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Digital CRM 2.0 Building Customer Relationships in the Digital Landscape

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Digital CRM 2.0 Building Customer Relationships in the Digital Landscape Digital CRM 2.0 Building customer relationships in the digital landscape 02 Introduction 04 A Challenging Environment for CRM 05 Study Results 10 Digital CRM Definition 12 Strategy 17 Analytics 30 Organization 36 Technology 42 Legal 50 Performance Measurement 54 Digital CRM Study Takeaways 66 Contacts 68 03 Introduction Dear reader, • What trends are leading organiza- Since our first Digital CRM Study was tions pursuing? published in 2015, this topic has gained even more traction. New trends and technological • What are the challenges they face? advancements have prompted us to reopen • How can Digital CRM play a role in a discussion about the transformation of achieving business objectives? customer management with internal and external topic leaders. To give our observations a broader foundation, we conducted in-depth Our 2015 study showed that not all interviews and discussed critical topics with companies and industries had the same various topic leaders across industries. level of maturity in customer relationship management. As customer needs changed As a complement to our findings, we provide and new technological solutions emerged, understandable real-life best practices and companies had to shift their priorities key considerations for each selected topic to create efficient relationship-building based on the experience we have gained in capabilities, with a strong focus on multiple Digital CRM projects and current integrating social channels. research in the field. A lot has changed since then. Cloud Enjoy the newest insights in our Digital CRM solutions have become the norm, new Study 2019! GDPR regulations are affecting key business processes and companies are trying to harness legacy CRM capabilities to drive Steffen Legler superior customer experience. Partner and Practice Leader Deloitte Digital The objective of this study is to shed some light on what is driving today’s CRM efforts. With this study, we will shed some light on the factors that are driving CRM efforts today. 04 A Challenging Environment for CRM In today’s world, digital transformation But the focus is shifting; expectations from forces companies of all sizes and industries internal and external stakeholders alike are to constantly re-evaluate their ongoing moving from shiny TV adverts towards true operations and adapt to new market excellence in customer relationship building realities. “The customer is king” has long and customer experience. been a popular mantra in marketing and sales departments, and industry leaders Why is it so important to focus on customer as well as academic experts are constantly relationship management? Four major preaching customer centricity. forces are dramatically changing the business environment: Customer demographics and behaviors 1 It is no longer a well-kept secret that screens, consumers are bombarded with customer demographics and behaviors content all day long, and they only pay have radically changed within the last attention to content they see as targeted, decade. Companies have to adapt their relevant and authentic. In the battle for marketing and sales strategy to meet eyeballs, companies need to understand these evolving customer needs. On and know their (prospective) customers the one hand, the customers’ time is to create a memorable, personalized scarce and they want goods on demand, experience across all possible online making them prime targets for a well- and offline channels. Contemporary crafted relationship strategy. On the customers demand more than just goods other hand, as their technological skills and services: they expect companies and product knowledge continue to to be authentic and sustainable, while increase, customers gain more leverage still offering the best deal. They demand over companies. Millennials in particular convenience and want to spend more (Generation Y, born in between the early time on the things that matter. We see 1980s and late 1990s) and Generation a strong desire for self-service, e.g. they Z (born after 1996) are tech-savvy, fully want the convenience to access relevant engaged in social media, and more likely information without a customer service to churn, if their expectations are not representative, but also expert consulting met for any reason. Spending several once they need it. hours each day looking at their mobile 05 The contemporary customer… Well-informed/ is well-informed thanks to technological advances (e.g. online comparison sites, peer validation, self-educated smart recommenders, etc.). does not trust most businesses, media or governments, wants self-service and, as a result, Self-directed is difficult to influence. is convinced that “time is money”. The goal is to get things done quickly and easily so they can spend Fast-paced more time on things that matter. reads product and service reviews, compares different offerings and carefully weighs all options Picky before making a purchasing decision. Contradictory is often contradictory in his/her behavior and does not exhibit any clear behavioral patterns. Always uses smartphones, wearables and corresponding technology at all times, blurring the distinction connected between the online and offline world. has a high willingness to change brands, especially when customers do not feel as if they are Volatile receiving special treatment. is both tech-savvy and impacted by tech, open to early adoption of new technology, uses tech to Tech-innate make the world more predictable and tends to see technology as reliable and people as unreliable. 06 New business models 2 As customer behaviors and expectations profitability and turning recent adopters change, companies experiment with into loyal long-term customers. If a new business models to create new company’s approach does not live up to revenue streams. Well-known examples the consumer’s expectations, they are are various Freemium business models very likely to abandon the company (e.g. Spotify), pay-per-use models with ecosystem entirely – without generating costs occurring only if the service is used enough revenue for the company to be or revenue models through relatively lucrative or break even on acquisition low monthly subscriptions (e.g. Netflix). costs. Building long-lasting relationships In each of these models, continuous with customers is therefore a crucial customer engagement is key to generating success factor for these new business sustainable revenue streams, reaching models. Technology 3 Technology is at the heart of Digital resources based on data insights and CRM. Once a company has defined its track progress of initiatives using tradi- CRM strategy, modern technology is the tional and customer-based KPIs. Digital enabler of that strategy and absolutely touch points along the customer journey crucial to meeting contemporary custom- enable companies to bring their customer ers’ expectations. Today’s CMOs need to identity management to life and gather collaborate closely with CIOs to create an insights about the anonymous as well as outstanding customer experience that is the known customer, taking the company’s grounded in data and incorporates tech- customer strategy and latest data protec- nological advances. Technology enables tion regulations into account. In addition them to gain transparency about mar- to digital touch points, companies need keting spending, customer engagement to integrate traditional touch points along and satisfaction. State-of-the-art CRM the customer journey as seamlessly as tools make the process of relationship possible. building internally transparent, allocate 07 Transparency 4 Marketers have seen their budgets grow their growing investments and provide over the past years and further growth transparency about the ROI. CRM leaders is expected. While priority of traditional have to rely on digital communication media decreases, more than 50 percent channels that generate reliable, valuable of marketing budgets are expected to customer data and establish advanced be spent on digital marketing by 2023. analytics capabilities to demonstrate This increase in marketing spending performance and effectiveness of CRM puts greater pressure on CMOs, who measures. are increasingly also in charge of the overall customer experience, to justify New business models Changing customers Technology Desire for advances transparency 08 Digital CRM enables companies to get their core ready to satisfy expectations with meaningful and value-adding relationships. 09 Study Results Customer relationship management continues to play an important role. 92 percent of the topic leaders in our survey cited CRM as a key priority for enabling their business strategy and, as a result, discussed it at board level. However, CRM still seems to be treated as a Profitable relationships are created by focusing technology-focused topic, ignoring the impact on value-adding customers at every touch point of other perspectives on success. We herewith and through various channels. At the same time, provide guidance by sharing our point of view our research shows that the often cited “omni- on what Digital CRM is and how it impacts an channel experience” has yet to become reality organization. in most cases and companies are still building relationships without insights on customer profitability. In the following pages, we elaborate on how companies can achieve consistent touch points, while also considering their brand, and putting customer value at the core of relationship building measures. Fortunately, the days of managing customers with
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