The future is looking brighter for CRM as corporate spending on related software and services is expected to rise, especially investments in customer service technology, according to a recent study.
The report by Jupiter Media Metrix found that U.S. businesses are expected to spend $500,000 or more on CRM technology over the next 24 months, more than on any other large-scale infrastructure initiatives. As this trend continues, CRM spending is expected to rise to $16.5 billion in 2006, up from $9.7 billion in 2001.
"The overarching theme spurring CRM investment is the desire of businesses to cost-effectively improve customer satisfaction," says David Daniels, a senior analyst at Jupiter Media Metrix. But implementing software alone is not the answer, he says, adding that companies will need a bulletproof CRM strategy led by a senior-level CRM guru who runs all the CRM activities and reports to the CEO.
Financial services firms are expected to lead the charge and outpace other industry sectors with their investments in customer service technology as their market consolidates and as they look to provide more customer touch points across their enterprises. In fact, 25 percent of financial service customers reported that they would budget more than $1.5 million for operational CRM infrastructure costs during he next 24 months.
According to the Jupiter CRM Spending Model, growth in CRM technology for operational contact centers, which comprises 54 percent of CRM spending, will remain constant over the next five years with an expected slow down in 2006 as the market matures. However, spending on analytical CRM software, which includes marketing-centric applications, will grow from $5.2 billion in 2001 to $8.7 billion in 2006.