Customer Relationship Management: CRM Dilemma during this recession

With the "R" word being on everyones water cooler talk it is but natural that this figures in the CRM budget planning for 2010. During such times the first casualty is always fresh IT investment as executives are looking for quick and easy cost cutting. What impact will this have on the long term prospects of the company if such indiscriminate chops happen for mission critical IT systems like CRM is very easy to guess.

While it is easy to justify cuts on all kinds of fresh investments in initiatives which have a long gestation period, yet it makes a lot of sense to study its long term impact before going ahead with these cuts.

If we were to look at CRM related spending then in most companies which have implemented CRM we have a definite owner for the system, be it the Corporate, Sales, Marketing or Customer Service and Support (CSS) teams or even indeed the IT department.

In such challenging times what is it that a B2B2C company must do - should it retain existing customers (strengthen CSS) or acquire new customers (strengthen Marketing and Sales) or do both? Given an option what makes more sense to put good money into good business, or, try and expand the good business a bit more to ensure that even if recession or competition were to take away some of their customers still they will have a nearly intact customer size? Or should they put in their valuable money into strengthening their existing CSS infrastructure and acquire that elusive 360 degree view of their customers?

Well it goes without saying that it is not an either or scenario that the companies must be thinking about. It ought to be an all inclusive approach with minimal tolerance for non ROI related projects and vendors. The tightening of belt has to be accompanied with a tightening of the system to ensure that the ROI claims of their vendors or CRM systems are clearly documented and measured at regular intervals. If investment has to happen then its returns have to be clearly identified and measured. This will set more objectivity into the process and ensure that CRM benefits are tracked and linked to the initiative.

Companies that invest in critical systems like CRM during leaner times are strategically poised to ride the upswing faster than their competitors.

Comments

I couldn't have said it better myself. It is a tough time, and there are many different views on how to survive this hardship. There is no one right answer. You have to take a look at your company and evaluate the situation. Whatever the decision is, it is the "right" one if you can justify the money spent against the return. Your last statement is great advice for those that are still on the fence about establishing a CRM system.

Posted by: Anh | January 23, 2009 9:42 PM

Indeed Anh these are tough times and patience is one virtue that executives must have to ensure that short term savings mentality does not cloud their decision making process.

Thanks for sharing your thoughts.

Posted by: Shreedeep Panicker | January 28, 2009 3:16 AM