Our Favorite Year: CRM Projects to Drive Revenues in 2005
This year is shaping up to be the one that most companies will understand the revenue possibilities that can emerge from CRM initiatives, according to a recent report from Gartner. "Predicts 2005: How CRM Will Help to Grow Revenue Again," states that the principal motive behind investing in CRM projects will shift from being cost savings driven to using CRM projects as avenues to drive revenue.
"We've moved from a model where the [companies] that were promising cost efficiency got well-funded, even through the budget cuts of 2001 through 2003 and into 2004," says Michael Maoz, a vice president and research fellow at Gartner, and coauthor of the report. "What we found in the second half of 2004, and what [we] believe is going to continue strongly into 2005, is funding not only for those that would promise cost reduction, but also demonstrate the ability to capture new revenue."
Self-service applications continue to remain an area of interest, but Maoz contends that the focus is not to just transfer customer interactions to the most efficient channel. It is important to be able to then analyze the customer's value, propensity to buy, and level of satisfaction with the experience regardless of the channel, elements that Maoz says will lead to a more loyal customer and profitable customer. "You have improved profitability, but you haven't improved top-line growth, and now that the economy is growing a little bit, companies are being asked not to just continue to show profitability. In a down economy that was enough, but if the economy opens up...to continue being valued properly, they're expected to grow as well."
To turn CRM investments from cost slashing projects to revenue generators, Maoz urges businesses to understand the customer experience. "Understanding the customer experience is something most companies give lip service to, but they don't really do enough to systematically capture customer feedback in the form of focus groups with your customers, defecting customers, and noncustomers," he says. "We're finding that when [companies] put in customer feedback systems...they are able to identify during the course of a transaction--or even before an interaction--that a certain process has to go with that customer. It's much more individualized by customer or by buying segment."
As customers move from channel to channel and through various departments within an organization, repeating questions to them to reconstruct a unified view of the customer may lessen the chances of acquiring repeat customers. To combat this Maoz sees a trend to organizations employing customer data integration (CDI). "They're using CDI to put a snapshot of the customer in more real time. By having that real-time data about the customer available, together with real-time analytics or predictive analytics...[companies can offer] more decision-and-recommendation support [for its agents]," which vendors including E.piphany, RightNow, and KANA are beginning to pursue. "All of these are working to be much more real-time and predictive, and that, together with customer data integration and customer feedback systems, are things that people should be looking for in their businesses in 2005, 2006."
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