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Customer Relationship Management: Guidelines and Resources

© Copyright Carter
McNamara, MBA, PhD, Authenticity Consulting, LLC

Although there is a conventional difference between the terms “customer”
and “client,” this topic refers to “customers” as meaning
both. Also, although a product is a tangible offering and a service is an intangible
offering, this topic often refers to “products” as meaning both. The
activities of customer relationship management apply to any type and size of
organization, so the term “organization” refers to that wide variety,
as well. Before reading this topic, you might read about the Relationship
Between Managing Supply Chain, Operations, Quality, Customer Relationships and
Customer Service.

Sections of This Topic Include

Introduction

Suggested Pre-Reading
You Are Probably Doing Some CRM Now, But …
What is a CRM System?
What Are the Main Benefits of a CRM?
Types of CRM Functions
Types of CRM Systems

Planning Your CRM System

Preparation
1. Clarify Organizational Goals and Measures
2. Align CRM Goals With Organizational Goals
3. Clarify How Customers Will Be Treated Differently
4. Decide What Organizational Design Changes Are
Needed?
5. Select the Best CRM Software

Developing Your CRM System

Redesign Your Organization As Needed for CRM
Start Cultivating a CRM Culture
Delegate CRM Goals to Teams and Employees
Train Employees About CRM

Managing Your CRM System

Manage Your CRM Teams and Employees
Manage Your CRM Software
Evaluate Your CRM System

General Resources

Glossaries
Organizations

Also consider
Customer
Service Management
Operations
Management
Quality Management
Supply
Chain Management
Related Library Topics

---

INTRODUCTION

Suggested Pre-Reading

Customer Relationship Management (CRM) ensures that the ongoing relationship
between your organization and its customers is always very valuable to everyone
involved. That was easier to do in the past when an organization was expected
to provide a product or service, and the rest was up to the customer.

That has changed dramatically. Today, customers can instantly access opinions
about your organization and its products. Also, they can instantly order products
and services from anyone else around the world.

So before reading the following guidelines and resources in this topic about
CRM, it would be very useful for you to first get some understanding of the
proactive, systematic, high-quality process required to ensure ongoing, great
customer service today.
All About Customer
Service: Overview and Numerous Resources

You Are Probably Doing Some CRM Now, But …

If you work in an organization, then you are probably already involved in some
form of CRM now. This is true whether your organization serves customers who
are internal or external to your organization, or both.

What do you do now to ensure a great ongoing relationships with your various
customers? For example, how do you keep track of information about them? Highlights
from your conversations? Their feedback about your services? Your plans about
serving them into the future? Schedules of when to contact them and what to
say?

For example, do you have a central database that organizes that information?
Do you use spreadsheets with customer information? Do you resort to using the
contacts list in your phones? Are there multiple people involved in serving
customers? If so, then how do you all ensure you are effectively sharing the
right information at the right times? How are you reminded of when to contact
certain customers and for what purpose?

The answers to those kinds of questions comprise some of your activities in
CRM. CRMs can be implemented and utilized in a rather informal, sporadic and
reactive approach. Or, they can be implemented in a proactively planned and
highly integrated approach. If your organization plans to grow and develop to
the next life
cycle, then you are far better off to use the latter approach. Fortunately,
there are many highly practical and affordable guidelines and tools that can
help you.

What is a CRM System?

A system is a recurring cycle of activities, including:

1. Planning to determine goals and how they can be achieved, and
2. Then developing and managing resources and activities to achieve those goals,
   and
3. Then evaluating whether the goals have been achieved or not, and
4. Then using the learning from the evaluation to improve the quality of the
   next round of planning.

Thus, a system is a recurring loop of components — in a continuous cycle of
improvement. Customer relationship management is best done as a system; otherwise,
the management tends to be highly reactive and sporadic, often resulting in
a patchwork of disconnected and ineffective activities.

The purpose of a CRM system is to take a recurring, comprehensive and systematic
approach to ensuring a mutually fulfilling relationship between your organization
and all of its customers. The system works with any type and size of organization
that has customers, whether internal, external or both. Here are two additional
perspectives:

• “Customer relationship management (CRM) is the combination of practices,
  strategies and technologies that companies use to manage and analyze customer
  interactions and data throughout the customer lifecycle, with the goal of
  improving customer service relationships and assisting in customer retention
  and driving sales growth.” SearchCustomerExperience
• “Customer Relationship Management (CRM) in a very broad way can be
  defined as the efforts made towards creating, developing, and maintaining
  a healthy and long-lasting relationship with the customers using technology.”
  TutorialsPoint
• “CRM is an organizational strategy, not a software tool — although
  software can be used to help the CRM system to work toward its purpose.”
  Carter McNamara

The CRM guides and supports customers through the various phases of the customer
relationship phases, as well as the phases in the sales pipeline.
The Three
Phases of CRM
Five
Customer Relationship Stages for Full Engagement

What Are the Main Benefits of a CRM?

The more you understand your customers — their types
and needs,
what they value,
their activities with your organization — then the more likely they will remain
loyal to your organization. Here is a list of some of the overall benefits of
a CRM system:

• You can easily access comprehensive and integrated customer-related information
  in one place, rather than sorting through a variety of different channels
  and people.
• It improves customer communications because you know how they prefer to
  communicate, the most recent status of communications with them, and what
  their current priorities are.
• It increases efficiencies and team work in operations, helping organizations
  to evolve through the necessary organizational life cycles.
• Overall, you can increase customer satisfaction, loyalty and retention —
  ultimately, increasing profits for businesses and community impact for nonprofits.

