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There has been a great deal of high-profile media coverage in the last few years about CRM project failures with many companies abandoning an implementation altogether or admitting they have not seen any ROI for their efforts so far.
Indeed, in two recent Conspectus surveys on this subject, strong evidence was found to support this view: just 4% of their sample in 2004 were prepared to describe their CRM implementation as ‘very successful’, and that proportion remained the same in 2005.
But the past 12 months has seen a real change in attitude and in performance. The proportion who now say their CRM applications have been very successful and delivered all the anticipated benefits has leapt to 14%.
A further 39% label their CRM efforts as ‘successful’ and say that the business has seen some, if not all, of the benefits they expected. Put together, this means that half the Conspectus sample (53%) reckon to be seeing real improvements as a result of implementing CRM applications.
However, organizations remain unsure about how well CRM applications are contributing to the success of the enterprise overall. Only 19% believe that CRM technology is delivering sufficient competitive advantage, compared to 13% who feel it is not, while the majority either cannot assess this satisfactorily (51%) or simply do not know (17%).
Organizations now seem to have learnt the lesson that keeping a customer satisfied will mean they keep that customer longer term and that this is a much cheaper alternative to finding new buyers – attracting new customers comes bottom of the list of desirable outcomes. In mature service-based markets especially, the resistance of customers to change providers is high so an organization must often get it spectacularly wrong to lose customers and quality CRM is the cornerstone of strategies to retain and grow these large, savvy customer bases.
Creating cost savings through the use of CRM also scores lower than the need to provide better strategic information to functional areas such as sales and marketing so that campaigns can be more closely targeted. This suggests that companies are looking for long-term gains to the business, rather than short term financial advantages.
Increased customer satisfaction levels are the measure companies are most likely to use to assess the success of any CRM initiative (cited by 62% of the Conspectus poll). Cost savings (57%) are another key indicator, along with the amount of new business generated (51%), while higher customer spend (36%) is also viewed as an important indicator.
However, organizations admit to some difficulty in measuring how successful their use of CRM technology has been, with less than a third (28%) saying they have been able to use such metrics in practice. The majority (39%) claim it is simply too early to say how a particular implementation is going, while one in five (20%) cannot weigh up progress in any meaningful way.
The survey does contain some broad assessments of the direction in which companies are going. For example, virtually all (91%) say customers can contact them via their website, which suggests that online working is now the norm.
But it is not all plain sailing and there is some way to go for even the slickest operators when it comes to completing all online transactions successfully. The biggest proportion (44%) do not know exactly how many of their online sales opportunities fail to carry through, but 11% reckon it is more than 50% of all transactions.
As well as online transactions which are lost completely, a quarter of companies (24%) report that in over half their dealings, transactions which start online involve the customer using the telephone to finish.
Companies also identify problems integrating their CRM applications with other existing software and data sources; an essential requirement if customers are to receive top-class service. While 14% maintain they can integrate easily, the majority (63%) admit this is a struggle. Only 7% say they have no requirement to do so, while 5% would like to integrate some applications but cannot.
Around half of those polled customize CRM applications either ‘moderately’ (20%) or ‘greatly’ (38%), while 15% make slight alterations to the standard offerings. Just 7% use CRM software exactly as it comes.
One alternative for organizations wary about the costs of customizing software to meet their needs, plus the ongoing expenses of running a sophisticated IT infrastructure, is to look at a web based CRM application – where the software is rented from a third party rather than purchased outright.This option, they acknowledge, is gaining ground rapidly in the marketplace with a significant percentage of organizations saying they are about to try this option or have definite plans to try it in teh near future.
Chic McSherry
CEO
iport4business.com
Source: Conspectus
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