Alternative approaches toward measuring CRM performance

Since the late 1990s CRM has become a buzzword especially among business practitioners and consultants. Companies have invested or are planning to invest huge amounts to implement CRM strategies, tools and infrastructure in order to win the battle in today’s increasingly competitive economy. However, many executives are struggling with trying to determine how their enterprises will balance the business value of CRM against its cost to determine CRM return on investment. Combining qualitative goals of CRM initiatives – such as increased customer satisfaction, loyalty, and retention – with monetary objectives such as the company’s profitability also provides a challenge for marketing researchers. The purpose of this paper is to develop a framework for a systematic cost-benefit-assessment and for ongoing performance monitoring of CRM initiatives. Based on well-known methods and instruments for measuring business performance the authors propose an integrated approach to determine and measure the effectiveness and efficiency of CRM projects.