Gartner on the need of CRM: another open door!!
I recently posted about the end of hig level consultancy. In my humble opinion, this statement of Gartners confirms again my point of view. Do you agree?
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Artist Steven Meisel
Customer relationship management is too strategically important for enterprises to abandon projects in the recession, says Gartner. As the recession deepens, however, enterprises are looking to drive greater efficiency and lower the costs of their CRM projects.
Those are just some of the findings of a new Gartner CRM survey among European businesses.
More than three quarters of respondents to the analysts’ survey said they are planning to enhance their investments in CRM initiatives in 2009, despite the deepening recession, which is proving more serious than many people anticipated. The survey was carried out predominantly among medium-sized businesses.
Gartner believes that CRM is seen by many businesses as an important tool in the worsening economic environment, as it minimises customer churn and the value of each customer. The survey found that the CRM projects concerned will primarily focus both on improving customer retention and increasing wallet share.
The research was carried out at one of the crunch points of the recession in Q3 2008. Gartner spoke to nearly 90 European business and IT leaders who influenced the CRM strategy within their organisations. A follow-up poll was commissioned in December to see if attitudes had changed over the final quarter as the full extent of the crisis became clear.
Gartner found that while there had been a shift in thinking about new CRM initiatives, the news was far from bad. “The responses to this later survey [December] indicated that, as expected, some budgets for CRM initiatives were negatively impacted, but the latest survey results showed that their earlier budget allocations for CRM initiatives largely remained in place,” said Chris Pang, principal research analyst at Gartner.
“It was clear that many projects such as implementation of direct marketing tools, customer analytics, and customer service and support capabilities are too strategically or tactically important to be suddenly abandoned.”
Gartner estimates that CRM spending in 2009 will not decline as dramatically as it did after 2000, but growth will be more moderate than in previous years. It forecasts that the European CRM software market will reach $3.5 billion (€2.4billion) in 2009, an increase of 4% from 2008.
When placed in the context of ongoing negative growth in the UK economy, which many predict will last until Q3 2009 or beyond, those are impressive figures.
Respondents also reported that primary objectives for their CRM programmes were, first, to enhance cross-selling or upselling of products and services; second, to increase customer satisfaction, and third, to increase sales revenue. “These objectives take on added importance in a downturn because the cost and effort needed to sell to existing customers is often less than that for acquiring new ones,” said Pang.
So does this suggest that businesses are more concerned about not losing existing customers than they are about acquiring new ones? “We saw that the economy was raking a dip long before the survey,” said Pang, “but we didn’t know it would dip so dramatically. Now it’s all about customer retention and maintaining customer satisfaction.
“So at the current time keeping your customers happy and still buying is the reality for many businesses. That said, it’s not a good idea to just focus on that. You also have to focus on keeping new leads and revenue lines coming. The priority may be retaining existing customers, but a sole focus on that means that when the recession ends you will be in a worse position.”
Gartner 05-Feb-2009
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Artist Serhat Demiroglu
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