While many companies have complained about the lack of measurable return on their customer relationship management (CRM) investment, very few companies have a useful metrics system in place, suggests a new study from DMR Consulting. The survey of 219 information technology professionals also revealed 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
- Companies with one person in charge of corporate-wide CRM initiatives are further advanced in developing a single, enterprise-wide CRM technology architecture
- A large percentage of companies that have completed CRM initiatives are no closer to being customer-centric than before implementing CRM software.
According to survey respondents, metrics for measuring the success of CRM efforts are not widely used. Fifty-six percent of companies had no CRM metrics in place, while 22% had only some metrics. Just 22 percent have metrics across sales, marketing, and customer service.
"Employing meaningful metrics is essential to evaluating how well your CRM efforts are paying off. 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," says David Yamashita, CRM practice director, DMR Consulting. "If an organization truly wants to take a strategic approach to CRM, it will develop a set of strong metrics when planning the CRM program."
The survey also revealed that companies that include sales, marketing, and customer service in their CRM initiatives are more likely to realize 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 percent 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" -- a senior business executive, typically the chief operating officer, who is accountable for all three customer-facing functions. In fact, survey participants with a CRM Czar are far more likely to have plans for an enterprise-level CRM architecture (84 percent) than other companies (68 percent). Only 34 percent of survey respondents have one individual responsible for CRM activities. "Most companies are able to achieve some 'quick wins' by targeting one customer function," Yamashita says. "However, creating sustainable value for the organization at large requires that a company and its employees accept the customer service philosophy of incorporating marketing, sales, and service."
Another key survey 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 apparently no closer to being customer-centric than they were before they installed the software packages. The survey also revealed that customer-centric organizations, 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 percent of their stated goals for the project. However, companies that were customer- centric to begin with -- i.e., they have a history of understanding customers and their value to the company, and of creating consistent experiences for their customers across all functions, divisions, and communication channels -- met 71 percent of their implementation goals. "Companies need to adopt a systemic methodology to customer relationship philosophies," Yamashita says. "Overcoming these barriers will generate CRM momentum and lead an organization to realize value from their investments."
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