Case ID: KEL232     Solution ID: 30896

ROI for a Customer Relationship Management Initiative at GST Case Solution


When calculating the Return on Investment (ROI) in a Customer Relationship Management (CRM) students must use the ROI on the analytic CRM as provided by an enterprise data warehouse. The case surrounds a real-life consulting commitment with a major Fortune 100 Telecommunication company. The executive management believes in customer acquisition and thus focuses on expanding the customer base by 5% annually, as one of the key strategic objective. It is not only the sensitivity analysis but also the Internal Rate of Return (IRR) of 800% that strongly supports the decision of initiating the project. However the current strategy is to acquire maximum customer base in an environment containing a mix of customers. Such factors meant that the revenues and net income are in-fact experiencing a decrease of millions of dollars each year. The information discussed above suggests that the company executives are approaching the inappropriate strategic channel. At this stage the company must deeply focus on retaining the customers instead of attempting to attract new customers in such a challenging environment. The case moves the students to develop a perspective beyond IRR and CRM and take concepts like Customer Relationship Management into consideration.

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