Digital CRM 2.0 Building customer relationships in the digital landscape - Deloitte
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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.
04A 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
05The 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.
06New 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
07Transparency
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
08Digital CRM enables companies
to get their core ready to satisfy
expectations with meaningful and
value-adding relationships.
09Study Results
C
ustomer 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.
F ortunately, the days of managing customers
with Excel files are over. Today’s technology
enables personalized customer relationship
management at scale. Although the
opportunities are huge, many companies
struggle to make use of them. Our examples
show how developing the right systems can
enable the business strategy and explain what
factors need to be considered when integrating ustomer relationship management is heavily
C
a system into the enterprise architecture and affected by increasing legal regulations. Although
how to ensure a solid data quality. 57 percent of topic leaders revealed that the
impact of GDPR was not as strong as they
expected, compliance with the regulations has
become a key topic on corporate agendas. That
said, 71 percent of CRM leaders still feel that the
operating model with legal departments needs
to evolve to enable closer collaboration.
10Meaningful insights are key in developing
meaningful relationships. We see more and
more companies trying to use their analytical
capabilities at scale to provide personalized
and context-based touch points. Still, we found
that a lot of industry players never go beyond a
personalized email subject. We offer a set of key company’s structure relies on the people who
A
building blocks to make companies more data plan and execute the initiatives that make or
driven and explain why customer analytics is break customer relationships. By contrast, our
essential in personalization activities. interviews showed that organizational structure
is still a key challenge on the way to achieving
digital CRM maturity. Although there was often
a fluency in agile project execution at the
operational level, leadership teams were stuck
in their old structures and struggled to adapt
to new roles within an agile way of working.
That is why we included best practices for CRM
operating models and organizational ways of
working.
In the past, companies spent a significant
amount of money on their customer
relationship management capabilities. Our
research shows that, because of the huge
importance of the topic, this is unlikely to
change in the future. Our discussions and
project insights reveal that transparency about
the success of those spendings is becoming
increasingly important. But: How do we define
success in CRM? And how can it be measured?
You can find the answer at the end of our
study when we summarize the topic of CRM
measurement.
CRM still seems to be treated
as a technology-focused topic,
ignoring the impact of other
perspectives on the success.
11Digital CRM Definition
With today’s changing customers, new on data insights and use traditional and
business models, emerging technologies customer-based KPIs to track the progress
and greater need for transparency about of their initiatives towards the defined and
spendings, companies are obliged to communicated target.
further develop their CRM capabilities. But
what does it mean to go one step further? Digital CRM provides the structural
Organizations already pursuing digital foundation for building and managing the
customer relationship management do capabilities and processes required for
not see CRM as just another tool. They see interactions from strategy to operations.
it as a strategic guidance for building It is driven from an inside out (company)
lasting and profitable relationships with orientation and therefore different from
their customer base by providing person- the concept of customer experience man-
alized and context-based interactions agement, which focuses on the outside,
throughout the customer journey. They i.e. human/company interactions. There is,
put the customer in the spotlight and however, some overlap and the distinction
identify the mindset and capabilities between the two concepts is still fairly
needed to enhance the experience of fuzzy. Companies need to be aware of
each individual’s interaction with this both the customer and the company per-
organization. Furthermore, they make the spective and combine them to meet the
process of relationship building internally customer’s expectations.
transparent, allocate resources based
Strategic Guidance
Profitability
12In order to meet customer expectations,
organizations will have to
Understand … Develop … Align …
… CRM value drivers and hurdles from … a consistent method of measurement … their operating model with the customer
various perspectives. Management needs for individual customer value and allocate journey. CRM requires a cross-functional
to strategically address functional, tech- resources for relationship building accord- and flexible way of working from top
nological and regulatory factors to ensure ingly to focus on high value customers or management to the operational level.
a proper fit in terms of the direction and potentials. This goes hand-in-hand with Top management in particular needs to
operationalization of the customer jour- adequate analytical capabilities to gather understand its new roles & responsibilities
neys they design. insights and personalize the customer in an agile setup.
journey.
Leverage … Integrate … Ensure …
… its CRM technology to the fullest extent. … legal knowledge into day-to-day opera- … proper measurement of CRM perfor-
Tools and analytics act as a foundation for tions to leverage the potential of CRM to mance. Companies need to continuously
automated channel orchestration, insight the fullest degree, while ensuring compli- prioritize agile project teams for effective
generation & personalization. In order to ance with authorities and regulations. resource allocation and communicate
function as expected, companies need their results with full transparency to
to establish a data governance model justify high CRM spending.
to ensure data gathering, quality, and
availability for each business use case.
Transparency about journey performance
requires consistent measurements at each
touch point.
