Operational CRM: Meaning and Comparison to Analytical CRM

1. What is meant when we talk about operational CRM?
2. How can you achieve improvements in operational CRM?
3. How can you distinguish operational CRM from analytical CRM?
4. And how can you implement the improvements in detail?
5. Do you need an IT software for this?
6. The conclusion to operational CRM

What is meant when we talk about operational CRM?

When we refer to operational Customer Relationship Management we mean all customer-oriented processes in marketing, sales and service. These consist (mostly) of recurring workflows and tasks for the relevant employees. These can be, to name a few examples, campaign creation in marketing, Lead qualification in sales or case processing in service. Since operational CRM extends across all processes, all workflows and associated tasks, this is where the most pitfalls are hidden in everyday business. Accordingly, they naturally also offer the most opportunities for improvement for you. The importance of operational CRM cannot be underestimated, as it is ultimately about achieving the best possible combination of economic action + resource-saving customer acquisition + optimization of existing customer business .

So far, there is no uniform understanding of what the operational CRM is, accordingly there is no universally valid definition. But to help you make improvements, here is a proposed approach. It enables any company to improve the customer situation in three steps: 1. Problem identification, then 2. Problem description and then 3. Problem solving.

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Here is a list of problem examples that can be identified in almost any company in the operational CRM:

Sales:

• Interaction: The assignment of competencies and the distribution of tasks are not clearly regulated. In the preparation for the customer appointment, inside sales and field sales are not pulling together
• Knowledge and competence: There are deficits in the transfer of information (open invoices, price changes, introductions) or in the competencies (addressing, knowledge of the industry) of the employees
• Media and information breaks: Working with different tools complicates a uniform data situation. Information from conversations with customers is lost
• Competitors: It cannot be clearly stated against which competitor to lose in certain situations. A feeling outweighs verifiable knowledge
• New Acquisition: Priority is given to existing customer business with guaranteed profit. Also, coordination problems between inside and field sales, lack of training measures and fear of personal contact prevent acquisition
• Target specifications: There are no target specifications and no controlling, which prevents evaluation. Salespeople wait for the customer to contact them instead of taking action and arousing needs themselves

Marketing:

• Automation: Database and channel-crossing activities such as online marketing, web controlling and updating customer data with all relevant information (shop system information, online behavior, brand affinity, etc.) are largely manual or only partially automated. A CRM, if in use, does not provide a uniform customer view including all turnover relevant data sources
• Data explosion: Huge amounts of data that are hard to handle require new technical skills to allow their use, evaluation and inclusion in planning
• Marketing mix: The factors (Product, Price, Promotion, Place, HR, Process, Physical Facilities and Public Relations) are difficult to align and the intended market reaction falls short of expectations as a result
• Change of perspective: Marketing now has to take into account not only the customer perspective but also other stakeholder groups (shareholders, government, environment, employees) and at the same time manage its own transition to relationship marketing
• Resource scarcity: Strict regulation of budgets or personnel leads to bottlenecks. The reason for this can be inadequate success evaluation or performance
• Management of activities: Controlling the sales intermediaries through activities is difficult or hardly possible to realize and understand. There is a lack of suitable marketing resource management
• Interaction: Lack of inclusion in product development makes it difficult for marketing to do high-quality work

Service:

• Service providers: Commissioned companies are not managed, resulting in increased customer inquiries. Due to the simultaneous lack of coordination between client and contractor, customer statements cannot be traced
• Customer information: Customers are forwarded from one employee to another due to technology or system limitations or are left hanging in the queue
• Planning: In on-site service, efficient use is prevented by old-fashioned work (calendar, note paper). Employees are calculated too tightly or customers are kept waiting for a long time. Work equipment is not available because it was accidentally double booked

Most of the problems in operational CRM are often in the sales area, while the biggest challenges for marketing and service are more likely to be found in the analytical CRM whose details you will find further down in this article.

In order to get a handle on the problems mentioned above, a structured procedure is needed, consisting of a Goal, a Focus and a measurable Result.

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How can you achieve improvements in operational CRM?

The Goal of operational CRM is to support business-specific business processes to meet customer expectations. By naming this goal so clearly and clearly, it is prevented that, for example, an IT solution such as a CRM software is purchased, which should then solve all problems in a general way. Because only in this way is it ensured that the individual department is looked at individually and their requirements are addressed sufficiently.

In order for you to experience success, the Focus is on the recorded information, which must be processed and stored systematically to enable immediate exchange between employees.

