Over the last few decades, customer lifecycle management has become a significant focus. Forbes recently provided an overview of the focus and set of processes. Similarly, CRM has fully migrated to Cloud solutions, and most customers have a CRM to manage their customer data.
What is the difference between CRM and CLM? ServiceNow has a definition and suggested interoperability. The two may converge into a single set of processes and solutions, which seems inevitable.
What’s next?
Value Threading continues to focus on the value of the ecosystem, with a strong view that those companies that lead their ecosystem will be future winners. While this comment has many “nods,” most companies don’t have a strategy – for a good reason. It is hard to know what to invest in/build, when to partner, how to sell APIs or data, and when to participate from a distance in the ecosystem. And, even if there were a strategy, there are limited systems to support customer management or monetization inside the ecosystem.
The five steps of Customer Lifecycle Management are:
1 – Awareness or Reach
2 – Acquisition
3 – Conversion
4 – Retention
5 – Advocacy or Loyalty
Those who own the ecosystem of digital services would expand on (#4 & #5) “retention and advocacy” and reduce the investment in traditional marketing (#1, #2, & #3) to benefit total returns from the ecosystem. The benefits of transforming traditional marketing push to ecosystem services are the foundation of maximum monetization and customer retention.
The Wall Street Journal published an article about how Hermès’ strategic marketing differs from that of its competitors. The article reports the 4% Hermes spends on marketing compared to LVMH’s 12%. Where does Hermès focus? On keeping the customer inside their ecosystem. In Hermès’ case, it is products inside their organization, and from the moment you enter the store, the entire process guides you into their ecosystem. When you purchase something at Hermes, from the day you walk into the store, they want to understand you and how you can be a long-term part of their ecosystem.
Consider the difference when you buy a car. How many salespeople at the local dealership talk about value over time? I still don’t understand why the automotive sales process does not suggest connected data could be used to partner with insurance companies and similar services to define a better total experience. This continues to be a missed opportunity. On the B2B side, there are equal examples, and in most cases, the value of the ecosystem is measurable in real dollars. I think John Deere is a standout example of doing this well, but most of the sales process is still about the product at the time of sale.
In relation to other industries, what would happen if telecoms, retailers, banks, or almost any product company made it easier for customers to access or buy digital products in their entire ecosystem? I was looking at a few telecom companies that believe they do this today. They offer bundles and packages of video-on-demand (generically OTT) with their services. OTT products are sometimes available, but there is no incentive to buy or stay in the ecosystem.
What makes the customer experience fall short?
- Challenging to find products – for me
- Bundled price offers limited incentives
- Contractually obligated for the long term, no mix and match over time
- The search/bundles were all telco products first, not customer-first bundles
- There was no incentive to bundle; customers could go to the source
ECLM defined:
ECLM is a set of tools that allow a company to lead by understanding the complete set of digital services and products that the customer sees as integral to their needs and to participate by leading customer engagement within the ecosystem. The solution is to know the ecosystem and monetize what you can while leading all you can.
What is required to build out your own ECLM solution?
- Define your ecosystem and your plays.
- Know how your customers interact with the ecosystem; build your marketing around that.
- Manage ALL customers as Subscribers, regardless of monetization model. Loyalty programs may also be important.
- Embrace Partners: you can’t own it all. If your partners win, do you also win?
- Build a Data Strategy: Ecosystem Monetization Model: “It starts and ends with your data.”
- Make e-commerce and order-to-revenue seamless for the customer within the ecosystem.
- Embrace the Ecosystem Monetization Potential: Ecosystem Market Dynamics & Monetization
Please look forward to future information on these topics, which will help align ECLM and the Value Threading framework.
