During difficult economic times, it becomes more important than ever for businesses to focus on delivering excellent customer service. With profit margins under serious pressure, companies may not be able to offer discount deals and other promotions as they bid to attract and retain customers. But they can ensure that each individual consumer feels valued and appreciated as an individual.
IT can help support customer relationship management (CRM) in a number of ways. Technology solutions enable firms to tailor their offering to the specific needs of different individuals and groups. They also allow customer service staff to communicate with the consumer in real time, via the platform of their preference. Analytics software enables firms to monitor the success of the CRM strategies, and identify potential areas for improvement.
In the current environment, it should come as little surprise that corporate spending on CRM solutions is continuing to rise. Research conducted by IT analyst Gartner recently indicated that CRM software will see the largest increase of all the application software markets worldwide in 2011. The firm found that 42 per cent of firms are planning to increase CRM spending this year, with 31 per cent raising application software investment.
"We're expecting the CRM market to recover gradually as buyer confidence returns and as businesses begin refocusing on growing revenue as opposed to just reducing costs," said Hai Hong Swinehart, a research analyst at Gartner. "Areas of investment are expected to include the online channel, Software-as-a-Service based deployments; and technologies enabling customer loyalty management, cross-sell/upsell opportunities, and more-targeted levels of customer service."
Speaking earlier this year, Mark Carter, marketing executive at Maximiser Software, highlighted a number of benefits of CRM software. He explained that such tools help companies to increase revenues, generate leads, raise productivity and appease consumers for a quarter of a century. "CRM is now firmly established as an essential component in the standard suite of business software for entrepreneurs, small businesses and large organisations," he stated.
But CRM success is not wholly reliant upon capital IT expenditure. A separate Gartner report recently highlighted the growing value of the social CRM application market. Worth £368 billion in 2010, the firm said the market is expected to reach £613 million by 2013. Andrew Girdwood, media innovations director at bigmouthmedia, said that social CRM is coming to the fore as businesses look to maximise the value of emerging communications channels. He suggested that social networking websites such as Twitter are becoming interactive platforms rather than simply broadcast channels.
He predicted that social CRM will be "a runaway success this year and next", as businesses "put their marketing and customer service heads together". "It's a proper two plus two equals five-style approach where if you can use Twitter to interact you can use it in an effort to retain clients [and] keep people happy as well as push your promotional messages," Mr Girdwood stated. "It takes resources, but it's worth it."
Justin Cooke, chair of the British Interactive Media Association, echoed these comments, claiming that social media is transforming the way brands communicate with their customers. He added that the medium is also having a direct impact on the products and services companies are producing. "We are surrounded by powerful evidence of brands successfully co-creating and collaborating with their customers," he stated. And by involving customers at such an early stage, using technology to obtain feedback and design suggestions, companies can potentially help generate long-term brand loyalty.
The Institute of Customer Service has described the consumer experience as "the vital differentiator in business today", and UK firms are well advised to take this message on board. If companies are prepared to invest a little in CRM – through dedicated tools or through social media strategies - there are clearly significant benefits to be obtained. They can learn more about their customer base, help improve loyalty levels and gain insight in their target markets - and this can make all the difference during highly competitive times.