CIO — The CRM package has landed?some would say crash-landed. A Bain & Co. study in June showed that 19 percent of customer relationship management users decided to pull the plug on their investments rather than pour money into them. Two out of five respondents (41 percent) said their CRM projects are either "experiencing
difficulty" or are "potential flops," according to a Data Warehousing Institute survey released in May. These points echo a warning from experts such as Berkeley Enterprise Partners that, in spite of their popularity, most CRM projects don’t result in measurable benefits (see "The Truth About CRM," May 1, 2001).
But there is hope. A number of companies are getting CRM right. They are treating the applications as more than a new set of sales-force automation tools or a new call center system. They’re focused intently on the returns: increasing the chances their customers will remain repeat buyers and identifying new prospects, whom they can then sell to.
What you’ll find in this article are three businesses?high-tech company Hewlett-Packard, online marketer Student Advantage and old-line manufacturer Tipper Tie?that avoided some of the common CRM pitfalls. First, they made sure they understood their customers’ needs before tackling a CRM application. They limited the scope of their rollout. They won buy-in from in-house users. They kept consultants, when they used them, on a short leash. And they measured the benefits of their projects. (See "Customer Focus," Page 106.)
By keeping their focus on the bottom line, these companies have achieved significant payback?an HP division counted an estimated $144 million in increased revenues, Tipper Tie’s CRM system should pay for itself in two years, and Student Advantage has leveraged its data insights of college students to sign up 15,000 business partners.
TIES THAT BIND TIPPER TIE
Apex, North Carolina
Tipper tie, a $94-million-a-year division of Dover Corp., is the world’s leading manufacturer of aluminum clips and wire machines for the food-processing industry. The Apex, N.C.-based company’s typical customer uses costly machines that wrap and seal its products?everything from a summer sausage the size of your pinkie finger to 8-inch-diameter Italian mortadella meats. (If you check out the meat aisle in your local supermarket, those small metal clips that seal the plastic casings on chickens, hams and sausages are likely made by Tipper Tie.) The meat packers’ machines need service, new parts, and plenty of wire and clips. Tipper Tie’s field sales reps and service technicians make in-person visits to customers, and a call center fields their questions, requests and complaints.