Transparency
Customer Experience
13Digital CRM provides the
structural foundation to create the
required capabilities and processes
to build lasting and profitable
customer relationships.
Adapting CRM for the digital landscape perspective might become a bottleneck
goes beyond technology. Companies need for overall success. For this reason, it is
generalists capable of considering various essential to drive CRM initiatives jointly and
CRM perspectives and understanding the ensure consistency in the level of maturity
different underlying value contributors, of an organization’s CRM capabilities.
especially at management level.
On the following pages, we will describe our
In reality, subjective priorities often vary observations and pair them with the best
depending on the organizational or practices we have seen according to those
functional unit. Distribution managers six perspectives. Each modular section
cannot overcome their dependency on an can be read individually and is distinct
underlying tech platform and marketing from each of the other ones. However,
leaders struggle to understand the legal we recommend that you take a holistic
regulations affecting their campaigns. view of the key challenges and potential
approaches in each perspective.
The level of maturity in and integration of
all six perspectives are key to overall Digital
CRM success, because otherwise, one
14Setting direction for CRM Providing insights for
activities and ensuring journey automation and
consistency along touch points decision-making
An
tegy aly
ti
a
tr
asurement
cs
Me
S
iz a tio n
L eg a
gan
l
Or
Competitive advantage Ensuring fit of operating
by integrating legal model, processes
expertise into projects and culture along the
Technolog y customer journey
Providing transparency
about CRM performance
Integration of tools and
consistent data layer with
enterprise architecture
15Key topics in a nutshell –
what you will read in the next chapters
An
egy aly
at ti
tr • Interaction consistency
cs
S
asurement • Moments that matter
Me
• Identity management
iz a tio n
L eg a
gan
• Touch point personalization
l
Or
• Data-driven decision-making
• Customer value management
Technolog y
• Balancing the amount of interaction
• Way of working
• CRM target operating model
• Customer-centric processes
• Role of technology
• Architectural decisions
• Master data management and
data quality
• GDPR impact on CRM
• Legal operating model & new roles and
responsibilities
• Technology to achieve transparency
• Deriving & visualizing core KPIs
• Integrating performance measurement
into CRM procedures
16Strategy
Based on our project experience and
various discussions with topic leaders, a
Interaction consistency
well-crafted CRM strategy is crucial for CRM According to our interviews, companies know that in order to build
success. Matching business goals with cus- superior relationships with customers, they need to evolve their
tomer expectations, a strategy must deter-
conversations from unidirectional to bidirectional. They understood
mine to what extent CRM can contribute to
the organization’s business objectives and
that the foundation for the relationship between their brand and
prioritize accordingly. By incorporating a the people with whom it interacts is an interactive dialogue at each
strong vision and mission, a CRM strategy touch point along the customer journey. However, our research
also clearly communicates the purpose of shows that there are three key challenges impeding success.
pending investments and unites the parties
impacted in their shared objectives.
Success depends on avoiding disparities
between the strategy and the execution.
By creating prioritized journeys with suffi-
1. Lack of overview &
responsibilities 2. Lack of guidance
cient detail, it becomes feasible to actually In our observations, we found that func- On the other hand, companies struggle
operationalize them. Organizations should tional groups are often unable to take a to align each interaction with the brand
also grow awareness on who is currently step back and consider the bigger picture experience they hope to offer. Every brand
experiencing the journey by focusing on of the journey they are a part of. They has a specific scope of needs it can credibly
customer identity factors in the journey neglect how codependent the different cover, based on a company’s strengths,
design. This enables effective persona- touch points are and focus instead on weaknesses or history. Every interaction
lization and leads to a more superior cus- optimizing each touch point individually. By needs to reflect this to meet customer
tomer experience in every interaction. contrast, customers focus on the cumula- expectations towards the brand and the
tive product/service and brand experience company. Additionally, companies need to
across multiple touch points and channels. understand what is driving their customers’
This becomes particularly important when needs and what their priorities are. That
looking at the various new interaction said, this knowledge must be applied con-
points available — new channels, devices, sistently across the organization to ensure
applications, and more. And when new eco- consistency along the journey.
system partners are included, it takes the
complexity of the game to the next level.
That is why it is so important to manage
the journey as a whole instead of individual
touch points.
3. Lack of feedback gathering
and sharing
Companies often stop the interaction
design process after the first implementa-
tion. It is unrealistic, however, to assume
that a first iteration is the perfect fit. And
as customer expectations and the brand
perception changes, it is very likely that the
design will be outdated in only a couple of
months. That is why organizations need to
incorporate processes to continuously test
and iterate with real customers to integrate
feedback.
