ROI Still Elusive in Customer Management

AMR Research’s recent IT Spending survey revealed that despite the slowing economy, organizations continue to invest in customer management technologies; however, the majority are still not reaping real business ROI.

The Bottom Line: Avoid uncertainties in investment return. Expend the effort to develop a sound business case that lets you measure actual business-oriented return.

What It Means: At first glance, the survey results indicate that recent customer management implementations have been very successful, with 43% claiming their investments yield real business benefits and ROI. However, closer examination shows that only half of this group was able to cite solid measurements of their success, potentially dropping the “successful with significant return” slice to 25%. Many measure success in soft terms, such as project efficiency, performance and functionality, data accuracy/manageability, and fast, problem-free implementations. Some 31% of our survey sample were unsure about the success of their project or said it’s too early to tell whether or not they achieved ROI.

Conclusions and Recommendations: Developing a metrics-based business case increases the overall effectiveness of your Customer Relationship Management (CRM) strategy. A successful business case includes vision, goals, alternatives, cost/benefit/risk assessment, ROI justification, key initiatives, critical success factors, and an action plan. Create metrics that are simple, specific, and result-driven.

CRM is never static (nearly half of companies with live applications today are implementing or evaluating additional installations). Invest wisely, and ensure future funding by avoiding difficult-to-measure benefits--aim for achievable ROI metrics that clearly prove project success.

AMR Research originally published this article on 4 September 2003.