ABSTRACT

When the proposal for a company-wide CRM system is first introduced, a chief executive officer (CEO) or chief financial officer (CFO) will inquire about the costs and benefits. Costs involve out-of-pocket CRM costs (relatively easy to measure but usually underestimated), in addition to management, employee development, training, and phasing-in costs (all more difficult to measure). Computing the benefits of CRM is not easy either. There are many effectiveness measures, and the appropriate ones need to be matched with the specific CRM goals and efforts at hand. In addition, it is sometimes difficult to relate certain effectiveness measures, such as satisfaction and loyalty, to the bottom line. Further, it is often necessary for company divisions to share customer transaction information and have a unified view of the customer before CRM efforts can be judged on their effectiveness. This can be a cumbersome undertaking if the divisions have legacy systems that do not mesh.