CRM Concept: The Blueprint for Better Customer Retention

Sergej Plovs 2/27/2023

Learn in this article what a CRM concept is about, what benefits it offers and with which steps you successfully develop it.

Table of contents
  1. What is a CRM concept?
  2. Why a CRM concept?
  3. What are the benefits of a CRM concept?
  4. What types of CRM concepts are there?
  5. What are the requirements for a CRM concept?
  6. How is a CRM concept structured?
  7. CRM concept development in 6 steps (with example)
  8. What challenges can arise when implementing a CRM concept?
  9. CRM Concept: A Conclusion

To begin with, a short digression. Because it's worth first delving into the topic of CRM in general. Customer-Relationship-Management is more important for companies today than ever before. Against the backdrop of steadily increasing efficiency pressure and ever more changeable, ever more demanding customers, it can not only help to improve customer relationships, but also to retain existing customers, gain new customers, and bind customers to the company in the long term.

In the early 2000s, the acronym CRM was primarily used as a synonym for CRM systems. This predominantly technical view changed around 2010: now the focus was on holistic customer-related processes in marketing, sales and service. But the evolution of the term was not yet over: today, CRM is increasingly associated with a customer-oriented strategy and as part of the company's philosophy.

Customer relationships continue to form the basis here, but the customer himself moves much more into the spotlight. Thus, this modern understanding of CRM combines the numerous approaches to maximum customer focus by creating positive customer experiences along all digital and analogue touchpoints.

The key to this is a comprehensive CRM concept. In this article, we'll explain how you can create an optimal CRM concept for customer retention – and what you should pay attention to.

What is a CRM concept?

To understand what a CRM concept is all about, it is useful to first classify and delimit the term in the overall process. As the following illustration clarifies, a CRM concept is developed based on the strategic orientation of a company, the future end-to-end processes, and the core requirements of the affected company areas.

CRM-Roadmap nach Vision11

Source: Vision11 GmbH

On this basis, both the CRM concept and the derived CRM roadmap can be created. Only then can the implementation of the CRM solution take place. If there is no suitable CRM technology in the company, an appropriate evaluation must be carried out beforehand.

What exactly is worked out within the framework of a CRM concept? Simply put, all the approaches, methods, measures and instruments, the organisational and technical requirements as well as the necessary changes to realise maximum customer focus and to consistently design positive customer experiences. (More on this under: 'How is a CRM Concept Structured?')

Why a CRM concept?

As just described: A CRM concept is based on a CRM strategy and the corresponding CRM target image. It gives you as many answers as possible to the numerous W-questions that arise from the strategy: how, what, when, who, with what, etc.

Furthermore, it serves to give a uniform structure to the company-wide CRM vision – and to define the optimal route for achieving the defined goals. While CRM strategies or CRM philosophies are formulated in a rather abstract way, the concept builds the operational bridge to concrete implementability.

Primarily, the CRM concept is used as a guideline for CRM implementation. It helps companies understand their customers better, personalise communication with them and strengthen customer loyalty. In addition, it enables companies to automate their business processes in marketing, sales, service and e-commerce, to collect all relevant data centrally and to gain valuable insights from it in a timely manner. All this increases efficiency and effectiveness, improves decision-making and thus strengthens the company's competitiveness.

What are the benefits of a CRM concept?

First off: Even the best CRM concept offers no advantages if it is not implemented. Only the realisation of the conceived approaches, methods and measures creates real competitive advantages. And these come into play at various levels. Here's an overview:

  • Better customer loyalty: Personalised interactions with customers not only strengthen customer loyalty per se, but also lead to higher customer loyalty and repeat purchases.
  • More consistent customer focus: A company-wide and customer-focused CRM concept promotes the customer-centred mindset throughout the organisation. It supports the company in aligning its processes, products and services with the individual needs and interests of its customers – always with a focus on customer satisfaction and loyalty.
  • Cost savings: Standardised and automated processes in marketing, sales and service reduce costs by saving time, resources and reducing the risk of errors.
  • Increasing revenues: CRM helps to better utilise cross-selling and up-selling potentials. After all, CRM provides tools and opportunities to address the right next-best-actions (NBAs) and next-best-offers (NBOs) at the right time and to the right customers.
  • Higher brand loyalty: Positive customer experiences along the customer journey strengthen trust, satisfaction, emotional attachment and thus loyalty to a brand.
  • Better decision making: CRM provides companies with a data-driven and holistic 360° view of their customers. Based on this, better decisions can be made in relation to marketing, sales and customer service.
  • More data security: Through process automation, customer data is processed more quickly and securely and stored centrally along the customer journey.
  • Cross-departmental collaboration: A company-wide CRM improves communication and collaboration between different departments and employees. It provides them with a common platform for managing and using customer information.

What types of CRM concepts are there?

In the past, the focus was primarily on four types of CRM: operational, analytical, collaborative and communicative. And although CRM in most definitions is referred to as a strategic approach: As a strategy of modern company management, it has only penetrated to higher management levels in recent years.

CRM is therefore not an isolated operational, analytical or collaborative tool: as a philosophy, it flows into all areas and units of a company - with the aim of achieving consistent customer orientation. The four familiar types of CRM therefore need to be expanded by the strategic component.

