The finance department has spoken: in light of the recession, new investments need to be curtailed. Despite that pronouncement, there is a strong case to be made for moving ahead with customer relationship management (CRM) applications during a recession. The key is to make arguments that get the finance department on board.

During a recession, finance professionals have two main goals: cutting costs and increasing productivity. The following arguments in favor of CRM applications are based around those goals:

1. The best deals are made in a recession. Taking the long view, some CRM investments are inevitable over the next few years. Whether it is an initial foray into a small business CRM system or an upgrade to more current technology, CRM investment is going to be a fundamental element of the way any customer-oriented organization does business. Better to make those investments when the economy is slow and vendors are offering the best terms.
2. The best service can be had during a recession. Not only can the best financial terms be negotiated with vendors during a slow economy, but those vendors are often in position to provide the best service at such times. When business is booming and the vendor is in demand, installation will occur on their schedule and with resources that are stretched thin. During a recession, vendors are eager to bring their full capabilities to bear as soon as possible.
3. Hosted CRM applications bring down the upfront investment. With hosted CRM applications, upfront investments in hardware and software are greatly reduced, so there is less of a barrier to taking this step, even during a recession. This is an especially attractive option for small business CRM initiatives.
4. Slow periods are the most productive time for training. The worst time to introduce any new system is when business is booming, because it means pulling people away from revenue-producing activities. Its much better to spend time on CRM and training when productivity is down, to take up the slack in employee activity.
5. A business slump makes it easier to demonstrate benefits to key users. When sales employees are busy and successful, it is very difficult for them to change their ways. When business is slow and they are scuffling for leads, they will be much more receptive to hearing how CRM techniques can help them. Once you get this buy-in, using CRM applications will become a habit that will last through good times and bad.

There is no telling how long this recession will last. This recession has already lasted longer than either of the last two. Rather than putting the business on hold indefinitely, it makes more sense to seek out initiatives that can result in greater productivity and overall cost efficiencies.

Champions of CRM software investments should recognize the concerns of finance and senior management during recessions. Any budget items that can be reduced should be, in order to demonstrate that moving ahead with new CRM applications is truly a top priority. At the same time, it can be demonstrated that CRM investments may be precisely the type of cost-effective moves a company should be looking to make during a recession.

Sources
E-Commerce Times
Inside CRM
National Bureau of Economic Research