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Survey and Research Data

In a 2002 survey of 800 companies concerning CRM effectiveness by the New Zealand Direct Marketing Association (NZDMA), respondents reported the following key findings (Baker, 2002):

  • 86 % had already implemented, or were currently implementing CRM systems;
  • 82 % stated the desired goal for CRM was to retain customers, with 51 % indicating that this was being achieved;
  • 75 % cited increasing sales to existing customers as their central goal, however only 35 % believed this was being achieved;
  • There was a divergence of opinion between marketing and IT respondents concerning what parts of their CRM initiative were working. 55 % of marketers considered that CRM definitely improved customer retention, while only 35 percent of IT respondents agreed.

A number of companies were concerned that they lacked a champion to coordinate CRM efforts making it difficult to measure its success or failure.

By way of comparison to the above research a 2002 survey involving 432 respondents from US Community Banks reported the following concerning Customer Relationship Management systems (Barthel, 2002):

  • 19 % of respondents had installed CRM software;
  • 60 % said they planned to install CRM in the next 3 years;
  • 41 % could not currently identify and track their best customers, and 71 % planned to acquire the capability by 2005;
  • 15 % saw no need for a formalised CRM system;
  • Almost 50 % said they did not have the staff to implement CRM;
  • 44 % said the cost of the related software was prohibitive;
  • 27 % said they were unsure concerning how to go about building a system.

In Canada 57 large companies were surveyed in 2003 to examine their CRM initiatives. Each company had implemented a CRM system and represented a wide range of industries with the top four being manufacturing (20%), services (17%), banks and financial services (12%), and retail (12%). These organisations had an average of more than 6,000 employees and revenues greater than CA$2.5 billion. More than half reported developing their CRM technological initiatives in-house while the remaining utilised packaged software from a variety of CRM vendors. The pharmaceutical industry had invested heavily in CRM technology (233 % of Information Services (IS) budget), followed by the services/consulting industry (170 % of IS budget), and the banking/financial services industry (44 % of IS budget).

According to Miner (2002) some 50 case studies from a variety of CRM system vendors were reviewed in 2001 and provided insights into company objectives for implementing CRM systems, and the benefits subsequently received. In the table below descriptions represent objectives or benefits. The most popular objectives are ranked according to the number of companies that identified with the descriptions. In contrast the most popular benefits achieved are plotted adjacently.

Description

Objective ranking

Benefit ranking

Focus of objective

Create a single view of the customer with improved management reporting and forecasting

1

4

Company

Improve productivity through standardised process, less paperwork, and better integrated IT systems

2

1

Company

Increase revenues by providing a wider range of products plus up-selling & cross-selling

3

5

Company

Increase customer satisfaction and loyalty by improving levels of service

4

2

Customer

Using a wider range of communications methods

5

7

Customer

Improve information sharing both inside and outside the organisation

6

6

Company

Improve the productivity of existing products by analysing marketing campaigns more effectively

7

3

Company

 

Gartner Group reported that in 2000 organisations world-wide paid US$23 billion for CRM services. Research indicates that expenditures on CRM are expected to rise to US$76 billion world-wide by 2005. The tools and technologies being used by organisations as part of their CRM implementations included (Pang & Norris, 2002):

  • Computer telephony integration - using computerised call centres to support activities such as voice recognition, matching calls against names in a data base, interaction with the company's website and initiating an intelligent agent application to help with requests;
  • Customer self-service websites - to allow the customers to do things themselves;
  • Business intelligence - using techniques such as data mining to get a better picture of the customer by identifying patterns and relationships;
  • Web portal - a website to provide access to a variety of content quickly and seamlessly;
  • Mass customisation and rapid fulfilment - a delivery process to individualise mass-market goods and services to satisfy specific customer needs.

A Forrester Research (cited in Tuck, 2003) survey revealed that 75% of executives registered satisfaction with the business results achieved from CRM but reported the following problems associated with CRM implementations (Tuck, 2003):

  • 46 % cited the top issue as resistance to process change;
  • 34 % cited back-end integration;
  • 33 % complained about software costs;
  • Only 13.5 % viewed technology selection/implementation as the most difficult;
  • 23 % identified end-user adoption as the most challenging phase;
  • 25 % complained about poor application usability, although few of the companies that were satisfied with their CRM efforts thought that application usability was an issue.

A Gartner survey indicated that 42 % of the CRM licenses purchased were not being deployed. The reason for this was thought to possibly relate to a misunderstanding regarding

  • The assessment of CRM benefits; and
  • The calculation of ROI.

A 2000 survey (cited in Totty, 2004) conducted by Andersen Consulting of 264 organisations that had implemented CRM concluded that a typical $1 billion company that enhanced its CRM capabilities by 10 percent could add $40 million to its pre-tax profits, or $120 million if it moved from average to high CRM performance. The study showed that CRM had on average (Garrett, 2000):

  • Increased revenues by 42 %;
  • Reduced cost of sales by 35 %;
  • Reduced the length of sales cycles by 25 %;
  • Improved margins by 2 %; and
  • Improved customer satisfaction ratings by 20 %.

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