Attaining ‘True CRM'
Attaining 'True CRM'
The key to developing an effective CRM strategy is to look beyond the software
Best Practices by Brent Pinkston
It has been reported that over 50 percent of customer relationship management (CRM) projects fail. The reason so many fail is because too many companies believe that software alone will accomplish their CRM goals.
CRM is based on thought and strategy, whereas software applications only serve as a means to help management achieve its goals. Without the proper leadership and experience, a "True CRM" strategy will mostly likely fail and many gaming companies will become spectators, not participants, in the race to create market dominance.
As competition increases, companies that can implement a "True CRM" strategy will have a better chance to maintain or increase market share with new entrants into their markets.
The role of business intelligence
Over the last year, there have been numerous articles and discussions pertaining to CRM in the gaming industry. The primary focus of these publications and presentations has been repeatedly to position CRM mostly as business intelligence (BI).
BI is part of the CRM process, but by no means is it the sole contributor. BI has been presented as reporting and analysis that leads to better and more expedient business decisions. This is half true. BI also serves as a statistical platform leading to consumer behavior model development that can predict future transactions-a facet rarely utilized in the gaming industry. Several gaming companies have become sophisticated concerning BI, but all gaming companies must develop an integrated plan that strives to move them to a "True CRM" organization.
BI is the foundation of any CRM initiative but focusing solely on it can lead gaming executives to comprehend only a small faction of CRM potential. Representing CRM as mostly BI will leave the industry still far behind the developments made several years ago by the financial and healthcare sectors.
Those casinos seeking a "True CRM" system may benefit from a CRM development plan I have honed through numerous implementations over the past 10 years. This plan organizes the CRM implementation process into five distinct steps: the Tool Phase, the Knowledge Phase, the Marketing Phase, the Customer Interface Phase, and the Evaluate/Refine/Reinvest Phase.
Prior to discussing the phases, here are some general ground rules. It is vital that the CRM initiative has executive management buy-in. The next most important facet is that the proper team and individuals are in place to help secure a sound plan, create a data warehouse, implement software, and develop CRM programs.
Finding individuals in the gaming industry with this level of expertise is difficult, so recruiting outside the industry may be necessary. Pairing experienced individuals from other industries with gaming professionals can be a rewarding partnership (a gaming company that has progressed the furthest in CRM has taken this approach).
During the execution of a CRM strategy it is necessary to have stewards from each department of the organization as part of a project development team to identify CRM needs property wide. It is important to note that CRM is not just a marketing approach; it is an enterprise approach that the entire casino must embrace.
Once leadership and development teams are in place, the CRM phase cycle can begin.
• The Tool Phase
The "Tool Phase" is the installation of the proper applications to easily get data from siloed operational systems to understand the current customer, financial, and operational information. Selecting tools (software applications) are critical, because tools must have the capabilities to match the corporate strategy.
In the Tool Phase there are five applications to develop: enterprise data warehouse, reporting tool (known as online analytical processing tool-OLAP) marketing automation/campaign management program, statistical modeling tool, and a content management tool. There are numerous providers that can supply most of these tools. I do not believe that there is any single provider that can provide all these tools in one software suite.
The most important part of the Tool Phase is not necessarily the tools selected but the implementation team that will create the data warehouse. There are several ways to organize a data warehouse and it is critical that the schema selected will be flexible to change with the business processes. Without a proper data warehouse implementation all the tools purchased will be worthless, because the necessary data will not be accessible.
• The Knowledge Phase
Once the tools are in place, mining the data will uncover gold nuggets from both the customer database and operational inefficiencies.
The key to this "Knowledge Phase" is the skill set of the staff analysts-they need to be more than individuals simply pulling reports from the operational systems. These individuals need the knowledge and experience to ask the right questions; and to develop the answers that will assist executives make critical decisions on current and future business strategies.
A solid analytic staff can surely become a hidden competitive advantage. The Knowledge Phase can also includes the predictive and statistical analytics that are rarely used in gaming today.
• The Marketing Phase
The "Marketing Phase" turns the learning in the Knowledge Phase into programs that move patrons through the customer lifecycle. The components of the customer lifecycle need programs targeted to potential customers, first-time visitors, return visitors, loyal customers, churn customers (customers spending less or coming less frequent), and inactive customers.
A critical point in the Marketing Phase is all marketing expenditures are tracked to understanding marketing effectiveness, no matter the customer interface. This will lead to a return on investment (ROI) measure to test various programs and determine what the proper marketing mix is to match the corporate objectives. By measuring all the marketing expenditures to revenue generated by each program, a gaming organization has the flexibility to either reduce their marketing dollars to increase profits or maintain the existing marketing costs while increasing revenue.
The Marketing Phase will introduce new idioms to the existing marketing programs. Some of the new thought processes will include segmentation (beyond merely grouping your customers by geography) using CHAID, decision trees, or cluster statistical methods, one to many communication strategies (message mapping), channel mix, creative variations, vehicle testing, offer testing, audience testing, prospecting using clone modeling techniques, vertical list purchasing, data hygiene, data appends, referral programs, contact strategies, and content management to name a few.
These new phrases have been used extensively throughout CRM and database marketing for over the last 15 years and developed correctly can master a casino's interactions with current and potential customers. Mastering the interactions through an integrated approach will mean you understand the behaviors, needs, and wants of your customers which all can lead to successful results.
• The Customer Interface Phase
This phase applies to how the casino interacts with customers through various customer touch points. Examples of customer touch points include direct mail, traditional advertising, call center, front desk (where a hotel is present), players club booth, outbound telemarketing, Web interaction, e-mail blasts, and electronic media.
The goal of the "Customer Interface Phase" is to take the learning in the Knowledge Phase paired with the programs created in the Marketing Phase and executing them through various customer interfaces or touch points. The Customer Interface Phase serves as the face of the property and provides the customer with a sense of acknowledgement for their patronage.
• The Evaluate, Refine and Reinvest Phase
Once a company goes through these phases they must evaluate, refine, and reinvest back through the previous phases. These phases are continuous and will not be solved with one software install if a competitive advantage is to be created.
CRM is a living process that continuously must change as the company or market place adjusts. It is critical that any casino that plans to go through this process or has already started must evaluate the success of the process to ensure that the initial goals were accomplished. If the goals were not achieved, it is vital to understand what where the causes for the shortcomings. Were they internal or external? How could we refine our strategic approach? Do we need to reinvest additional dollars to achieve the corporate objectives?
A "True CRM" program is very complicated and should not to be taken lightly. To remain competitive in an increasingly fierce competitive industry, gaming executives need to ensure that they are willing to invest into a strategy that takes time to see substantial returns. With a solid plan, the right tools, experienced staff, knowledge based marketing programs, and technology any CRM program can be successful. This is what is meant by a "True CRM."
Brent Pinkston is the president of Empirical Consulting, a full service CRM and marketing company specializing in assisting gaming companies. He can be reached at (702) 596-4987 or e-mail brent@empiricalconsulting.com for further information. Visit Empirical Consulting's Web site at www.empiricalconsulting.com.
