CRM Efforts Lack a Defining Purpose

Within that perspective, CRM is not for all companies. Many firms indicated to us that they intend to spend little money in this area because their central focus will be kept on cost reduction and operational excellence. Some of these firms are producing and selling commodities and 

Do we know the value of our customers or the cost of the services we provide  

How do we use our database and that of our allies to find the means to do a better job of customer satisfaction  

What are the specific ingredients of a network CRM effort that will establish the level of customer loyalty we know will guarantee success  

Before we outline the techniques and models to be used, it is appropriate to consider a number of contemporary measurements that will help establish and confirm the business case. A critical doctrine of CRM is that it is substantially more efficient to maintain current customers than to acquire new ones. A measurement such as customer turnover rates, or what has been termed as churn, is often used to justify the substantial expenditures required for a CRM implementation. Emerging from this idea are new measurements, such as customer lifetime value and customer ROI, that attempt to relate the long-term value and profitability of a customer to the cost of maintaining the relationship. As the business case is constructed, other traditional measures should also be used. 

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