CRM budgets rise despite widespread strategy shortcomings

24th Mar 2014

Among all the economic uncertainty and financial insecurity that business are enduring, there is one constant across the board – CRM investment. Budgets allocated to customer relationship management are remaining steadfast.

In a new survey carried out by Gartner, half of the respondents – from businesses spanning across 20 industries and 30 countries – report that they intend to up their CRM budget this year by an average of 2.5% compared with what they invested in 2013.

However, organisations may be wasting their money, as many of the respondents fear that the success of these CRM initiatives is threatened by the lack of a clearly defined CRM strategy. 

Without the correct game plan, these bigger budgets may not yield relative returns - a worrying prospect at a time when businesses hardly have money to burn. 

Nevertheless, Gartner predicts that the CRM software market of Western Europe will further blossom, growing by more than 9% by the end of 2014 to see a total revenue of $5.5 billion. It also forecasts that we’ll see substantially more Cloud in 2014 too – with a these kind of CRM applications generating 24% more profit.

When asking businesses about their goals for the year ahead, Gartner found that, for the fourth year in a row, attentions remain very much on improving levels of customer satisfaction. This reflects the modern consumer’s focus on service, and willingness to switch supplier allegiance after a poor experience.

Jim Davies, research director at Gartner, commented on the findings: "The survey findings highlight the continuing trend for organisations to commit to improving the management of their customer relationships. We are observing an increasing number of large, transformational projects being undertaken as organisations look to embrace social and mobile interactions for sales, marketing and customer support."

He continued: "Organisational commitment to the customer experience continues to rise, as business leaders appreciate the benefits of providing differentiated and consistent cross-channel experiences. A new objective added to the list of options this year was 'increase customer engagement', which jumped into the No. 2 position and further demonstrates the growing desire of European organisations to get closer to their customers and have a more mutually beneficial relationship."

So it seems that in order to rise to the challenges they’ve set themselves, and to avoid entirely defeating the object of increasing their CRM investments in the first place, companies will need to pull their socks up when it comes to strategy.

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By 70 Fathoms
24th Mar 2014 16:14

First some background - 70 Fathoms is vendor independent, provides business and process analysis to clients and then recommends the right product for their needs. Normally the technology part of each project is long and complex, but predictable. We deliver the right recommendations and a CRM or marketing automation system is chosen for implementation. However this is when the problems often start. The client often relaxes and thinks that the problem is solved.

70 Fathoms consultants are CRM experts, but are also committed to figuring out and recommending the cultural and process changes required. These are normally extensive and is always critical. Looking within the organisation to see who has strong preferences towards the system and who is a blocking, can be the critical differentiator. Advocates will commit to solving cultural problems and lead others out of the mire into the brave new world, but are there enough of them and do they have the tools for the job?

"Increase customer engagement" was the objective of one. This now seems to consist of bombarding customers with excessive volumes of communications because the leaders are too busy, the strategy was unclear and the cultural changes weren't successfully made.

So if you see a company hopping about and apparently changing their strategy and tactics its probably because they have shot themselves in the foot with their sales automation or marketing automation implementation in addition to their CRM system woes.

If you want to reach out to us for more help and advice, we can be reached at, but please be prepared to address the soft issues.


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