This return on investment (ROI) for a customer relationship management (CRM) scenario, students must calculate the ROI for analytical CRM is enabled by the corporate data warehouse. The case is based on real consulting interaction with major Fortune 100 telecommunications company. In this case, the strategic goal of executive management team is growing its customer base by 5 percent each year attract clients. The internal rate of return is calculated by the data presented in the case of more than 800 percent in one year, and a sensitivity analysis shows that a reliable forecast, suggesting it should be financed without question. However, the firm's strategy is to attract customers in high churn. As a result of the dynamics of income and the net profit of the company is actually less than the hundreds of millions of dollars each year. The best solution would be to understand that the executive team has the wrong strategic goal. Customer acquisition is the wrong approach in a high churn and managers should focus on customer retention and cross-sell and up-sell high-value customers. Case discussion therefore takes students beyond CRM ROI to focus on key strategic concept of customer relationship management. "Hide
by Mark Jeffrey, Robert J. Sweeney, Robert J. Davis Source: Kellogg School Management 22 pages. Publication Date: January 1, 2006. Prod. #: KEL232-PDF-ENG
Related Case Solutions & Analyses:
Ocean Carriers
BP Amoco (A): Policy Statement on the Use of Project Finance
Forecasting Denosumab
Peace Games: Non-Profits Journey from Birth to National Expansion (Epilogue)
Middle East Turnaround: Strategy at Abu Dhabi Commercial Bank after the Financial Crisis
The Naini-Itarsi Railway Electrification Project
Newfield Energy
Target Corporation
Target Corporation
Disaster By Design: California’s Experience with Electricity Restructure: The Origins (A)