17We observed three main success factors for consistent customer interactions:
Prioritized Journeys
A stack of prioritized journeys, potentially each owned by a
dedicated team member, helps to align the organization towards a
common target picture and breaks up silos. Experience maps help
to give guidance to each department involved about their roles &
responsibilities.
CRM Principles
A common understanding of customer needs and their respective
priority act as a foundation for journey design and maintenance.
Clearly communicated brand attributes and easy-to-access content
management ensure brand consistency.
Trial-and-error Mentality
Testing interaction designs with a small group of customers helps
an organization to develop best practices and align them closer to
their target group. For this to work effectively, however, companies
need the courage to adopt a trial-and-error mentality and effective
processes designed to share the insights gathered.
18We see four major steps organizations can take to ensure consistency along the journey
1. efine your territory of
D
customer needs
Beliefs and values steer our behavior For companies, it is important to step back
and perception as customers and have a and see the whole person in a broader
strong impact on each individual’s core context of their daily lives and their core
needs. Those interactions with a company needs. Afterwards, companies can align
that reflect the way we see ourselves interaction activities by identifying the
resonate with our personal values and territory of customer needs it wants to
meet our underlying core needs to address. Those are derived from the
make us feel satisfied. Understanding implicit and explicit needs of humans,
the landscape that underlies a person’s the competition, and the brand itself.
subconscious reactions allows companies Adherence to this territory in every
to systematically address motivational customer interaction helps address
goals when designing relevant customer relevant customer needs while remaining
interactions. The sum of all interactions unique and true.
highly influences the way in which humans
value a relationship. This is the point
where branding meets interaction design
and CRM.
Persona
Need Sphere®
t Ad
m en ve
ite nt
c ur
Ex e
1
Achieve transparency about the
territory of customer needs that
Enjoyment
Autonomy
you want to address when building
a relationship with them. Make sure
to understand the broader context.
Se e
cu
rit ip lin
y D isc
192. esign the experience to
D
contribute to those needs
We observe quite often that the interplay
of touch points and channels does not
reflect a company’s territory of customer
needs or lacks logical consistency with
other interaction points. Customer
journey maps can help set the stage
to tackle this very common issue. They
display the aggregation of interactions
and the related experience of a human.
Based on extensive customer research
What is happening? – Interaction design
and cross-functional knowledge, they can
be used as a target picture for all of an
organization’s contributing departments. Who is responsible? – Capabilities
They provide a common understanding
of how the actual customer relationship
How to execute? – Processes
is built and they also help to identify the
“Moments that Matter“ in the journey
of a human, which highly influence a Which systems are involved? – Tech stack
relationship.
What data do we need? – Data layer
On the other hand, experience blueprints
visualize the relevant actions, processes
and departments affected by an Build an interaction framework that aligns relevant
interaction with the customer. They are interactions for each persona with every phase of the
derived from customer journey maps
and provide an excellent overview about 2 customer journey and visualizes which processes and
supporting capabilities are necessary to enable the
what needs to be done by whom in interaction. Focus on “moments that matter”.
each specific situation. Both concepts
together provide a holistic overview about
what and who is necessary to make a
certain interaction happen and what it
should look like in order to build strong
relationships with customers.
In practice, we see a lot of companies
successfully making use of this concept to
better manage each interaction.
203. nable individual interactions
E
matching context, channel and
customer segment
Once a company understands customer Unplanned interactions are difficult to effective an interaction is and therefore
needs and visualizes potential touch foresee and are characterized by a very the experience the customer has. Not
points, it can start designing detailed individual context, in which the customer every channel is the right fit for every
interactions. An interaction plan can help initiates the interaction. Although these situation. A complex complaint might be
to structure the relevant factors – e.g. interactions are complex to manage and better managed by calling the customer
target group, occasion, channel. difficult to integrate into an interaction directly, rather than writing an email.
It is important at this juncture to plan, they often have a very high impact Companies need to factor in these
differentiate between two kinds of on the relationship between a company considerations for each interaction in their
interactions: planned and unplanned and its customers. Therefore companies interaction plan and ensure that their
interactions. might find it useful to define principles technology platform can facilitate them.
that ensure consistency in unplanned
Planned interactions can be derived customer interactions.
and designed based on customer needs
and predicted touch points. Using high The channel selection is important for
quality customer insights and accurate both kinds of interactions. Every channel
context data, they can be personalized has its own characteristics, benefits
and context-based to guide the customer and disadvantages which need to be
along his journey and build relationships considered. Being cautious in channel
specifically. selection can strongly impact how
3 Set of needs
Create an interaction plan which
translates needs into value-adding
interactions across channels.
Carefully consider the different
contexts of an interaction, the
channels required and the segment
you serve to enable the interaction.
