Strategic Alignment:
New Strategies to Win and Keep Key Customers
By Robert Thompson, Experienced Resources’ Health Care Executive
As an Experienced Resource executive, my current role includes working with executives of a leading health care system in the Twin Cities to design and implement strategic alignment within their organization. Strategic Alignment is the process of linking business development and customer relationship management techniques and information technologies.
Business development is about building market position using tools such as business model design and brand development, market intelligence and customer targeting, prospect development and sales fulfillment.
Customer relationship management (CRM) primarily uses information technology to structure marketing, sales and contract fulfillment, and to coordinate and support staff responsible for advanced business development.
Health care systems and large medical groups have been engaged in aspects of business development and customer relations for the past 20 years. Now the level of competition produced by an extensive expansion of capacity, a tightening financial environment and a thinning physician pool requires far more sophisticated management of these techniques.
CRM Targeting: At the client organization, a strategic alignment team will be selected and assigned high-value responsibilities as part of a new and sizeable patient and clinical care initiative. As an example of CRM-style strategic management, the alignment team will be assigned detailed tasks and targets for:
Sales: Patient mix and volumes by specific clinical services and units
Penetration: Market share and referral commitments among high priority groups
Relationships: Customer satisfaction measures as expressed by key clinicians
CRM Technology: The term CRM refers to a combination of IT applications that organize, link and coordinate sales and marketing functions and staff. The typical components of a CRM applications suite would include:
Sales Force Organization and Automation: Lead management, contact management, opportunity management and sales forecasting.
Customer Service and Communication: Email response management, Web and voice self-service and call center functions, agent support and productivity.
Marketing Strategies and Execution Tools: Prospect identification and targeting, customized mass communications, sales campaign planning.
Hosted CRM: Refers to the Application Service Provider (ASP) model in which applications are run on the vendor’s servers connected to users via Web interfaces. Hosted CRM’s tend to be faster to install and easier to use with little IT support required at the client end. They are priced as an initial package with annual contracts based on functions chosen and number of users. There is limited customization or data integration. Security is considered reliable among the major vendors.
On-premise CRM: Refers to self-contained and comprehensive packages installed and operated within the client’s IT structure. Upfront investments are required for servers, data storage, communications and software licenses, but long run costs may be lower. On-premise CRM’s are favored where a high degree of control and customization, scalability, data security and integration are important.
CRM Selection: There are dozens of CRM packages aimed at product-oriented sales and marketing departments. Few are designed specifically for the service-oriented hospital and medical field. A careful understanding of the organization’s goals for CRM and its ability to take on CRM are critical. In considering CRM, buyers should evaluate:
Financial commitment required, based on initial pricing, installation and total cost of ownership (TCO) over the life of the intended CRM application.
Demands on the IT staff for implementation, integration and customization, and standards for data backups, protection and security:
Organizational characteristics, leadership support for CRM, user skills and discipline required, (CRM is not for the casually interested.)
CRM is both a sophisticated business technique and a powerful information technology tool. In considering whether to take on CRM, first ask yourself: How could we use CRM to dramatically improve our customer relationships? Who would be the champions for CRM and how will we bring them in as early users? How will we get senior management to buy into and ultimately sponsor the introduction of CRM?
The lessons learned from the work done by the Experienced Resource team and their client is: Plan carefully and don’t try to do this alone.
Robert (Bob) Thompson is currently on a project assignment through Experienced Resources. Bob has over 25 years of experience in management and board leadership with hands on expertise in planning and management of programs and operations in non-profit health and community service organizations. Bob has a Master of Hospital Administration degree and a Bachelor of Economics degree from the University of Michigan. |
The U.S. financial crisis and economic turmoil are affecting virtually every sector of the economy. Historically, the health care industry tended to be insulated from economic cycles; however, the resiliency of the health care industry appears to be waning. Health care organizations will need to look for ways to improve performance and position themselves for future growth despite these economic challenges.