Share this content

From strength to strength: CRM and the sustainable organisation

23rd Jan 2009
Share this content

Based on our members' concerns about the worsening economy, editor Louise Druce speaks with resident analyst Jennifer Kirkby to establish how organisations can become sustainable - and where CRM disciplines fit into this.

By Louise Druce, editor

Twelve months ago, Jennifer Kirkby boldly predicted that 2008 would bring chaos - and boy was she right! So when our members asked us what issues they should be considering in light of the challenging business landscape, who better to go to than Kirkby herself.

In 2008, customer experience initiatives were being ramped up whilst social marketing emerged as a hot topic. According to Kirkby, 2009 will bring its own trends, and these will undoubtedly be dominated by the prevailing credit crunch. The economic shift will mean that companies will be looking to provide more value to the customers with the most potential, emphasised by 'new marketing', innovation, the shift to better resource allocation and building up customer relationships as an asset.

According to the businesses she has spoken to over the past 12 months, Kirkby suggests the key issues for organisations in 2009 will be:

  • Where they will find growth
  • How to build trust and real relationships
  • How to capitalise on social marketing
  • How to become more innovative
  • How to build a sustainable organisation

"There are a lot of organisations concerned about where they will find market growth in 2009," she explains. "They are also asking themselves how they can build trust and real relationships – Future Foundation statistics on trust indicate that consumers are losing trust in businesses."

There is also the issue of capitalising on social marketing. "There are a lot of people looking at this because there are some sexy benefits from the likes of cocreation," Kirkby continues. "Innovation remains important, as echoed by the likes of McKinsey’s. And finally, they are also asking themselves how they can build a sustainable organisation."

"Being sustainable means adapting to the market conditions around you and having the internal capabilities to do it quickly."

Jennifer Kirkby

Sustainability is about making sure your company maintains its usefulness to customers, and its competitiveness. Therefore, being sustainable means adapting to the market conditions around you and having the internal capabilities to do it quickly.

"Organisations have to remember that customers are also changing as well as a result of the downturn. An economic change is one thing, but changing customer needs is another way that markets change. Sustainability is about maintaining your position in the market over the long-term."

What makes a company sustainable?

Customer relationships can build an asset to provide a cushion against changes in the market, according to Kirkby - a kind of 'brand halo'. This is where a brand can reach market share peak, have very high salience and become a market leader, but also remain a market leader long after it doesn’t deserve to be any more simply because people remember its status and think it is still on top.

In the past, many organisations thought that they were sustainable due to this halo, when in fact they weren't. "When Dyson came along, Hoover possessed a certain brand salience so that Dyson, as a brand challenger, had to fight this, even though it may have been a better product than Hoover. So part of being sustainable is maintaining a very positive image with your brand and your customer value proposition," Kirkby explains.

"Obviously, if you are going to keep that position - and be entitled to keep that position - then you are going to have to possess the capabilities to adapt as you go along and also have the market intelligence and customer intelligence so that you know what is going on."

When it comes to customer intelligence, Kirkby believes organisations are going to embrace analytics and understanding customers. The concept of listening to customers a lot more is where the social side will come in. But she also expects a resurgence of ‘strategy’ as well.

"When P&G found itself in a downturn, it reinvented itself and turned from research and development to connect and development, where it has built up its social cocreation."

"Companies are going to have to get far more strategic," says Kirkby. "In the 90s, organisations such as McKinsey’s told CEOs that all they needed was five strategic imperatives. They didn’t need strategy any more – it didn’t guide the organisation. But what they now need is an adaptable strategy. Firms will increasigly realise you can’t guide an organisation with five strategic imperatives at all; you do need something more tangible."

Achieving sustainability isn’t easy, of course. A case in point is Woolworths, which arguably fell down because it didn't reinvent itself. So who is sustainable?

"Marks & Spencer had to reinvent itself and now it is probably going to have to reinvent itself again. If it is successful you could certainly point to M&S," says Kirkby. "You could point to Tescos, which goes from strength to strength after it was really failing. IBM has also reinvented itself quite successfully, as has Procter & Gamble. When P&G found itself in a downturn, it reinvented itself and turned from research and development to connect and development, where it has built up its social cocreation."

Indeed, it is said that a lot of innovation comes out of a downturn. Orgnisations are acknowledging that if you look and operate like everybody else, how do you really know what to do and what not to do? The company will merely get into a price drive situation, which is just not sustainable.

Kirkby adds: "Sustainability is all about being different and retaining that difference - and retaining that difference in the eye of the consumer in a way that is meaningful to them as well."

Replies (1)

Please login or register to join the discussion.

By pdolivieri
29th Jan 2009 15:35

I agree with Jennifer Kirby's statement, "Sustainability is all about being different and retaining that difference..." The challenge for most companies is that being different requires change from the status quo including change in the corporate philosophy and culture supported by senior executives.

Most companies that have not embraced, adopted and leveraged CRM to its full capability have been caught in what I call the "Barriers of Convention" syndrome, where status quo corporate philosophies, cultures and management structures remain anchored to old world thinking, ideals and power bases.

For companies to survive in the current economy, they need to mitigate the issue of simply giving customer centricity lip service vs. having an active customer-centric philosophy, culture and actionable strategy.

Enter the role of the Chief Customer Officer. The CCO will be instrumental in helping companies to survive in the current economic downturn by championing the philosophical, functional and financial commitment to customer centricity and ensure that a focus on the customer is not the exception but the rule, as an essential competitive strategy that is especially important during an economic downturn and recession.

To ensure success, the CCO role along with the other CXO roles need to be clearly defined where customer accountability is concerned. Doing so should also help liberate companies from the siloed way of operating by tearing down the walls of the mini-empires built by traditional functions through a mandate toward a common customer objective.

Finally, the CCO will help companies align their budgets with their customer centric journey working with Finance to implement processes and technologies to view departmental accounts through a customer-centric lens, thereby mitigating the risk of the customer being impacted, ignored or alienated when tough business decisions are made.

The role of CCO is a step in the right direction toward company sustainability.

Phil Olivieri

Thanks (0)