Customer relationship marketing (CRM) has become a big focus for companies in recent years, witnessing heavy investment in call centres, sophisticated database systems, online support services, etc. But despite these large-scale CRM investments, 55–75% of companies have failed to meet the expected returns. Why is this the case and, moving forward, how can managers ensure better results from their CRM initiatives?
Despite being well-managed and well-resourced, a large number of companies have failed to see adequate return on CRM investments. This is a definite concern as many invested heavily prior to the recession (between 2000 and 2005, $220 billion was spent on CRM solutions) and will be planning to invest further as the world economy improves.
It seems that organizations with the money to do so simply rushed into large-scale IT-based investments, seduced by conventional wisdom and management fashion. Along the way, managers have continued to run their businesses as they always did, assuming customers would simply value the results of their investments and not realising the capabilities needed to support them. But successful CRM investment cannot be achieved without developing specific marketing skills and CRM capabilities. It’s easy to acquire resources, but building the right capabilities to genuinely enhance customers’ service experience, is much harder.
In this Idea, faculty from Cranfield School of Management propose a framework to help managers position their organization’s four principal marketing capabilities, which are as follows:
Through use of this framework, they can then identify how these capabilities must be developed in order to execute their desired CRM strategy. Two examples help illustrate this in practice:
Four key insights for managers responsible for their companies’ CRM investment decisions can be summarised as follows:
As well as the above, an organization’s top team needs patience and the courage to eschew neat global solutions, consultants’ so called ‘best practice’ models and their own preference for immediate results by allowing marketing capabilities to develop and lead CRM investments.
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