Reflections on the Recent State of the CRM Market
Customer Relationship Management (CRM) generally refers to the continuous accumulation of customer information during a company's operations and the use of this information to develop market strategies that meet personalized customer needs. CRM represents a shift in perspective, beginning to focus on the customer.
From the above definition, we can see that it emphasizes customer-centricity and stresses that CRM is not merely a technology capable of meeting all customer needs. Because CRM is not just a system or a technical solution but more so a management philosophy. This shift in perspective will ultimately influence the entire process of implementing CRM.
In recent years, the concept of Customer Relationship Management has permeated every field and corner. The benefit of implementing CRM is that it can improve customer satisfaction, maintain high customer retention, and positively impact customer revenue and potential earnings—these benefits are highly attractive to companies. However, understanding these benefits clearly proves to be a significant challenge. Many companies that have implemented CRM systems find they do not achieve the anticipated results, while even more companies experience outright CRM failures. In 2001, CRM began to decline somewhat, and in 2002, CRM continued its downward trend.
Nowadays, Customer Relationship Management is like a hot potato; everyone is rushing to implement CRM systems, but the actual implementation process encounters many difficulties—it’s impossible to swallow it all at once without getting burned. However, it is certain that as these obstacles decrease, CRM will inevitably be widely adopted by businesses. For a large company, having no customer strategy seems almost impossible. But how should companies handle these issues? How can they make Customer Relationship Management less daunting and digestible? Efforts are still needed in many areas, such as internal process improvements, the establishment of customer service departments, and employee skill enhancement.
Many companies have invested substantial funds and manpower in implementing CRM and have made good predictions about their goals, yet the results are often failures. As Fiserv's senior vice president said: "Why do companies frequently spend so much money on CRM when customer satisfaction continues to decline?"
Technology is an important component of CRM, but we cannot solely blame CRM for failing to realize its potential benefits. CRM vendors, including application providers and external service providers (ESPs), must bear at least some responsibility for this. Many vendors loudly tout the benefits of CRM but fail to emphasize that the effectiveness of CRM requires more than just technology—it's necessary to understand business rules deeply and take responsibility for them. Since ESPs only care about maximizing their own interests, they don't realize that CRM is a comprehensive business strategy. This leads to the failure of many of their enterprise users in implementing CRM. Effective CRM requires companies to increasingly focus on customers, gradually changing the way they currently work, rather than simply implementing applications related to customer relationship management and other technical products.
CRM Market Outlook — Starting in 2003, CRM will gradually be adopted by small and medium-sized enterprises
Customer Relationship Management (CRM) has now surpassed the peak of hype promoted by Gartner. For most companies in 2002, it was a challenging year, and this notion of overhyped expectations has been shattered. Gartner described CRM as almost magical—it could make companies instantly understand customer needs, avoid inefficient processes, and reduce various costs associated with achieving customer retention goals. In 2003, companies and vendors will adopt new growth approaches to gradually realize the three pillars of customer relationship management: sales, marketing, and customer service.
Having learned from past experiences, companies will approach CRM with a more realistic attitude in the new year:
1. Companies will set reasonable, tactical, and achievable CRM objectives.
2. Companies will establish strict standards early in their implementations and create return-on-investment models based on real-world situations.
3. Companies will realize that implementing a CRM system involves more issues than simply installing a software system; it involves outsourcing, hiring employees, and flexibly adapting to the ever-changing market. That is, companies will recognize that CRM is an activity where management outweighs technology.