New Aberdeen Group research among prospective CRM buyers and those who have bought and currently use CRM demonstrates a disparity between what people expect the technology to deliver and what they get. In Aberdeen’s “CRM Spending and Satisfaction Report 2003,” which will be released shortly, the expectations most often cited by prospective CRM buyers (in rank order) are:
- Enhanced revenue/market share growth
- Productivity improvements
- Maintain or gain a competitive advantage
- Improve analysis and reporting
However, the benefits that experienced CRM users say they get from their CRM investments are quite different. Again, in rank order, experienced users say their benefits are:
- Productivity improvements
- Improved analysis and reporting
- Cost control or cost savings, and
- Enhanced revenue/grow market share
The reality of “enhanced revenue/grow market share” standing in fourth place stands in stark contrast to the expectations of new CRM buyers. Frequently, productivity is much more difficult to quantify than either cost savings or improved revenue it tends to be a “fuzzy” metric. If productivity enhancements led directly to cost containment, quantification would be easy; frequently, initial productivity improvements are subtle and do not directly translate into lower costs or greater revenue production, and that reality makes calculating return on investment (ROI) much harder if not impossible. Could this be CRM’s “smoking gun?”
CRM is, after all, a technology and a business solution that ultimately changes a corporate culture, and culture is not something that changes overnight.
The answer is a highly qualified maybe, but maybe not. It is intricately tied to customers’ overall satisfaction with their CRM investments. There are too many anecdotal reports of dissatisfaction with CRM to dismiss all of them out of hand. Moreover, many of the organizations that use CRM today are still supporting versions of systems bought in the “bad old days” of client/server architectures connected by virtual private networks that’s the down side of being an early adopter, or as the old joke goes, You can always tell who the pioneers are. They’re the ones with arrows in their backs.
The limitations of old-style architectures are reflected in the comments of existing users. When asked where they thought CRM was “missing the boat,” their answers were revealing. A plurality (26.8 percent) said it was too expensive to implement, 18.2 percent said it was too hard to maintain and upgrade, and 17.7 percent said it was too hard to use.
These backward looking numbers do not necessarily reflect the realities of more modern CRM technologies and only indirectly do they take into account the many CRM successes. In fact, although these numbers indicate unhappiness in the ranks and room for improvement, they do not suggest that organizations will rip out their systems anytime soon.
CRM’s “expectation gap” is just what one might expect to find in an industry hitting its stride. The pioneer or early adopter days may be over, the technology may have improved substantially, but the expectations of enhanced revenue and market share gains remain to taunt buyers and fuel skeptics bent on calculating ROI. However, it may still be too early to quantify the returns in many cases. CRM is, after all, a technology and a business solution that ultimately changes a corporate culture, and culture is not something that changes overnight.
In the Aberdeen survey, the most often cited CRM benefits are improved productivity (23.8 percent), followed by improved analysis and reporting (19.4 percent). These core benefits enable a company to do more with less and to work smarter and that, eventually, results in big improvements in corporate performance. Interestingly, the third- and fourth-most cited benefits are cost control (18.4 percent) and revenue enhancement (15 percent). Taken as a whole, these four markers describe an arc across time, which is repeated in virtually every organization that implements CRM from primary cause to ultimate effect. It is entirely likely that the revenue enhancement metric will continue to track further improvements in productivity and that this gap will shrink. The fact that we are not all the way to enhancing revenue yet and proving out ROI expectations is not a grave concern.
Expectation gap? Aberdeen is betting that it’s temporary.
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