In a good and comprehensive CRM concept, you should describe all these five CRM components in such a way that they can be implemented in the next step. Fundamentally, two types of CRM concepts can be distinguished:

  • Professional concept: A professional CRM concept describes the professional requirements and objectives, as well as the way in which customer-focused business processes should be supported or optimised. The basis for this is provided by a thorough analysis of business processes in marketing, sales and service, a defined CRM target image, and the company strategy. End-to-end processes, roles, professional responsibilities, and the time frame must also be clearly defined. Also described are: the necessary organisational changes resulting from the introduction of CRM, and the associated development of customer-centred mentality and skills.
  • Technical concept: A technical CRM concept describes the technical aspects of the CRM implementation. These include, for example, how the CRM architecture is set up and operated, how CRM is integrated into the company-wide system landscape, and the requirements for the necessary software components. The system architecture and integration options are also specified here, as well as the security measures for the protection of customer data. If there is no suitable CRM solution in the company, the technical concept identifies and prioritises the most important criteria for the evaluation of future CRM technology.

It is advisable here to describe all the professional and technical aspects in a CRM concept, but to clearly separate the two areas. The professional design should always precede the technical concept. The CRM concept is rounded off by a complete but clear CRM roadmap. This serves as a basis for creating a project plan for a step-by-step implementation of the CRM project.

What are the requirements for a CRM concept?

The golden rule in creating any CRM concept: 'As much as necessary, but as little as possible'. Because a too detailed concept restricts the necessary flexibility to react to unpredictable situations or changes during implementation. A too superficially written concept, on the other hand, leaves too much room for interpretations. It doesn't show the way to the defined CRM target image, but only the approximate direction.

Essentially, a CRM concept is the blueprint for the forthcoming CRM project. In it, you not only determine the way and the pace, but also describe requirements, processes and the architecture. Modern concepts take into account the following perspectives:

  • Customer perspective
  • Employee perspective
  • Company perspective

The most important requirement here is the customer perspective. Modern, future-oriented companies change their perspective by 180 degrees: from inside-out to outside-in. In doing so, they not only rethink their processes, but also their products and services consistently from the customer's point of view. After all, every digital and analogue contact along the customer journey should lead to a positive customer experience.

The employee perspective describes the future CRM from the users' point of view. It is important to know the needs, requirements and expectations of all user groups - and to take them into account in the conception. Just as buyer personas can vividly describe certain customer segments, here it is recommended to use employee personas to illustrate the typical requirements of the users and stakeholders. However, to avoid the dreaded data silos and island solutions, the user perspective should never collide with the holistic view of the customer.

Finally to the company perspective: Its primary goal is to be economically successful in the long term. Satisfied and loyal customers as well as employees who identify with the company strategy and know the sense and purpose of their work are already the best prerequisites on this way.

But in order to be able to demonstrate successes, measurable and ambitious goals must be set in advance. These are included as KPIs in the concept. In addition, the company-specific system landscape, measures to protect data and ensure data security, and the internal end-to-end processes relevant to CRM should be described.

Important in all of this: You should in no way confuse a CRM concept with a specifications or a backlog list. The concept rather serves as the basis for a specifications and requirement specification, if a new CRM technology needs to be evaluated. And it is the conceptual basis for all work packages, milestones or sprints in the subsequent implementation phase.

How is a CRM concept structured?

A CRM concept usually consists of several components, which together enable holistic customer management, improve customer relationships and make business processes more efficient. At the beginning of the concept, the most important aspects of the CRM strategy are presented. This is followed by a clear objective, based on the already defined CRM target image.

To structure a CRM concept in a structured and clear way, you should list the following contents in this order:

  • Position in the market
  • Definition of medium and long-term goals
  • CRM Organisation & Culture
  • Understanding customers and target groups
  • Definition of customer contact points
  • Sketching the Customer Journey
  • Presentation of the Customer Life Cycle
  • Orchestration of channels, processes, and data
  • Technical description of the end-to-end processes
  • Technical requirements for the CRM
  • CRM architecture
  • CRM integration into the existing system landscape
  • Data management and data protection
  • Analyses and 360° customer view
  • Responsibilities and roles
  • Change Management
  • CRM rollout and operation
  • CRM roadmap

It is crucial here to describe each of these aspects in such a way that immediately after completion of the concept phase, the implementation – and, if necessary, a preceding CRM evaluation – can be started.

Recommended CRM tools & software

In total, we have listed over 250 CRM system providers on OMR Reviews that can support you in customer relationship management (CRM). So take a look at OMR Reviews and compare the CRM-Tools with the help of authentic and verified user reviews. Here are a few worth recommending:

CRM concept development in 6 steps (with example)

Within the framework of a structured and methodical approach, a CRM concept can be developed based on the following 6 steps. Depending on the size of the company, the industry, and the status quo in terms of CRM, you should plan between five and seven months for the development of the concept.

