 RESEARCH AT CRANFIELD SCHOOL OF MANAGEMENT
WHY CRM FAILS – AND HOW TO FIX IT
Dr Stan Maklan
Reader in Strategic Marketing
Over half of companies fail to meet the expected return on their CRM investments…
because they rush too quickly into large-scale, IT-based CRM investments,
seduced by “best practice” and management fashion.
The authors’ research suggests the problem is
relatively straightforward: companies have
bought sophisticated new relationship
management resources, such as call centres,
databases, software and websites, but
continue to run their businesses as they have
always done and assumed that customers
would value the results of their investments.
However, successful CRM investment begins
by developing new capabilities. But these new
capabilities do not develop automatically from
investments alone in CRM technology
solutions.
The question arises of how marketing
investments should be managed for the
greatest return. A sustained program of
investing in and developing a wide range of
resources (e.g., brands, distribution networks,
supply chains and know-how) and capabilities
is required. Unfortunately most managers do
not hold such a holistic view, i.e. the need to
invest in both resources and capabilities.
From the authors’ observation, the problem is
confounded by the issue that it is unclear who
is responsible for the development of these
new relationship marketing capabilities.
The authors’ research findings are that the
marketing function and organisation need to
develop new capabilities to improve customer
relationships and then backfill the capability
development with capital investment in order
to sustain and embed it. However, the authors
posit that managers have lacked a suitable
framework for assessing and developing their
marketing capabilities.
A framework that helps managers develop
their CRM resources and capabilities
concurrently is presented in the article.
Managers can use this framework to position
each of their organisation’s four principal
marketing capabilities (demand management,
creating marketing knowledge, building brands
and CRM) in relation to the marketing
relationship continuum (from transactional,
one-to-one to networked relationships). In
doing so, they can then identify how these
RESEARCH AT CRANFIELD SCHOOL OF MANAGEMENT
capabilities must be developed in order to
execute their desired CRM strategy.
This approach is utilised and described in two
UK examples: 1) BMW Ltd. (UK) who in the
early 00s decided to delay its investment
pending further capability development in
relationship management; and, 2) Flutter, an
online betting company, who, after going
through a programme of identifying its true
marketing capabilities, invested in a less
expensive and different aspect of CRM than it
had first intended.
Key insights emerge for managers responsible
for their companies’ CRM investment
decisions from the action research
undertaken:
team needs patience and the courage to
eschew “neat” global solutions, consultants’
best practice models and their own preference
for immediate results by allowing marketing
capabilities to develop and lead CRM
investments.
Maklan, S., Knox, S., Peppard, J. (2011)
Why CRM Fails – and How to Fix It, Sloan
Management Review, vol. 52, no. 4, pp. 7785.
For further details on this research paper
please contact:
s.maklan@cranfield.ac.uk
WATCH THE VIDEO INTERVIEW
•
Capabilities are the precursor of CRM
investment and not vice versa
•
The rate at which capabilities develop
varies between companies
•
CRM cannot always be driven topdown.
As a result of the research, and in answer to
the question of why is it that so many large,
well-managed and well-resourced companies
fail to see adequate return on their CRM
investments, the authors argue that it is
precisely because these leading companies
are usually so well endowed with resources
that they rush too quickly into large-scale, ITbased CRM investments, seduced by “best
practice” and management fashion. Somehow,
the capabilities needed to support these
resource investments get forgotten. The top
http://tinyurl.com/ca2svmo
Management Theme: Marketing,
Sales and Client Relationships
MANAGEMENT THEMES AT CRANFIELD SCHOOL OF MANAGEMENT
 Business Economics and Finance
 Business Performance Management
 Corporate Responsibility and Sustainability
 Entrepreneurship and Business Growth
 General Management
 Information Systems
 Innovation and Operations Management
 Leadership
 Managing People and Global Careers
 Marketing, Sales and Client Relationships
 Programme and Project Management
 Strategy, Complexity and Change Management
 Supply Chain and Logistics Management