Study: Specific ROI Goals Are Crucial to CRMMore than 70 percent of executives heading their companies' customer relationship management initiatives have not set clear, specific goals for achieving returns on their CRM investment, according to a recent study by consulting firm BearingPoint, McLean, VA, formerly KPMG Consulting Inc.
The study, "Mastering the Moving Target," also found that while some companies are re-evaluating their CRM initiatives, the nation's soft economy is the cause of fewer than 22 percent of these re-evaluations.
"Right now companies are re-evaluating their CRM initiatives due to their inability to meet business performance expectations, not because of the downturn in the economy," said Bruce Culbert, senior vice president of BearingPoint's CRM practice. "In order to meet their goals, companies need to establish appropriate metrics and a specific ROI.
"When a company monitors and measures the effectiveness of its CRM strategy against desired targets, tangible ROI can result, driving sales and enhancing competitiveness and market position."
The study also found that, once ROI goals are set, measurement planning and performance monitoring are key activities to help CRM initiatives meet anticipated results. Only 6 percent of companies surveyed set specific ROI targets early in their CRM initiatives, helping them effectively clarify expected results.
BearingPoint interviewed 167 businesses representing 14 industries with more than $1 billion in annual revenue. The vast majority considered CRM very important, but few had achieved the expected value from their CRM initiatives.
Executives who did have metrics in place were measuring customer, transaction and productivity data without understanding the cross-functional impact or ability to gauge and translate such data into significant ROI.
One key finding is that many companies did not know what they should be measuring to determine the success of an initiative. Other key findings included:
· 40 percent of executives indicated they had only partial organizational buy-in.
· Alignment of CRM strategies with a company's overall business strategy includes a multichannel approach such as telephone, Web, direct mail and in-store.
· While CRM's importance to overall e-business has increased, barriers to overcome include budget constraints, lengthy implementations and organizational buy-in.