Using CRM to Survive the Recession

Investment in CRM geared toward achieving sales goals ranks as a top priority among executives in a recent survey.
(Page 1 of 2)

Don't be fooled by the talk of economic recovery by politicians and some leading business executives. While recent earnings reports and Fed chairman Ben Bernanke’s statements about seeing "green shoots" all purport to indicate an economic upturn, your IT development and operational priorities should remain in recession mode for the next year or so.

And that is especially true for revenue generating applications such as Customer Relationship Management (CRM).

Improving customer service, and therefore wringing more revenues from existing customers, are high priorities in the current economy, according to a survey of more than 110 senior executives of large companies by BusinessWeek Research Services earlier this year.

"Selling more to existing customers" is as high a business goal as increasing profit margins for the rest of this year and into next year, they said. This is a big change from pre-crash 2008, when reaching new customers was a higher priority.

Focusing on your existing customers is a time-honored tradition during a recession, of course. No surprise there.

However, interest and investment in CRM tools to achieve that goal ranks as the most important development project among the survey respondents, despite the downturn. While more than four out of 10 respondents said they already had a CRM system, another 43% said they would have CRM capabilities in place within two years.

In fact, more companies are working on new CRM implementations than on any other technology, including tools to improve operational efficiency, sales and marketing, compliance or asset allocation.

crm investment, 2009

The ironies abound in the effort to use CRM to sell more to existing customers. I have been hearing consultants, sales and marketing executives and C-suite suits extol the virtues of up-sell and cross selling for two decades. In the late 1980s the up-sell/cross sell concept was the hot button of the day, especially at banks and other financial institutions I was writing about in the pre-Internet era.

One of the primary drivers of the mergers and acquisitions wave was so the bank could be a financial supermarket – it could offer savings accounts, checking accounts, stocks, bonds, insurance policies, retirement plans, mutual funds. And launder your dirty socks, too.

In this scenario (or illusion), the role of IT was visionary: bank tellers, call center operators and other customer facing personnel would be prompted by their workstations to sell existing new customers new services.

Here's an example of the theory for a call center operator responding to a customer query:

"Oh, I see you just opened a savings account for your child. Would you like to open a college fund account, too? Given the amounts in your accounts, I bet the tax advantages would be substantial."

Well, we all know how that theory worked out at Citigroup and several other financial supermarkets. But the idea of selling additional products (cross-sell) and increasing sales of existing products (up-sell) still makes sense. The failures were due to poor management and inadequate technology.

Now, however, the CRM technology reality has caught up to the CRM vision.

Page 1 of 2

1 2
Next Page

Tags: services, CRM, marketing

0 Comments (click to add your comment)
Comment and Contribute


(Maximum characters: 1200). You have characters left.



IT Management Daily
Don't miss an article. Subscribe to our newsletter below.