Value Comes First
Tactics to Ensure Investments in Customer Relationship Management Produce Results
By Michael J. Penney
The value of customer relationship management (CRM) is unchallenged, but the method for capturing the value remains elusive. Any opportunity to grow or retain market share and profitability must be considered, and the potential benefits frequently justify the allocation of significant resources and investments.
For direct marketing companies, the key is to ensure that their investments in CRM programs pay off. The deployment of significant resources and investments implies the assumption of risk, and the issue for many organizations is properly managing that risk. Consider the following situations:
Situation 1. A financial services company believes there is value to be gained by cross-selling products and services to existing customers. To accomplish this, plans are made to create a unified customer data warehouse that will be leveraged by a new call center, sales force and marketing campaign management and analysis tools. Naturally, massive process and organizational changes will be required along with the new technology. The company faces years of internal change and investment.
Situation 2. A consumer goods manufacturer is struggling to retain market share and wants to develop direct relationships with its consumers. It believes putting in place processes and technologies that currently are maintained by distributors and retailers are necessary to understand customer buying behavior in its industry.
Situation 3. An insurance company believes that greater knowledge about its customers can lead to more efficient prospecting and is considering increasing its direct marketing investments to initiate direct contact with customers while reducing its television and print advertising budgets. Initial thoughts are to create customer and prospect data marts and to acquire and deploy customer touch-point systems and processes. However, it believes this undertaking will take years to implement and cost tens of millions of dollars.