One way of measuring how important a customer relationship technology is to companies is to examine related key management positions. Currently, 19% of major UK corporations have shown a commitment to CRM by appointing a dedicated 'Head of CRM', according to a study by integrated marketing specialist GI Insight.
The current figure of 19% shows a substantial increase over the number of CRM-committed companies two years ago (only 14.5%), and represents a growth rate in dedicated corporate CRM Director positions of almost one-third over that time period.
The study also analysed the number of Heads of CRM in total, including those that also have another main job (such as Marketing Director or Customer Services Director). The findings showed that 48% of the UK's top 500 companies now employ a Head of CRM, compared to 44% in 2005.
According to Andy Wood, managing director for GI Insight, "Because one-off CRM technology costs can be written off, while ongoing senior personnel costs can't by written off, a company that puts CRM into the title of one of its senior managers is making a real statement about its commitment to CRM."
Return on investment needed
In many cases a measurable return on investment (ROI) needs to be proved before a company appoints a Head of CRM as a senior directorial role, regardless of whether this is an internal promotion or an external hiring.
"In this sense the 'Head of CRM' penetration is acting as a real indicator of commitment," said Wood. "CRM initiatives have been implemented, hard bottom-line results have been measured, and ongoing metrics have usually been put in place before CRM management is given 'senior' status."
CRM commitment by sector
A more detailed analysis of the survey revealed a number of sectors that scored particularly well for appointing a Head of CRM. Three industries stood out from the rest in particular:
Of those retail organisations appointing a Head of CRM, 52% are dedicated Heads of CRM. Because transactional data is so fundamental to customer relationship management in retail, the sector's leading position may well also reflect some of the ways in which retailers can use the data and analysis outputs that come out of CRM programmes.
- Media and Entertainment
Of the media and entertainment organisations appointing a Head of CRM, 50% are dedicated Heads of CRM. This was entirely unexpected, according to Wood. Music labels, publishers, broadcasters, cinemas, and so on are usually the mainstays of the above-the-line (ATL) advertising industry. But customer value tends to be much higher now than in the past. Newspapers are engaging their readers with a wide range of online and offline services, music publishers are also issuing games, technology, infotainment products and much more. And the culture of home entertainment has been vastly boosted by increasing levels of DVD viewing and television usage.
- Travel, Leisure & Hotels
Of these organisations that had appointed a Head of CRM, 46% are dedicated personnel. Businesses in this sector seem to be returning to their previous status as effective CRM players. This is a crucial return to the industry form last seen in the 1980s (as pioneers of loyalty and database marketing initiatives).