Part three: evolving an adaptive strategy

By Jennifer Kirkby, consulting editor

So how do you build a customer strategy and tune it in to constant market change? Through a five stage iterative process - this is how all those CRM techniques get aligned and turned into something much more meaningful for you.

1. Understanding value (or situational analysis). This stage uncovers the current context regarding potential and actual customer needs and value - the market place and your position in it; your capability strengths and weaknesses. It employs a variety of information sources including environmental scanning, internal data, customer feedback, market research and capability assessments. The situational analysis culminates with a market map, analysis of the customer, stakeholder and product portfolios; customer journey maps, financial and capability analysis, plus a vital PEST (political, economic, social, technological) and SWOT (strengths, weaknesses, opportunities, threats) analysis which will provide a good base for non-financial indicators the CEO wants. “We don’t agree with your assumptions about the market” is a huge cause of internal strategic failure – so the science needs to be done upfront.

2. Choosing value (or setting purpose and objectives). This stage should inspire an organisation with purpose. Which customers or prospects in which markets are to be engaged with what proposition? To achieve this, a variety of modelling techniques - eg market positioning, segmentation and scenario planning - should be utilised to look at strategic options for building value. It is here that brand values and core value proposition are set alongside key strategic engagement objectives for customer acquisition, development or retention; as well as market development, share and penetration. “We don’t understand what is needed” is a major reason for lack of customer focus, so turn the purpose into a story.

3. Designing value (or building the proposition). This must be a highly collaborative phase where innovation is at a premium. Mixed functional and customer co-creation teams should be brought together and given relevant information from stage one and two in order to design the detail of the value proposition and how the objectives will be achieved. This should cover the detail of product/service/experience (product); pricing and resource to serve (price); situational touchpoints/partnerships (place); engagement/ co-creation/ dialogue (promotion); internal change (internal communications); and capabilities (resources)

4. Creating value (or building capabilities). This is the stage where the strategic capabilities - eg data, technology, organisational structure - get built, and where the proposition is turned into operational models and process maps. One of the more useful new tools in this phase is the customer touchpoint/journey map – it is this more than anything else that links strategy to operations and makes it adaptive to customer need. For companies moving to a customer-focused strategy, this stage will also mean preparing CRM programme plans to create a phased implementation of new and updated capabilities. Big bang projects simply do not work, a programme is the only way to build new capabilities and manage in the benefits, whilst negating debilitating politics. “It doesn’t suit us” has been identified as a particular cause of strategic failure.

5. Ensuring value (or tuning in to continuous change). By this stage the whole company needs to be engaged with the organisational purpose – delivering continuous customer value at every touchpoint; listening and learning. Value is ensured either through business as usual or pilots. Antennae should be trained to register changing market conditions, eg customer feedback, sales force intelligence, monitoring word of mouth. And all staff alerted to customer experience and their own performance in delivering it. It is through a deep understanding of company purpose and their role that command and control metrics can be kept at a minimum and key performance indicators put in place that really link to the intended strategy.

Part four, the benefits of the strategy process, click here.