January 02, 2001, 4:28 PM — Far and away among the hottest sectors in IT for the past year have been all things related to customer management. After years of virtually ignoring their customers, corporations everywhere have awakened to the fact that there is a tremendous amount of untapped value in their customer base.
Most Fortune 500 companies have initiated a CRM (customer relationship management) project, and most of these companies have experienced some initial level of success. After all, when you've ignored your customers for almost three decades, any effort to reach out to them -- even electronically -- is better than none at all.
The problem is that not everyone is convinced that simply reaching out to customers online is a good thing, the caveat being that unless the entire business is prepared to deal with the interactive nature of any CRM project, it may not have the beneficial effect that was originally intended.
|CRM takes off|
A survey of 300 companies by Meta Group revealed the following stats for e-business and customer resource management.
* 75% expect to increase investments in enterprise CRM strategies.
* 80 % report success with CRM programs and projects.
* 76 % have not yet fully integrated CRM programs into their e-commerce initiatives.
Source: META GROUP
Historically, one of the primary tenets for achieving profitability in any business has been in limiting the amount of money spent on customer service. This is because customer service is a cost, and although spending a lot of money on it may make for happy customers, it tends to make the chief financial officer very antsy because all the money spent on customer service comes right out of the bottom line.
In fact, it's no accident that most customer service operations put customers through an escalating series of hurdles to resolve any conflict. After all, if it takes effort to get a problem resolved, most customers won't bother trying to resolve the problem. This may not make for happy customers, but if only 10 percent of your customers have a problem, then spending additional monies to make those customers happy may not be financially prudent. Servicing that 10 percent could cut into profits by as much as 50 percent.