The Next CRM: Going 1-to-1 with Constituent Relationship Management

HOME November 1999
The Next CRM: Going 1-to-1 with Constituent Relationship Management
Your key constituents demand a "real" relationship with your company...

by: Christian Sarkar
Christian Sarkar is an e-business consultant based in Houston, Texas. His website is at www.onewwworld.com.

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.)

consituents.GIF (12295 bytes)

OK, at first glance it looks like we're solving world hunger. But with the advent of relationship management tools, you now have some very real options.

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:

IDENTIFY your constituents at all points of contact.

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?

Customers	You already know the CRM spiel. Just don't get too extreme.
Partners	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!