Shareholders kept in dark over CRM profits
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Recent research has shown a lack of communication between marketers and board members – the people who hold the purse strings don’t realise the impact of CRM on profits. And if shareholders don’t know the value of CRM initiatives, there’s a risk they won’t continue to support investment.

Fewer than 35% of companies report back to investors on customer profitability – which means they have no way of gauging how effective CRM is in improving the business’ overall profit margin. Shareholders in two-thirds of UK businesses have no idea how effective CRM is.

“Customer profitability is one of the most effective ways of measuring the success, or indeed failure, of CRM initiatives – something that marketers are aware of,” said Iain Campbell, managing director of INFACT Research. “It’s essential that board members also recognise the importance of disseminating this information to shareholders.”

Keeping them in the dark
Even worse, 55% of boards who have this information don’t pass it on to shareholders. Almost 40% of marketers thought an increase in customer profitability was the most important CRM criteria to measure.

By contrast, the next most important factors were:
• the number of customers retained (27%)
• the number of customers acquired (18%)
• increased cross- and up-selling of products (18%).

Indicator of success
“There’s clearly a difference in priorities between marketers and board members,” said Tony Heywood, senior vice-president, international operations at Xchange.

“Marketers appreciate that customer profitability is a clear indicator of success, but board members need to ensure that this information is passed on to the people who control the purse strings.”

Xchange software solutions give companies a single, real-time view of the customer, helping them to personalise and synchronise their campaigns across multiple channels. With six years’ experience in CRM, its customer list includes Royal & SunAlliance, The Woolwich, Abbey National, Thomas Cook, DaimlerChrysler, Sky, Vodafone and Great Universal Stores (GUS).


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