If yours is a small or medium-sized organization, then you might be mistakenly
thinking that a CRM system is much too complex and expensive for your organization.
If so, then you might benefit from reading this article.
Top
Five Myths About CRM Debunked

Types of CRM Functions

The CRM system works by pulling together information about your customers from
a variety of different sources that you specify in order to automate:

• Marketing, for example, organizing information about each
  different group of customers, and then tailoring sales and marketing campaigns
  to each (see Marketing)
• Sales, for example, analyzing information about each customer
  to help them to evolve through the sales pipeline, as well as using CRM for
  account and contract management (see Sales)
• Customer service, for example, recognizing your different
  types of customers, the needs of each and what they value, as well as noticing
  their complaints and what has worked to resolve them (see Customer
  Service)
• Analytics, for example, generating forecasts of likely
  demands for certain types of goods and services, as well as what might be
  the best pricing structures for them (see Business
  Data Analysis)
• Collaboration, for example, sharing calendars and project
  plans, as well as coordinating common communications across different stakeholders
  (see Team Building)

By automating these functions with CRM software, you can organize information
from your documents, notes, phone calls, emails, chats and forums. You can program
some CRM software to monitor certain social media tools to notice comments regarding
your organization and its products and services.

Thus, CRM systems can give you a clear picture of each of your customers to
help you cultivate a strong relationship with each as you support them through
the customer
life cycle.

Types of CRM Systems

When considering which type of CRM system might be best for your organization,
it helps to consider from among three main types including the following. You
will notice that they correspond closely to the above-mentioned types of CRM
functions.

1. Operational – This type focuses especially on activities
   in sales, marketing and customer service. It also organizes information about
   customers, including each individual customer, as well as different groups
   of customers. It is the most popular type.
2. Analytic – This type analyzes information to suggest, for
   example, buying patterns of each group of customers as well as their spending
   patterns and timing to convert leads to contracts.
3. Collaborative – This type coordinates the sharing of up-to-date
   information among different key personnel and teams, as well as among different
   groups of stakeholders, including, for example, suppliers, distributors and
   vendors.

CRM
Types
Operational,
Analytical, Collaborative
An Introduction
to Different Types of CRM Systems
What
is CRM? 3 Types of Customer Relationship Management

---

PLANNING YOUR CRM SYSTEM

Preparation

Understand Problems and Pitfalls to Avoid
in Implementation

Now, before you plan and implement your CRM system, is the best time to consider
the types of problems that can occur — not later on when you are in the middle
of trying to operate the system, while also trying to resolve problems in how
it is operating.
Why CRM Fails
Top 5 CRM
Software Pitfalls
Avoid the
Four Perils of CRM
Why
CRM Projects Fail & How To Avoid These Pitfalls
Top
10 CRM Implementation Pitfalls

Form a CRM Team

The planning and implementation of a CRM system requires sufficient time, energy
and expertise, as well as a variety of different perspectives. That means a
well-qualified and designed CRM Team of the most suitable members from your organization.
The CRM Team would make recommendations to management about, for example:

• Goals for the CRM
• Metrics to measure progress toward the goals
• The best approaches to train employees about CRM
• Criteria to select the best CRM system
• The best CRM system that meets the criteria

It is best to draft a job description for the CRM Team to be used when explaining
the CRM Team’s role to upper management and suggesting who should be on it.
The description also gives guidance and direction to the CRM Team as it is doing
its job.

It is often best, as well, to train the members of the CRM Team about CRM. It might
be useful to hire an expert to do that training, as well as to being a resource
to the CRM Team as it does its job.
How
to Build the Perfect CRM Implementation Team
How
To Structure Your CRM Implementation Team
5 Important People
You Absolutely Need for CRM Success

Also see
Hiring
Consultants
Team
Building
Team
Performance Management

Understand the CRM Planning
Process

Here are some excellent articles that can give you and your CRM Team a good impression
of what is generally involved in planning and developing your CRM system. You
might read them in this order from general to more specific:
Top
4 CRM Implementation Considerations
How to Complete
a CRM Implementation in 5 Steps
How
to Create a CRM Strategy in 7 Steps

1. Clarify Organizational Goals and
Measures

What are the organization’s overall goals regarding its sales, customers and
service? For example, are they to increase sales revenue, expand marketshare,
increase customer retention and/or reduce customer complaints? What is your
unique
value proposition to sell your products and services to different groups
of customers? What is your unique
selling proposition that separates you from your customers?
Strategic Planning
How to Do to Planning
Goals
and Objectives Should Be SMARTER

2. Align CRM Goals With Organizational Organizational
Goals

Define the CRM goals needed to help achieve the strategic goals. For example,
should you focus more efforts on various preferred groups of customers, such
as the most profitable customers, new customers, current customers and/or reducing
their complaints? As much as possible, associate the necessary SMART
objectives needed to implement each CRM goal. It is helpful to articulate a
fictional customer profile, or persona,
to most easily consider the nature of each group of customers.

When deciding CRM goals, it is often useful to consider various metrics, or
measures of progress, for a CRM system. The metrics themselves can become goals
to achieve.
The
CRM Metrics: How to Measure the Performance of CRM
How
to Measure CRM Success
CRM
Metrics: What Should You Monitor and Measure?

Also see
Action
Planning and Operational Planning
Strategic
Action Plans & Alignment

3.Clarify How Customers Will Be
Treated Differently

How can you best evolve each preferred group through the sales pipeline, while
maintaining strong customer relationships and services? For example, should
you sell directly to them or use a distributor? For each group, should you start
or enhance a call center, up-sell or cross-sell, focus on certain types of discounts
and/or improve quality management? Also, what are the most appropriate communications
channels for each preferred group?
All About Sales
How to Work With Others

4. Decide What Organizational
Design Changes Are Needed?

A conventional rule in deciding the structure of something is “form follows
function.” In other words, the structure of the organization (its design
and roles) should be to what is most useful in implementing the organization’s
functions (its goals and methods to achieve those goals).

So what departments, teams and employees are now — and should be — involved
in dealing with customers, for examples, sales, marketing and customer service?
What roles are now — and should be — involved in using the CRM system, including
its software? What goals should each department, team and various employees
have in customer relationship management? What SMART objectives should be associated
with each goal?
Organizational
Structures and Design
Requirements
for Successful Organizational Change

5. Select the Best CRM Software

What Type of Software Platform is Best?

On-premises

In this type, you install the CRM software on your computer system, as well
as maintaining, troubleshooting and updating the software. You would either
use one of the free CRM tools (listed later on below) or buy or license a tool
from a vendor.

