AnalyticsROI MarketingKnowledge: The Key to ROI

Knowledge: The Key to ROI

Recently, Arthur's been examining what DOESN'T deliver ROI in a CRM initiative. Here's the one you've been waiting for: what makes CRM pay off and how successful companies make it happen.

In my last two articles, I discussed the “Myth of ROI.” In this installment, I’ll disclose the key for achieving return on investment (ROI) in customer relationship management (CRM).

I have suggested that the success of a CRM initiative is largely determined by how broadly and deeply embedded it is in competitive strategy. Most successful companies are essentially learning organizations, focused on three types of knowledge (or intelligence): customer knowledge, self- (or internal) knowledge, and market (or competitive) knowledge.

Customer Knowledge

The first category describes what is becoming known as “analytical CRM,” constantly analyzing and examining changing needs and profiles of customers and prospects.

Customer knowledge is often based on online analytical processing (OLAP) queries of multidimensional cubes, which in turn are extracted from data warehouses and data-mining applications, such as predictive and descriptive modeling. The process doesn’t have to be so tech-heavy. Old-fashioned, proven techniques — such as talking to customers and asking them what they need — work for many businesses (especially professional services).

Often, it’s not the knowledge that’s hard to obtain. Deployment of knowledge is the problem. Many organizations possess isolated pockets of best practices and expertise but don’t have the will (culture) or the way (an enabling real-time architecture) to utilize these precious assets.

Successful organizations are dedicated not only to customer-knowledge discovery and learning but also acting on this information. Most businesses conduct a few surveys here and there and rely on anecdotal evidence combined with executive preconceptions about who their customers are and what they want.

Self-Knowledge

Successful organizations have very realistic assessments of their competitive strengths and weaknesses. They are willing and able to marshal resources to continually improve processes, adopt best practices, and experiment with new ways of getting things done.

Increasingly, they look beyond the boundaries of their own organizational, operational, technical, legal, and network infrastructure to ensure excellence among their partners. They know competitive advantage lies in the ability to create dynamic supply networks that can capitalize on demand.

Market Knowledge

Successful organizations understand that business strategy is competitive strategy. They learn about their competitors and know that another company’s weakness creates an opportunity.

The result of all three types of knowledge discovery is a strategy and execution framework that treats demand discovery and fulfillment as an integrated, end-to-end process.

An end-to-end approach represents the integration of knowledge of external market demand, internal organizational capability, and competitive conditions. Successful organizations find out what clients want, then focus on delivering offerings they can competitively and profitably deliver. They understand customers are won — and lost — in the interplay of demand and supply.

Related Articles

6 ways to increase your conversion rate using behavioral data

Analyzing Customer Data 6 ways to increase your conversion rate using behavioral data

4w Mike O'Brien
Influencer marketing: Eight tools to identify, track and analyze your brand's next biggest fan

Content Influencer marketing: Eight tools to identify, track and analyze your brand's next biggest fan

4w Tereza Litsa
Tools and tips for calculating the ROI of social media

Conversion & ROI Tools and tips for calculating the ROI of social media

1m Clark Boyd
How to use behavioral data to enhance your website's conversion rate

Analytics How to use behavioral data to enhance your website's conversion rate

2m Chris Camps
Big data in the travel industry: How can travel companies do more to collect and use customer data?

Analyzing Customer Data Big data in the travel industry: How can travel companies do more to collect and use customer data?

2m Clark Boyd
How machine learning can help you optimize your website's UX

AI How machine learning can help you optimize your website's UX

1m Chris Camps
Why banks are becoming customer-centric organizations

Analyzing Customer Data Why banks are becoming customer-centric organizations

1m Al Roberts
How to achieve true omnichannel relevance

Analyzing Customer Data How to achieve true omnichannel relevance

2m Clark Boyd