CRM’s Not For Every Company

Jul 16, 2004

By George Anderson

Keeping customers loyal is not the goal of customer relationship management (CRM) programs, writes Marco De Veglia of The CRM Group on the Web site, Keeping them
loyal and making more money for your company is the goal.

Mr. De Veglia says many companies simply don’t do the math that’s necessary before embarking on the time and expense associated with developing a CRM program. They simply do
not understand whether implementing a CRM program will help them increase the business they do with customers over the lifetime of the relationship.

“Marketing is not rocket science, but CRM is the closest thing to rocket science you can find in marketing land,” writes Mr. De Veglia. “It’s no surprise few marketers can manage
all the details. It seems they had worked so hard to understand the technical details, the direct marketing details, the customer service details, the internal organization details
and even (somehow) the data analysis details, that now also checking if this thing will work is a bit too much to ask.”

Moderator’s Comment: Are companies jumping on the CRM bandwagon before they’re ready or without understanding if it
will help their business? What factors do companies need to weigh before embarking on a CRM program of their own?

We loved the example provided by Marco De Veglia to illustrate how companies fail to ask the questions as to whether pursuing CRM makes sense.

After informing a client that implementing a program would have a negligible impact on its ability to increase the lifetime value of its customers, he was
told, “Mmmh…this lifetime value thing…I think we aren’t going to go into such detail…No, we aren’t interested in this part.”

George Anderson – Moderator

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