Survey exposes companies` `blind faith` in CRM

According to the latest KPMG Consulting/Atos Origin research report, 70% of businesses in key sectors in the UK economy are investing in customer relationship management (CRM) initiatives to achieve their business goals. Although customer centricity is cited as one of the key business drivers in today`s economy, only 6% of the directors that took part in this survey confirmed that they are measuring the effectiveness of their CRM programmes.

Commenting on the status of CRM adoption in SA, Keith Fairhurst, Technology Solutions Partner at KPMG Consulting, says: "In SA we saw a focus on CRM initiatives about two to five years ago. This activity was largely on the back of technology drivers with an emphasis on call centre technology. There is increasing recognition that customer analytics will play a bigger role going forward and that closer integration is required between CRM technology solutions and customer-facing functions within organisations."

The survey entitled `Is CRM delivering value to shareholders`* further indicated that despite this lack of measurement, over 80% of surveyed companies declared their CRM initiatives a success.

Says Fairhurst: "We are seeing a significant gap between what businesses think and what they actually do in terms of managing their customer relationships. CRM is being used as a short-term tactical response to issues such as customer churn and retention, rather than as a strategic approach to delivering shareholder value.

"As with all forms of business ventures, establishing a return on investment measurement for initiatives is of utmost importance, especially in the current economic climate. Investing in technology or business solutions, should not be treated any different," says Fairhurst.

The survey also indicated that 75% of respondents believed that customer satisfaction was the primary or secondary goal of their CRM programmes. However, only four in ten businesses interviewed, measured customer satisfaction. Says Fairhurst: "Many companies appear to be paying little more than lip-service to the objective of becoming customer-focused. Applied properly, CRM is an effective way of delivering mutual value - to customers and the business simultaneously - by balancing customer needs with service costs."

The single most important goal of CRM initiatives is culture change, identified by 29% of respondents. According to Fairhurst: "The priority of cultural and process change over pure technology implementation in CRM is an encouraging sign. It shows that businesses are finally viewing CRM as more than an investment in IT systems.

"We now need to see CEOs leading the drive for a customer-focused ethos across all levels and functions of the business, and measuring the results against financial targets. It`s the only way that organisations will see a real return on their CRM investment," concludes Fairhurst.

* Is CRM Delivering Value to Shareholders? The findings are based on telephone research conducted by MORI between 6-28 March 2002 with 163 directors with customer management and/or marketing responsibilities across the following sectors: retail/wholesale/distribution (37%), financial services (37%) and telecommunications/high-tech/IT/communications and content/media (26%). The annual turnover of the companies` UK operations is from lb50 million to over lb5 billion. Only two per cent had a turnover of lb50 million - lb100 million per annum.