Customer Relationship Management: Coping with Budget Cuts

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Vendor Guru

TM

Customer Relationship Management: Coping With Budget Cuts

Introduction

The 2008/2009 recession has required companies to go through more than the usual “belt tightening” that accompanies normal dips in the business cycle. This time around, the economic decline has been deep and sustained, and as a result the budget impact for the average business has involved painful cuts with lasting effects. Since customer relationship management (CRM) system spending has been a significant component of marketing budgets in recent years, it cannot help but be affected by this economic environment. As much as CRM projects may be a high priority among marketing professionals and strategic planners, they cannot escape the threat of being curtailed or even cancelled when a company is under severe budgetary duress. This white paper will look at six ways CRM projects can avoid, or at least deflect, the budget-cutter’s knife. It will look at the extraordinary nature of the 2008/2009 recession, and then outline six possible responses with respect to CRM projects. These responses are all aimed toward keeping CRM initiatives moving forward while still recognizing the severity of the economic environment.

The Extraordinary Budget Impact of the 2008/2009 Recession

Although the beginning and ending of recessions is officially declared retrospectively, by the Spring of 2009 the recession which began at the end of December 2007 was already longer than any recession during the previous quarter century, and seemed well on track to becoming the longest since the Great Depression. Indeed, the International Monetary Fund predicted no relief during 2009, with the global economy projected to shrink by 1.3% for the year, and the U.S. economy projected to suffer a 2.8% contraction. One measure of how extreme this recession has become is its likely impact on technology spending. IT spending is pretty much assumed to enjoy robust growth through good times and...