The Trouble with CRM
By Lisa Yorgey Lester, Managing Editor
By now, we've all heard the proclamations that more than half of all CRM programs have failed to achieve a return on investment. Why have so many CRM initiatives been deemed failures? Is it the fault of the people, the process, the technology?
Perhaps the problem is in the planning—or lack thereof, as Arthur Hughes, dirctor of database marketing strategy at DoubleClick, proposes in "A Failing Grade." Hughes contends companies are spending far too much money on data warehouses and million-dollar software. "Many companies believe a data warehouse and CRM software will achieve profitability. This is a mistake," he writes.
Indeed, a Gartner Group survey released last March reported 42 percent of the total number of software licenses bought by businesses go unused, which, ultimately, increases the total cost of ownership by 20 percent to 30 percent, as compared to businesses that carefully plan their CRM software license purchases.
Instead, Hughes stresses, more emphasis should be placed on a strategy that can be executed with fewer dollars and a modest data mart.
Fair Issac's Susan North concurs that many companies place too much emphasis on technology; she talks about three common reasons for CRM failure in "Just One Question."
Also in this report: How newsletters are quickly becoming a popular medium for communicating with customers.