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STAMFORD, Conn., May 26, 2009 View All Press Releases

Gartner Highlights Five CRM Strategies That Cost Little to Nothing, but Will Generate Positive Results

Future of CRM to Be Discussed at Gartner Customer Relationship Management Summit, September 14-16, in Scottsdale

Companies that fail to invest in CRM strategies because of the tough economic climate will delay perceived benefits by at least 12 months once the economy recovers, giving rivals an advantage in the market, according to Gartner Inc.

Gartner analysts said that lesson learned from previous downturns indicate that 40 percent of companies will use the current economic slump as an opportunity to generate post-recovery growth via effective use of CRM strategies.

“Just because times are tough and budgets are being cut, companies should not think that means no CRM investment,” said Scott Nelson, managing vice president at Gartner. “Companies need to think in terms of spending smarter, not spending less. 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.”

Mr. Nelson said in reality there is no such thing as true "zero cost strategy" — as money has often already been spent on CRM systems and there are ongoing care and maintenance expenses — CRM success can be secured without spending more money on technology. Many organizations have large investments in call centers, Web sites, marketing systems and sales force automation. With these pieces in place, companies can wrap effective strategies around these tools and generate real success from a customer standpoint.

“CRM is a journey, not just a one-time and done strategy,” said Mr. Nelson. “If the right strategies are employed now, then companies will get a ‘sling shot’ effect going into the eventual recovery, putting them well ahead of the rivals who chose to wait and who equate CRM success with spending more money on technology.”

Gartner has identified five strategies that companies can undertake now that cost very little or nothing, but which will generate positive results from a CRM strategy point of view.

Customer Communities
Gartner predicts that CRM of the future will be about creating online communities of customers via emerging social media, such as Facebook, Twitter and similar Web sites. The economic downturn provides a great opportunity to begin experimenting in this area, and Gartner advises companies to set up accounts on the various Web sites and learn what they do and don’t do, and how users interact.

Analytics
Once bought and installed, analytic tools can be put to good use during economic downturns. Many companies have more information than they know what to do with, 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. While doing so, companies should bear in mind that customer behavior may change when the economy improves.

Segmentation
Many segmentation schemes are based on psycho-demographics, profitability or account attributes. 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.

Process Redesign
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. Now is an excellent time to study customer processes with a view to redesigning them and creating a win/win situation for both the company — which gets greater efficiency — and the customer — who gets a "partner" that interacts with them in a meaningful way.

Organizational Redesign
Organizational change is one of the most difficult areas of CRM strategy, but many companies need to make the move from product-centric to customer-centric. In a down economy, with fewer distractions, many companies will find that this is the perfect time to start to address some of the organizational issues that get in the way of serving the customer.

“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,” said Mr. 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.”

Mr. Nelson will discuss the key issues facing the CRM industry during the Gartner Customer Relationship Management Summit, September 14-16, at the Westin Kierland Resort & Spa in Scottsdale, Arizona. This Summit delivers leading-edge insights on how technology enables the marketing, sales and customer service functions, adding value to the customer experience and delivering higher levels of customer satisfaction while increasing sales and saving money. Additional information is available at www.gartner.com/us/crm. Members of the media can register by sending an e-mail to Christy Pettey at christy.pettey@gartner.com.

Additional information is available in the Gartner report “Zero-Cost CRM Strategies.” The report is on Gartner’s Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=943912&subref=simplesearch.

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