This type of software installation works best if you have available ongoing
technical skills for installation, troubleshooting and upgrades. You also will
need considerably more time to install the software as you climb the often steep
learning curve to understand the software and its installation. You are likely
to face occasional periods of downtime of the software as problems are solved
and upgrades are installed.

Cloud-based

In this type, you subscribe or license the software from a vendor that makes
the software available to one or more people in your organization, depending
on the licensing agreement. The vendor manages all aspects of the software,
including installation, testing, training, troubleshooting and upgrades. This
works if you have a suitable budget. Fortunately, the price of CRM software
has continued to decrease over the years.

How to Select the Right CRM Software

Questions to Consider When Specifying Your Software Requirements

Itarian
lists a variety of questions to consider, including:

1. Is it suitable for your size of organization?
2. Are there any limitations to the number of users?
3. Is it easy to use?
4. Can it be integrated with your other computer systems?
5. Is it easy to integrate with other customer service solutions that you already
   use?
6. What are its security features against hackers’ attacks?
7. Is the software affordable and fits in your budget?

You should also consider:

1. What type of CRM software do you need? (See Types of CRM
   Systems)
2. What type of technical support does the vendor provide? How reliable is
   it?
3. Does the vendor provide training?
4. Does the vendor include a careful manual for implementing the software?
5. Does the vendor provide demonstrations that your employees can experience?
6. What are some of its customers saying about the software?

Specify the Requirements for the Software

Now you are ready to specify what you want the CRM software to accomplish for
you. It is best to write a software requirements specification (SRS), while
focusing now on the needs of your organization, and not on the particular software
tool that you might already prefer. Later on, you will take your SRS to the
various CRM software vendors for you to carefully decide if their software will
indeed meet your organization’s needs.
How
to Create an SRS for CRM
CRM Software
Requirements for Your Business
How
to Define Your CRM Software Requirements

CRM
Requirements Example Document
Five
Levels of CRM Requirements
Specify
Your CRM Requirements

Lists of Some CRM Software and Costs to Consider

Free CRM Software

7 Best Free and
Open Source CRM Software Options
How
Can You Use Gmail as CRM Tool?
Evernote
The Free CRM With Something
for Everyone
Best Free CRM Software
for Business in 2019
Free CRM for Small Business

Fee-Based Software

CRM Software
Best CRM Software
2019: Comparison & Reviews
The 25 Best CRM Apps
for Every Business
CRM Tools
Customer
Relationship Management Software

For Small Organizations

“Most of the businesses out there will choose a CRM software to measure
the performance of their strategy. The good news in selecting a CRM Software,
is most of the complexity has been taken out of the process now. The best CRM
software solutions include SaaS (software as a service delivered online), and
innovations in this area improve everyday. This means there is no longer a costly
need of an in-house IT team and server space. At least this will be the case
for 97% of all businesses with less than 10 employees.” Thinkaboutcrm

For Nonprofits

Nonprofits can also use CRM software, for example, for tracking clients, program
outcomes, funders, results of fundraising, volunteers, memberships and their
membership levels.
How to
Choose the Best CRM for Your Nonprofit
6
Awesome Nonprofit CRM Options for Your Organization
Top
Nonprofit CRM Software

Now Select the Best Software For Your Needs

You are in a great position now to begin working with various vendors to get
the best software to meet your needs, as specified in your SRS. You might include
your specification in an overall Request for Proposal (RFP). You also might
bring the members of your Implementation Team with you when talking to the vendors.
Your
Definitive CRM Selection Guide and Checklist
How
to Choose Customer Relationship Management (CRM) Software
Choosing
CRM Software
23
Tips for Choosing the Right CRM Software
A
Step-By-Step Guide To Selecting The Right CRM Software
CRM
Vendor Evaluation Matrix
A
CRM Evaluation Checklist: What Should You Look For?
A
CRM RFP Guide and Template for Creating the Perfect Proposal

Also see
4
Reasons Business Contracts Fall Apart
US
Business Contracts

---

DEVELOPING YOUR CRM SYSTEM

Redesign Your Organization As Needed
for CRM

Consider the goals and objectives that you established during the CRM planning
for each department, team and employee associated with customer relationship
management. What teams and roles should exist? How should they be integrated
with each other? For example, which departments, teams and employees should
be collaborating with each other and how? What organizational design would best
facilitate that type of involvement and collaboration?
Understanding Organizational
Structures and Design
Work
Design and Job Design
Organizing
or Reorganizing an Organization and Its Employees
How to Know What
Positions and Jobs Are Needed

Start Cultivating a CRM Culture

Research shows that long-lasting, successful change in an organization usually
requires a change in its culture. Unless the culture begins to change, it does
not matter how much advice and many tools that the organization gets. A change
in culture will determine whether they are actually used or not.

Great customer relationship management is a mindset. It is a way of thinking,
prioritizing and planning about customer relations in an organization. It guides
how decisions are made and how problems are solved regarding customer relations.
When many people in an organization have that mindset, then the organization
has a CRM culture.
CRM
Culture – How to Bring CRM Culture Successfully?
10
Steps to Implementing a CRM Culture in the Organization
Creating
a CRM Culture

Also see
Cultural
Change
Planning
Team Building

Delegate CRM Goals to Teams and Employees

Consider the CRM goals and associated objectives that you decided during the
planning. Which goals should be delegated to which teams and employees? Make
sure that you make the assignments according to the team performance management
and employee performance management practices that are formally established
in your personnel policies.
Goal
Setting with Employees — What Should Employees Work On?
Team
Performance Management: Performance Planning Phase (Assigning Goals)

Also see
Personnel
Policies

Train Employees About CRM

It is critical that all employees have a mindset of great customer relationships,
especially as a result of having great relationships with customers. The relationship
requires skills customer service, including in building
trust, having empathy
for others, listening,
asking thoughtful questions
and sharing feedback.

