Companies Often Waste CRM Spend, New Study Finds
— Sales and marketing professionals at ZS isolate ways for companies to drive impact, revenue with Customer Relationship Management investments —
EVANSTON, Ill. – July 16, 2015 – When used effectively, Customer Relationship Management (CRM) programs offer the promise of better customer engagement, business performance and sales. Still, there is significant opportunity today for companies to get more value from CRM by shifting their organizations from a tool-based to customer-focused mindset.
These are key findings of a new study on CRM from ZS, the world’s largest sales and marketing consultancy. The firm found that companies across industries – including health care, financial services, technology, manufacturing and professional services – can significantly increase the value they get from CRM investments, and eventually improve business functions across an organization.
Significant opportunity to improve CRM impact
The 2015 CRM Survey asked 115 respondents – mainly sales and sales operations leaders and members of the Sales Management Association – to rate how much value they derive from CRM in 15 areas. While some (though not a majority) report achieving “high to extremely high” value in areas such as opportunity management (42 percent), customer information look-up (39 percent) and sales forecasting (35 percent), fewer see similarly high value in areas like customer communication (13 percent), internal coordination (13 percent) and collateral and proposals (7 percent).
“CEOs write big checks for CRM technologies, but sales leaders cannot demonstrate return on the investment,” said ZS Principal Ron Siahpoosh. “The impact of great CRM is the ability to understand current and prospective customers and address needs and preferences better than competitors. But most companies use CRM only for tracking purposes and it becomes just another tool for reporting to management. Sales teams aren’t leveraging valuable data to gain customer insights.”
Respondents rated data accuracy a particularly big issue. Few respondents rated the accuracy of data about existing customers, prospective customers or future sales as “high” or “very high” in areas such as sales results (42 percent), opportunities (24 percent), and prospect profiles (19 percent).
Given this value gap, the majority of respondents (72 percent) reported that salespeople do not spend enough time on their CRM platform.
“Sales personnel are resistant because they don’t see ‘what is in it for them.’ They consider the platform as a means for their bosses to monitor them,” said Siahpoosh. “Managers, on the other hand, believe that sales representatives enter whatever they think management wants to see. The end result is that leaders cannot rely on CRM to generate actionable insights.”
A better way
According to Siahpoosh, only when the gap is filled between CRM’s current impact and its promise of successful customer relationship outcomes can customers state confidently that, ‘you understand us and address our needs better than do your competitors.’
“Consider what CRM stands for: customer relationship management,” adds Siahpoosh. “Most people think of the ‘M,’ or a tool, when they hear CRM. Creating real impact with CRM starts when a company changes its mindset. If senior leaders want to improve customer relationships, they must focus on the ‘C,’ or customers – not the tool.”
Study respondents were aligned with this premise, and identified a number of priorities to help their companies drive more impact from CRM investments. This includes improving the quality of CRM data and tying CRM to more consistent internal processes, each a priority for 74 percent of respondents.
Using its survey findings and experience working with various industries, ZS identified two key drivers to improve CRM usage and impact. Company leaders must ensure that CRM helps their teams:
- Do the right things with customers; defining a customer engagement process (linked to CRM) for how to build stronger customer relationships and financial results.
- Know the right things about customers; implementing data management and analytics programs to consistently gather, integrate and analyze data for deeper customer insights.
For more information about the new 2015 CRM Survey, download a copy of the study’s findings here: http://bit.ly/1CD7Fv1
ZS is the world’s largest firm focused exclusively on improving business performance through sales and marketing solutions, from customer insights and strategy to analytics, operations and technology. More than 3,000 ZS professionals in 21 offices worldwide draw on deep industry and domain expertise to deliver impact where it matters for clients across multiple industries. To learn more, visit www.zs.com or follow us on Twitter (@ZSAssociates) and LinkedIn.