Scepticism and disappointment have replaced initial enthusiasm about customer relationship management (CRM).
The disappointing results of CRM projects are often related to difficulties that managers encounter in embedding CRM in their strategy and organisation structure. Fred Langerak and Peter C Verhoef believe that distinguishing between strategic and tactical CRM might lead to more effective understanding and implementation of CRM.
One of the major developments within today’s business practice is the increasing interest in customer relationship management (CRM). Instead of a focus on the acquisition of new customers, marketers are moving their attention to retention of customers and the maximisation of the customer lifetime value. Many marketers have been seduced into investing huge amounts of money in CRM projects to achieve the promised higher customer loyalty and resulting higher profits.
However, the rate of success of CRM projects varies between 30 and 70 per cent. Not surprisingly, many managers are dissatisfied about their CRM performance. In the academic literature a number of authors have expressed their doubts about some of the key premises of CRM. These include claims that CRM programmes should not be expected to result in significant changes in customer purchasing patterns in fast-moving consumer good markets and that in consumer markets the promised positive relationship between customer loyalty and profitability is often absent.
The reality is that most managers are unaware of the fact that CRM does not always have a positive impact on customer performance, which is why, not surprisingly, they are often disappointed about the implementation results of CRM programmes.