Page 296 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Unit 11: CRM Measurements

With these small changes in place, Company A was able to realize significant gains in the Notes
following year, even exceeding some of the growth and efficiency targets the company
set:
Initial year-one sales increased dramatically, from approximately US $58,000 to US $73,000,
while sales in subsequent years increased only slightly (less than US $1,000). Other
adjustments meant that COGS decreased by about 15%, while sales and marketing costs
were reduced by about one-third. All this added up to an astounding increase of 400% to
its customers’ lifetime value, from about US $8,000 to more than US $41,000, an overall
increase of $4 million total, taking Company A into the black. The small steps that Arc
recommended using an analysis of basic metrics yielded incredible results in just one
year’s time.

Questions:
1. Analyse and present your observations and comments.
2. How would you relate this case with the learning you had from this unit?
Source: http://searchcrm.techtarget.com/feature/CRM-case-studies

11.7 Summary

 Comprising of several distinct disciplines and cutting across just about all business units
within most companies, Customer Relationship Management (CRM) measurement is
complex.

 Companies use CRM measurements for different purposes; digital channels provide for
new measurement and product/service distribution options; businesses are fractured
internally with inconsistent communication and often incompatible systems.
 Despite this complexity, companies are adopting measurement systems, or frameworks,
that have acceptance in the marketplace. These frameworks range from the strategic to the
operational.
 How companies build and deploy a CRM measurement framework depends on the
planning horizon under consideration, the market volatility, the company’s overall strategic
posture and goals, and how much of the organization and customer base is impacted by
the CRM solutions considered.

 In addition, how customer knowledge is created and utilized for benefit is under continual
debate with different points of view.
 This unit reviews the key issues in CRM measurement, offers some attributes for describing
and evaluating CRM measurement frameworks, and suggests several implementation
approaches.

 Change begins with knowing. Companies today need to implement more sophisticated
ways of measuring this complex and diverse field.

11.8 Keywords

Balanced Scorecard: It is a strategic planning and management system that is used extensively
in business and industry, government, and non-profit organizations worldwide to align business
activities to the vision and strategy of the organization, improve internal and external
communications, and monitor organization performance against strategic goals.
Brand-building: The goal in brand building is to carefully manage a company’s name, brands,
slogans and symbols, otherwise known as brand equity.

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