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

Updated · Jan 24, 2001

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

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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