Overview

As we pointed out in Chapter 1, customer relationship management or CRM is at the top of most corporate agendas. The huge surge of interest in the concept derives from its potential to harness a raft of new technologies to implement relationship marketing cheaply and effectively. As everyone knows, loyal customers are more profitable, and selling more to existing customers has become the Holy Grail of marketing. The availability of data mining tools and data warehouses, to say nothing of the huge opportunities afforded by the internet, offer unprecedented potential to gather and deploy information on customers that will allow companies to tailor products and services to them.

According to Gartner Group, the worldwide CRM services market was worth $19.9 billion by the end of 2000. Gartner predicts the market will grow at over 26 per cent a year for the next four years, and will be worth $64.3 billion by 2005.

Yet, as we mentioned in Chapter 1, despite the massive investment in CRM, many applications of the technique have failed to live up to its promise. Customer satisfaction is falling, not rising, and the few companies which measure the return on their investment, are disappointed by the results. There are a number of reasons for this, but the overriding problem is that, ironically, many companies have lost sight of the customer in their efforts to implement CRM. Lots of their offerings and approaches are supply-side, product-driven, rather than customer-led. They view CRM as a technology...