Question

1. What are some of the differences in estimating the benefits for CRM investments versus determining the return on more traditional investment situations?

Answer 1

CRM is one of the marketing strategy that is being used by many companies to increase their sales and profitability majorly by customer retention and new acquisitions. Before we estimate the benefits from investments done on CRM, we should no how CRM affects the revenue.

CRM affects revenue in 2 ways :-

Reducing internal costs (in case of existing customers)

Increasing revenue from outside customers

Now, there's an assumption involved in both the above points that the cost has been reduced because of the CRM methods adopted by the company or the new customers are contributing to the revenue because of the CRM. Hence, this is a little ambiguous as we can never be sure that the ROI has increased because of the CRM adopted. And so, there will always be some estimation that has to be made.

However, In case of the traditional investments, we can get the results directly associated with that in numbers and hence it's easy to get the ROI on that.

I hope this is what you were looking for :)