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Ogilvy chief says 70% of CRM investment not productive

By Bhupesh Bhandari in New Delhi
April 01, 2003 14:14 IST
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At least 70 per cent of expenditure on customer relationship management is not productive.

And, in most cases, CRM hasn't paid back -- customers just aren't receiving any benefit.

Time to ask, says who?

Well, says John Goodman, president, Asia-Pacific of OgilvyOne Worldwide.

He should know, because OgilvyOne Worldwide is a global leader in CRM. Goodman points out two reasons for the failure of CRM. One, companies try to do too much too quickly. "Global CRM cannot be done in 90 days," he said.

Two, companies implementing CRM do not look at it from the consumer's perspective.

"Small shopkeepers do CRM extremely well. Good CRM is all about replicating the same experience with the use of technology."

Goodman, whose hobbies include motorcycling, football and horse racing (also as a spectator) and who occasionally moonlights as a reggae deejay, sees a limited role for technology in implementing CRM.

"Many people feel that having installed a CRM software everything else will be taken care of. It is not so. Technology is only a means to an end. Companies typically install technology first and then try to figure out what to do with it," he said.

His advice for companies planning to adopt CRM is simple: start small, look for CRM best practices in your company and then try to replicate it, and take time out to understand your customer.

Talking about CRM in India, Goodman said that it has caught the attention of chief executives more than in other countries.

But Indian companies have so far been reluctant to make substantial investments in CRM, he added. "Going by the high rate of failure of CRM investments, this is a blessing in disguise," he said.

OgilvyOne Worldwide has a team of around 100 people in India. "We have doubled our business in India in the last three years and I see no reason why we shouldn't double it again in the next three years. Finding new clients is not difficult, while finding good employees is difficult," Goodman said.

Over $200 billion is being sunk by companies the world over in the name of CRM and $320 billion is expected to be expended over a three-year timeframe on it.
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Bhupesh Bhandari in New Delhi

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