Survey Findings: Measuring the ROI of CRM A survey conducted by Peppers and Rogers Group and TechTarget John Gaffney, Executive Editor

Agenda Survey overview and methodology The CRM landscape among respondent firms Current and planned CRM spending Functional and fiscal responsibility for CRM initiatives Primary functional areas of CRM initiatives The role of ROI in CRM The importance of ROI measurement and tracking The role of ROI metrics ROI measurement areas Challenges of measuring ROI ROI results What does all this mean?

Overview and Methodology Peppers and Rogers Group and TechTarget conducted the CRM ROI survey to explore the presence and context of ROI within CRM initiatives in institutions as represented by high level executives and marketers. In November 2003, 113 users of CRM products and services completed the survey. Findings are self-reported and are not projectable to the entire US business population; the results do provide good insights into the CRM programs in place today and the role of ROI metrics in investment decision making and CRM program success.

Survey overview and methodology The CRM landscape among respondent firms Current and planned CRM spending Functional and fiscal responsibility for CRM initiatives Primary functional areas of CRM initiatives The role of ROI in CRM The importance of ROI measurement and tracking The role of ROI metrics ROI measurement areas Challenges of measuring ROI ROI results What does all this mean?

2003 spending on CRM as planned… 39% of respondents note that compared to their planned 2003 budget, actual spending on CRM products and services was about the same Only 6% state that spending was higher than planned

… yet 2004 sees overall increase in spending 30% expect CRM spending to increase over the next 12 months, compared to 2003 17% expect CRM spending to increase between 6 and 10% and 13% project spending to increase more than 10% over the next 12 months, compared to 2003

Marketing most often manages firms’ CRM initiatives… Respondents state that marketing (30.6%) most often manages the enterprise’s CRM initiative, followed by the company’s executive committee or CEO (16.2%) Q: Which internal team manages your enterprise’s CRM initiative? Unweighted N=111 survey respondents

…yet, marketing, most often maintains fiscal responsibility of CRM Marketing (26%), Executive Committee (including board and CEO) (23%) and Finance/Operations (20%) most often maintain fiscal responsibility of enterprises’ CRM initiative Q: Which internal team maintains fiscal responsibility of the CRM initiative? Unweighted N=111 survey respondents

Firms report that sales and marketing are most often primary areas of CRM initiatives Respondents state that sales effectiveness (lead management, customer profiling, SFA, etc.) (67%) Q: What are the primary functional areas of your CRM initiative? (Check all that apply) Unweighted N=111 survey respondents

Overview and Methodology The CRM landscape among respondent firms Current and planned CRM spending Functional and fiscal responsibility for CRM initiatives Primary functional areas of CRM initiatives The role of ROI in CRM The importance of ROI measurement and tracking The role of ROI metrics ROI measurement areas Challenges of measuring ROI ROI results What does all this mean?

ROI measurement rates as “important” to respondents 61% rank ROI measurement and tracking as very important or important to their companies, almost always requiring business cases for investment decision-making Q: How important is ROI measurement and tracking to your company?

ROI metrics played role for almost half of respondents’ CRM initiatives 47% of respondents note that ROI metrics were used to build a business case and forecast results of the CRM initiative; only 14% state that ROI metrics played no role in making the CRM decision Q: Which statement best describes the role ROI metrics played in your company’s decision to move forward with your current CRM initiative?

More than 80% of respondents will consider ROI metrics 29% of respondents note that CRM decisions will be made based largely on ROI metrics; 52% state CRM decisions will be made based somewhat on ROI metrics Q: Which statement best describes the role that ROI metrics currently plays in your companies CRM decisions?

Money talks: Respondents measure revenue enhancement Revenue enhancement (63%), customer satisfaction (53%) and cost savings (50%) are the primary areas respondents measure the ROI of CRM Q: How do you measure the ROI of your CRM initiative? (check all that apply)

Checking the numbers: Data becomes the clear issue Respondents cite that unreliable or inaccurate data (40%), lack of consensus on which metrics to use (37%) and no clear ownership of measurement criteria within the organization (37%) are the biggest challenges in measuring the ROI of CRM initiatives Q: What have been your biggest challenges in measuring the ROI on your CRM initiative? (check all that apply).

. . . Finally, relevance of the data becomes a challenge as well Despite other reports to the contrary, 44.2% of respondents note that the ROI of their CRM implementation was not used or not applicable; only 16% said it was higher than expected Q: The ROI of your CRM implementation was: (choose one)

What does all this mean? Survey responses indicate an awareness and willingness to measure the ROI of CRM initiatives, yet they are limited by a lack of know-how or capability to overcome measurement barriers. Inaccurate data is a huge problem that must be addressed and improved by first applying effective strategy and expectations. How do we define success? Metrics gained from ROI initiatives need to be clearly defined. Companies need to understand how ROI is achieved and understand their data.