CRM No Evil

Despite economic slowdown, CRM keeps growing

NEW YORK-- May 9, 2001-- A new report reveals that spending on customer relationship management (CRM) will grow to $10.4 billion by the end of this year, a 167% increase from the $3.9 billion spent in 2000. The CRM Report, released today by eMarketer, reveals that during the current uncertain economic times, the adoption of CRM solutions is moving ahead at an aggressive pace as organizations continue to spend time and money on these applications.

"Much of the survey data from late 2000 indicated that more than 80% of businesses were placing a high priority on CRM initiatives going into 2001," said Steve Butler, senior analyst at eMarketer. "With 52% of Siebel Systems' sales coming from new clients during the first quarter of 2001, it is clear that companies are following through on their CRM implementations, despite the economic slowdown. It makes sense from a financial standpoint as the cost of acquiring a new customer can be as much as 5 times the cost of holding on to an old customer."

The CRM Report also shows that businesses are focusing upon the integration of telephony and internet-based customer service channels as their top CRM priority. Other findings from the report include:

-- The worldwide market for CRM applications is dominated by the US and Europe, which together will account for more than 75% of CRM industry software and services revenues in 2003

-- For every $1 that a business spends on CRM software, it also spends between $2-$5 on implementation and maintenance over the lifetime of the product

-- 9 out of every 10 interactions that a company has with a customer are not transactions; instead, they are some form of communication

-- Companies can increase profits by more than 25% if they reduce customer defections by 5%