It’s True – CRM Investments Improve Sales

By Robert Moskowitz

What makes a CRM program effective and therefore a justifiable expense? According to many experts, that may be difficult to define.

But Mark T. Wolfe, Stephen F. Dull and Timothy Stephens of Andersen Consulting have offered a giant step toward making effective CRM far less subjective and hence an easier investment to justify. In fact, Wolfe, Dull and Stephens claim they can attribute as much as half the difference in financial results (among similar companies) between the best performing firms and firms with only average performance to their level of investment in CRM.

Along the way, they have identified five key areas for CRM investment: customer insight, customer offers, customer interactions, high-performance organization, and enterprise integration.

The researchers show that, just by improving its CRM performance from “average” to “high” in these five areas, a large company can increase sales by about 12 percent per year.

More specifically, the study identified 50 different marketing, sales and service capabilities that can be considered elements of CRM. Within these 50, they show that five specific capabilities have an extremely important impact on a firm’s financial performance, regardless of industry.

Here they are, with few surprises:

Customer Service
Motivating and Rewarding Employees
Converting Customer Information into Insight
Attracting and Retaining Personnel
Selling and Service Skills

You don’t have to be a rocket scientist to understand the implications of this report: pennies spent on CRM in critical areas are likely to yield dollars in top line revenue.

And the improvements aren’t very esoteric or difficult to install.

For example, Marriott Hotels has learned that as tiny a detail as asking at check-in, “Do you still prefer a nonsmoking room?” can favorably impact a guest’s impression of the hotel and the company during those critical first 10 minutes of a stay.

And Sprint PCS found that rewarding sales excellence with assignments to desirable special projects costs almost nothing, yet leads to major improvements in the company’s financial performance.

For more information, or to inquire about obtaining a copy of the report, call 312-737-7777.