Study: CRM Applications Yield High Returns

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Successful implementations of customer relationship management applications have yielded returns ranging from 16 percent to more than 1,000 percent, according to an ROI study from IDC, Framingham, MA.


IDC also found that technology-related savings account for only 7 percent of the average return, while benefits from increased productivity and business process enhancements account for 51 percent and 42 percent, respectively, of the return.


Other findings include:


· 19 percent of companies in the study generated an ROI of 50 percent or less, 52 percent generated an ROI of 51 percent to 500 percent, and 30 percent reported returns of 501 percent or more.


· 58 percent experienced payback in one year or less, 35 percent experienced payback in one to three years, and 8 percent experienced payback in three years or more.


· Median initial investment in a CRM application is about $426,000, which includes all costs incurred before the CRM implementation enters production at a site. Median total cost over the first five years is estimated at $1.2 million.


IDC conducted more than 30 in-person interviews with organizations in North America and Europe that implemented CRM applications.


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