Enterprise Application Platform

Enter CRM.

 

As the U.S. economy worsens and consumers rein in discretionary spending, brands are ramping up their customer relationship management efforts, aiming to grab some of that money by building one-to-one relationships with consumers.

Feel-good talk about leveraging CRM — the art of using tools such as database maintenance and customer segmentation — to boost understanding of consumers isn’t anything new. Ask around, though, and industry folks will tell you 2008 is shaping up to be the year in which companies put their money where their mouths are –

With a looming recession making brands more sensitive than ever about the returns on their marketing investments. CRM-software -industry global revenue is projected to jump 14.2% this year to $8.9 billion, according to research house Gartner.

CRM, long valued by marketers for its measurability, historically has been embraced by certain sectors (namely financial services and automotive) more than others. But the Direct Marketing Association’s Quarterly Business Review for the first quarter of 2008 found that 50% of the marketers surveyed said they would increase their spending on database segmentation, overlays and analysis should there be a recession.

More choices, tight budgets

A number of agency pros said the surge in CRM isn’t necessarily tied to the economy. But Mike Gatti, executive director of the Retail Advertising & Marketing Association, disagreed. “Absolutely it is,” said Mr. Gatti, who has seen most association members increase their CRM efforts. “Budgets aren’t being raised, and in some cases they’re being squeezed, so they to have market as cost-effectively as possible. The choices of where to market are expanding much faster than budgets.”

According to David Scholes, Targetbase President-CEO, “People are turning to more-measurable programs and a focus on ROI in a tight economy. But the bigger trend is the recognition that we need to understand the customer better. … This is a sea change in the marketing discipline, not just the effects of the economy.”