Face-off: Can CRM win and retain loyal, repeat customers?

By P.J. Connolly, InfoWorld |  Networking

CRM (customer relationship management) solutions promise to analyze what you know about your customers, including their buying habits and their complaints, and use that knowledge to advance your business. The objectives of reducing operating costs and improving customer service seem at odds, but that's what most CRM vendors claim to do.

Companies adjusting to the softening of the capital-mad New Economy are scrambling to get their costs back under control. Trimming customer service staff is a common fix that buys some time, but customers won't spend 30 minutes on hold because you're having a bad quarter. They demand exemplary service with an even louder voice when their wallets are thin. Despite consolidation, buyers still have plenty of options. Business desperately needs the benefits promised by CRM technology to maintain competitive customer service with a smaller staff. The question is can CRM deliver the goods?

To put it mildly, I'm skeptical of the ballyhoo surrounding CRM. To listen to some vendors talk, all you have to do is sign on the line and your customers will immediately be 10 percent happier. It sounds more like snake oil to me.

I'll grant Tom that some adopters are satisfied with CRM; in the InfoWorld CRM Survey 35.4 percent of respondents said their CRM software met or exceeded their expectations. But note, too, that 18.8 percent felt their expectations went unfulfilled. Some other numbers also stood out from the survey: 29 percent of the respondents who had a working CRM installation claimed it was "too early to tell" if the software met their expectations.

I expect a major project like implementing CRM to have bugs, and I usually consider the first month of any software deployment to be rocky. But after 30 days, you should know where you stand.

One of the biggest problems is distinguishing among the sheer number of vendors who have jumped into the arena. Hey, I'm all in favor of competition, but this space can't support two or three dozen vendors, unless each finds a niche, such as health care, and sets out to own it. Even then, the general trend of consolidation and mergers means that although you may own an industry, you're going to depend on a handful of customers.

A lot more manure is floating around about how CRM and similar sales and marketing automation tools are about to completely transform the way companies do business. I keep hearing about CRM vendors using the ASP (application service provider) model, and guess what? More than a third -- 34.8 percent -- of the survey respondents felt that an ASP model isn't important to them.

Then, there's the wireless aspect. Most of the millions of salespeople in America are begging for wireless access to their companies' systems.

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