CRM - Beyond the Hooplah (1,414 words)
Hinman: Unfortunately, CRM has become too closely associated with the technology supporting it. Rather, we should look at the overall process of managing relationships with customers. That requires a technology platform, but more importantly, effective data and human intelligence.
Inevitably, measurement is where the CRM system falls down. In most cases, the systems aren't held accountable for the costs of implementation, the loss of productivity and the measurable difference between the newly implemented system and the old way.
In database marketing, the old-school metric focused on recency, frequency and monetary value to identify profitable segments based upon either derived revenue or gross margin dollars. Lifetime value emerged in the late 1990s. It considers the customer individually and his or her historic or prospective value to the corporation based upon net present value cost accounting, minus the investment needed to make the customer a longer-term one.