Last week, we ran another of our "Articulating the CRM Proposition" courses. Delivered to our partners located in the Midlands area of the UK, the course is designed for attendees - new & old when it comes to CRM - to understand how to identify & map a strategic business case for CRM to their prospects.

During one of the breaks, a conversation started on the differences between "operational" versus "analytical" CRM - what these terms meant & why are they important.

Fortunately, I recently came across a fellow CRM practitioner based in Australia. Francis Buttle, a visiting Adjunct Professor at Macquarie Graduate School of Management in Sydney, works in areas of CRM and Service Organization Management. He's recently released a book that I think is a very clear & comprehensive study of CRM. In particular, he sets out four major perspectives on CRM: strategic, operational, analytical and collaborative.

I think it's good for all of us to remember how CRM needs can "appear" within organisations and, consequently, the way these needs should be addressed. Francis' book does a great job at summarising different CRM needs, so I thought I would share some of his top-level ideas.

Strategic CRM
A customer-centric business strategy that aims at winning & keeping profitable customers. Typically, customer information is collected, shared and applied across the business - delivering "customer-centricity". Sometimes the CRM initiative aims to shape employee behaviours such that they enhance customer satisfaction and retention.

The challenge, as Francis points out, is that customer-centricity is often at odds with other chosen company strategies such as "product excellence" (customers choose products with the best quality, performance or features) or "efficiency excellence" (customers choose lowest price products). Nevertheless, in today's world, customer-centricity is a key feature of many CRM initiatives.

Operational CRM
Typically focuses on the automation of customer-facing processes such as marketing, selling and customer service.In the case of marketing, it's usually about applying technology to marketing processes, using customer-related data to develop, execute and evaluate targeted communications and offers. In the case of selling, operational CRM is often linked to efforts to improve and standardize the selling process. These initiatives can help understand & drive standard behaviours around activities such as lead generation & qualification, needs identification, proposal generation, proposal presentation, objection handling & sale closing.

Analytical CRM
This approach focuses on the mining of customer-related data for strategic or tactical purposes. It's all about the capture, storage, extraction & using of customer-related data, with data found in enterprise-wide repositories: sales data (purchase history), financial data (payment history,credit score), marketing data (campaign response information) and service data. This data, overlaid with third party information (e.g. geodemographic & lifestyle data) allows companies to derive answers to questions such as: Who are our most valuable customers In what sector do they exist What else might they buy (etc.)

Collaborative CRM
This approach applies technology across organizational boundaries with a view to optimising interactions between company, partners and customers. It's often described as the alignment of normally separate enterprises in a supply chain for the profitable identification, attraction, retention and development of customers. A simple example would be co-marketing, joint new product development and/or joint market research when large consumer food products manufacturers work together in bringing a new product to market.

So, as we say to attendees on ourown course, CRM is not just a software tool. It's not about just database marketing. It's not justa sales contact tool. It's not a service management offering. And, it's certainly not an IT issue. It's a business strategy. Understanding your customer's strategic aim is critical in shaping your response & articulating your product proposition.

-= David