I’ve heard many people discuss how businesses are cutting their marketing budget during the recession and I believe that this is not necessarily the best strategy. Although there are arguments for both sides to decrease the advertising budget, a good CRM investment has become increasingly valuable during these tough-times, here’s why:

1. Consumer Behavior is Changing: Changes in consumer behavior during the recession have changed the profitability and ROI of certain clients. Access to this information can help you manage risk and better serve a specific growing client base; however, it is imperative that the data is accurate or it may provide misleading results.

2. Accuracy of Information: A good CRM investment can help you manage data flow and present hidden opportunities within your network that will increase sales. To do this properly, a good CRM system must ensure that the data is both accurate and kept up-to-date (I’m repeating this intentionally for emphasis). The only way to guarantee this is to automate the process (eliminating errors caused by user-laziness) and to allow clients that want to build a relationship with you to update their own information.

3. Competitive Advantage: Maintaining and building relationships with your existing clients becomes increasingly important during these times as it can help you gain a significant advantage over your competitors: your network.

4. Invest Smarter: Many businesses have cut their marketing budget during the recession, and of course there are arguments for both sides regarding your advertising budget; however, your investment in your client relationship must be your top priority. Not only will this investment pay off when the recession comes to an end, but it is an important tactic to ensure that you even survive the recession; furthermore, it will allow you not just to survive but to actually grow your business by finding opportunities within your existing network.

5. Managing Your Constraints: By concentrating on your best clients you can increase the profit produced per hour of sales which will increase your ROI. Staying lean-and-mean is key! An intelligent CRM system will also help you discover these types of opportunities that are often hidden in important relationships.

6. Recessionary Growth: It is still possible to grow your business during a recession; however you will require a different strategy. Your existing clients are like a cash-cow and meeting the demonstrated needs of your client base will help you grow while remaining lean and competitive.

As you can see, keeping your business lean will improve you ROI and lower your risk during the recession. Becoming lean is accomplished by building strong relationships with your existing clients and by seeking opportunities within your network to build relationships with other potentially valuable clients. Many times these important relationships are often hidden within your network so it takes an intelligent CRM system to facilitate this network growth.