CRM – we hear about this term a lot lately, but what is it and how can we use CRM to influence successful new product development/

CRM is the acronym for customer relationship management.  Very often it is implements as a technology to collect data about customers and is used primarily by the sales force.  In practice, we can identify at least two other implementations of CRM at a function level and at a strategic level.  Let’s take a look at each of these.

Technology-Driven CRM

Big data and the opportunity to gather vast amounts of data, such as web page viewing, click-through behavior, and purchase histories, have led to the creation of many functional CRM systems.  These CRM systems are driven by technology and have a limited use.  Often, the CRM is used only to automate sales force functions or to manage promotions and campaigns.

Analysis of CRM data to inform new product development is lacking in a technology-driven system.  Companies may invest significant capital and IT resources to install CRM systems.  Yet, the stored data is often neglected so that the return on investment is far less than expected.  This leads to severe disappointment in the CRM and executives continue to search for ways to collect consumer insights.  The CRM thus becomes a wasted resource.

Level 1 CRM

A Level 1 CRM utilizes the data collected through the IT application and shares the information to build a consistent customer view across several functions.  Companies deploying a Level 1 CRM recognize the importance of coordinating customer and segment knowledge to deliver a unified customer experience.

Functions involved in a Level 1 CRM might include sales, marketing, customer service, technical service, warranty, and maintenance.  Each department will have access to the CRM database showing a customer’s purchase and claim history.

The idea behind a Level 1 CRM is to focus on the total customer experience.  A firm will recognize the customer throughout the purchase process from decision-making, buying, and after-sales support.  In some industries, a Level 1 CRM can be differentiating.

Strategic CRM

A strategic CRM system goes beyond Level 1 by integrating the customer experience throughout the new product development process.  We might prefer to call a strategic CRM “CVM” – or customer value management.

At the strategic level, customer viewpoints, reactions, and interactions are integrated into all business processes.  CRM is not simply a data collection tool but a warehouse of information and knowledge to inform business decisions of a customer-centric organization.  All the functions involved in a Level 1 customer experience analysis are included in a strategic CRM, but also involved are R&D, engineering, operations, and supply chain.

These cross-functional teams study and observe customer behaviors to validate stated and unstated customer needs.  Customers are queried throughout the NPD process to verify new concepts and new product features and functionalities.  Strategic CRM focuses on processes that span department boundaries in order to select customers and products that will deliver the most value to the frim.

Using CRM

Companies most successful with Strategic CRM use their intimate knowledge of customers and segments to design and develop future products as well as to understand current needs.  Strategic customer value analysis includes evaluation of societal trends influencing customer behaviors as well as segment and industry activities.  This is the difference between transactional sales management and customer relationship management.  Having a direct dialog with customers provides a qualitatively differentiated product and service solution for customers, giving the firm a competitive advantage.

How do you use CRM in your company?  If it is currently a technology-driven sales tool, dig into the existing data to mine it for new customer insights.  The sales force often has the highest level of interaction and communication with your customers and will document reactions to new product concepts in the CRM.  Understanding thoughts, opinions, and desires of your existing and potential customers can lead to valuable insights for NPD.

You can learn more about building lasting relationships with customers in an NPDP workshop where we discuss specific marketing tools and techniques for new product development.  Contact me at [email protected] or 281-280-8717 to enroll in a free NPDP overview course or any of our newly scheduled PMP, Scrum, or NPDP workshops in Houston as well as our online PDH courses.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC