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The Many Reasons to Believe in CRM
Customer buying patterns, technology advancements will fuel the market.
For the rest of the August 2002 issue of CRM magazine please click here
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CRM will remain one of the hottest areas in the technology sector for the next couple of years and will be the driver of the real-time enterprise due to a combination of many factors. As Internet commerce gathers steam and advancements in technology in the fields of analytics and wireless continue, CRM solutions will become more integrated into other enterprise-level systems and be a must-have for businesses, said industry experts attending the recent DCI Customer Relationship Management Conference & Expo in Boston. "CRM is a business approach that integrates people, process, and technology to maximize relationships with all customers," said Barton Goldenberg, president of ISM Inc., a CRM consultancy. "CRM is a comprehensive approach that provides seamless coordination between all customer-facing functions. And CRM increasingly leverages the Internet." In fact, it is the natural relation with the Internet that will be most responsible for fueling CRM, Goldenberg said. "The Internet has driven CRM and CRM has driven the Internet," he said, adding that currently about 1.8 percent of all retail purchases are made on the Web, representing $33 billion in sales last year. This is expected to jump 20 percent to $40 billion in sales this year, according to Goldenberg. In addition, customer satisfaction relating to Web purchases is increasing, which is improving buyers' comfort level. Specifically, those purchasing products over the Web recorded a 70 percent customer satisfaction rating, compared with 75 percent for purchases through retail stores, Goldenberg said. "We have more people on the Web spending and happier," he said. Christopher Fletcher, vice president and research director at Aberdeen Group, a market research firm, agreed with the Internet's impact on CRM, saying he expects the overall CRM industry to grow approximately 15 percent a year for the next three years. "I am not as bullish as some, but I am optimistic," he said, adding that he expects more smaller, "point-of-pain" CRM rollouts going forward as opposed to "big-bang" deals. In addition to closer ties with the Internet and technological advancements, a better understanding by executives of what CRM ultimately means to an organization will also help boost the industry, industry executives attending the show said. Executives are realizing CRM is an overall business strategy, not just a technology purchase.
"All companies are now trying to focus not simply on the technology CRM has to offer, but the business benefits," Fletcher said. "In a high value, b-to-b environment, customers want to know everything in real time. It starts with the shipment of an order through any channel." "CRM is a comprehensive process that provides seamless coordination between all customer facing functions by integrating people, process, and technology to optimize relationships with customers," said Dean Athanasia, executive vice president of strategic marketing at FleetBoston. And Athanasia should know. Two years ago Fleet's Wholesale Bank sales force needed to optimize capital and grow the business by cross-selling the banks other services. The firm embraced a Siebel Systems CRM platform to develop a common sales force automation system to unify customer, product, and marketing information. As a result Fleet has increased its cross-selling revenue by 15 percent, increased the number of products it sells per customer to 5.7 per customer from 4.6, and decreased its dependency on credit revenue, Athanasia said. But Fleet is not alone, according to Goldenberg. Other companies enjoying benefits from a real-time enterprise environment as a result of a tightly integrated CRM solution include Cisco Systems Inc., Dell Computer Corp., FedEx Corp., General Electric Co., Limited Brands, Morgan Stanley, and Wal-Mart Stores Inc. --Elliot Markowitz
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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
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