Customer Relationship Management (CRM) is a perpetual favorite topic for the IT analyst community. Every week, there are analyst views, reports, quotes, and interviews on the problems facing CRM. The analyst firms also vary, sometimes wildly, in their views and predictions for CRM. In this series of columns, I’ll take a look at what some of the firms having a specialization in CRM think about CRM, the market, and the future.
Aberdeen Group: CRM's expectation gap
In a recent newsletter, Boston-based Aberdeen Group said it believes that one of the major reasons for the news of unhappy CRM customers is the gap between the benefits potential customers expect from a CRM system and what they receive.
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The good news from Aberdeen's research is that most CRM customers do experience benefits from their CRM implementations, just not in the order they expected them. Sometimes they reap benefits they were not anticipating. The following table shows the ranking of prospective buyers' expected benefits and the actual benefits reported by experienced CRM customers.
|Rank||Expectations of prospective CRM buyers||Benefits of CRM from experienced CRM customers|
|1||Enhanced revenue/market share growth||Productivity improvements|
|2||Productivity improvements||Improved analysis and reporting|
|3||Maintain or gain a competitive advantage||Cost control or cost savings|
|4||Improved analysis and reporting||Enhanced revenue/market share growth|
Source: Aberdeen Group
The biggest gap occurs with the benefit of enhanced revenue/market share growth, with a number one ranking for buyers but fourth place for customers. Another gap is shown by the benefits that show up as number one and number two for customers: productivity improvements and improved analysis and reporting. Both of these benefits can be difficult to quantify in real dollars.
If the CRM implementation was sold to management based on increasing revenue and market share, someone will be very disappointed. Imagine going before the CEO or CFO and saying, "You know that revenue and market share growth we promised from our CRM investment? Well, it's not really coming along as well as we thought, but, boy, have productivity and our reporting and analysis improved!" Somehow, I think they won't be very pleased and may slap a label of "failure" on the CRM implementation.
Aberdeen also attributes the expectation gap and customer dissatisfaction with CRM on the fact that many existing CRM customers were the early pioneers who implemented products that are antiquated by today's standards. These early adopters that Aberdeen questioned made the following observations about their CRM implementations:
- Too expensive to implement—26.8 percent
- Too hard to maintain and upgrade—18.2 percent
- Too hard to use—17.7 percent
Aberdeen contends that "these numbers do not necessarily reflect the realities of more modern CRM technologies.” The implication is that there are newer products on the market today that are easier to implement, easier to maintain and upgrade, and easier to use, but the article doesn't provide any insight on what these products are and if there is any hard evidence yet to show whether these products reduce the expectation gap.
Aberdeen does claim that vendors' efforts to modularize and "Web-ify" their CRM applications during the past two years have helped reduce the occurrence of some of these complaints, and as more customers implement the improved products, these complaints will likely continue to diminish.
According to Denis Pombriant, the Aberdeen vice president and managing director of CRM research who wrote the expectation gap perspective, productivity and analysis are the cultural changes companies go through on a path that leads to cost control and revenue enhancements. And given the fact that CRM is a rapidly growing market, more customers will be in the productivity phase than in the revenue enhancement phase, and that accounts for the benefits gap we see.
“Over time, we expect revenue enhancement to track productivity and the gap will close," Pombriant said.
He adds that the "CRM users are a relatively happy group.... But everyone is still looking for additional benefits."
Read more of Aberdeen's perspective on the CRM expectation gap.
Read the interview with Aberdeen's Denis Pombriant.
In next week's column, I'll take a look at a recent report from TechnologyEvaluation.com called "CRM: The Truth, The Whole Truth, And Nothing But The Truth (For A Change)," which provides the results of a comprehensive study of 448 completed CRM implementations. If you want a preview, read the "Whole Truth" article and more than 130 other CRM views on the Analyst Views CRM Hot Topics page.