Training also includes how to use the CRM software, for example, its purpose,
how to use it, how it integrates with other computer systems, and where to get
help. Good CRM software should come with ample documentation about how to use
it. If you licensed or bought the software, the vendor will very likely have
time-tested training and materials to use.
Keep
It Simple: Training New Employees on the CRM System
How
to Train Your Staff for CRM
The Importance
of Training in CRM Success

Also see
About
Training and Development

Also see
Cultural
Change
Planning
Team Building

---

MANAGING YOUR CRM SYSTEM

Manage Your CRM
Teams and Employees

You have already done the phases of setting goals and delegating them to the
appropriate teams and employees. Remaining tasks are to monitor and measure
progress toward those goals, implement performance improvement methods where
needed, and reward/compensate teams and employees accordingly.

For teams:
Team
Performance Management: Performance Appraisal / Evaluation
Team
Performance Management: Development (Improvement) Planning Phase

For employees:
Giving
and Receiving Feedback
Evaluating
Performance (Performance Appraisals)
Rewarding
Performance
Addressing
Performance Problems
Performance
Improvement/Development Plans
Firing
Employees

Ensure all necessary collaborations are occurring among teams and stakeholders,
for example, cross-collaboration between marketing, sales and customer service
activities.

Monitor and evaluate the achievement of team and employee CRM-related goals,
and report the progress toward achieving the organizational and CRM goals.

Also see
What
is Supervision? How Do I Supervise?

Manage Your CRM
Software

The management activities specific to the CRM system include, for example to:

• Develop useful written procedures about managing and using the CRM system.
• Ensure all necessary employees continue to effectively use the CRM software
  — that is, they are indeed adopting the CRM system.
• Update the content in the CRM software, for example, adding and modifying
  current contents from the functions of marketing, sales and customer services.
• Manage the CRM software, for example, doing backups and upgrading the versions
  as necessary.

Evaluate Your CRM System

Evaluations should monitor various metrics, or measures, to decide how well
the CRM system is operating. (Various metrics were listed above in the section
2. Align CRM Goals With Organizational Goals .)

Evaluations should especially be in regard to measuring the extent of achievement
of the CRM goals that you had established for your customer service management
system.

Be sure to use the learning from your evaluation activities to improve the
next round of the planning of your CRM system. In that way, you are indeed treating
your CRM as a recurring system of integrated and tightly aligned activities.

Also see
How
to Design Successful Evaluation and Assessment Plans

---

General Resources

Glossaries

CRM Glossary
CRM Definitions and Glossary

Organizations

Customer Service Institute of America
International Customer Service Association
National Customer Service Association
North
American Customer Service Management Association
SOCAP International

---

Learn More in the Library’s Blog Related to Customer Service and Satisfaction

In addition to the articles on this current page, also see the following blog
that has posts related to Customer Service and Satisfaction. Scan down the blog’s
page to see various posts. Also see the section “Recent Blog Posts”
in the sidebar of the blog or click on “next” near the bottom of a
post in the blog. The blog also links to numerous free related resources.

Library’s
Customer Service Blog

---

For the Category of Customer Service and Satisfaction:

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

---

What Really Constitutes a Business Crisis?

© Copyright Michael Nayor

There are many types of issues facing businesses, but what counts as a true crisis?

It’s not always immediately apparent when your organization is in the initial stages of a crisis. To this effect, I am pleased to bring you a guest blog submission by Michael Nayor, founder and CEO of crisis consulting firm The Rhodell Group, that investigates “What Really Constitutes a Business Crisis.”

What is a Business Crisis?

A business crisis can be anything that can negatively effect a company’s reputation or bottom line. Many events at first blush may not appear to be serious. HP’s firing of Mark Hurd and the subsequent entanglement with Oracle was not a big deal in the scheme of things, even though internally it must have been a shocker. However, the death or resignation of a key person in any organization could very well be serious for any company depending on just how key that person really was. Natural catastrophes, product recalls, labor disputes, computer data losses. The list is endless. Some are temporary. Some can cause the demise of a company. Most can be handled with honesty and the realization that it may be necessary to absorb losses over the short haul in order to achieve a long and healthy business life.

Two Categories of Business Crises

Two distinct categories of crisis need to be recognized. In one we lump all those events over which we have no control, such as product tampering by outside forces or natural disasters. Even in these situations there are always some actions we can take: tamper-proof packaging, liability insurance, proper protocols. But generally these events can blind-side us.

The second category contains all those events that might have been avoided had we chosen to take the actions necessary to protect ourselves and the public. Some are obvious. We look at the BP oil spill and see things that surely could have been done. Other events are not so obvious and these are the ones that can be insidious. When a management believes it is doing the right thing but in fact is fueling a potential crisis we have the makings of a catastrophe. A couple of examples will make this abundantly clear.

Market share is usually very important to a company, oddly sometimes more important than the bottom line. There is always great competition for new customers. Many times the efforts and resources devoted to advertising, marketing and selling to new customers are at the expense of a company’s loyal customer base. This can even be seen at the local level. Where I live heating oil companies consistently offer new customers a deal for the first year in order to lure them in. This, of course, is done at the expense of old, loyal customers who have to make up the slack. The result is that many savvy oil customers these days do a lot of shopping each year to find the best deal. Loyalty is a thing of the past. On a national level the problem has gotten even more serious. A recent financial story in The New Yorker last month observed that there is almost universal recognition that customer service in this country has deteriorated. Such service is considered a “cost”. Companies are looking for the customers they don’t have so they are willing to spend on marketing and advertising but are not as interested in adding to their costs of service. The article made it sound a little like cynical dating. Companies are interested in luring you in but then once they have you, they don’t quite value you as much as the next potential customer they want to corral.

Lack of service is not just a pain for helpless consumers. In this internet age they can do something about it. This is how a company can sow the seeds of its own destruction, and inexorably create its own crisis. Companies and their products and services are being rated on the internet and consumers don’t hold back. They tell it like it is. Granted, competitors may be planting some of these negative comments but for the most part product and service evaluations are being taken at face value. The moral of the story: be faithful to those who brought you to the dance, or the consequences could be severe.

