This week Gartner, Inc. released it’s latest projections on the global market for Customer Relations Management (CRM) software. The conclusion? In spite of the looming threat of recession CRM spending is looking up, likely to undergo a 14.2% increase from 2007. Gartner’s predictions mean that now both the two major enterprise research firms, Forrester and Gartner, are playing the part of CRM cheerleaders. Forrester released its own projections towards the end of Februray, predicting a more modest but still sizeable 8% increase this year.
Why is it that companies aren’t planning to cut down on CRM spending? CIO’s see a lot of good reasons for keeping CRM a high priority.
- Avoiding a vicious customer-loss cycle – With the economy shrinking consumers are tightening their belts. Offering a good customer experience becomes more and more important because those customers who are displeased aren’t going to squander their limited budget on companies who don’t give them what they need. Companies who cut back on customer experience will find themselves loosing businesses and having to make even further cuts, which then may cause more harm to customer experience. An investment in CRM can help prevent that sort of vicious cycle. As Sharon Mertz, research director at Gartner told SearchCRM.com “When the economy slows down and consumers don’t spend as much, businesses need to fight harder for every dollar consumers spend. Customer experience will only help that.”
- Increasing productivity – Lot’s of CIO’s see CRM as a great productivity booster, helping firms create a leaner more effective staff. The numbers back them up too, with research from AMI concluding that companies who have CRM deployments reap higher revenues per employee than those that don’t, $306,618 compared to $229,025. In a recession that sort of productivity boost can’t be overlooked.
- Smarter marketing – As we’ve talked about before on the blog, marketers often times have a less clear picture of the customer than they think they do. CRM, especially when integrated with other business processes, can help go a long way towards getting more bang for your buck in the area of marketing. That’s nothing to be overlooked in a recession.
The other thing that’s important to note is that a recession can even be useful for your business in the long-term. If you’ve been thinking about adopting productivity or retention boosting software and practices, but have worried about getting the cultural buy-in from your staff, then the recession can be a powerful motivator.
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