Customer relationship management is a broad term that includes everything from call center routers to complex analytics, and budget allocations and deployments might well depend on individual interpretation. According to Patricia Czech, how enamored companies are with CRM apparently lies in its definition.
A number of respondents to a recent survey by Reveries.com defined CRM as “customer relationship marketing,” which could explain why 32% of the 191 who responded indicated that marketing strategy was the single biggest reason for CRM success. More than a quarter (26%) chose executive commitment as the No. 1 factor. Realistic expectations — not looking to CRM as a “magic cure” — accounted for 12% of the responses.
Interestingly, the surveyed marketers didn't give technology too much credit for a successful CRM strategy. Only 4% chose technology excellence as their response to the query. Proper metrics weighed in with 8%, and 7% chose organizational design.
More than half (51%) of the 197 respondents claimed that the marketing department usually leads CRM at their company (or client companies). Senior management came in a distant second with 19%, followed by IT (12%), sales (9%).
Meanwhile, customer relationship management ranked fourth from the bottom on the list of 25 Management Tools compiled by Bain & Company.
The survey, which examined the usage, satisfaction, and effectiveness of the 25 most commonly used management tools among 451 senior executives across more than 30 industries in 22 countries, found that a fifth (19%) of CRM users had abandoned the tool altogether.
Considered a “new economy tool,” customer relationship management posted the lowest satisfaction ratings and ranked among the highest in defections. However, customer satisfaction measurement is one of the top five tools, used by 60% or more of respondents. Despite implementation by the majority of respondents, this figure represents a lowered usage rate for the tool, which ranked at 86% when first evaluated in 1993. It descended in rank from fourth to fifth.
The disparity in the ratings between customer relationship management and customer satisfaction measurement might have something to do with how Bain defines the terms. Bain identifies customer relationship management as a tool that collects data about customers to optimize marketing, sales, and service processes to increase customer value. The research company defined customer satisfaction measurement as a tool that collects input from customers to measure satisfaction, set priorities, and determine key customer requirements.
Although customer relationship management by Bain's definition falls short, the tools that improve customer equity (increasing market share, customer loyalty, and customer value), rated significantly above average: One-to-one marketing, customer satisfaction measurement, customer retention, and customer segmentation.