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
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:
- 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
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
does business. Better to make those investments when the economy is slow
and vendors are offering the best terms.
- 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
and with resources that are stretched thin. During a recession, vendors
are eager to bring their full capabilities to bear as soon as possible.
CRM applications bring down the upfront investment. With hosted CRM applications,
upfront investments in hardware and software are greatly
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.
- 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
away from revenue-producing activities. Its much better to spend time
on CRM and training when productivity is down, to take up the slack
- 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
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
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.
National Bureau of Economic Research