21 Jul 2009
Firms are continuing to invest in customer relationship management (CRM) systems, according to a recent study, despite many failing to receive the anticipated benefits.
The study by the National Computing Centre (NCC) found 45 per cent had achieved partial success with their CRM deployment, while five per cent said they had seen no major benefit at all.
And while around half of firms reported seeing some benefit, not a single respondent said their CRM projects to date had been a complete success.
But the recession has heightened the desire to improve customer relations, and many firms will continue to invest in CRM, according the NCC study: it found that 18 per cent of firms will increase spending on CRM activities in the coming year,
NCC sees the budget for CRM activities holding up well, with 18 per cent of organisations expecting to spend more on CRM; 50 per cent keeping expenditure at the same level; and only 12 per cent expecting to see a cut in CRM spending.
“It’s reassuring to see that organisations are maintaining their investment in CRM software to better understand their customers and improve their service levels,” said Steve Fox, NCC’s Evaluation Centre managing director.
Firms have invested heavily in customising their CRM systems, with 10 per cent of respondents having made "very significant" modifications, while 35 per cent have made "significant" adaptations.
However, few of the firms surveyed show an appetite for the supposedly cost-effective on-demand CRM, with just 10 per cent adopting this approach. A further 26 per cent said they may consider implementing on-demand CRM, but 43 per cent have ruled it out all together.
The survey polled a broad cross-section of more than 100 organisations, from the public sector, financial services sector and others.
Despite the huge and prolonged negative impact of the recession, companies must use any potential downtime proactively and seize the opportunity to spend time resolving their CRM issues and realising the benefits of using their system effectively.
During the upturn, many companies invested in CRM as the must-have tool, but were too time-pushed to train staff, input relevant data and introduce policies in order to maximise its potential. This meant many CRM systems were installed purely as a sales and marketing tool impacting upon customer service, with much of the functionality lying dormant and unused.
But it is now, whilst customer acquisition may not be so rife, that businesses must use this opportunity to dust off their CRM investment and focus on client retention. Companies need to look at how to best use the software that they already have in order to provide a better service to existing customers. The CRM system no longer has to be just a contact or diary management system - with an in-house champion driving the system, providing training, setting targets and enforcing guidelines on its effective use, it can provide greater visibility and transform the company mentality in order to survive and emerge strong from the recession.
Within an organisation, CRM is probably the application that is most prone to failure. The reason for this is the lack of investment in time to make it work. Like anything new to a business, a CRM system needs time to settle and direction in order to impact the business or it will fail.
During the lull, companies must take this opportunity to become more intelligent with their data and how it's being used. CRM is a mindset, not a solution.
Roger Cole
CRM Consultant
CPiO Limited
www.cpio.co.uk
Posted by: Roger Cole, CRM Consultant, CPiO Limited 05 Aug 2009
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