Plan: the customer touch points available. EffectivePlan: the customer touch points available. Effective


 During this period, the marketing division
decides how best to reach customers defined in the evaluation stage by creating
marketing campaigns and strategies. Despite the IT solutions for the campaign,
the stage does not rely heavily on technology for its success. Traditionally,
the planning phase is the creative part of marketing, with support provided by
tools and frameworks.

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The implementation phase of the cycle is
where an organization puts all this knowledge to work, using all of the
customer touch points available. Effective customer interaction, which has two
dimensions, is the key here. The first dimension is the execution and
management of marketing campaigns and customer treatment strategies through
these interaction touch points.

The second dimension is the tracking of responses,
which also represents an important aspect of this phase: gathering data on the
results of each plan which are to be used in the next assessment cycle or the
next time a customer interacts with the company. From an IT perspective, it is
essential to understand the nature of the data to be gathered and how it will
be used so that appropriate data standards and metadata definitions can be
deployed to make the subsequent use of this data simple and meaningful. If this
data is captured successfully, then the next cycle will be more productive and
the repeatability of the process will be beneficial. If the organization does a
poor job of defining and using the execution data, then the repeatability of
the process will only lead to a rehash of the same mistakes over and over




The CRM cycle needs to be completed with
the final phase to review the effect of the current cycle. Through reviewing
the feedback collected in the implementation phase, the managers are to
reevaluate the whole cycle, explore what is good and more importantly, what is
bad. The goal in this phase is to revise the business processes, improve the
procedures in carrying out the whole CRM strategy, and set up a more solid base
for the next round of cycle.


There are three primary reasons why CRM
has taken hold as rapidly as it has: fierce competition, the economics of
customer retention are unequivocal, and technology allows organizations to do
this more effectively and profitably today.

The Return on Investment of CRM Strategy
– There is only three ways to increase the profitability of a customer base:
acquire more customers, optimize the value of existing customers, or retain the
right customers longer. All of these benefits must be achieved with lower
costs. As the economic climate continues to become more competitive, the fight
over customers intensifies Of the three options, getting new subscribers is the
most expensive. The research also shows that loyal customers will buy more of
their lives and are willing to pay for what they like and trust. So while the
organization will continue to seek new customers after they have already
purchased, they already know that it is worth the significant investment to
keep it. CRM is one way to do this. Areas of improvement that companies are
seeking to improve their target market and move to the CRM approach demonstrate
the tremendous benefits that good CRM strategies are available.

A Confluence of
Technological Factors

Technology has become a prime factor in
the move to CRM. A confluence of multiple disciplines, from a data warehouse
and its underpinnings in parallel computing, data mining, and other
complementary technologies, have enabled marketers to sift through mountains of
data to extract invaluable information and knowledge about their customer base.
Without these technologies, the ability to achieve a market-of-one concept
would not exist. Integrating these technologies with operational front-end and
back-end systems provides the necessary seamless collaboration and the IT
challenge that comes along with it. Companies have also recently become aware
of the need to manage their processes more effectively. Workflow technology,
which allows enterprises to design automated processes to enhance the
productivity and responsiveness of their work force, as well as to deliver new
levels of service, has also played a major role in enabling CRM initiatives and
providing a higher quality of customer service. Finally, as data mining and
segmentation technology has evolved, there has been an observed trend toward in
sourcing of database marketing activities, rather than the more traditional
outsourcing to service bureaus. As the technology for identifying target
customers becomes affordable and available, individual companies are finding
that they want to gain control of the process of connecting with their
customers. Bringing the process in-house leads to not only more control to the
organization but better results. Companies can overlay their own data to better
understand customer attributes and get better results. Rather than relying on
purchasing extensive lists of customer attributes (many of which they can’t use
and throw away), companies can intelligently select these attributes, thus
saving money and achieving better tailored results.

Furthermore, as the algorithms for
segmentation become well refined, companies are coming to understand the power
of the segmentation tool. By brining the tools in-house, they are able to build
models that meet their own specific needs. These highly customized segmentation
and propensity models have become highly treasured trade secrets, which must be
assiduously guarded. This represents an opportunity and a challenge for the IT
professional to work with the marketing organization in implementing and
deploying these new technologies.

The Fierce Competition

For most companies
that sell products, the value chain includes processes and activities that are
capital intensive, but don’t add value from a customer perspective (e.g.,
inventory, distribution centers). Forward-thinking companies are increasing
their profits by reducing their investment in this capital intensive and
non-value added links of the chain; and then redirecting those investments into
activities that do have value to the customer. Companies as diverse as Dell
Computer, and Cisco all exemplify this trend. For example, both Dell
and have vastly reduced their