CRM Building Blocks


Gartner published a report on CRM Building Blocks that needs to be reviewed once again.  Why?  Because customer information management strategies enable application leaders to deliver on the business goals of their CRM strategy.  And, consistent and accurate customer information and insight are the foundation of CRM.

Below is a summary of what you need to know about creating CRM Building Blocks.

CRM Building Blocks – Key Challenges for CRM

  • Increasing amounts of data make it difficult for organizations to determine what data to use and what type of insight to create.
  • Organizations have trouble establishing business ownership of many sources of data, the customer information and insight strategy, and the information governance and information stewardship processes.
  • Creating, maintaining and leveraging a single view of the customer is hard to achieve internally and the required data quality and stewardship capabilities have been a challenge for CRM vendors to provide – the wealth of data describing customers and channels.
  • Organizations struggle to apply relevant customer information and insight to delivering business benefits such as customer acquisition, cross-selling, up-selling and retention.
  • Organizations are being tested in their ability to honor customer data privacy — particularly for the EU’s General Data Protection Regulation (GDPR).

CRM Building Blocks – CRM Recommendations

  • Ensure high-quality, accurate and complete customer data by establishing information ownership, governance and quality management structures and processes.
  • Determine the relevance of different types of customer information and insight based on the business goals that your CRM business leaders are trying to achieve.
  • Optimize customer engagement and encompass CRM optimization requirements by striving toward a single view of the customer and developing an enterprise information management (EIM) program.
  • Recognize that a customer’s profile will continue to evolve over time and can change rapidly.
  • Categorize customer data appropriately to prioritize its use and increase your ability to comply with privacy expectations.

CRM Building Blocks – CRM Fundamentals

Customer information and insight is at the heart of a successful CRM systems and is essential for superior customer engagement. Relevant customer data can power:

  • customer service interactions
  • personalization
  • marketing campaigns
  • field sales opportunities
  • lead management
  • social interactions
  • cross-sell/up-sell activities

CRM-Building-Blocks-8-Building-Blocks-of-CRMHowever, a lack of business ownership of information governance, processes and sourcing can prevent organizations from successfully using customer information when engaging with customers.  At worst, poor use of customer data can result in:

  • lost sales
  • loss of customer advocacy
  • and customer defection to competitors

Organizations should develop an enterprise information management (EIM) program and move beyond merely maintaining data to managing data in a manner that provides competitive advantage. The best in class EIM programs bring together several different sources of data for use within CRM systems, including:

  • customer master data
  • CRM and ERP application data
  • transactional data
  • marketing data
  • voice of the customer (VoC) data
  • and analytics/business intelligence

CRM Information Strategy

To build a data and information strategy specifically for CRM

  • Develop a central, trusted, accessible, accurate, timely and comprehensive single view of the customer that is shareable across operational channels.
  • Create customer insight using CRM analytics, data science and machine learning.
  • Establish bidirectional integration between operational and analytical systems, in ways that lower data latency where this provides additional business value.
  • Empower each individual channel to leverage customer information and insight in order to improve the customer experience, while recognizing that a typical customer’s journey will span several channels.

CRM Building Blocks – CRM Insights

Establish Information Ownership and Governance to Ensure High-Quality and Accurate Customer Data

Trusted, fit-for-purpose and accurate customer data is a vital component of successful CRM strategies. Organizations can achieve this level of success by creating structures and processes for information ownership, governance and quality management, in addition to developing a solid understanding of the critical elements of their customer information model.

