CRM safe from spending cuts

Gartner says customer relationship management (CRM) projects will remain largely unaffected in European firms focused on increasing customer retention.

Customer relationship management (CRM) projects already in place are likely to remain largely unaffected by the global credit crisis this year, according to a study of European businesses.

Analyst Gartner said its research among nearly European business and IT leaders with CRM strategy influence suggested the importance of improving customer retention and increasing average spend outweighed recession-driven IT spending cuts.

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In fact, more than three quarters of respondents in Europe said they were planning to enhance their investments in CRM initiatives in 2009. It is clear from the survey that some CRM initiative budgets have been negatively impacted, according Chris Pang, principal research analyst at Gartner.

But he added: "It was clear that many projects such as implementation of direct marketing tools, customer analytics, and customer service and support capabilities are too strategically or tactically important to be suddenly abandoned."

Gartner estimates that CRM spending in 2009 will not decline as dramatically as it did after the Y2K upheaval. But it did say that growth would be more moderate than in previous years.

The forecast would see the European CRM software market grow by four per cent this year compared to 2008, to reach 2.4 billion (2.2 billion) in 2009.

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The survey respondents also reported that their primary objectives for their CRM programmes were first, to enhance cross-selling or upselling of products and services, second to increase customer satisfaction and third to increase sales revenue.

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"These objectives take on added importance in a downturn because the cost and effort needed to sell to existing customers is often less than that for acquiring new ones," added Pang.

The majority (40 per cent) of respondents also said they were not looking for new CRM technologies, while 32 per cent said they were reviewing existing technologies.

The analyst pointed out that most organisations were looking to optimise or move to a newer product to benefit from new functions and business process support for their CRM strategies.

The initial research findings in advance of its Customer Relationship Management Summit 2009, taking place on 3 to 4 March, at the Royal Lancaster hotel in London.

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