Most chief information officers (CIOs) may believe that these are not the right times for new projects with expensive funding requirements. But this might prove myopic, especially where customer relationship management (CRM) is concerned.
The last thing an organisation would want now is to lose customers. This is the time to tighten relationships with customers. It is on the strength of these relationships that companies will survive the downturn. In fact, most market analysts are telling companies to invest in the most suitable CRM technology before the competition beats them to it.
Why is CRM strategic?
- CRM applications can help to maximize customer value: A slowing economy means customers spend less, but one of the basic aims of CRM is to gain a share of the customers’ wallet so that the company gains on an overall basis.
- All customers are not equal: There will almost certainly exist some customers who tend to cost
more to serve than they are likely to return in profit. Therefore,the smart company will grow its business by managing its customer relationships in order to make each individual customer optimally profitable.
- Know your customers and prospects: It makes sense to concentrate on those who are more likely to generate the most profit.
While a non-CRM user is powerless to address this reality, companies that segment and market according to a CRM strategy can grow their business cheaply by simply serving fewer unprofitable customers, all of whom can be efficiently identified and targeted. That might sound anathema to companies conditioned to the often (ab)used term “Customer is king”. He still is, only this time the companies get to choose their kings.