Online customer service fails despite CRM growth

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By: Wise Marketer Staff |

Posted on February 27, 2003

Despite the growth of online CRM systems, companies that offer online customer service by e-mail are failing to meet basic consumer expectations, resulting in online shoppers resorting to the telephone for customer service, according to the 'CRM Through 2008' market forecast report from Jupiter Research.

While 88% of consumers surveyed by Jupiter Research expect a response to their e-mail service enquiries within 24 hours, only 54% of companies examined actually met that expectation - the same percentage as in Jupiter's 2001 survey, despite the fact that CRM spending continues to rise.

The report predicts that CRM spending will continue to grow at a rapid rate through 2008 but warns that failure to provide the expected levels of service will cost companies a lot.

Cost penalties
"Companies that fail to get serious about their management of customer service e-mail will pay the price with higher customer service costs and lost revenues later on," warned David Daniels, senior analyst for Jupiter Research.

And the issue is likely to be compounded because customer service e-mail enquiries are expected to rise to 3.3 billion in 2008 (up from 1 billion in 2001). Inadequate service in the online channel accelerates the rate at which customers turn to the telephone for support and, according to Jupiter, companies without efficient management of customer service e-mails are better off sending site visitors directly to their telephone support centre.

Online CRM forecast
Jupiter's market forecast predicts that online CRM technology spending will grow from US$2.3 billion in 2003 to US$4.7 billion in 2008, accounting for 25% of the US$18.9 billion overall spend at that time.

The spending increase in the CRM market will be spurred on by the continued growth of contact centre staffing levels. Financial services companies are expected to continue to be the biggest CRM spenders, with their expenditure increasing from US$3.4 billion in 2003 to US$5.9 billion in 2008, representing some 31% of the total spend.

"Companies must deploy CRM step by step, and remember that a successful CRM deployment is more dependent on an organisation's ability to achieve a coordinated customer focus throughout the business than on the CRM technology itself," concluded Daniels.

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