• July 18, 2007
  • By Colin Beasty, (former) Associate Editor, CRM Magazine

Only 4% of CRM Users Are Very Successful

Many companies believe their investments in CRM systems are not delivering business value, yet few have any metrics in place to measure its success. According to new study by PMP Research, 42 percent of organizations polled said CRM systems had achieved only partial success and limited business benefits. The high level of dissatisfaction is exacerbated by the fact that respondents believe an effective customer relationship strategy is now more essential than it was three years ago, said Cliff Mills, a research manager at PMP Research, in the report. It is seen as "much more important" by 44 percent of companies and "slightly more important" by 39 percent. "No one sees it as less important," Mills said in the report. "Companies have come to realize its value." Recognizing value and realizing the full potential of CRM are hardly the same thing, of course. While 37 percent of businesses claim to have seen some clear benefits from their CRM systems, a scant 4 percent saw their CRM cystems being very successful and delivering all the benefits sought. One factor undermining CRM's overall success rate may be the lack of commitment to measuring results: Less than a third of companies (30 percent) interviewed regularly measure their CRM systems against agreed criteria to gauge expected benefits. Another third say they are planning to measure, while 11 percent have only measured once after the initial implementation. Fully 13 percent of CRM users have never tried to measure the benefits at all. "This suggests that judgment as to the degree of success of a CRM system is often made on subjective grounds rather than quantitative information because companies don't know how to successfully, or how frequently, measure their CRM system," Mills said in the report. For those companies who do regularly measure the effectiveness of their CRM implementations, the major criteria are mainly customer-centric. Some of the key metrics employed by users who measure are increased customer satisfaction levels (cited by 69 percent of respondents) and an increased number of retained customers (cited by 69 percent). Not far behind is the amount of new business generated (63 percent), while cost savings is seen as significant by 50 percent of respondents. But companies are certainly not giving up on CRM, according to PMP's findings. Over three-quarters (78 percent) report that they are currently making changes and additions to their implementations in order to realize more of the benefits they originally sought, or say they plan to do so shortly. Just 11 percent have completely ruled out further improvements. Respondents were asked to rate their reasons for adopting CRM technology on a scale of 1 ("not important") to 5 ("very important"). The aggregated results show that the most common drivers are:
  • 4.4 the desire to provide better strategic information to functional areas of the business, such as sales and marketing;
  • 4.2 the desire to improve customer satisfaction levels;
  • 4.1 the desire to improve customer lifetime value; and
  • 4.0 the retention of existing customers.

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