DataWatch: Consulting by Numbers

Customer Relations

CRM Growth Slows, But Still Robust

Consulting work within the Customer Relationship Management arena will begin to level off this year after soaring 39 percent in 2000, according to Kennedy Information Research Group's report, The Consulting Opportunity in CRM.

Growth in CRM consulting will maintain a lower but still robust 30 percent rate in 2001, but then begin to decline annually until reaching the IT category growth rate of 14 percent in 2005, KIRG projects. This will grow CRM services from $12 billion in 2000 to $31.2 billion in 2005.

Market Demand

Who Needs CRM?

Two attributes (customer complexity and company size) roughly define a four-sector model of CRM need and utility, according to KIRG.

Function Control: Small companies with a limited number of customers serviced through only one or two channels. Needs to implement control over customer touch points.

Cost Management: Larger companies with many customers serviced via only one or two channels. Needs to measure and control the costs of customer touch points.

Efficiency: Small to mid-size companies that service a variety of customers through multiple channels. Coordination and consolidation of customer data.

Strategic Information: Mid-size to large companies that service a variety of customers through multiple channels. Customer data as a strategic tool for profiling and marketing campaigns.

Client View

Applying a CRM Solution

The applicability of a CRM solution will depend on where on this matrix a company resides. Point solutions will suffice for smaller firms with simpler relationships, while larger firms with highly complex relationships will require a full enterprise-wide solution for optimal performance.

The chart suggests how CRM solution applicability will fall across these four segments. Companies that are small with a short to moderate list of customers will probably require one or two CRM modules. Sales force automation tools and call center automation tools are the usual applications of choice. A company that is larger and/or has more complex arrangements with its customers begins to require a more sophisticated solution.

Evaluation Tool

One Firm's Example

CGE&Y has developed a CRM index that can assist most companies in determining where they are and where they'd like to be as far as CRM capabilities go. Not only does this chart provide insight into the reasons behind CGE&Y's CRM service offerings, but it also provides a model for the market in its totality. Most firms are customer-focused, if they have the system capability to be so, but few have made the commitment and investment to take the next step and become "relationship-focused."