CRM Success Continues To Falter
This month we were brought another quantifiable reminder of a topic all of us in the CRM software industry know only too well from first hand experience. According to a July 2007 research report issued by PMP Research and circulated in CRM magazine, 42% of enterprises polled said their CRM systems had achieved only partial success and limited business benefits. The research report discovered a clear separation between recognizing the importance of CRM strategies and actually fulfilling those strategies. PMP Research Manager, Cliff Mills, suggests that an even greater number of organizations recognize that CRM strategy is more essential now that it was three years ago. It is viewed as "much more important" by 44% of the organizations surveyed and "slightly more important" by another 39% of respondents. "No one sees it as less important" according to Mills.
Recognizing the importance of customer management strategies and achieving planned results remain mutually exclusive for most organizations. 37% of organizations report achieving some clear benefits from their CRM software systems while only a small 4% of surveyed participants indicate their CRM software systems are successful and delivering all of the intended benefits.
While CRM software implementation failures suffer from a causes and factors which have been well publicized for over a decade, CRM post-implementation success has not received the same coverage. The PMP study did offer one concrete failure point which is that CRM production environments can degrade and often fail due to a failure to periodically measure results. Only 30% of the companies enlisted regularly measure their CRM systems performance against operational metrics and anticipated benefits. About another third of CRM implementers indicate they are planning to measure progress, 11% have measured only one time since the software implementation and an embarrassing 13% have never measured their CRM application effectiveness. Author Mills comments in the report, "This suggests that judgment as to the degree of success of a CRM application is often made on subjective basis rather than quantitative information because organizations do not know how to successfully, or how frequently, measure their CRM software."
According to the research report, the most cited benefits for initiating customer relationship management software implementations included the following:
- Delivery of better strategic information to functional areas of the business, such as sales and marketing;
- Improvement to customer satisfaction levels;
- Improvement to customer lifetime value; and
- Retaining existing customer longer.
The report finding also showed that a lack of success is not reducing interest in being successful. 78% of participants indicate that they are currently implementing changes and improvements to their on-premise and on-demand CRM software implementations in order to ultimately achieve their objectives. Only 11% have thrown in the towel and completely abandoned further improvements.