Is ROI considered an appropriate mechanism that can measure the performance of investment made on CRM by the officials working in the banks of Islamabad

Abstract

Customer relationship management (CRM) is although a new terminology but this concept was present even in ancient times. The history of this term is as old as is the history business. (Drucker, 1954) was of the view that the main objective of a business concern is to make and retain the customers. The only change, which this era of globalization has brought forward, is the capacity of the management of the company to deal with the customers on individual basis. It has been seen that the banks find investment on CRM very rewarding and innovative. The implementation of an effective and well thought CRM policy no doubt increases the profitability of an organization. But, the business managers should keep this fact in mind that investment on CRM takes some time to produce results/benefits. It is also a fact that it is very difficult to calculate the profits/returns precisely on investments. It is perhaps due to the reason that there are many intangible variables, which are involved e.g., while calculating return on investment (ROI) customer behavior is not considered. Therefore, measuring precisely return on investments (ROI) is not possible.Since there was/is no mechanism to calculate the returns on investments made on CRM, therefore, a question arises on the reasons of CRM investments.