Abstract:
CRM practices are being adopted in most industry sectors to build stronger
relationships with customers in order to develop superior customer value and
increase shareholder value. This article questions the basis upon which the
business case for CRM investments is traditionally made, highlighting the
shortcomings of focusing only upon discounted cash flows, and points towards a
strategic approach that accounts for such investments in asset value terms. A
case study is used to illustrate how to value the returns using both cash flow
and strategic investment calculations for comparative purposes. The managerial
implications are discussed.