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November 1999
The Next CRM: Going 1-to-1 with Constituent
Relationship Management
Your key constituents demand a "real" relationship with your company...
Now that we're all trying to create one-to-one relationships
with our customers, it's time we realized that the same principles apply to
"others" as well- suppliers, partners, the media, industry analysts,
shareholders, employees, even competitors! I was trying to think of these various
"others," and came up with a few ideas- ways in which innovative companies could
(and some already do) use the web to create
conversations with their markets. Let's call it Constituent
Relationship Management.
Why Bother in the First Place?
That's first question you'll be asked.
To which you reply in fluent corporate-speak: "so we can maximize customer
satisfaction and long-term shareholder value." You'll get the usual blank-looks
and skeptical squints, but don't give in. Because if your company's goal really is
to create value and wealth in the long-term, you can't afford to leave your relationships
to chance or "just-in-time," seat-of-the-pant (expensive) PR initiatives.
Someone (Peter Drucker) once
noted that every
business should be defined as serving either customers, markets, or
end-uses, and that every marketing analysis should in fact work
through these three dimensions, to find the one that works best.
And while the recent Customer Relationship Management (CRM) rage
focuses on gaining increasing shares of the loyal customer's wallet,
Drucker would say- what about the non-customer, the
person who does not buy our products and services?
Why not find ways to convert the non-customer into a loyal customer
as well?
And what about the rest of the market? No business exists in a vacuum. Some high-tech
companies are learning the hard way that focusing on customers and products alone does not
smooth sailing make. The bottom line- if you have
personal relationships with your key constituents, you'll be
significantly more profitable than your competition (all other things
being competitive, i.e., you still better have a darn good product or service!).
Who are my Key Constituents?
These are the firms, groups, organizations, and individuals that your company has to
interact with in the market. Here's a
sketch I made this morning- the key candidates for 1-to-1 conversations. (Let me know if I missed anyone.)
How To Do This: A Constituent-Based
Approach
Let's apply our CRM techniques to the problem. Let's agree that it's important for a
company to institute a process to learn about each constituent in a
systematic way.
Don Peppers calls this a "Learning
Relationship" and it has four basic implementation steps-
IDENTIFY, DIFFERENTIATE, INTERACT, and CUSTOMIZE- IDIC,
as Peppers & Rogers call it.. We'll modify Peppers' concept,
and replace the word "customers" with constituents;
voila- here's what the enhanced IDIC process looks like:
DIFFERENTIATE your constituents based on their
individual needs and value to your organization.
INTERACT with your constituents in two-way
dialogue.
CUSTOMIZE some aspect of your products or services based on what
you learn from your constituents.
With each interaction with any one of your constituents, you learn
more about their preferences, their needs, and their goals.
Instead of keeping this information locked inside your head, you capture
it and share it with the rest of your organization. And as your
knowledge of the individual constituent grows, you'll be able to anticipate their needs
and genuinely help them work better with you.
Remember to apply the lessons we learned from CRM:
i) Treat different constituents differently
ii) Protect constituent privacy
iii) Organize around constituent needs, which might not be
product-centric!
iv) Give constituents the option to customize their experience
v) Anticipate constituent needs and give them personal
recommendations
vi) Encourage self-service
As you can see in the table below, nothing has changed, simply treat
your constituents as customers. If I got a little carried away, it's merely
because I know these momentous changes are really happening. About time, don't you
think?
Here's
where it gets interesting. Say you're a global engineering company.
You've teamed with design partners in a low-cost regional engineering center in Asia. You
use the web to do the front-end conceptual design in your US office, and
the detailed engineering in Taiwan, with everyone sharing in the
project's progress online. Over time, you learn the individual strengths of the
people on the team- making it easier and more cost-effective to work together on the next
virtual design project.
The same concept can
apply in a distributed enterprise software marketing arena. Suppose
you've partnered with a firm to market and sell your software in Eastern Europe. You use a
secure extranet to seamlessly tie-in your product managers to their field
reps in Bucharest. Now customized product pricing, technical support,
planning documents, configurations, application demos, you name it, are all a mere click
away.
Employees
Employee
retention- the competitive battleground of the future. Increasingly, you've got to treat
different employees differently. What better way to hold on to your most
valuable employees than to offer them customizable work, salaries,
and benefits. Let them choose what projects they want to work on,
with whom, and when. When was the last time you worked for a company which truly
valued you as an individual, quirks and all, and put your strengths
to full use?
