Higher-growth organizations (those with the greatest revenue and profit growth rates relative to their industry peers) are almost 50% more likely to see customer relationship marketing (CRM) as a critical way of life than lower-growth organizations (36% vs. 25%), details Merkle [download page] in a new study. The survey of more than 350 leaders within large US enterprises ($1 billion in revenue and higher) reveals that higher-growth organizations are much more likely to perform 6 key business capabilities crucial for CRM at above-average levels.
Those key capabilities “essential for optimal CRM,” according to the researchers? They are:
- Information (defined as “managing a comprehensive view of… customers”);
- Insights (described as “understanding, identifying and managing customers based upon their value”);
- Optimization (“allocating resources to optimize long-term customer value”);
- Targeting (“customizing and personalizing customer interactions”);
- Measurement (“understanding the incremental impact of each marketing activity”);
- Agility (“responding to changes in customer, competitor or marketplace conditions faster than their competitors”).
Higher-growth organizations are benefiting from better customer analytics, according to the study, with 50% satisfied with their analytics functions, versus 20% of the overall sample. They’re also more likely to enjoy stellar CRM talent.
But while higher-growth organizations appear to be getting everything right, major enterprise CRM changes still suffer from low success rates in general, per the researchers. In fact, currently, only about half of effective CRM initiative changes could be deemed successful to some degree. While that’s an improvement from a decade ago, it still means that half of changes are met with disappointment.
Among the key challenges to CRM among those whose maturity in this area is low, leadership shows up as a running theme. Indeed, the top 3 challenges for these enterprises are the lack of clear organizational ownership of customer insight (53%), management bandwidth and priorities (43%) and the lack of executive sponsorship (38%).
Compounding that problem is the finding that there seems to be little correlation between the success of CRM change initiatives and a positive career impact for those leading it. Dividing responses into quadrants, the study finds that:
- 22% advanced careers (of initiative leaders) even while their initiatives failed;
- 16% had successful initiatives, but did not get any recognition;
- 37% delivered success and saw advanced careers of the initiative’s leadership; and
- 24% failed in their initiative and did not get any recognition.
While the weak correlation gives rise to what the researchers call “executive dilemma,” there are some keys that can drive successful changes. Those keys are:
- Sponsorship (“Champion the cause”);
- Customer vision (“Showcase the customer vision”);
- Target operating approach (“Come to terms [with change and your cohorts]”);
- Planning and financial commitments (“Commit to the plan”); and
- Implementation and change management (“Unapologetic execution”).
As the researchers note, the running theme? Effective leadership.
About the Data: The survey was completed in Q1 2013. Respondents were from a variety of industries. All are AVP or above, and more than 50% are C-level. Respondents were evenly split between B2B and B2C focus.