Jupiter Predicts Rise in CRM Spending
Research from Internet analysts Jupiter Media Metrix reveals that 74 percent of businesses will spend more money on customer relationship management (CRM) infrastructure in 2001 than they did in 2000 — most increasing spending by 25 to 50 percent. Those seeking online customer service will go from 33 million in 2001 to 67 million in 2005, making CRM spending a wise investment for e-businesses. However, CRM solutions can only be truly effective if they are implemented across all channels and not limited to the Internet.
“Although the current state of the economy is causing companies to cut costs in many areas of their businesses, customers still expect the same level of service,” said David Daniels, analyst, Jupiter Media Metrix. “Customer satisfaction has always been a key metric for positive financial results. Businesses must not make CRM investments only to keep pace with the growth — they should view their CRM spending as a strategic benefit that will bring higher levels of customer satisfaction and retention.”
Various Jupiter CRM research surveys have also discovered:
- Sixty-three percent of companies use customer satisfaction metrics to measure the ROI (return on investment) of their CRM investments, compared with 33 percent that view cost savings achieved by reducing service staff as the best measurement of return. Businesses using customer-satisfaction ROI measures should not expect a quick return on their CRM investments, because the rate at which a business can measure satisfaction will depend on how frequently and through which channels it touches its customers.
- Businesses should realize that advancing customer satisfaction is an uphill climb. Only 41 percent of respondents were satisfied with the state of online customer service. However, companies that adopt CRM systems with customer satisfaction in mind will realize revenue growth sooner than those that only strive for cost savings.
- The success of online CRM systems has been stymied by redundant spending. Redundant spending will cost Global 2000 companies between three billion and four billion dollars over the next two years. Disparate corporate goals and separate business units have led companies to invest in CRM solutions that have failed to unify the customer experience.
Other critical findings of Jupiter’s latest CRM research will be evident during “Connecting with Consumers,” August 20-21 in Las Vegas — a four-day CRM conference. The forum will focus on identifying the elements that online customers care about most; developing metrics to value customer relationships; and creating targeting strategies. A follow-up showcase August 22-23 titled “Consumer-Centric Operations” will explore integrating online and offline service channels; evaluating new technology and service offerings; and developing metrics to benchmark your efforts.
Headquartered in New York City and operating worldwide, Jupiter Media Metrix delivers Internet and new technology analysis and measurement. Jupiter Media Metrix brands include Media Metrix, AdRelevance, Jupiter Research and Jupiter Events