214. Test and iterate to improve
Optimizing a company’s ability to perform
value-adding interactions is an ongoing
and extremely important process, which
involves continuous testing and innova-
tion. A changing brand perception, evolv-
ing customer needs or new technological
advances enabling new channels can be
factors that require changes and improve-
ments at all levels of an organization in
terms of customer interaction. Concepts
working exceptionally well today might be
obsolete tomorrow. A flexible organization
with an agile mindset must therefore
continuously tailor its interaction strategy
to the customer to enhance customer
relationships.
4 Continuously test and iterate
customer interactions to adapt
Delight Customers
to changing needs or improve
by using new technologies.
Learn from
Test early and mistakes and
often communicate
gained insights
Design Interactions
22Deep Dive –
Moments that matter
Companies, and especially marketers in How to win? Steps
those companies, are often obsessed
• Focus on people’s subconscious feelings
with understanding the demographics,
and needs by using ethnographic and
feelings, behaviors or interests of their
observational approaches instead of
targeted (potential) customers to design
surveys IDE N T IF Y
personalized ads or interactions and drive
sales. Although personalization based • Always consider a customer’s broader
on the characteristics of an individual context. Excellent opportunities to
matters, the extent to which a customer delight a (potential) customer can often
benefits from an interaction will depend be found before he even knows that he
DE S IGN
more on the context. needs a certain product
• There will be many potential micro
The context of a situation comprises its
moments. Assign them to specific
specific characteristics and is experienced
groups, e.g. to the customer lifecycle
as an individual moment. The key to suc- T E S T
phases, to maintain an overview
cess is identifying those moments which
have the highest impact on a human – the • Moments that matter come as fast as
“moments that matter”. they go. Try to focus your content on the
intent of the specific moment to really
R E FINE
When companies recognize those make an impact. A good landing page,
moments, and make the right moves, they which takes 30 seconds to open, is not a
create strong, lasting relationships with good landing page
their customers, because they are sup-
• The moments with the strongest
porting them in emotional situations. S C A LE
emotional attachment and potential
impact on the relationships occur when
This is the reason why companies need to
something goes wrong. How a company
identify those moments and learn how to
handles customer issues or complaints
design them in the most human-centric way.
can actually create huge value and trust,
or completely destroy a relationship
Focusing on those moments along the
journey not only benefits customers. It
also helps companies prioritize their inter-
action design and focus on the capabilities
that enable really important interactions.
Technology trends like the Internet of
Things (IoT) pave the way by collecting the
relevant data.
Retail Journey
“I am not sure “The shirt got torn “I need an outfit
which size to but I need it for the immediately”
order” moment birthday party in two moment
days” moment
John, 34
Online shopping advocate Online Offline
23Customer identity management
A consistent, personalized journey with The purpose of identity
a firm focus on moments that matter management is to
provides a strong foundation for all CRM
efforts. It is just as important, however, 1. c onsciously handle a customer’s identity
to know which specific customer is at a spectrum depending on the context
certain touch point. Why? Because inter- of a touch point and the customer’s
actions depend on the person involved preferences
and the immediate context. How can an
airline offer superior customer service to 2. m
ake personal data reliably available
a customer without knowing that he just for each interaction by identifying cus-
entered the airport? It cannot, unless he tomers in a fast, precise and convenient
somehow exposes his identity. That is why manner
identity management is so essential for
companies, especially for their relationship Although identity plays an integral part
with the customer. Customer identity in successful journey management, most
management is not, first and foremost, a touch points today still offer an unsatisfy-
technology issue. It is the decision where ing user experience.
and how a company facilitates and incen-
tivizes customers to disclose their digital Today’s customers are also ambivalent
identities. This is an often overlooked when it comes to their digital identities.
prerequisite to providing a personalized On the one hand, they expect highly per-
customer journey while also ensuring that sonalized and context-based interactions
the customer can handle his data with the both online and offline. On the other hand,
expected sovereignty. they often want to restrict the access to
their data depending on the situation and
are suspicious when it comes to disclosing
their (digital) identities due to security or
data protection issues.
The topic becomes even more challenging
when it comes to offline touch points,
where customers cannot be easily identi-
fied via cookies or SSO logins. Also identi-
fication across ecosystem partners makes
the situation more complex.
24Personalization opportunities
Unknown – A human for Anonymous – Set of data Registered – Set of data available based
which there is no addi- available based on IP and on IP and cookies. Further information
tional information besides cookies. Reference to data based on user-generated data.
his IP address. based on anonymous ID. If necessary, the human can be verified
No reference to real identity. (e.g. PostIdent).
