10 CRM Trends to Watch in 2002
The technology and strategy are in place; now it's time to see a return on your customer relationship management (CRM) investment.
"Companies' CRM investment decisions in 2002 will be driven by the need to produce measurable business results within IT and marketing departments that face mounting budget pressures," report executives at Braun Consulting, a Chicago-based professional services firm.
Based on its work on combining CRM technology with business strategy for its clients, Braun executives cite the following 10 CRM trends as potentially having the greatest impact in 2002.
1. In a down economy, highly successful companies will invest more in customers, not less.
"Despite the uncertain economic environment, successful companies will continue to invest in CRM initiatives, shifting their emphasis from customer acquisition to retention," says Larry Goldman, Braun's vice president of customer solutions. In such a climate, consumers are more sensitive to their cash outlays and spend less in a down economy than they do in a booming economy. As such, companies must retain the customers they already have, because customer acquisition is not as easy as before. They must work harder to get those same dollars.
2. Companies will compete for customer share, not market share.
Before the economy turned south, consumers spread out their spending and even may have split spending across multiple channels, explains Goldman. But as consumers consolidate their dollars, companies have an opportunity to gain a greater share of their customers' business.
For example, a customer may buy products and services from you at the retail level, but prefers to shop your competitor by Web. If you invest in your Web channel, you potentially can grab the dollars that consumer is spending with your competitor.
3. CRM will evolve to CVM.
CRM largely is viewed as a technology-driven strategy. Customer Value Management (CVM) is the approach by which companies realize a return on their CRM investment. You can't buy CRM in a box. Rather, you need to change your cultural and corporate mentality. Determine your cost- and revenue-drivers, then base your business decisions on those metrics, Goldman advises.
4. Companies will heighten their focus on data analysis and organization to avoid information roadblocks.
Braun executives project companies will place a much greater emphasis on the analysis and organization of data.
Data often are difficult for users to access, whether they are of insufficient quality, locked away in an antiquated legacy system or present an incomplete data picture. Goldman predicts that 2002 will be the "year of the user." Easy access to data will enable marketers to quickly obtain easy-to-understand information from which they can make better business decisions.
5. Companies will realize customer satisfaction doesn't translate to loyalty.
Satisfaction can be part of loyalty, but the two are not synonymous. Many customers may be dissatisfied with a company's service, but are loyal to a product and continue to buy. To better understand customer behavior patterns, company executives will ask why customers are staying with or leaving a current service plan. That knowledge then can be used to adjust product and service offers to minimize migratory purchasing behaviors.
Says Goldman: "Loyalty drivers can change; however, you can observe change and then react in a timely manner."
6. Companies will focus on "thoughtware," not software.
This is the organizational side of CRM. "Changing a company's attitude is a herculean effort. It's a dramatic change that isn't activated by an e-mail; it requires a procedural, cultural and mindset change," points out Goldman. You can build CRM technology, he says, "But you can't exploit it without cultural change."
7. Companies will stitch together their customer channels.
Multichannel integration will allow companies to present a consistent experience for customers at each touchpoint, regardless of how customers choose to interact with an organization.
8. Companies will embrace partnership relationship management as a means to maximize value to end-
Organizations will approach CRM as a team effort by outsourcing non-core competencies to partners, sharing and leveraging information.
9. Companies will create CRM platforms and plug in best-of-breed applications.
Long-term strategic planners will create consistency throughout an organization by creating a single CRM platform. Best practices for specific functions then can be plugged into this platform to gain competitive advantage, as opposed to stringing together point implementations.
10. Companies will shift to a long-term focus.
With technology and infrastructure in place, organizations now are looking at the long-term investments and benefits of a CRM program.
To be sure, this will be a year of implementation and follow up. For most companies, the CRM technology already is in place. Now, the trick is to put it into action and see the results. For more information, visit