Cap Gemini Ernst & Young Survey: Companies Lose By Not Tracking Customer Relationship Investments

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Posted January 24, 2001 By eCRMGuide.com Staff     Feedback

Cap Gemini Ernst & Young say the survey data helps them quickly introduce a new tool to market - The CRM Index.

SQUAW VALLEY, CA--Cap Gemini Ernst & Young (CGE&Y), a management and IT consulting firm, has announced the results of a major study regarding customer relationship management solutions and strategies. The company says the survey, administered to senior marketing, sales and customer service executives, reveals that few companies track investments made in customers and, therefore, have no real sense of ROI.

"There is clearly no single rule or prescription for turning a company into a customer-centric business, but we do know it's critical to track what has been invested and how it's impacting customer behavior," says Paul Cole, CGE&Y's CRM global practice leader. "Our survey doesn't show that management is delinquent in its efforts to better reach and interact with its customers, but rather that market forces - competition, customer expectations, technology - are changing so rapidly that management faces formidable challenges in delivering a consistent and seamless customer experience."

CGE&Y says highlights from the CRM survey show that companies face some key hurdles in their effort to reach and retain customers:

  • A lack of discipline in measuring return on investment from CRM initiatives - 42 percent of executives do not know because they did not measure.

  • Product based organizational structure - Well over half organize around product groups (41 percent) or geography (29 percent) vs. customer segments.

  • No complete view of customer history or activity.

  • No one executive "owns" the customer experience - More than half of executives interviewed (54 percent) said their companies split this responsibility across multiple executives.

According to CGE&Y, the study found that those companies that are growing the fastest tend to "touch" their customers more often and are more likely than others to be directing their IT investment toward CRM initiatives. This provides strong evidence of the economic payoff of CRM.

In an effort to help its clients devise strategies and accelerate CRM transformation, CGE&Y says it has created CRM Index, a tool for rapidly assessing CRM effectiveness and designing roadmaps for the future. The company says that by looking at a company's mindset - whether it leans towards broad market focus or relationship focus (one-on-one), and Connectivity - whether its processes and technology are fragmented or highly integrated - the CRM Index places an organization within one of nine models. Those models include: Customer Satisfiers, Basic Transactors, Pleasant Transactors and Relationship Optimizers. CGE&Y says that by understanding where it stands today, a company can identify performance caps in its marketing, sales and customer service capabilities and plot a future course of action.

Other facts revealed by CGE&Y's CRM survey include:

  • 65 percent of companies are Customer Satisfiers - they recognize customer satisfaction is important to ensure continued revenue streams and have established methods to track performance and implemented some automated solutions to interact with customers across multiple touch points.

  • The most sophisticated CRM business model is Relationship Optimizer. These companies, of which there are relatively few, typically provide special treatment to high value customers, synchronize their channels and collaborate with customers on design and delivery of products and services.

"Our goal is to identify the most appropriate business models and corresponding technology architecture; one that is responsive to customers and extracts maximum value from CRM investments," said Paul Cole. "We believe that the CRM Index, combined with the proper technology-enabled solutions provide clients with both the strategic and technical underpinnings ne

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