High
Potential for personalization
Low
Low Customer Details High
Customers benefit from an enhanced
experience and the chance to take back
control over their data. Companies can
leverage the potential for better sales
performance along the customer journey.
25Increasing customer expectations force companies to find a way to leverage personal
interactions even as the customer remains anonymous – a perfect paradox. What is a
company to do?
Provide and communicate benefits Integrate identification in your touch Based on different tracking results, com-
Organizations need to clearly communicate point design – on- and offline panies can create profiles for anonymous
what the benefits are for customers when Depending on the context and the chan- potential customers and link them to a
they disclose their identity. And sometimes nel, the ease of identification procedures generated ID. If they can successfully track
they even need to incentivize it. This does varies. Make sure to provide identification the data over time and analyze emerging
not automatically include monetary ben- procedures that fit the touch point design. patterns, companies can find the right
efits or complimentary services. It is often Unless absolutely necessary, do not force moment to interact with users and collect
enough to communicate clearly how the identification to avoid losing a customer in the final pieces of information – their per-
customer experience will improve. the process. sonal contact details.
Depending on the situation and the 97 percent of the visitors to an average Making identity management and identifi-
expected net value of a customer, a website, however, are anonymous, i.e. cation processes transparent is a win-win
company might find it more or less advan- not part of a company’s CRM. That is why situation. Customers benefit from the
tageous to take it one step further and companies need to collect and analyze improved experience with personalized
develop more sophisticated or persuasive customer data to turn unknown custom- and context-based interactions and the
incentives. Ask yourself: do I see any ers into known customers. To nurture a ability to take back control of their data.
benefits for me that give me a reason to rich customer profile, companies can track Companies, on the other hand, can lever-
identify myself? micro actions from three areas: age the potential for better sales perfor-
mance along the customer journey.
Put a focus on data sovereignty
1. Self-reported data from web forms and
Customers often feel like they have lost
online questionnaires
control of their data. The simple solution
is to give back control by providing trans- 2. D
igitally collected data through brows-
parency. Explain why you need a certain ing activity tracking, reverse IP identifi-
set of data along the journey and let them cation and geo-locations
manage the data set afterwards. Also let
3. Profiled data from third-party data
them configure to what extent they want
sources, data onboarding, cookie-
their data to be used for the purposes
matching technologies, and contextual
of personalization or advertisement.
targeting
Customers will be willing to share more
information when they feel that they can
take back control later.
26Case Study – Identity Management as a
core enabler for omni-channel
One of our automotive clients recognized that their customers were increasingly
demanding a consistent experience across all digital marketing touch points. Their
communication with actual and potential customers, however, was organized in
silos structured by channel, which produced inconsistent messages, an inefficient
marketing spend and missed sales opportunities. One key challenge we identified
early on was how to manage partially unknown or anonymous identities across
the various onsite (own website) and offsite (third-party website) touch points
and to potentially link them to existing records of known customers. As a result,
the company was unable to offer a high degree of personalization and relevant
content to the touch point visitor.
In order to connect the dots, Deloitte
supported the challenging project by
The integrated DMP now allows for
consistent customer data management
Automotive
|identifying and prioritizing across the different channels for unknown
organizational, |legal and IT prerequisites and anonymous visitors and links the data
necessary to deliver on the client´s with the company’s known customers in its
customers expectations. already established CRM system.
In the next step, we developed a use case- As a result, our client could measurably
driven target picture and collaboration increase customer satisfaction by providing
model between |business units to align more personalized and relevant content,
and orchestrate customer communication leading to a top line improvement through
on digital marketing touch points onsite, increased conversion. From a bottom line
offsite and for registered customers. perspective, our client was able to decrease
From a technology perspective, we his online media spending by increasing
provided a status quo target system efficiency in targeted initiatives.
and data architecture |with AI-based
analytics and implemented an end-to-end
|Data Management Platform (DMP).
We also established a business case tool to
plan, but also to |measure project results,
allowing the client to create momentum
for softening silos by communicating
early project success throughout the
organization. GDPR compliance of relevant
tools and procedures across markets was
ensured from the start of the project by
including legal skills in the core project team.
Identity Management
27Sidebar – Disclosing identity requires
trust and blockchain can help
As mentioned before, there are several Thanks to this identity verification service,
ways to improve identity management for participating companies in the ecosystem
customers across touch points. One of can provide services to customers without
them is to leverage blockchain technology. having to go through separate registration
Why? It can be used to harmonize identity and verification processes. This will not
management within an ecosystem and only streamline and harmonize customer
support customer data sovereignty by identification across the ecosystem,
giving them control over how, when, companies can also provide personalized
and with whom, their data is shared. services without the burden of handling
This is difficult to achieve with current sensitive customer data on their own.
technologies that require companies
to enter into individual partnerships to Customers, on the other hand, benefit
enable this kind of service, usability and from increased data sovereignty, security
data sovereignty. and overall privacy, as none of the detailed
identity information is shared between
Working with the Deloitte Blockchain participants of the ecosystem.
