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The ABCs of CRM Success

The focus of many CIOs is now turned to gaining competitive advantage through customer-facing strategies. They realize that companies must create customer loyalty and build business value by improving sales tools and understanding consumer habits. But it's also well-known that many companies faltered in their CRM initiatives, and satisfaction levels are still abysmal. The drive to gain a comprehensive view of the customer has outpaced some companies' ability to deploy scaled, successful CRM projects. It would seem that the end of CRM is at hand.

In fact, many organizations are highly entrenched in their CRM efforts and continue to spend a great deal of time and money to leverage its greatest benefits. According to Forrester, businesses were expected to spend more than $3 billion worldwide on new CRM software licenses in 2005. And total spending on CRM—including maintenance, integration, and related hardware and software—will exceed $12 billion. Unrelenting pressure on businesses to differentiate the customer experience they offer from that of competitors spurs demand for further investments.

But to many CIOs, CRM is still falling short. Among the 94 business and IT executives Forrester recently surveyed, only 10% strongly agreed that the business results they expected to achieve had been met or exceeded. And just 14% strongly agreed that their CRM applications had improved end-user productivity (see chart, left).

What do the top performers do to meet CRM objectives? We recently interviewed 22 global IT executives to understand their methods for achieving business-performance improvements from a CRM initiative. The organizations—which represent manufacturing, financial services, communications, and utilities—cited four types of benefits: increased revenue, lower costs, higher ROI, and improved competitive strength.

From this, we identified 10 best practices that led to outstanding results in five areas: governance, process management, data management, user adoption, and technology. It's important to note that eight out of 10 of the best practices are not technology-specific, but rather are based on strategy and execution. Here are our recommended best practices.

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