Magazine Article | October 1, 2000

CRM In The IT Spotlight

Source: Innovative Retail Technologies

Sure, customer relationship management (CRM) solutions have been around for years. But, the Web is bringing the benefits of this technology back on center stage.

Integrated Solutions For Retailers, October 2000

One of this year's more memorable TV commercials was for A customer shops online for a red sweater while conversing on the phone with a customer service representative who provides site navigation and shopping assistance.

This commercial captured my attention both as a consumer and as a technology editor. First, it showed me the Web's potential to provide some of the personal attention that I receive in a store. Second, the commercial illustrated the growing importance of customer relationship management (CRM) technology in e-tailing.

Breaking Down The Definitions Of CRM
CRM is defined as software that helps a company manage customer relationships in an organized way, according to, a Web site of technology terms. CRM also describes a grouping of products that automate a company's sales, customer service, and marketing functions. Some of these products include: sales force automation software, call center management software, and customer interaction management software. In addition, customer data can be found in other applications, expanding CRM into other product sets. CRM is often integrated with software applications such as enterprise resource planning, business intelligence, and data warehousing.

Interest In CRM Explodes
CRM applications have existed for years, but recently there has been a buzz about this technology. Market research firm IDC found a 71% increase in worldwide CRM revenue in 1999, creating a $3.3 billion market. IDC attributes this growth to businesses' renewed focus on winning and retaining customers. IDC says the CRM market's rapid growth will eventually slow to an annual growth rate of 30% through 2004. However, this still means $12.1 billion in revenue in 2004.

These strong market predictions for CRM are not surprising to me. Earlier this year, I wrote a column about how wireless and CRM were two technologies to watch (see July 2000 issue, p. 8). In the article, I mentioned Siebel as a company commonly identified with CRM (see related article in this issue on p. 18). I also described how several companies not traditionally associated with CRM – such as SAP and Baan – are now getting into the game. The slight mention of these three companies in my column generated e-mails and letters from other CRM companies, such as Oracle, that also wanted press. The reality is that I could fill this column with a list of companies involved in CRM.

Recently, I attended Advanstar's Customer Relationship Management Solutions show, which had over 250 companies exhibiting technologies. (See some of the product releases and announcements from the show on pp. 28-32.) The show floor had a healthy flow of traffic at a time when most expos are experiencing alarming decreases in attendee numbers. This just continues to reinforce that interest in CRM is on the rise.

Why CRM Is In The Forefront
Today, business in almost all industries is becoming increasingly competitive. Enhancing customer relations is one way a company can differentiate itself and gain a competitive edge. This is especially true in an economy where customers expect more. They want low prices, good service, and fast transactions, or they'll go to your competitor. To keep up, businesses in all industries, especially retailers and e-tailers, are investing in CRM technologies.

The Web is also providing added pressure and competition in customer relations. According to Jupiter Communications, 90% of online customers want human interaction when purchasing on the Web. CRM technology vendors have realized the Internet's impact. Many have introduced e-based versions of their products (eCRM) and new Web functionality.

Look for more information on CRM through the remainder of 2000 and get ready for our ramped-up focus on this technology in 2001. Or visit our industry partner,, for the latest on CRM.

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