Institute, we defined an identification
procedure that provides solutions for the By setting up a network with other
common challenges organizations face. businesses, organizations can create an
In our case study, the identity manage- ecosystem, in which customers profit from
ment service is tailored towards telco a seamless user experience across all
operators, because they already have a participating vendors. This also opens up
big customer base, relevant customer new business opportunities for companies
data and the necessary infrastructure to participating in the network, such as the
provide identity services. As soon as an opportunity to broaden the customer
ID generated by the company is verified base through strategic partnerships or
by an endorser, customers can use their new revenue streams and loyalty benefits
digital identity to seamlessly authenticate from providing IDaaS (ID as a Service) to
services. This could, for example, be partners and customers. To learn more
renting a car through a shared mobility about the Deloitte Blockchain Institute
provider or unlocking a hotel room with- and the identity management as a service
out prior authentication at reception. The case, please click here1.
blockchain layer uses a customer’s digital
identity to automate know your customer
(KYC) checks and can also handle payment
transactions quickly and economically.
1
"How Telco Operators can improve their customer engagement with Blockchain Technology",
28 Deloitte, https://www2.deloitte.com/de/de/pages/innovation/contents/blockchain-telco.html.An interoperable, secure identity layer could allow frictionless communication across
providers and technologies as well as contract handling
New identity information
can be added, securely
stored, and retracted as
Identity attributes securely
applicable
stored on a blockchain
Telco creates a
digital identity
(device/person)
Trusted third parties
verify and endorse key ID
attributes
Customer uses endorsed
identity to seamlessly
authenticate service
Automated due diligence
(KYC) checks are
undertaken by verifying
supplied information
29Analytics
Applications for analytics range from
strategic decision-making to operational
Personalizing touch points
journey enhancement and automation.
This becomes particularly true for CRM Since the paradigm shift to digital communication, many
leaders. The dependence on customer companies aspire to addressing customers in a personalized
insights and the responsibility for (at least)
manner yet they also want to convey their standardized digital
interactions with the customer make
personality.
analytical know-how a top priority, even
beyond the current CRM structure. Making
analytics the core of an organization Engage in real-time as well as Think forward about ethics and
requires a lot of effort, but also pays off predictive analytics compliance
in enhanced decision-making and an When creating personalized touch points, New analytical capabilities and ways to
improved customer experience. companies should offer their customers engage with customers present ethical
opportunities to communicate with challenges that lead to laws like the General
In addition to becoming an insight driven them on their own terms. For example, Data Protection Regulation (GDPR). Compa-
organization (IDO), it is crucial to develop a always-on support functionalities such as nies should therefore proactively address
deeper understanding of customer value conversational commerce offer meaningful, regulatory requirements, define their own
and a more precise planning of interaction instantaneous customer interaction and standards and position themselves as best
frequencies on an individual level in order systematically record real-time customer practice examples. We will dig deeper into
to prioritize customers and contact them data. To truly become data-driven and cus- this topic in the chapter “Legal”.
in the best possible way. tomer-centric, businesses are also looking
at predictive analytics. Organizations can
use patterns and forecasting to identify
next steps in their customer’s journey with
predictive models.
Embrace interpersonal touch points
Traditional human interaction, however,
can be the deciding factor when it comes
to personalized customer experiences.
Individual touch points with a motivated
workforce can lead to positive real-time
experiences. At the same time, this means
sales staff in stores or call center agents are
exposed to varying customer expectations,
for which support from analytics tools
could be beneficial. These enabling ser-
vices allow them to make communication
between people more personalized while
still complying to the organization’s set
guidelines at the commercial (personalized
offers) or brand level (brand consistency) –
even when speaking to numerous different
customers each day.
30Importance
62 percent of CMOs believe they
will increase their budget for
marketing and customer analytics
in 20192
Targeted
Differentiation
Companies often offer the same
level and quality of service to all
customers, leading to customer
dissatisfaction as well as missed
opportunities for targeted cross-
Expected by selling and up-selling
customers
88 percent of managers state that
their customers and prospects expect
a personalized experience3
CX Focus
72 percent of managers see
opportunities of personaliza-
tion in improving the overall
customer experience4
2
"CMO Spend Survey 2018 - 2019", Gartner, 2018.
3
" 2018 Trends in Personalization", Researchscape International, 2018.
