Making CRM Pay: A Customer Value Management Perspective

Originally posted: 10/3/2003

Why is it so difficult to make CRM pay? While analysts regularly point out that 70 percent or more CRM projects destroy shareholder value, it’s not like we don’t know what drives success in CRM. Recent studies, like the CRMGuru Blueprint for CRM Success, have clearly identified the success factors. But putting recommendations into practice often requires difficult, long-term changes across the whole enterprise. Simply knowing that “customer centricity” is a critical success factor is not much help if you are a manager charged with making your CRM project pay back within the current financial year. Or else!

So how should you spend your CRM dollars to get the best return? An answer is can be found through Customer Value Management (CVM).

Beyond Customer Lifetime Value

CVM is not the same as managing customers based upon their customer lifetime value (CLV). As recent research on profitable long-term customers has shown, the most valuable customers at any moment i…