CRM and you: Perfect together?
Companies should allow at least one year to see a Return on Investment (ROI) on their Customer Relationship Management (CRM) plan, says a new study from Cutter Consortium, an IT consultancy. It's not just the complex meshing of products and technology that takes time to get into place but also the training of the people who will use the system.
The Cutter study also found some good news: Of the 159 Fortune 1000 companies and government agencies it surveyed, 77 percent say that they are satisfied with their organization's CRM initiatives. That's not bad, considering that 66 percent of these initiatives have been fully functional for a year or less.
Customers Rule
Right now is a good time to be a consumer. "Sure, customers are always right, but now they're 'armed and dangerous,'" says Bob Chatham, principal analyst at Forrester Research. "The Net directs buyers to the latest good or bad news about products and services--and then to the best deal," he says.
It's no wonder that CRM is a big deal to many companies, whether they are pure e-commerce businesses or brick-and-click combos. Simply put, CRM products and services help companies improve relationships with customers, whether through call centers, chat rooms, or e-mail.
The point of a good CRM service is to coordinate these areas so that if, for example, Jane Smith calls the help line one day with a question and then uses the chat room a week later with another question, a complete log of her interaction with the company is recorded. An even better CRM plan anticipates Jane's needs and delivers personalized service, along the lines of "We've noticed you like country music. There's a new Tricia Yearwood album due out next week. Interested?"
But most of the news about CRM implementations is bad, mainly in terms of integration. The chat room has no record of Jane's call to the help line from the previous week and so she has to start explaining herself all over. Forrester says that 20 percent of the typical CRM implementation is wasted because of overlapping product offers and poorly coordinated spending. That's because every CRM plan is a patchwork of 10 to 15 vendors, by Forrester's count.
Whether CRM initiatives are working yet or not, the majority of companies agree that a CRM plan is necessary. "Strengthening customer relations" was ranked the number-one competitive strategy by 58 percent of the Internet companies surveyed in ActivMedia Research LLC's annual study, "Real Numbers Behind 'Net Profits 2001." "Customer satisfaction and loyalty"--an oft-touted net result of a good CRM program--was ranked third, at 43 percent.