Performance assessment process
InChapter 2, we suggested that the CRM services market was still growing fast,despite the downturn in other IT sectors. Gartner (Nairn 2001) predicts that the market will triple in size in the next four years. It also predicts that fail rates
for CRM projects will rise from 65 per cent today to more than 80 per cent in two
years. The reason is that more and more companies are embarking on CRM
initiatives without understanding the full extent of the business changes required,
without an appropriate methodology for developing CRM and without relevant
performance metrics to measure – and manage – the impact of CRM investments.
Ultimately, these measures, or KPIs (Key Performance Indicators), need to reflect
the two drivers of shareholder value: productivity and growth. Productivity –
cutting costs, investments or price rises – may prove the easier to measure and
arguably the first to deliver results, but it is growth that delivers shareholder value
based on improved customer retention and acquisition.