Another form of self-inflicted crisis involves weathering the storm

Whether in politics, professional sports, or in business, “players” still believe that because of their importance they can ride out any issue or problem. They can’t. We can all easily tick off a dozen or so examples, but the latest is surprising. Johnson & Johnson has recently gone through a spate of recalls of tainted children’s Tylenol and Motrin. The Company has generally kept a low profile and even contracted with a third party to buy up Motrin off retail shelves rather than announce an actual recall. And for the last decade it has been settling with claimants for a variety of injuries and death allegedly due from Ortho Evra, a contraceptive patch made by its subsidiary, Ortho McNeil. It appears clear that the current management of J&J has not followed in the footsteps of the management that handled the Tylenol crisis of 1982 which is often cited as the quintessential example of crisis management in modern corporate history. Back then cyanide had been found in bottles of Tylenol in the Chicago area. J&J immediately issued public warnings, issued a product recall, created tamper-proof packaging, and before long was back in business. The Company was up-front and willing to bite the bullet in the best interests of the public. Unfortunately that does not appear to be the philosophy today. There is clearly a danger in believing one’s invincibility. The trust and respect of the public is at stake, and once lost, is very difficult to retrieve.

A crisis is not just the obvious explosion at a plant or a mine. Companies can and do create their own crises. Companies must evaluate their philosophy, their strategy and their honesty. They must take action to minimize their vulnerabilities but at the same time be prepared to take action in the best interests of the public if they value company longevity.

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For the Category of Crisis Management:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

• Related Library Topics
• Recommended Books

All About Crisis Management

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Sections of This Topic Include

• 10 Steps of Crisis Communications
  
• Guidelines for Successful Crisis Management
• Guidelines for Successful Social Crisis Planning
• Examples of Organizations’ Successful — and Unsuccessful — Crisis Management

Also consider

• Crisis Management: Advice about responding to a crisis, once it’s already occurred
• Business Insurance: Guidelines and advice about buying various kinds of insurance
• Risk Management: Guarding against theft, fire, disasters, etc.
• Safety in the Workplace: About types of workplace injuries, programs to reduce accidents, etc.)
• Protecting or Repairing Your Reputation
• Related Library Topics

Learn More in the Library’s Blogs Related to Crisis Management

In addition to the articles on this current page, also see the following blogs that have posts related to Crisis Management. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog. The blog also links to numerous free related resources.

• Library’s Business Ethics Blog
• Library’s Crisis Management Blog

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The 10 Steps of Crisis Communications

By Jonathan L. Bernstein (Update � 2016 by Jonathan Bernstein. All rights reserved.)

Crisis: Any situation that is threatening or could threaten to harm people or property, seriously interrupt business, significantly damage reputation and/or negatively impact the bottom line.

Every organization is vulnerable to crises. The days of playing ostrich – burying your head in the sand and hoping the problem goes away – are gone. You can try, but your stakeholders will not be understanding or forgiving because they’ve watched what happened with Volkswagen, Chipotle, FIFA, and Lance Armstrong.

If you don’t prepare, you will incur more damage. When I look at existing crisis management-related plans while conducting a vulnerability audit (the first step in crisis preparedness), what I often find is a failure to address the many communications issues related to crisis or disaster response. Experience demonstrates that organizational leadership often does not understand that in the absence of adequate internal and external communications:

• Operational response will break down.
• Stakeholders will not know what is happening and quickly become confused, angry, and negatively reactive.
• The organization will be perceived as inept, at best, and criminally negligent, at worst.
• The length of time required to bring full resolution to the issue will be extended, often dramatically.
• The impact to the financial and reputational bottom line will be more severe.

The basic steps of effective crisis communications are not difficult, but they require advance work in order to minimize damage. So if you’re serious about crisis preparedness and response, read and implement these 10 steps of crisis communications, the first seven of which can and should be undertaken before any crisis occurs.

PRE-CRISIS

1. Anticipate Crises

If you’re being proactive and preparing for crises, gather your Crisis Communications Team for intensive brainstorming sessions on all the potential crises that could occur at your organization.

There are at least two immediate benefits to this exercise:

• You may realize that some of the situations are preventable by simply modifying existing methods of operation.
• You can begin to think about possible responses, about best-case/worst-case scenarios, etc. Better now than when under the pressure of an actual crisis.

In some cases, of course, you know a crisis will occur because you’re planning to create it – e.g., to lay off employees, or to make a major acquisition.

There is a more formal method of gathering this information I call a “vulnerability audit,” about which information is available here.

This assessment process should lead to creating a Crisis Response Plan that is an exact fit for your organization, one that includes both operational and communications components. The remaining steps, below, outline some of the major topics that should be addressed in the communications section of the plan.

2. Identify Your Crisis Communications Team

A small team of senior executives should be identified to serve as your organization’s Crisis Communications Team. Ideally, the organization’s CEO will lead the team, with the firm’s top public relations executive and legal counsel as his or her chief advisers. If your in-house PR executive does not have sufficient crisis communications expertise, he or she may choose to retain an agency or independent
consultant with that specialty. Other team members are typically the heads of your major organizational divisions, as any situation that rises to the level of being a crisis will affect your entire organization. And sometimes, the team also needs to include those with special knowledge related to the current crisis, e.g., subject-specific experts.

Let me say a word about legal counsel. Historically, I used to have to do a lot of arm-wresting with attorneys over strategy and messaging. They were focused strictly on the court of law and, of course, a crisis manager is focused primarily on the court of public opinion. More and more lawyers understand that the organization in crisis can be destroyed in the court of public opinion years before the legal process plays out. And attorneys have also come to understand that, while “no comment” translates as “we’re guilty or hiding something” to the public, there are a lot of ways to say very little without compromising legal matters, while still appearing responsive to those seeking more information.

Remember this – entire countries and causes have had their ambitions thwarted, or aided, as a consequence of their trials in the court of public opinion.

3. Identify and Train Spokespersons

Categorically, any organization should ensure, via appropriate policies and training, that only authorized spokespersons speak for it. This is particularly important during a crisis. Each crisis communications team should have people who have been pre-screened, and trained, to be the lead and/or backup spokespersons for different channels of communications.