Die 6 Entwicklungsschritte eines CRM-Konzepts nach Vision11

Source: Vision11 GmbH

Based on the CRM strategy and the CRM target image, the individual CRM goals are set. The following illustration shows as an example how the action fields and concrete measures can be derived from the goal setting 'Continuous and sustainable improvement of contact and lead quality'.

Das Zielbild des CRM-Konzeptes nach Vision11

Source: Vision11 GmbH

The core components of a CRM concept are the identification of action fields and the development of operational and strategic measures for each defined goal. In addition, the individual measures must be technically described from a process, organisational and data perspective, and located in the future CRM architecture from a technical perspective. From the technical requirements for the implementation of all derived measures, the requirements for future CRM technology finally emerge.

What challenges can arise when implementing a CRM concept?

A comprehensive and coherent CRM concept is the best prerequisite for successfully introducing CRM. But the implementation of a CRM concept presents organisations with a range of challenges. Because it involves changes in all areas and at all levels. Here are the seven most common 'sticking points':

  • Integration problems: CRM systems are not stand-alone solutions. They need to be integrated into existing system landscapes as seamlessly as possible. Often this integration is underestimated during CRM implementations – and viewed as purely a technical challenge for the IT specialists. In fact, however, the technical integration at system level is not sufficient. For optimal process and data integration, experienced data and business process experts are required in addition to IT.
  • Lack of employee acceptance: If employees are not included in the CRM conception and in the implementation process, their acceptance is very hard to win. The fear of additional work and new ways of working can even lead to resistance against using the CRM system.
  • Involvement of managers: The success of a CRM implementation very much depends on stakeholder management. Particularly, the management should be involved in the project early on. The earlier decision-makers are included, the more the project will become their own personal matter. The top management should also be represented in the project – at least in its steering committee. Ideally, the management will simultaneously act as project sponsor. It's particularly important that it continuously emphasises the importance of the project and the expectation regarding the CRM implementation.
  • Automation and the human factor: A major challenge in implementing future-oriented CRM concepts is the balance between automation and the human contribution. Because too much automation can lead to losing personal contact with the customer and the relationship cooling down. The human factor must never be overlooked at any stage of the implementation. Even in the context of automated procedures, one thing remains: For a truly positive customer experience, interpersonal communication and genuine human-to-human relationships are indispensable.
  • Lack of data quality: One of the most important prerequisites for starting the implementation of a CRM concept is high-quality and up-to-date data. Unfortunately, the customer data available in the ERP is often not the best choice. Because they are often not 'clean' enough to be transferred directly to the CRM. Therefore, it is necessary to define uniform data quality rules already in the conception phase - and to cleanse the data immediately before implementation (or in the first step). This should not be postponed to a later project phase. Because then the probability is high that it will never happen.
  • Data protection and data security: As a large amount of personal information about customers is stored in CRM, it is essential to keep this data safe and protected. This means only authorised individuals should have access to the data – and that the data is protected from unauthorised access and loss. Companies must ensure they comply with strict data protection laws such as the EU GDPR and respect the rights of customers. This also includes adhering to data security and data protection regulations when transmitting and storing data in the cloud. Careful monitoring and documentation of all data processing operations are also obligatory. Regular security checks and testing of emergency plans should also be part of the security measures. Another challenge: Companies need the consent of customers before they can process and use their data. In many cases, this requires an adaptation of existing processes and the IT infrastructure.
  • Individuality vs. standard: One of the fundamental decisions when introducing CRM is the choice between individual and standard solutions. In the past, companies often opted for on-premise solutions – thereby striving for greater individuality in the implementation of processes. But cloud-based CRM solutions today offer countless possibilities to implement even more complex requirements and functionalities within the standard framework. Nevertheless, one should not orient oneself completely towards the standard of the CRM manufacturer. Individual adjustments and extensions can contribute to the users accepting and using the solution better. Important here: The numerous possibilities for individual adjustments in cloud-based CRM solutions don't have to be exhaustively utilised. The focus should rather be on better use of the standard functionalities to map the individual processes.

CRM Concept: A Conclusion

With a solid CRM concept, you create the prerequisites to improve customer experiences, optimise customer relationships, increase customer satisfaction, and make business processes in marketing, sales, and service more efficient. A well-thought-out and future-oriented CRM concept serves as the basis for the successful introduction and use of CRM in the company – and is an indispensable part of a successful business strategy.

What is critical here is that a successful CRM concept not only takes into account technological aspects, but also the organisation, culture, processes, and above all the strategy in the company. And last but not least: CRM concepts that gather dust in drawers do not benefit companies at all. As trivial as it sounds (but the statement is quite justified): It is essential to actually implement a concept and integrate it into daily business processes.

Sergej Plovs
Sergej Plovs

Seit nahezu 20 Jahren beschäftigt sich Sergej Plovs intensiv mit Customer-Relationship-Management (CRM) und der Optimierung der Customer Experience. Sein Weg führte ihn über Stationen in der Forschung, in Beratungshäusern und in international agierenden Großunternehmen zum CRM-Spezialisten Vision11. Als Managing Director von Vision11 und mit etwa 17.000 Followern auf LinkedIn gehört er heute zu den einflussreichsten CRM-Experten im deutschsprachigen Raum.

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