It's not shocking that many companies are scaling back, delaying or canceling IT projects. Recent Gartner survey data of 475 IT decision makers in global enterprises with 1,000 or more employees found that more companies are actually postponing or scaling back computing projects rather than canceling them outright.
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Conventional wisdom would hold that customer relationship management (CRM) software is one area of the business not to be ignored during tough financial times. But who's got millions to spend on new CRM apps and functionalities?
According to Gartner analysts, companies don't have to spend millions. In fact, they might not be tapping into many functionalities that their CRM applications already offer or may have to spend next to nothing to gain more insight on and better connect with their customers via their websites, call centers and other sales and marketing systems.
"Companies need to think in terms of spending smarter, not spending less," notes Scott Nelson, managing vice president at Gartner, in a recent report. "There are zero or low-cost strategies that can be implemented now that can make all the difference, generate competitive differentiation and not draw the attention of the CFO."
As recommended by Gartner, here are five CRM strategies that companies can undertake now while not breaking the bank:
1. Target Customer Communities
Like many other analysts, the Gartner report expects that future CRM strategies will rely on "creating online communities of customers" using social media, including Facebook, Twitter and other websites. These Web tools are quite free, of course.
"The economic downturn provides a great opportunity to begin experimenting in this area," notes the report, "and Gartner advises companies to set up accounts on the various websites and learn what they do and don't do, and how users interact" with a company's brand and systems.
2. Scour Customer Analytics
The average enterprise has already bought and installed analytic and customer intelligence packages (with varying degrees of success), and economic downturns are great times to tap into that computing horsepower. "Many companies have more information than they know what to do with," states the report, "and now they have the opportunity to put this to good use studying attrition models, looking at the next most likely to buy models, and figuring out channel usage patterns."
Of course, as the report points out, decision-makers using the analytic tools should remember that customer behaviors may change significantly when the economy finally does improve.
3. Review Customer-Segmentation Tactics
Gartner research finds that many segmentation strategies are based on "psycho-demographics, profitability or account attributes," notes the report. "However, a down economy provides companies with the opportunity to review their segmentation strategy and see if it really is the very best one that they could have."
4. Fix Broken CRM Processes
Process is "often an overlooked part of CRM and in many cases all that CRM technologies have done is taken out old, broken processes and made them run more efficiently," notes the report. But they're still bad processes.
Now is as a good a time as any to reexamine customer processes with a mindset to redesigning poor, inefficient ones. The end result for this strategy, according to Gartner, would be to create situation in which both parties win: the company—which gets greater efficiency—and the customer—who gets a more interactive "partner."
5. Change Your Organizational Structure
Not everyone likes change. And any type of organizational change can be one of the most difficult areas of CRM strategy, Gartner states. However, notes the report, "many companies need to make the move from product-centric to customer-centric." A down economy typically offers "fewer distractions," and many companies should find that this is the perfect time to begin addressing some of the organizational issues that get in the way of identifying the needs of and serving their customers, according to Gartner.
"At the end of the day, CRM is all about change. Changing from product to customers, changing age-old processes, changing enterprise mindsets, and changing how companies relate to customers," notes Gartner's Nelson. "All of this can be done without new systems, and the challenging economic environment may give companies just the chance they have been waiting for."
For a different take on cost-conscious CRM strategy, see David Taber's recent CIO.com article, "CRM on the Cheap: Five Strategies That Really Work."