All organizational spokespersons during a crisis situation must have:

• The right skills
• The right position
• The right training

The Right Skills

I’ve met senior-level corporate executives who could stand up in front of a 1,000-person conference audience without a fear and perform beautifully – but who would get virtual lockjaw when they knew a camera was pointed their way for a one-on-one interview.

I’ve also known very effective written communicators who should probably never do spoken interviews because they’re way too likely to “step in it” using that format. These days, spokesperson responsibilities invariably include online communication, and social media is a very easy place to make a mistake.

Matching potential spokespersons’ skills with their assignments as a member of the Crisis Communications Team is critical.

The Right Position

Some spokespersons may naturally excel at all forms of crisis communications – traditional media, social media, B2B, internal, etc. Others may be more limited. Only certain types of highly sensitive crises (e.g., ones involving significant loss of life) virtually mandate the chief executive be the lead spokesperson unless there is very good cause to the contrary.

The fact is that some chief executives are brilliant organizational leaders but not very effective in-person communicators. The decision about who should speak is made after a crisis breaks – but the pool of potential spokespersons should be identified and trained in advance.

Not only are spokespersons needed for media communications, but for all types and forms of communications, internal and external. This includes on-camera, at a public meeting, at employee meetings, etc. You really don’t want to be making decisions about so many different types of spokespersons while “under fire.”

4. Spokesperson Training

Two typical quotes from well-intentioned executives summarize the reason why your spokespersons should receive professional training in how to speak to the media:

“I talked to that nice reporter for over an hour and he didn’t use the most important news about my organization.”

“I’ve done a lot of public speaking. I won’t have any trouble at that public hearing.”

Regarding the first example, there have hundreds of people skewered by CBS’ “60 Minutes” or ABC’s “20/20” who thought they knew how to talk to the press. In the second case, most executives who have attended a hostile public hearing have gone home wishing they had been wearing a pair of Depends. They didn’t learn, in advance, the critical differences between proactive PR, which focuses on promoting your organization, and crisis communications, which focuses on preserving your organization.

All stakeholders, internal and external, are just as capable of misunderstanding or misinterpreting information about your organization as the media. It’s your responsibility to minimize the chance of that happening.

Spokesperson training teaches you to be prepared, to be ready to respond in a way that optimizes the response of all stakeholders.

5. Establish Notification and Monitoring Systems

Notification Systems

Remember when the only way to reach someone quickly was by a single phone or fax number, assuming they were there to receive either?

Today, we need to have – immediately at hand – the means to reach our internal and external stakeholders using multiple modalities. Many of us have several phone numbers, more than one email address, and can receive SMS (text) messages or faxes. Instant Messenger programs, either public or proprietary, are also very popular for business and personal use. We can even send audio and video messages via email. And then, of course, there is social media. This may be the best/fastest way to reach some of our stakeholders, but setting up social media accounts for this purpose and developing a number of followers/friends/contacts on the various social media platforms (e.g., Facebook, LinkedIn, Google+) is not something you can do after a crisis breaks, because nowhere does news of a crisis spread faster and more out of your control than on social media.

Depending on how “techie” we choose to be, all of this type of communication – and more – may be received on or sent by a single device!

It is absolutely essential, pre-crisis, to establish notification systems that will allow you to rapidly reach your stakeholders using multiple modalities. The Virginia Tech campus shooting catastrophe, where email was the sole means of alerting students initially, proves that using any single modality can make a crisis worse. Some of us may be on email constantly, others not so. Some of us receive our cellphone calls or messages quickly, some not. If you use more than one modality to reach your stakeholders, the chances are much greater that the message will go through.

For a long time, those of us in crisis management relied on the old-fashioned “phone tree” and teams of callers to track people down. Fortunately, today there is technology – offered by multiple vendors for rent or purchase – that can be set up to automatically start contacting all stakeholders in your pre-established database and keep trying to reach them until they confirm (e.g., by pressing a certain number on a phone keypad) that the message has been received. Technology you can trigger with a single call or email.

Monitoring Systems

Intelligence gathering is an essential component of both crisis prevention and crisis response.

Knowing what’s being said about you on social media, in traditional media, by your employees, customers, and other stakeholders often allows you to catch a negative “trend” that, if unchecked, turns into a crisis.

Likewise, monitoring feedback from all stakeholders during a crisis situation allows you to accurately adapt your strategy and tactics.

Both require monitoring systems be established in advance. For traditional and social media, Google Alerts are the no-cost favorite, but there are also free social media tracking apps such as Hootsuite. There a variety of paid monitoring services that provide not only monitoring, but also the ability to report results in a number of formats. Monitoring other stakeholders means training personnel who have front-line contact with stakeholders (e.g., Customer Service) to report what they’re hearing or seeing to decision-makers on your Crisis Communications Team.

6. Identify and Know Your Stakeholders

Who are the internal and external stakeholders that matter to your organization? I consider employees to be your most important audience, because every employee is a PR representative and crisis manager for your organization whether you want them to be or not! But, ultimately, all stakeholders will be talking about you to others not on your contact list, so it’s up to you to ensure that they receive the messages you would like them to repeat elsewhere.

7. Develop Holding Statements

While full message development must await the outbreak of an actual crisis, “holding statements,” messages designed for use immediately after a crisis breaks, can be developed in advance to be used for a wide variety of scenarios to which the organization is perceived to be vulnerable, based on the assessment you conducted in Step 1 of this process. An example of holding statements by a hotel chain with properties hit by a natural disaster, before the organization’s headquarters has any hard factual information, might be:

“We have implemented our crisis response plan, which places the highest priority on the health and safety of our guests and staff.”

“Our thoughts are with those who were in harm’s way, and we hope that they are well.” “We will be supplying additional information when it is available and posting it on our website.”

The organization’s Crisis Communications Team should regularly review holding statements to determine if they require revision and/or whether statements for other scenarios should be developed.

POST-CRISIS

8. Assess the Crisis Situation

Reacting without adequate information is a classic “shoot first and ask questions afterwards” situation in which you could be the primary victim. However, if you’ve done all of the above first, it’s a “simple” matter of having the Crisis Communications Team on the receiving end of information coming in from your team members, ensuring the right type of information is being provided so you can proceed with determining the appropriate response.