4
"Evolve Now To Personalization 2.0: Individualization", Forrester Research, 2017. 31Data-driven decision-making
Although personalization is already often In contrast to other, less data-savvy That said, our observations show that
used to tailor a customer journey to an organizations, an IDO … analytical insight gathering is still not a core
individual, it is only one example of how value in most organizations. Although the
analytics insights can be used. In order …u
nderstands the value of analytics in reasons for the status quo differ across the
to fully leverage the potential of data decision-making and journey organization, the symptoms are painfully
analytics in CRM, organizations need to automation. obvious in a company’s CRM due to inac-
consider the broader context. Insight curate prioritization and customer under-
based decisions must arrive at the core of … ensures that the analytics vision aligns standing. That is why CRM leaders need to
today’s organizations. with and supports corporate objectives. drive efforts to enable a more insight-driven
structure along five building blocks: strategy,
We call organizations that have succeeded … constructs scalable technical capabilities. people, process, data and technology. The
in embedding analytics, data and reason- Deloitte IDO approach facilitates this pro-
ing into its decision-making processes By leveraging those analytics capabilities, cess. More information on this topic can be
Insight Driven Organizations (IDO). the generated insights can also benefit a found by following this link5.
Their capability goes far beyond data company’s CRM by increasing customer
generation and interpretation, taking into understanding and improving strategical
account technological resources, strategic and tactical decision-making. Employees
alignment, talent, leadership, business need to decide on a regular basis which
processes and the entire information content should be communicated via
lifecycle to elevate the effective generation which channel at what time, always taking
and application of insights from data in all the specific customer value of an individ-
areas of the enterprise. An IDO sees the ual into account.
use of data-driven insights as a core capa-
bility across its organization rather than a
project with a start or end date.
The five building blocks of an Insight Driven Organization
Are the right people Have we created a
engaged & ready to clear line of sight from
implement the right business decisions to
initiatives? data sources?
Strategy Process Technology
People Data
What does it mean Have we designed a Have we constructed
for our business suitable process to an integrated &
when we become control the delivery of scalable technology
an Insight Driven insights? architecture?
Organization?
5
" Analytics & Information Management", Deloitte, https://www2.deloitte.com/de/de/pages/
32 technology/solutions/information-management-and-analytics.html.Customer value management
In most cases, investing in customer Companies need to start allocating Different perspectives of
relations generally pays off for a company. resources for relationship building based customer value
To allocate these investments efficiently, on the value they can potentially derive
however, it is crucial for companies to have from a customer. This becomes particu-
knowledge about the value composition of larly important considering that more
its (potential) customer base. On average, and more companies are transforming
20 percent of customers generate over their business models. With subscription
100 percent of profits for a company 6. or pay-per-use models and increased
Understanding which ones actually con- flexibility for customers, companies need
Customer lifetime value
tribute towards a company’s bottom line to invest continuously in CRM efforts to
Present value of future profits generated
is a challenge that many companies feel retain customers. That said, investing
from a customer over his or her life of the
overwhelmed by. in low-value customers can result in a
business with the firm
lack of resources to retain the high-value
Our interviews showed that few com- ones. Companies may, however, imple-
panies have the capability in house to ment measures to transform low-value
transparently measure the value they customers to high-value customers while
can derive from a customer relative to measuring the success – always based on
the costs incurred in serving them. As a individual customer value insights.
result, they overspend on customers that
Customer referral value
will, in fact, never generate a positive ROI Once a company understands the value
Value derived from extrinsically motivated
(return on investment) over their lifetime composition of its customer base, it can
customers referring a company to
and underestimate the non-financial value focus on individualizing its relationship
potential customers
a customer can generate. Moreover, the building initiatives based on those
framework underlying CLV (Customer insights. Companies that understand and
Lifetime Value) calculations is often based can accurately predict the value generated
on several different KPI definitions and by each customer are in a stronger posi-
measurements due to structural silos. This tion to make informed judgements about
makes an organization-wide calculation of how to allocate resources and how to best
CLV impossible or at least misleading. develop their customer portfolio.
