Once you understand what customers value and how value is delivered, you should restructure your CRM processes so that value flows without interruption to customers. This means removing any process, decision point or other bottlenecks that unnecessarily hinders the flow of value to customers. Continue reading this article. About the Author: Jim Berkowitz is a seasoned executive with more than 30 years of professional services and project management experience related to Customer Relationship Management (CRM) and Financial Management (Accounting & ERP) software solutions for small, mid-sized and Fortune 500 companies. As a Sales Force Automation and CRM Consultant, Jim has assisted more then 100 companies with the design and implementation of custom CRM solutions. Mr. Berkowitz is the founder and President of CRM Mastery, Inc.; a company dedicated to serving small and mid-sized enterprises (SMEs) by offering affordable tools and guidance to help them plan for and succeed with their CRM initiatives. |
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