This is the only way to achieve the desired Result, that the business processes to be carried out become transparent and easily perceptible for the employees.

Together with the previous problem identification in the respective areas, this structured procedure ensures that a complex problem is translated into a clear understanding of the goal and that a subsequent transformation into a software that supports problem solving can succeed. With that, the problem description is completed and the solution finding can follow.

In order for the path to continue as strictly, a delineation from analytical CRM can help.

How can you distinguish operational CRM from analytical CRM?

This distinction is very important in order to initiate the really relevant measures. Because not every problem in sales, marketing or service can be tackled with measures for operational CRM, otherwise success would be lacking. To enable knowledgeable decision-making, the details of all dimensions are mentioned here for the sake of completeness.

Table 1: The CRM-dimensions

Source: Brodersen, L.: CRM in practice, Cardo Publishing, 2nd ed., Hamburg, 2023, p. 26

And how can you implement the improvements in detail?

You are now in the Problem Solving and the following table describes the exact execution for operational CRM. To differentiate it from the other dimensions, they are also included.

Table 2: Implementation of CRM dimensions

Source: Brodersen, L.: CRM in practice, Cardo Publishing, , 2nd edition, Hamburg, 2023, p. 27

To recap briefly: At the beginning, you created an awareness of problems for the respective departments in the area of operational CRM. Then you made a goal definition, sharpened the focus and defined your intended result. The implementation for operational CRM now describes identifying the necessary processing tools for you.

Now let's take a look at an example problem to see how this might look. Here's a reminder of the problem description:

• Interaction: The assignment of competencies and the distribution of tasks are not clearly regulated. In the preparation for the customer appointment, inside sales and field sales do not pull together

For this problem example, we will now translate into the appropriate measures as they were named in the second table CRM dimension execution. Pay attention to the fact that the success of the measures can always be tracked measurably:

1. Structuring of data

a. Creating fields to classify a customer to provide transparency about which phase the respective customer is in. Especially in B2B, the same should be done for projects

2. Recording customer information

a. The necessary information for the outside and inside sales must be able to be stored. This starts with contact data up to e.g. information to determine the creditworthiness

3. Presentation of key figures

a. In a business process flow, it is shown which employee/which department is responsible for the respective defined phases

b. There are milestones and handover conditions for the cooperation

4. Support in direct and indirect customer contact

a. For the field service the information is provided mobile ready, which includes the focus on relevant information for the respective application case

b. For the inside sales e.g. e-mail templates are created and a CTI software is purchased

These are only some, exemplary examples that of course can look a bit different in every company. But I hope it has become clear for you how a structured approach in operational CRM can lead to an optimization of the customer situation, which – and this is what matters – is perceivable for the customer and in the end leads to a more profitable customer relationship.

It is recommendable to tackle the problems step by step, to observe the successful implementation of the initiated measures and to measure the success when it can be seen via KPI's that the customers notice this (e.g. via customer satisfaction surveys) and reward this (determine customer profitability in a customer group affected by the measures).

Identifying the appropriate measures can be particularly challenging, especially for complex problems. I would recommend you to ask experienced companions, whether they are fellow entrepreneurs or external consultants, about their experiences.

Do you need an IT software for this?

For your project to be successful, you do not necessarily need software. Many improvements can already be achieved with the right employee training. But as soon as you are dealing with complex business processes, products needing explanation or data-driven measures (including newsletters), you will not be able to do without IT support.

Many of the problem areas mentioned above in operational CRM can be solved with one of the best CRM software. This software ensures that employee support is constantly guaranteed but also that defined processes are adhered to. Not to be neglected is that a CRM software ensures a high quality in the area of customer data, which often already represents the basis for many problem solutions.

In addition, a Marketing Automation Tool can help for a smoother communication. This can be combined with a Customer Data Platform to provide data from the Data Warehouse for larger segmentations (without constant IT interface projects). Also valuable is a ticket tool for case processing in service as well as a telephone integration in the software to be able to address customers more directly and quickly. An integration into the ERP system can help you see the booking data of your customers in combination with the communication history. Also not to underestimate is the fulfillment of the management's requirements for reports and overviews, which can be achieved with a BI software.

The conclusion to operational CRM

Operational Customer Relationship Management can help deter everyday problems in departments with customer contact and identify and solve them. By supporting business processes in such a way that happier customers can be reached through standardization and automation. This makes them more resilient to price increases, because they perceive a high quality standard at the company, and are able to overlook stumbling blocks because a trust-based relationship prevails.