Successful customer information management strategies define

  • how to source
  • cleanse
  • deduplicate
  • augment
  • govern
  • and leverage customer information and insight assets

It’s crucial for the business — not the IT organization — must exercise stewardship over customer information and insight assets. Information stewardship is a component of information governance.  Typic ally, information stewardship contains the monitoring and execution components of governance. Other components of information governance may include

  • policy creation
  • change management
  • and change impact analysis

Information stewards should be business people, assisted by IT colleagues, who are accountable for data sourcing, quality and access.  Without effective information governance, customer data can be superfluous, fragmented or duplicated. Poor customer data quality will lead to inaccurate customer insight and harm the organization (and its customers) in many ways The lack of trusted, accurate and complete information will make it difficult to manage customer interactions effectively. Lack of insight into customer behavior will reduce the effectiveness of personalization efforts, thereby reducing the opportunity for increased revenue via cross-sell and up-sell initiatives as well as creating a less than satisfactory service and risking the departure of customers.

The lack of good quality customer data is a key operational hurdle. Organizations are often unaware of the scale of the problem, and the cost, time and resources needed to correct it. The problem starts with a lack of governance. Everyone in an organization has a role to play in the governance of customer information assets. It is also important to keep in mind that implementing CRM solutions and systems will not guarantee information quality, and may in fact degrade it.

B2B Marketing – Synchronizing Sales & Marketing

 CRM Business Goals

Determine the Relevance of Different Types of Customer Information and Insight Based on Business Goals

A successful CRM strategy will optimize the value of the customer base and help manage relationships with customers at various points in the customer life cycle. Sales and marketers need to capitalize at the moments that customers explore, evaluate and engage in the customer life cycle are fluid stages. In the context of the customer life cycle, there are different needs for information, different sources of information and different types of information required at different times. Additionally, customers have different expectations regarding what you should know about them at each phase; what might be expected from an existing customer may be creepy to a prospect with whom you have yet to develop a relationship.

  • Prior to a transaction or authentication, the organization might not have a base of historical data on a customer. In a situation where prospects are being targeted, the organization depends on gathering information and insight from external sources and using marketing tools to attract those prospects.
  • If the focus is on consumers, buying descriptive information for identification and communication, as well as buying demographic information to give behavioral insight, can be invaluable to the marketing department — enabling it to build prospect databases and prepare target lists.
  • For business customers, the challenge is different and importance will be placed on account-based marketing — where marketers identify legal entities and attempt to build organizational relationships. This will be necessary for sales territory planning and can form the basis of an integrated view of leads and customers for both marketing and sales.

During the buying cycle, many organizations will gather and analyze data via digital personalization engines in an effort to provide more relevant solutions, products and services to prospective customers. This process of gathering information and fostering the relationship does not stop after a purchase is made. The most successful companies will use transactional data, customer service interaction data and subsequent digital data (web, mobile and social) to continue fostering the customer relationship and to drive future sales.

The data behind many organizations’ customer information management strategy is expanding at an alarming rate. Companies are increasingly faced with the challenge of exploiting both internally generated data sources and externally generated data from social networks. Further, external data from Internet of Things (IoT)-enabled devices will exponentially expand the amount of data that companies work with, and these devices will act as customers do today in many ways. Data will come in both structured and unstructured formats, such as text, images, video and audio, all of which have the potential to provide valuable customer insight. It is often only after the data is ingested and analyzed that its true value can be determined.

Building Blocks for CRM – CRM Analytics

Analytics plays a crucial role in creating insight for effective customer engagement, and is separate from data gathering exercises. Sales and marketing professionals should prioritize analytics use cases that can drive the most business value, and understand the six styles of customer analytics. Data can be analyzed in aggregate, but often the goal is to identify individual customers and develop a one-to-one relationship with them.

Identifying customer profiles will depend on the effectiveness of identity resolution technologies and techniques. The challenge is that customers use an ever-increasing number of channels when engaging with companies. Customer journey analytics seek to solve this challenge, but solutions are still nascent in this area. Ultimately, companies must connect any data and insight about individual customers to their MDM systems and maintain that link. In this way, the extended knowledge from the data can be leveraged in the context of established business applications and business intelligence systems.

