CRM grows but ROI is only 'modest', says study

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By: Wise Marketer Staff |

Posted on December 16, 2003

Customer relationship management (CRM) solutions have delivered only modest gains in revenues despite millions of dollars of investment, according to a new survey and report from AT&T, in co-operation with the Economist Intelligence Unit (EIU).

Only 29% of the 237 high-ranking global executives who responded to the survey said they were satisfied with the quality of their companies' customer relationship management system, while other research cited in the AT&T report suggests that more than half of all CRM programmes are failing to deliver the expected return on investment (ROI).

But companies are continuing to invest in CRM solutions in an attempt to streamline their marketing campaigns, improve sales effectiveness, and increase customer profitability. Industry analyst, Gartner, predicts that the worldwide market for CRM services will achieve a compound annual growth rate (CAGR) of 16%, reaching some US$47 billion by 2006.

New channels
The surveyed executives indicated that their companies will need to support a range of new customer contact channels in the near future, with more than half saying that their companies would be using video links and web-based chat and messaging services to communicate with customers in the next two years. This, AT&T suggests, adds greater urgency to attempts to resolve CRM problems.

Problems pin-pointed
The report identifies a number of reasons for CRM's apparently disappointing performance. For example, too many companies have allowed IT to dominate their CRM initiatives, resulting in solutions that don't always meet the needs of end users in marketing, sales, and customer service. And many companies lack effective tools to measure the state of customer relationships, despite the increasing sophistication of CRM systems, and the availability of analytical tools.

The majority of executives see better analysis of customer behaviour as the priority for improving the quality of their customer relationship management. Analytical tools could help sales and marketing professionals cross-sell and market more effectively - but, the report warns, these tools also require training in skills that are new to many sales and marketing people.

"It is clear from the survey results that a thorough review of the business needs for CRM, and of how the expected benefits would flow, needs to be carried out before any investment in process and system implementation," said Jeff Ace, business development vice president for AT&T's global operations. "The EIU research shows that enterprises have to examine what other aspects of the business would need to be re-engineered to ensure the benefits materialise."

The AT&T survey is presented in a white paper, 'More than numbers: CRM in the networked organisation', which was written in co-operation with the EIU, which conducted the global survey and held a series of interviews with 237 analysts and executives between March and July 2003. The top five industry sectors represented were business & information technology, software, financial services, manufacturing, and healthcare & pharmaceuticals.

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