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Why CRM Doesn't Work

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Why CRM Doesn't Work

How to Win by Letting Customers Manage the Relationship

Bloomberg Press,

15 min read
10 take-aways
Audio & text

What's inside?

Customer Relationship Management was the new hot bullet. Just one problem: the customer wasn’t in charge.

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Editorial Rating



  • Innovative


Customer Management of Relationships (CMR) is not a tactic or gimmick - it’s a new way of looking at your business. Author Frederick Newell promises that CMR will put your customers where they should be: at the forefront of your company’s efforts. Newell, an international marketing consultant and leading Customer Relationship Management (CRM) authority, explains that a strong relationship with customers is essential to success. Although his book is unnecessarily repetitive at times and poorly organized, he provides excellent advice for companies already on the road to improving their customer interactions. Valuable testimony from experts accompanies numerous case studies. Whether you took a ride on the CRM train, or not, if you want better customer relationships for your business, thinks this book may be your ticket.


The Ghost of CRM Past

At first, Customer Relationship Management (CRM) placed itself at the forefront of strategic corporate thinking. Companies initially embraced the concept as a way to use transactional and demographic data to serve customers better while achieving operational efficiencies. According to a Jupiter Media Metrics study, 74% of U.S.-based companies increased their CRM budgets from 2000 to 2001, most of them by 25% to 50%. In Europe, according to a Cap Gemini Ernst & Young and Gartner survey, 67% of companies surveyed started a CRM program between 1999 and 2001, and more than one third of respondents thought of CRM as a priority.

But now, a few years after it caught fire, CRM has failed to deliver its promised heat. Despite the considerable sums of money poured into CRM programs in recent years, the concept failed to meet expectations and, more significantly, failed to help companies achieve profitability. Today, only 25% to 30% of companies are satisfied with the results of their CRM efforts. In 2001, only one in five CRM providers made a profit, while the others lost a collective total of $8.8 billion.

Why has CRM left so much to be desired...

About the Author

Frederick Newell, an international marketing consultant, has helped multinationals as well as small businesses develop and manage customer relationship strategies. He consults for companies in the U.S., Canada, the U.K., Brazil and Argentina. He is also the author of, Wireless Rules and The New Rules of Marketing.

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