According to a recent survey from Cap Gemini Ernst & Young, few companies are tracking their investments in customers and building relationships with their customers. As a result, these companies do not have a real sense of return on investment (ROI), according to the study.
The survey was administered to approximately 250 senior marketing, sales and customer service executives at companies with revenues in excess of $1 billion. The results of the study show that 42% of its respondents do not know the ROI of their CRM efforts, while 52% do not know the ratio of marketing dollars spent to increased sales in their companies.
"It's extremely important to know" the ROI of a CRM program, said Kevin Moncrief, vice president at Cap Gemini Ernst & Young. Some industries are just less focused, such as manufacturing, he said. "They look at the contact center as an expense; if they reduce the number of people in the organization, it's a one-time definite decreased cost."
Companies have implemented CRM programs to improve their costs, as they were more focused on their product than customers, according to Moncrief. "Contact centers evolved as a cost of doing business," he said.
"With the technology leveraged today, such as [products from] Siebel and Clarify and CTI [computer telephony integration], companies can improve effectiveness with automation opportunities," Moncrief said. This includes intelligent voice response systems that can route callers to an appropriate agent, as well as store information, such as an account number, and display it for the agent upon answering the call, he added. By cutting down ten seconds of an agent's time on the phone, companies potentially can save millions, he said.
The types of CRM projects that companies are implementing runs the gamut from business effectiveness projects that improve service levels to customers to highly technologically oriented programs with enterprise-wide workflow management, making every employee that touches the customer much smarter, Moncrief said.
There are two ways to track these investments, according to Moncrief. The first involves the company's IT department, with implemented architecture such as workflow management and real-time integration, he said. "IT could potentially be a mechanism to make sure objective metrics are captured and reported," he said. The number of transactions being posted and the actual throughput from a request from a customer to fulfillment are both items that can be tracked through IT.
Companies also need to build a balanced scorecard in customer satisfaction, which tracks a soft return on the investment, Moncrief said. The principle behind tracking customer satisfaction is that satisfied customers are more likely to make repeat purchases, he said.
The study showed that there was not just one executive devoted to the customer experience. Over half of the executives surveyed -- 54% -- said that their companies split this responsibility across multiple executives.
"Companies have to dedicate some resources [and] have someone on the management team that internalizes the information [tracked by IT] and makes decisions based on it," Moncrief said. "It has to be a full-time thing."
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