Suppliers, Vendors
What
do you need from your suppliers? An e-procurement solution with one-click
ordering and one-click tracking. A customizable catalog
with your company's discount pricing. An extranet which lets you look at
current and historical metrics- volume, cost, service, delivery times,
etc. As you apply IDIC principles to your suppliers, you'll be
able to differentiate relationships with your suppliers, creating different tiers- tier
one suppliers, for example, might have transparent inbound and outbound processes,
letting them anticipate your needs and plan for them. You'll get better stability in
your forecasts, less reactive decision-making, reduce inventory capital costs, and reduce
your expediting and transfer transactions. Nirvana? No, just a new set of online supply
chain management competencies your company will have to develop if it wants to
remain competitive.
Distributors & Retailers
Managing
channels in a time of great change- e-business has changed the relationship between you
and your channels forever. The clicks and mortar
paradigm is here. Companies that get it will embrace the
possibilities instead of fighting them. And here are some suggestions
on how to integrate your virtual and physical processes around the customer.
Shareholders
You
can spend less and have more. That's the message for corporate investor relations
departments. Treat your current and future investors using a 1-to-1 customer
approach- through your integrated web and call-center. Many companies do this today, but
ask yourself, do I have a customizable portal-view into the company, a "my
Exxon" page? :) You could also send them an informative bi-weekly
e-newsletter to keep them updated (with permission, of course).
Financiers, Analysts, Consultants
How
important is the right relationship with your bank, your "angels," your industry
analysts? These relationships will, in most cases, be actual face-to-face
relationships, but it won't hurt to give these key constituents their own "my
Exxon" page and bi-weekly e-newsletter as well.
With industry consultants, its critical to build
relationships with the key strategic thinkers in your industry. Again, the personalized
content approach is a good start.
The Media & Reviewers
You
don't have to do what the automobile industry does- send journalists on an all expenses
trip to exotic locales to try out the newest model XYZ- do you? I'm not advocating
that type of relationship, but why not create demos, press packs and
presentations tailored for the individual reviewer. If you know who the key
reviewers are, and you should, there's nothing wrong with providing them with useful
information and data, or even unfettered access to your internal staff - genuine workers
on your firm's "assembly line." Don't try to package everything, but
respond to the real and legitimate needs of the media.
Competitors
Why
go 1-to-1 with your competitors? Because in today's fluid world, you may be partners
tomorrow. Or you may have to team up to beat a third party. Or you may just
want to understand what your competition is doing- the players and their strategies for
winning customers. Your competitive
intelligence system should also track your competitor's relationships.
Government
Just
how do you have a personal relationship with the bureaucrats in government? Ask your
lobbyist. If you can't afford one, you can always get involved in quasi-governmental
organizations or alliances. The real story here is to avoid two things: a personal
relationship with the IRS, and two, a 1-to-1 entanglement with the Justice Department.
It does make sense to educate your public affairs department how to use the
web- and then set up a customized, permission-based e-mail campaign for their key contacts
at local, state, and national levels.
Action
Groups
Not
easy. Will Monsanto ever have a non-confrontational relationship with Greenpeace?
Can't see it happening in the near term. But stranger things happen. It is a
good idea to engage in constructive, sustainable coalitions with legitimate institutions
and action groups. You're not going to find common-ground without a relationship based on
respect. Again, a customized,
permission-based e-mail campaign can help. Show them what you are doing for the
common good.
A novel way to look at these so
called "fringe" action groups, is to view them as your most demanding customer
focus group. What if you really could feasibly meet their product alteration
demands? Well, then you're one step ahead of your competition! This may be an
idealistic approach, but it may actually be less expensive (and risky) than fighting your
way through the courts. And think of the free PR- if that's what motivates your
company.
The
Public
Capturing
the mindshare, goodwill, or even imagination of the public is a noble goal.
Why not view the public as your future customer, or employee? Who are the
public opinion leaders that count? Do you know who they are? Do you have personal
dealings with them? Why not?
Conclusion
The e-relationship age is upon us. E-relationships are cheaper, faster, and if done
right, profitable- both for the companies using these new technologies and for the
companies creating them. If you haven't already, it's time to put on your company's
strategic thinking hat and think ahead. And then do something!
