June 1, 2001, 12:00 AM

IDC survey says European business will be tough sell on CRM

IDC reports that while half of European companies see the value of CRM applications, a third are skeptical. The answer: more education of the benefits apart from customer service.

Vendors of customer-relationship-management systems are going to have a tough sell in Europe, according to a report out this week from IDC. IDC interviewed 405 European organizations and found that more than 50% rate CRM as critical for their business, but nearly a third are not interested at all. "Much of this apathy relates to a simple lack of understanding of the benefits of CRM, not to mention basic functionality," said Bill Clough, senior research analyst with IDC`s European ERM and CRM Applications research program. "Now that companies are going to be a bit more careful with their IT budgets, and less driven by the `first mover` or `early adopter` messages, it will take even more effort on the part of software vendors to educate the market about the real needs that are met with CRM solutions."

In its Demand-Side Survey: A Reality Check on CRM Software, IDC reports that the value and benefits of CRM-which many U.S. retailers are evaluating-seem ambiguous to many respondents. Although most identified with the benefit of improving customer service processes, many missed the possibility of key advantages such as customer acquisition and retention, IDC says. "In tightening economic markets, when businesses begin to focus less on the latest technologies and more on what solves real problems and cost issues, these two benefits are not receiving the attention they deserve," Clough said.

Despite widespread media coverage and extensive software vendor marketing campaigns, the overall impression is that end users remain uncertain, if not suspicious, about the qualities and benefits of CRM technology, IDC concluded.

IDC`s survey shows the response to CRM technology varies by country and industry. While some of these variations were expected, others were not. Only 36% of French respondents claimed to be using CRM software, while in the United Kingdom and Italy, 53% said they were using the technology. The European average was 46%. "End users in the largest economic zones appear most apprehensive about CRM technology. German and French respondents in particular rated CRM as a `no need` among a long list of possible technologies," Clough explained.



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