Customer Relationship Management
1. Abstract
This white paper explores the Return on Investment (ROI) attributable to Customer Relationship Management (CRM) systems. It provides a discussion of the potential returns from such a system.
Any organization attempting to analyze the ROI from a CRM solution must first complete a Situation Analysis (SA) to understand where the ROI may come from, as the sources of benefits relating to ROI vary from one organization to the next. Sources of ROI attributable to a CRM implementation arise from three general areas:
1. Creation of a long term knowledge asset or "corporate sales memory".
2. Increased sales revenue (by improving market share and/or customer share).
3. Decreasing sales costs through increased efficiency.
There are sometimes other down stream returns that result from the introduction of a CRM system. For example, collections may be improved or staff turnover reduced. Sources of ROI can be either hard or soft. Hard returns are easily attributable to the CRM system, are tangible and quantifiable. Soft returns are the obvious benefits that fail to pass the criteria for hard returns. A CRM system has the ability to create competitive advantages: by creating value for the customers, reducing costs associated with customer processes and creating time advantages. In any analysis of ROI, an organization should explore the cost of doing nothing. The business environment does not stand still and often carrying on without change can result in loss of revenue. In order to achieve these returns a company needs to invest in a CRM solution that provides a relevant, easy to use system, a rapid implementation life cycle and the ability to adapt to ongoing change. The understanding of the benefits and measurement of these results over time allows a corporation to formulate a plan for implementing a successful, long-term CRM strategy.
2. Situation Analysis
Before considering the ROI from a CRM system, an organization should first analyze it’s current
This white paper explores the Return on Investment (ROI) attributable to Customer Relationship Management (CRM) systems. It provides a discussion of the potential returns from such a system.
Any organization attempting to analyze the ROI from a CRM solution must first complete a Situation Analysis (SA) to understand where the ROI may come from, as the sources of benefits relating to ROI vary from one organization to the next. Sources of ROI attributable to a CRM implementation arise from three general areas:
1. Creation of a long term knowledge asset or "corporate sales memory".
2. Increased sales revenue (by improving market share and/or customer share).
3. Decreasing sales costs through increased efficiency.
There are sometimes other down stream returns that result from the introduction of a CRM system. For example, collections may be improved or staff turnover reduced. Sources of ROI can be either hard or soft. Hard returns are easily attributable to the CRM system, are tangible and quantifiable. Soft returns are the obvious benefits that fail to pass the criteria for hard returns. A CRM system has the ability to create competitive advantages: by creating value for the customers, reducing costs associated with customer processes and creating time advantages. In any analysis of ROI, an organization should explore the cost of doing nothing. The business environment does not stand still and often carrying on without change can result in loss of revenue. In order to achieve these returns a company needs to invest in a CRM solution that provides a relevant, easy to use system, a rapid implementation life cycle and the ability to adapt to ongoing change. The understanding of the benefits and measurement of these results over time allows a corporation to formulate a plan for implementing a successful, long-term CRM strategy.
2. Situation Analysis
Before considering the ROI from a CRM system, an organization should first analyze it’s current