If you're looking for the biggest bang for your CRM buck, a recent study by Andersen Consulting can show you the way. For the study, "How Much are Customer Relationship Management Capabilities Really Worth? What Every CEO Should Know," Andersen surveyed 130 chemical company executives. The conclusion? Improving your customer relationship management techniques isn't just a PR gimmick, it can add directly to your bottom line. For example, a $1 billion chemical company or business unit improving its CRM capability from "average" to "superior" could gain as much as $100 million in profits, the study found.
And, according to Andersen, all CRM capabilities are not created equal. The study analyzed 54 customer service, sales and marketing capabilities and concluded that only five differentiate the strongest performers. The winners, in order of importance, are:
- Enabling easier customer contact
- Fairly compensating and rewarding service personnel
- Developing and executing an effective channel strategy
- Building flexibility into information systems/technology
- Using customer service to generate sales
Improve on one or more of these key capabilities, and the payoff can be huge, predicts the study. In customer service, moving from average to superior performance with regard to leveraging information technology could add up to $23 million to a $1 billion chemical company/business unit's return on sales. In sales, the study projects that moving from average to superior sales performance could add up to an additional $4 million.
Andersen Consulting has conducted CRM research in a number of industries, including communications, forest products, pharmaceuticals and electronics/high technology. Although executives have consistently agreed that investing in CRM is essential in a competitive marketplace, what this study emphasizes is the importance of investing in the right capabilities. "Having a sound basis on which to make CRM investment decisions has been lacking," says Dale Renner, global managing partner of Andersen Consulting's Customer Relationship Management practice. "Now there is a way for chemical executives to select and prioritize their CRM investments for maximum returns."