Customer influencer value
Value derived from intrinsically motivated
On top of that, it is important not to meas-
customers interacting with actual and
ure the value derived from a customer in
potential customers
terms of bank notes. Companies need to
include other perspectives on customer
value to adequately measure indirectly
generated value. Although a single cus-
tomer might be unprofitable from a purely
financial perspective, he or she could indi-
rectly generate exponential value by influ-
Customer knowledge value
encing friends or social media contacts
Value of information a customer provides
and therefore growing brand authenticity
towards the company (e.g. ideas for
and sales.
improvements)
6
Converting Customer Value from Retention to Profit ( John Wiley & Sons Ltd, 2006). 33Balancing the right amount of interaction
Strong customer relationships promise with customers through activities which
loyalty and retention but their strength is are customized to their interaction pref-
influenced by various parameters such as erences. For example, if both the firm and
contact frequency, relationship duration customer are willing to invest resources
and customer preferences among others. (e.g. time, money, efforts, passion and
Today, analytics provides an array of tools manpower) in their relationship, an idea
to help organizations engage with their contest or a company’s own online com-
customers at the right moment with the munity would be suitable venues for both
right content. For example, customer partners to derive value from each other.
behavior analysis gives insights not only
by collecting customer data but also by To create meaningful customer interac-
clustering customers into segments in tions, companies should focus on the
order to approach them in a standardized value they can deliver to their customers
yet personalized manner. Furthermore, through interactions instead of fixating on
natural language processing allows you the financial value they might extract from
to review past conversations to gather a customer relationship through mere
insights into customers’ levels of satisfac- contact. If customers cannot see the value
tion. These can be used in the future to in engaging with a firm, the firm might lose
address them with their preferred content their share of engagement. Also, if the
and style. contact is too frequent, CRM resources will
not be used efficiently and customers may
Besides utilizing analytical tools, firms become dissatisfied and annoyed.
can engage in various value-generating
activities with their customers. These
activities can be customer-driven or
company-driven depending on each par-
ty’s level of engagement. The illustrated
activities should inspire firms to interact
34Typology of interaction
High
Customer-Driven Hashtag-based True Collaborative
content aggregation
Web forum
Firm created
online community
Online reviews
Idea contest
Customer-created
Wearables
online community
Webinar
Customer investment
Social media Gamification
brand page
Firm blogging
Sweepstakes
Online video
channel
Exclusive offers
E-mail campaign
Low Passive Firm-Driven
Low Firm investment High
35Organization
The basis of successful CRM is an organi-
zation that enables the customer experi-
Operating model
ence. It must be fully aligned towards the
customer journey to ensure a seamless Today’s CRM organizations must be able to CoEs can provide advice tailored to the
and personalized experience. Our inter- quickly adapt to changing customer needs specific situation to make the decision-
views show that most topic leaders high- and serve them consistently along the jour- making process more effective. For this
light how important it is for companies ney. This requires a move from functional setup to succeed, close collaboration is
to have the right structure and operating silos to flexible cross-functional teams particularly important along with subse-
model to achieve CRM success. responsible for the customer’s end-to-end quent knowledge sharing for other journey
journey. teams. Co-location of functional teams and
Companies understand that they need CoEs in combination with regular
their organizations to become more agile, Depending on the journey and its potential knowledge-sharing events will help to
quicker to react and more insight-driven touch points, these teams include various ensure close collaboration.
to meet the customers’ changing needs. skill sets from UX design to analytics and
This requires an interdependent operating incorporate deputies of the different And yet, even the best way of working
model derived from the customer journey CRM-related disciplines such as marketing cannot succeed without the right culture.
that brings people, processes, technology or customer service. Companies must Culture is defined as the “way we do
and data together to serve the customer establish a common direction and continu- things around here”, a system of values
in the best possible way. ously orchestrate the journey to deliver a that shapes the behavior of leaders and
consistent brand and customer experience. employees across the organization. By
The way the various contributing CRM strategy teams have to give guidance trying to make an organization more
functions work together becomes a key by providing principles and governance to customer-centric, CRM leaders must
success factor in this construct. Organi- each journey responsible. Many of our change that system of values. This will
zations must use the right incentives and clients have adopted this model and require their full attention and persis-
establish the right culture to delegate successfully aligned their workforce towards tence to communicating the purpose of
clear end-to-end responsibility for each the customer journey, resulting in improved the change. When people have a clear
journey and ensure that all relevant customer experience and less friction ambition, they have a target picture to
departments make an effective contribu- between the departments involved. work towards. Finally, a clear incentive
tion to the overall experience. scheme based on a mixture of traditional
To strengthen each cross-functional team’s and customer-centric KPIs helps to align
By working in small, agile teams that skill set, companies can build centers of each employee’s actions with the overall
have the right skill set, organizations can expertise (CoE) for insight gathering and strategy.
stay flexible and thus better cope with legal advice. Although each team should
changing business environments. To con- already have a basic set of skills for both,
tinuously improve CRM efforts, companies
also need to start incorporating feedback
and lessons learned into the project teams
at an early stage.
The legacy process landscapes of tradi-
tional organizations should be re-designed
to serve the goal of customer satisfaction,
taking the established operating model
into account. Combined with a sufficient
degree of process automation, companies
can achieve a lean, effective process
design that benefits the bottom line by
reducing costs and improving customer
experience.
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