To win in CRM, appoint a guru

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By: Wise Marketer Staff |

Posted on March 4, 2002

To win in CRM, appoint a guru

Technology is not enough alone to gain a competitive advantage – effective coordination of all CRM activities is needed.

While the spending on CRM technology for contact centres will remain fairly static for the next five years at 54% of the total spent on CRM - and then slow down as the market matures - the spending on analytical CRM software will grow from US$5.2 billion in 2001 to US$8.7 in 2006 and will ultimately account for 53% of the CRM market. This is revealed in the Jupiter Research Report, "The CRM Imperative: Organising for Success in an Expanding CRM Market".

Jupiter analysts forecast that one in four of US firms will spend over $500,000 on CRM in the next 24 months, followed by content management and then supply chain management. Also, as the percentage of service contacts made online rises from 2% in 2001 to 9% in 2006, CRM spending in the US will rise from $9.7 billion in 2001 to $16.5 billion in 2006.

Guru needed David Daniels, Jupiter senior analyst, says that businesses must realise that investing in CRM technology doesn't by itself ensure that they will be able to implement the organisational changes needed to gain a competitive advantage. For it to work properly, businesses must appoint a CRM guru who reports to the CEO and coordinates all CRM activities.

Market sizes Financial services companies will provide the single largest market for CRM systems, with a spend rising from $3.1 billion in 2001 to $5.4 billion in 2006. Other high CRM spenders will be the retail sector ($3.2 billion in 2006) and telecoms ($2.9 billion in 2006).

Nearly all of the respondents to a Jupiter Executive Survey are planning to boost their CRM spending over the next two years, but only 7% said that their planned increases would be directed at improving the profiling and targeting of their customers.

Top issues The top issues that businesses face when integrating CRM are centred on cultural issues and corporate politics. These included justifying the return on investment to the rest of the organisation. Jupiter analysts suggest that companies should adopt an organisation structure that is supported by customer-focused rewards and incentives. This would include active support from the head of the firm, leadership from various business units, a company-wide view of customers and a common measure of profitability.

To buy the report, contact Jupiter Media Metrix at