Customer relationship management is supposedly a simple concept--know your customer--but it has become vitally important in the current economic downturn.
ZDNet Australia explores the state of CRM in Australia:
- Learning lessons from past mistakes
- Solutions and products that have worked
- Who's who in Australian CRM?
- Which companies are right for CRM
If there is a word that best sums up the current attitude of corporate Australia, it must be "defence".
With the war on terrorism and the aftershocks of the 2000 tech wreck still being felt in local balance sheets, companies are fighting a rearguard action to keep their fiscal performance steady, let alone improve on previous figures.
In this context, it is not hard to understand why customer relationship management (CRM) has been one of the few tech sectors to enjoy a roaring trade, especially after the events of September 11, 2000.
In short, CRM is a term describing the process by which an organisation identifies its most profitable customers, and maximises its returns from them.
The most familiar expression of the theory behind CRM in popular wisdom is the 80/20 rule, which states that 20 percent of your customers produce 80 percent of your profits. In a climate where customer numbers are dropping, any initiative which seeks to hang on to that top 20 percent is bound to find favour with senior management.
In the final quarter of last year, mid-range CRM specialist Multiactive Software booked more business than ever before, according to marketing manager James Granter.
"That's a result of two things," says Granter. "First, reduced budgets by the tier-one customers have meant they are looking for interim solutions, because they don't have the money to spend, so they come into our space."
"It is more cost-effective and is positioned for growth, so that you don't have to roll out in a big way straight off," he says. "You can start off with a small number of users, then build your way up from there."
"The other thing is, the whole nature of CRM is about building on your existing relationships, and getting more out of your customers. When an economy goes down, a lot more people are looking at getting as much out of the accounts they have rather than trying to win new business, because the new business isn't really there at the moment."
Ray Kloss, product manager for Asia/Pacific for high-end enterprise software developer PeopleSoft, says his company's activity levels in its CRM division are much higher than they were a year ago.
"What we're finding right now with the economic climate is everyone is trying to do things more efficiently. One of the biggest drivers we're seeing is people saying, 'We need to get more efficient and get more streamlined business practices'," he says.
