Despite CRM's success in sales, marketing, and service business units, a lack of clearly defined internal strategy can seriously damage the effectiveness of an enterprise's CRM solution, according to a new report from Frost & Sullivan.
The report, Global CRM, Interactive CRM, and Mobile CRM Initiatives and Forecasts, reveals that the CRM industry generated revenues exceeding US$11 billion in 2001 and is likely to expand to almost US$36 billion by 2008.
"Customer relationship management is as much about a corporate philosophy and business strategy as it is software. It is a philosophy that places the customers' needs at the centre of business operations, and this strategy is used to increase profits by improving client acquisition and retention," explained Frost & Sullivan industry analyst Katherine Shariq.
Originally CRM was more about making customer service agents more efficient on the telephone. But it has advanced since then: now it aims to make it easier for a customer to do business with a firm by providing knowledge transfer, information sharing and, often, online self-service capabilities. Organisations must be able to provide customers with the right tools to foster healthy company/client relationships. And while many companies have implemented the technology itself, CRM solutions are often under-used internally.
Lack of strategy
While the adoption of CRM solutions is rising at corporate level, the same cannot be said for employees' adoption of the technology, according to the report - which makes the point that effective software adoption is really an issue of employee compliance, rather than a technology issue.
Many early users viewed CRM as the solution to all of their customer problems but, with a lack of clearly defined enterprise-wide CRM strategy, this was not the case. "Companies did create the supporting internal processes that were required. Much of the success with CRM has to do with changing in-house systems more than deploying the technology," added Shariq.
To overcome this challenge, industry participants must take a more proactive role in seeking out new markets, and in educating end users about the operational strategies they need to adopt. Meeting with clients and explaining CRM's potential is essential to overall market success.