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Companies can't measure their own ROI

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27th Feb 2002
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Too many companies have no idea about how to measure the ROI on their CRM investments, according to DMR Consulting.

A survey of 219 information technology professionals found that companies that include sales, marketing, and customer service in their CRM initiatives are more likely to achieve key strategic goals than companies that target just one or two of these functions. Furthermore companies with one person in charge of corporate-wide CRM initiatives are further advanced in developing a single, enterprise-wide CRM technology architecture. But a large percentage of companies that have completed CRM initiatives are no closer to being customer-centric than before implementing CRM software.

A basic problem is that metrics for measuring the success of CRM efforts are not widely used. Fifty-six per cent of companies had no CRM metrics in place, while 22 per cent had only some metrics. Only 22 per cent have metrics across sales, marketing, and customer service.

"Employing meaningful metrics is essential to evaluating how well your CRM efforts are paying off,” said David Yamashita, CRM Practice Director, DMR Consulting. “Understanding whether you are actually achieving the measurable benefits you targeted when planning your CRM program enables you to make informed, proactive changes to that program over time.”

The survey also revealed that companies that include sales, marketing, and customer service in their CRM initiatives are more likely to realise strategic benefits than companies that target just one or two of these functions. In particular, survey participants that integrated their CRM approach across all of their customer-facing business functions were 100 per cent successful in achieving two key strategic goals: selling more to current customers and creating new revenue streams.

Such integration is greatly facilitated by the presence of a "CRM Czar" who is accountable for all three customer-facing functions. Respondents with a CRM Czar are far more likely to have plans for an enterprise-level CRM architecture than other companies. But Only 34 per cent of survey respondents have one individual responsible for CRM activities.

Another finding is that the ability of a company to be "customer-centric" requires much more than CRM software. In fact, nearly two-thirds of companies with CRM software are no closer to being customer-centric than they were before they installed the software packages.

The pay off is that customer-centric organisations, on average, had greater success in their CRM implementations than other companies. Across all CRM initiatives covered by the survey, non-customer-centric companies met an average of just 53 per cent of their stated goals for the project. However, companies that were customer-centric to begin with met 71 per cent of their implementation goals.

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