Assessing the crisis situation is, therefore, the first crisis communications step you can’t take in advance. If you haven’t prepared in advance, your reaction will be delayed by the time it takes your in-house staff or quickly hired consultants to run through steps 1 to 7. Furthermore, a hastily created crisis communications strategy and team are never as efficient as those planned and rehearsed in advance.

9. Finalize and Adapt Key Messages

With holding statements available as a starting point, the Crisis Communications Team must continue developing the crisis-specific messages required for any given situation. The team already knows, categorically, what type of information its stakeholders are looking for. What should those stakeholders know about this crisis? Keep it simple. Have no more than three main messages that go to all stakeholders and, as necessary, some audience-specific messages for individual groups of stakeholders. You’ll need to adapt your messaging to different forms of media as well. For example, crisis messaging on Twitter often relies on sharing links to an outside page where a longer message is displayed, a must because of the platform’s 140 character limit.

10. Post-Crisis Analysis

After the cowpies are no longer interacting with the air-circulating device, the question must be asked, “What did we learn from this?”

A formal analysis of what was done right, what was done wrong, what could be done better next time and how to improve various elements of crisis preparedness is another must-do activity for any Crisis Communications Team. I have developed a formal process for accomplishing this, but even a solid in- house brainstorming session can do the job.

“It Can’t Happen To Us”

When a healthy organization’s CEO or CFO looks at the cost of preparing a crisis communications plan, either a heavy investment of in-house time or retention of an outside professional for a substantial fee, it is tempting for them to fantasize “it can’t happen to us” or “if it happens to us, we can handle it relatively easily.”

Hopefully, that type of ostrich emulation is rapidly becoming a thing of the past. Yet I know when all is said and done, thousands of organizations hit by natural and man-made disasters will have suffered far more damage than would have occurred with a fully developed crisis communications plan in place. This has also been painfully true for scores of clients I have served over the past 30+ years. Even the best crisis management professional is playing catch up – with more damage occurring all the time – when the organization has no crisis communications infrastructure already in place.

The Last Word – For Now

I would like to believe organizations worldwide are finally “getting it” about crisis preparedness, whether we’re talking about crisis communications, disaster response or business continuity. Certainly, client demand for advance preparation has increased dramatically in the past decade, at least for my consultancy. But I fear there is, in fact, little change in what I have said in the past – that 95 percent of American organizations remain either completely unprepared or significantly under-prepared for crises. And my colleagues overseas report little better, and sometimes worse, statistics.

Choose to be part of the prepared minority. Your stakeholders will appreciate it!

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Guidelines for Successful Crisis Management

The following links are to a wide variety of guidelines for successful crisis management that will avoid crisis management mess. Many of the articles include real-life examples of success.

Recommended Articles

• What Really Constitutes a Business Crisis?
  
• Crisis Management
• Making a Statement
• Are You a Crisis Manager?
  
• Coping with catastrophe: what keeps us going in the face of adversity?
• Managing in Crisis
• Your Crisis Communication Response Plan is Due for Maintenance (And/Or a Rewrite)
• Questions to Avoid Crises
• Prevent and React

Additional Articles

• Who Does What?
• Turning a Public Crisis Around
• The Crisis Counselor
• The Doctor Recommends Crisis Prevention – But It’s Your Choice
• Information Security as Crisis Prevention (video)
• Crisis Simulation
• The Right Steps
• Take Advantage of Crises to Grow and Learn
• Crisis Management and Customer Service
• After A Crisis
• Various Manuals for Crisis Interventions
• Questions to Avoid Crisis
• Reality of Communication
• Training to Prevent Disasters — Not Just the Job of TSA
• Turning a Liability into an Asset
• Proactive Crisis Management
• Avoiding Pain
• Crisis Leadership
• Transparency in Crisis
• Can You Simulate a PR Crisis and Then Handle the Real Thing?
• Your Crisis Communication Response Plan is Due for Maintenance (And/Or a Rewrite)
• Fix the Problem
• Prevent and React
  
• Online Crisis Management Tools
  
• Honest Insurance?
  
• Crisis on Stage
  
• The Human Touch
  
• Coping with Tragedy
  
• Take Responsibility
  
• Ready and Able
  
• Three-Act Crises
• Own It
  
• Learning from Crisis
  
• Prepare With Dark Sites
  
• Real Crisis Management
  
• Simplify and Repeat
  
• Have a Plan
  
• Reputation Combat
  
• Are You Vulnerable?
  
• Bring On The Hate
  
• Crafting the Ideal Apology
  
• Role Responsibility
  
• Rumor and Innuendo
  
• When Share Price Puts a Value on Brand Reputation
  
• Business as Usual
  
• 10 Ways to Ruin Your Company’s Communications Efforts
  
• Don’t Tip Your Hand
  
• Red Cross UK Disaster Challenge
  
• You Know What You’re Talking About, Right?
  
• Bird Flu Breakout
  
• Caribbean Cops Get Crisis Communications Training
  
• The Digital Media Law Project
  
• FEMA’s Pledge to Prepare
  
• High-Speed Crisis Management
  
• Shoe Shackles Raise Consumer’s Hackles
  
• Video Crisis Management
  
• Paterno Family’s Reputation Management no Touchdown
  
• Romney Film Reveals Crisis Management Risk
  
• Calm Yourself Through Crisis
  
• Hotel Hacker Exposes E-Vulnerabilities
  
• Make Your Apology Mean Something
  
• Short Term/Long Term
• The Crisis Show
• The Crisis Show Ep. 2 – Crises, Crises, Everywhere!
• The Crisis Show Ep. 3 –
• Data Jackings and #Fail Tweets
• The Crisis Show Ep. 4 –
• Corporate Crises
• The Crisis Show Ep. 6 –
• Colorado, Tony Robbins, Olympics & Penn State
• The Crisis Show Ep. 9 –
• Back to School

Also consider

• Social Networking and Social Media
• Public and Media Relations (including online reputation management)

