Digital Due Diligence: CRM

Companies love to talk about their acquisition levels (both B2B and B2C) and while this is a key for driving initial traction and growing the business, to drive profitability and to achieve long term growth companies must focus on what they do with these new leads and how they are driving lifetime value and making these leads/customers loyal. This element of a business should be a key focus of the Digital Due Diligence process.

Realising early that not all customers are equal, this also applies to media channels. Once you have identified these potential high value customers you can begin segmenting and developing journeys and experiences to drive loyalty. As part of digital due diligence you need to ensure you understand if the target company is doing this and how. 

At the same time be aware that some marketing channels can give false positives. A Channel like PPC might drive great ROI, but when reviewed, it might show that from a top-line perspective this is correct because it was reviewed on last click tracking, when however a deep dive happens a large percentage of these clicks and subsequent enquires might already be existing customers who are just looking for the platform again, the value then created from this channel is then not the same as a channel which from a initial perspective drives less leads and enquiries but they are all signing up for the first time. This issue is solved Attribution tracking which gives a value to each touch point in a customer journey.  

Which leads us into the deep dive during Digital Due Diligence and understanding the real long term value of Customer’s/leads and retaining them. 

Each company will have a loyal customer base (hopefully a lot of them) and CRM is about looking after these customers and creating more of these quicker. To understand when and how a customer becomes loyal the company needs to define the Point of Loyalty. Can the potential company explain and show when a customer gets to the “point of loyalty”. The Point of loyalty is where a customer does not need to be sold too but have an attachment to a product or a service that they just keep on buying. This is how you can measure true loyalty, how many of these customers they have in this category and how does a customer get there. Once a company understands this moment they can build a strategy to drive customers to this point.

Loyalty has many parts, exceptional customer service creates loyalty, if you buy or engage and then the experience falls down immediately they won’t return.

Simple campaigns in CRM are a good indicator that the company is moving towards and understands CRM. Are the company regularly staying in contact, do they have lifecycle campaigns, segmented customer groups and most importantly how are they reporting all the touch points the company has. 

During initial Digital Due Diligence it is all about understanding where the company is in it’s maturity with CRM and depending on it’s age and growth levels it can be at different stages but are they thinking about the right questions and making steps towards CRM maturity.

Key indicators if a company understands CRM during due diligence are: 

Lifecycle campaigns - How are these structured and reported on, they should be constantly developed to understand improvement and growth opportunities. If a lifecycle campaign is just set up and left to run, it will never achieve the results the company might want or expect, they need to develop through testing, learning and most importantly analysis of the results. 

Example Lifecycle campaigns are; Lapsing customers, abandoned baskets, welcome programmes, how to use etc.

Reviews - Does the company ask how it is doing? Are team members rewarded for getting great feedback and encouraged to request it. This drives team members to actively encourage people to rate the company and service. Also show’s confidence they believe in the product and service. 

Analysis -How is data stored and managed? Ideally a data warehouse with a single customer view, linked to all marketing channels and touch-points of the customer. If they have this it can be used to create a true lifetime value of each customer then understand how to grow the customer base based on the marketing channel which bring in the best performing customers and the CRM journey to keep them. 

Ranking Customer’s. We started talking about the fact that not all customers are equal and during the digital due diligence review it is important to understand how and if the company is segmenting customers into tier’s. This can be so they receive a different level’s of service (concentrate on the best customers) and receive a structured programme to keep them engaged and drive up the lifetime value, it also helps planning and focusing acquisition channels focused on these customers, so the company acquires the best performing customers. 

CRM is complicated and there is no one size fits all but if the company is following or at least engaged in thinking about the above points it shows a good level of maturity. The Digital Due Diligence would cover the above in depth and ensure that if the investment goes ahead it the investor has a full understanding of the company and it’s levels of CRM development.