One of the most challenging areas of any CRM initiative is that specific components that are goals of the project relate to Customer Experience, best practices in operations, and the creation of measurable areas that were previously undocumented or not tied to any particular type of technology.  The divergence from areas like ERP or Document Management are that many of those projects have such concrete capabilities and outputs that there are tangible and hard costs that are tracked.  In fact, when many of these systems are implemented there is a change taking place to replace an outdated or older system with many of the same functional capabilities (albeit with new bells and whistles).

Many of prospects that come to our firm to replace an ERP system come armed with very specific capabilties and these customers have highly evolved requirements.  When this is the case there are specific capabilities with specific transactions that are documented and the savings to the firm are obvious and measuarable.  For instance, if a company has a "sales" arm and a "manufacturing" arm a new ERP system might handle all of the "due to" and "due from" transactions.  If there are a couple of people that do these transactions full time that are no longer needed then the savings are highly visible.

When consolidating data into easy to find locations and eliminating filing cabinets full of paper the savings by implementing a document management system the return is pretty easy to calculate.  There is the savings on paper and toner.  Space is saved from eliminating filing cabinets and the time it takes for people to retrieve information can be easily documented.

So why then, is CRM ROI so hard to track down?  I think the answer depends on two critical elements relating to what you are trying to accomplish and whether the goal for the project is transactional or relational?  Yep, I said it, relational.  You know, as it the "R" in CRM?

The point here is really all about the the "Customer Experience" that everyone is touting and not so much about the technical ability to say that sales, marketing and service all operate out of one particular database.  I would like to use exaggeration to make my point through a couple of hypothetical situations.

In hypothecial situation number one the sales team is working their pipeline and constantly looking to get more deals in the pipeline so the marketing team is proactively sending more and more email campaigns to try and increase lead flow.  The sales people are also responsible for some existing customer account management and light service tasks.  As the marketing team executes to get more leads into the pipeline the number and then the percentage of deals drops sharply and there is a spike in the number of service requests.

Analyzing what happened and then losing a key customer the president of the company calls the customer to try and get them back and receives the following feedback, "Since the beginning of the year we have seen more and more requests from you about more products and services.  Honestly, we began to have problems getting a hold of your representative to help us wiht the core products we already buy.  And then, we just decided to move to someone else that wasn't trying to be everything to everone."

Putting the Practical CRM spin on this I think that this company hit a situation where they approached CRM from a very mechanical way and not in a way that makes a difference in creating a truly exceptional customer experience.  Instead the customer began to perceive the company as more interested in themselves rather than their customers.  From an ROI perspecitive the company could certainly track more leads, track customer resolution time and measure the number of deals closed to reach an ROI argument.

In hypothetical situation number two the company also has moved onto a CRM system and did so with the goal of improving the effectiveness of its team to deal with the customer at all levels.   Trust me, you won't be putting that one in a CRM calculator.  But let's look at the net effect on what happened in their business when their teams worked together.

First, the sales teams were able to provide feedback on the quality of leads for marketing to put more money into some programs and discontinue others.  When the service team completed dealing with any issue a survey was sent out to find out how the customer felt and to also find out what other products and services they were interested in.  And finally, the sales team was able to get involved in the right type of selling opportunities rather than just working a higher volume.   The company stayed focused and listened to their customers and revenues grew across the board.

So, in one situation a company was able to drive lots of activity and measure lots of things, and another company utilized tools to better at execution of their corporate mission.  One drove revenue and growth while the other began to see many unanticipated challenges.  And, the kicker???  The first situation was the easier to measure from an ROI perspective.

If you want to get right down to it.  None of us are delivering the level of service and execute the way that we think we are.  If we choose to go down the path to improving these areas the statistics tell us that doing the right thing will matter on the bottom line.  So what if you can't always measure it.