businesses to achieve real CRM gains, they should take the terms in order: Customer first, Relationship second and Management third.

Customer first means that both software and business must meet customer needs and wants. No business is the same, so no CRM software can adequately serve more than one business and its customers. Established businesses must reorganize so that a CRM software initiative is not imposed between itself and its customers. That means retraining, reorganization and perhaps even rebuilding costs.

Relationship second means that customers must view both software and sales representatives as an integral part of the customer's requirements. Complete CRM must offer cost reduction, timeliness, respect and, by extension, status.

Management third means that all requirements and procedures necessary for a profitable and equitable business process are hidden away. Though detectable through successful customer and business relationships, management and any required software should be as little bother as possible in all relationships. Satisfied employees and vendors help manifestly in maintaining satisfied customers.

The Breakeven Point for CRM ROI
     Businesses deciding when to advance database marketing & accounting (DMA) to a customer relationship management strategy should first determine a return on that investment (ROI). Why spend the money and turn your business upside down without a clear, predictable goal?
     Factoring in all variables isn't easy, however. Even if you include all variables, how do you weight them? Estimate variable weights based on business history and research. Following are some variable and extended costs you might consider:

♦ Personnel retraining and salary issues
♦ Additional processes & implementation
♦ New and upgraded equipment
♦ Additional or reduced maintenance
♦ Licenses and taxes
♦ Legal indemnity issues
♦ Increased or decreased service or product costs
♦ Marketing exposure and costs
♦ Advertising benefits and costs
♦ Office, treatment or manufacturing space (+ or -)
♦ Service or product costs/benefits
♦ Administrative costs

• Accounting
• Management
• Decision support
• Recording records
• Retrieving records
• Supervision
• Collection
• Convenience
• Interest Rates
• Money volatility
• Expertise upgrades
• Opportunity costs
• Security
• System integration

♦ Customers served per day (+ or -)
♦ Average customer spending (+ or -)
♦ Customer/employee resistance
♦ Competitive effects
♦ Technology changes
♦ Future market changes

     Apply an amount to all your variable and extended costs under your current DMA system. Now try to anticipate all new variable and extended costs under CRM on a time line, plus how current costs may differ over time. Supposedly,
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