CRM Growth Forecasted in the Current Economic Downturn
In today’s current economic downturn, companies currently using or considering implementing a CRM solution have an excellent opportunity to utilize the benefits of CRM as a means of growing their business and maximizing strong relationships with their clients and prospects.
According to research conducted by business professors at Penn State and the University of Texas, well-run companies should not, cut back on their marketing efforts during a period of an economic recession, but instead increase their marketing spending to achieve superior business performance both in the short and long term. An effective CRM approach will give businesses a significant competitive advantage during recessionary conditions.
A CRM system can be a valuable tool for segmenting existing customers, scheduling the appropriate follow-up actions (e.g., phone calls, site visits, emails or a combination of these actions). Other benefits include providing the company with a deeper understanding of its customer/prospect base, filtering strong and weak leads, keeping clients informed of the company’s products/services, increasing customer satisfaction and mostly importantly increasing the “close” rates in its percentage of business orders. The saying “It is cheaper to keep a customer than acquire a new one” is valid during difficult economic times. AMI Research has found that companies that employ CRM have higher revenues per employee than those that do not, around $306,618 as compared to $229,025.
Noted CRM blogger Chris Bucholtz believes that during the current recession, the CRM sector will not be hit as hard as other sectors. A Gartner survey shows that CRM is among the top three concerns of more than two-thirds of the 250 major technology-savvy corporations surveyed. Bucholtz additionally forecasts that CRM spending will hold its own at small companies simply because many have not yet implemented a CRM solution. Bucholtz agrees that an economic downturn is a great time for companies to focus on service, marketing and improved processes.
Add-ons and plug-ins also are likely to increase as companies seek to enhance their CRM system, but CRM vendors will face increased pressure to boost their functionality and support to aid their customers in surviving the current economic downturn. As competition increases within numerous markets, a need to contend against competitors’ products/services will become very important, thereby leading to continued growth for the CRM industry.