Guidelines for Successful Social Crisis Planning

Copyright Jonathan L. Bernstein

As it stands today, crisis management is very much entwined with social media. Whether you like it or not, when trouble hits you’ve got to quickly meet your stakeholders in the places they frequent in order to maintain control of your story, and that means being ready. In an article for business2community.com,
David Vap provided some solid tips for getting your organization in position to handle social crises:

1. Understand your organization. Review external communication processes, social capabilities, and corporate culture. This is where we recommend scenario planning. Key questions could include: how would we respond if a vocal customer complaint suddenly went viral? How would we respond to a brandjacking attack?
2. Create a new social mindset in your organization. The social shift calls for a mindset characterized by transparency, accountability, employee empowerment, and planned spontaneity. Technology is certainly a crucial component of dealing with crisis communication, but preparing processes and practices must come first.
3. Know your consumers. Listen to conversations unfolding on the social web about your brand, and respond/employ proactive social support. Also identify your customer advocates on the social web – they will be invaluable in the event of a crisis.
4. Form a social crisis team. A successful social strategy must cross the boundaries of department and hierarchy because consumers expect a seamless experience. Build a cross-functional team, including a social media manager, a product owner, and at least one executive sponsor. Draw up a social team charter to clarify roles and responsibilities and create an internal collaboration space for this team.
5. Roll out a social crisis communications plan. Develop a playbook with guidelines for the social crisis team. Define an escalation process for potential PR issues. Build feedback into every step so you can adapt. Your plan needs to think through three areas – process and culture (what / who needs to change), technologies and tools (what to use to get there), and key metrics (what to track).

I especially like this list because of step two, “create a new social mindset in your organization.” Far too many businesses create social media accounts and install fancy managing programs but neglect proper training and education, not only stifling possible gains but also creating the risk of improper use, which raises the chance of crisis even further.

• Uses of Social Media for Disaster Response
• Are You Prepared For a Social Media Crisis?
• Uses of Social Media for Disaster Response
• Avoiding Pain
• Transparency in Crisis
• Social Media in Emergencies
• How to Start a Social Media Crisis
• Qantas Neglects Twitter in Crisis
• Social Crisis Planning
• Social Management
• Twitter Mistakes to Avoid
• Blogging for Crisis Management
• Getting Started with Social Media
• Crisis Communication via Twitter
• Fight Back with Social Media
• Putting Out Fires with Twitter
• Tech to the Rescue
• Rounding Up Rumors
• Disaster Management
• Emergency Twitter Tips
• FEMA and Social Media vs. Irene
• Define Your Goals for Social Media
• Twitter Underprepared for Censorship Backlash
• Social Media and You
• Social Media Crisis Management Strategies
• Social Media Preparedness
• $28k of Taxpayer Money �to Tweet?
• Flinging Mud with SEO
• Listening for a Crisis
• Social Media and Your Next Crisis
• ASUS Fails at Social Media
• Handling Negative Comments
• Social Media for Reputation Repair
• The Outrage Trap: How You Get Turned into a Dupe by Political and Activist Groups
• One’s Missed Opportunity is Another’s Brilliant PR
• When Deleting Social Media Comments is OK
• Winnie the Pooh on Social Media

Examples of Organizations’ Successful — and Unsuccessful — Crisis Management

One of the best ways to learn is from the mistakes of others. The following links are to many examples of crisis management done poorly.

• Chevron Gets Pranked
• Qantas Neglects Twitter in Crisis
• Monkey Business at the Better Business Bureau
• Air New Zealand Shows How to Fight Back
• Dell Has a New Crisis
• Man Declared Dead too Soon
• Bad Guys Lose with Google
• Anti-Bimbos
• Bad Crisis Communications Hurts Electronics Manufacturer
• Most Hated Companies
• Twitter or the Web?
• Storing Good Will
• Charlie Sheen — Misunderstandings about Addiction and Crisis
• Crisis Leadership in Japan
• Celeb Denies Make-A-Wish
• If You Lie Down With Dogs
• Southwest ™ Sub-Par Crisis Management
• Lessons from P&G
• Playstation Network Breach
• Southwest Gets It Right
• Impostors
• Zombies Attack
• Weiner Scandal
• Almost Good Crisis Management
• Delta Drops Fees, Learns Lesson
• E.coli Crisis
• Responsible Behavior
• Nikon Averts Facebook Crisis
• Penn State Crisis Management — ESPN Interview with Jonathan Bernstein
• USAJobs Controversy
• BofA Gets Brandjacked
• GM’s Crisis Management
• Kansas Gov. Bungles Social Media Crisis Management
• Can Apologies Be Funny?
• Don’t Let Reputation Damage Become Disaster
• NY Times Pays for Errant Email
• Ryan Braun: Victim or Villain?
• Talk About Transparency!
• Citibank – A Grimm Fairy Tale
• Crisis Management During Hard Times
• Crisis Management from the Marine Corps
• Dane Elicits Pain About Obama’s Public Speaking
• How To Say No Comment Without Saying No Comment
• More Military Crisis Management
• Army General Neil Tolley Opens Mouth, Inserts Combat Boot, Endangers Secret Ops
• Citibank – A Grimm Fairy Tale (update)
• Correcting a Customer Complaint Crisis
• How You Can Cause a Crisis by Giving Someone the Finger
• Is Siri Stalking You?
• Glaxo’s $3 Billion Deceit
• Toyota’s Crisis Management Runs Flat
• SumoSalad Hepatitis A Disaster
• Travelocity’ s Good Deed Goes Punished
• Crisis Management for Android in OS Wars
• GoDaddy Does Online Reputation Management
• Worried About Mass Shootings? Think Prevention
• Employee Error Dings Aussie Red Cross’s Reputation
• FEMA Combats Sandy Rumors Online
• When it’s OK to laugh, and when it’s not
• Quick Crisis Management from O2

Also consider

• Preventing Violence in the Workplace
• Safety in the Workplace
• Crisis Manager Newsletter and various information on crisis management

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For the Category of Crisis Management:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

• Related Library Topics
• Recommended Books