Becton Dickinson and Company: Multidivisional Marketing Programs
BEST PRACTICE
Early adopters of customer relationship management systems were often disappointed by high costs and elusive benefits. Now some companies are reaping strong returns on their CRM investments.
CRM Done Right by Darrell K. Rigby and Dianne Ledingham
T
HROUGH THE LATE 1990S a n d illtO
2000, managers plowed millions of dollars into information systems meant to track and strengthen customer relationships. Often built around complex software packages, these customer relationship management (CRM) systems promised to allow companies to respond efficiently, and at times instantly, to shifting customer desires, thereby bolstering revenues and retention while reducing marketing costs. But most firms failed to reap the expected benefits, and as executives dramatically reduced IT expenses in subsequent years, CRM sales plummeted. After rising 28% between 1999 and 2000, CRM sales dropped by 5% in 2001,25% in 2t>O2,and 17% in 2003, according to the technology market research firm Gartner. Many observers came to believe that CRM was destined to join enterprise resource planning (ERP) as another overhyped
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IT investment whose Initial unmet promise nearly killed off the approach. But something miexpecled has happened: Senior executives have become considerably more enthusiastic about CRM. In 2003, Bain ik Company's annual Management Tools Survey of 708 global executives found that firms actually began to report increased satisfaction with their CRM investments. In 2001, C KM had ranked near the bottom of a list of 25 possible tools global executives would choose. Two years later, it had moved into the top half. In fact, 82% of surveyed executives said they planned to employ CRM in their companies in 2003-a large iumpfrom the 35"o who employed it in 2000. Today, CRM spending appears to be picking up. Gartner forecasts that overall CRM sales will rise another 10% by the end of 2005. So what's changed? Why has disappointment turned to satisfaction,
Early adopters of customer relationship management systems were often disappointed by high costs and elusive benefits. Now some companies are reaping strong returns on their CRM investments.
CRM Done Right by Darrell K. Rigby and Dianne Ledingham
T
HROUGH THE LATE 1990S a n d illtO
2000, managers plowed millions of dollars into information systems meant to track and strengthen customer relationships. Often built around complex software packages, these customer relationship management (CRM) systems promised to allow companies to respond efficiently, and at times instantly, to shifting customer desires, thereby bolstering revenues and retention while reducing marketing costs. But most firms failed to reap the expected benefits, and as executives dramatically reduced IT expenses in subsequent years, CRM sales plummeted. After rising 28% between 1999 and 2000, CRM sales dropped by 5% in 2001,25% in 2t>O2,and 17% in 2003, according to the technology market research firm Gartner. Many observers came to believe that CRM was destined to join enterprise resource planning (ERP) as another overhyped
18
IT investment whose Initial unmet promise nearly killed off the approach. But something miexpecled has happened: Senior executives have become considerably more enthusiastic about CRM. In 2003, Bain ik Company's annual Management Tools Survey of 708 global executives found that firms actually began to report increased satisfaction with their CRM investments. In 2001, C KM had ranked near the bottom of a list of 25 possible tools global executives would choose. Two years later, it had moved into the top half. In fact, 82% of surveyed executives said they planned to employ CRM in their companies in 2003-a large iumpfrom the 35"o who employed it in 2000. Today, CRM spending appears to be picking up. Gartner forecasts that overall CRM sales will rise another 10% by the end of 2005. So what's changed? Why has disappointment turned to satisfaction,