The different information types you may need to consider can be summarized as follows:

  • Master data — Describing customer, products, locations and so on
  • CRM application data — Used by CRM apps that extend master data (for example, relationship data that links customer to product/service, or additional customer attribution)
  • Transaction data — Created, stored or processed by CRM and other business applications
  • Analytics data — That consumes any of the aforementioned data
  • Metadata — Describing any of the aforementioned data types

CRM Building Blocks – CRM Optimizes Customer Engagement

Create a Single View of the Customer to Optimize Customer Engagement

A single view of the customer is critical for developing the insights needed to maintain consistent and relevant customer engagement, regardless of the channel. However, a single view of the customer does not necessarily result from a single technology solution, nor does it mean collecting and maintaining all customer data. Instead, organizations should prioritize and collect customer data that supports the business goals at each stage of the customer life cycle. An effective EIM program is likely to involve multiple systems and processes that work together to develop a single view of the customer.

Most large enterprises have a diverse application portfolio and significant amounts of customer information; not just in CRM systems, but in key operational systems such as ERP systems, billing systems, order management systems, customer care solutions and digital commerce platforms. To achieve a single customer view, enterprises must strive to minimize the number of disparate customer data sources. However, since migrating to a single system is impractical, customer data will need to be federated and stored in different locations, or copied and consolidated into one or more dedicated platforms.

Organizations can choose how they invest in creating a single customer view. An EIM program is vital, as described above, regardless of whether or not a solution is bought or built. Ultimately, the EIM strategy should govern the use of MDM systems that power CRM engagements. If an MDM program is already in place without a broader EIM strategy, broaden the scope of your MDM program to create an EIM strategy by incorporating additional data categories beyond master data, creating a 360-degree view of the customer.

An MDM solution will also provide the basis for building and maintaining an enduring, accurate, timely and complete single view of the customer that can be shared across channels, processes, business units and partners. The nature of the view will vary depending on whether the customers are consumers (with the focus on the individual or household) or business organizations (with the focus on the legal entity and other hierarchies, and on individuals within those organizational entities).

Additionally, customer views cannot be static — customer data can change rapidly as customers embark on new journeys, use new devices and engage via new channels. Creating a single view of the customer is an iterative and continuous process. The data used will invariably increase as new processes or initiatives are introduced. It is also quite likely that trusted master data domains other than those of the customer will need to be incorporated into the single view of the customer and, potentially, the EIM program — if they are not already within its scope.

Organizations must also consider the frequency with which customer data insights are updated — in order to move away from infrequent and asynchronous batch updates toward real-time updates. As customers move quickly from channel to channel, customer data can rapidly become outdated and inaccurate. Customer data that is updated daily will be useless to contact center agents fielding questions from customers who need answers. Instead, real-time updates about customers’ online activities will not only help contact center agents to handle customer inquiries more efficiently, but also result in higher satisfaction rates among customers.

CRM Building Blocks – CRM & Data Privacy

Invest in Customer Data Privacy but Not Just to Comply With Regulations Such as the GDPR

It is critical to categorize customer data appropriately, in order to determine what data is needed to support the business goal and to prioritize the governance and business use of customer data. After categorizing customer data, carefully consider the manner in which customer data is used, relative to customers’ privacy expectations.

Take additional steps to develop a more thorough privacy management program inside your organization. Mitigating privacy is essential for all organizations — for both externally facing individuals (customers) and internally facing individuals (employees). Privacy violations cause loss of trust and loyalty, which leads to internal inefficiencies and lost revenue. Organizations should implement privacy programs broadly, not just in individual business units, and they should execute these programs not just for compliance purposes but for better end-to-end control over personal data.

Additional Marketing Automation & Predictive Marketing Resources From Four Quadrant

Marketing Automation Buyer’s Checklist >>

Predictive Marketing Analytics Checklist >>

MegaTrends in Analytics >>

The State of the CRM Market >>

CRM Market Research >>

Go to Market Strategy Templates

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