A second chance for CRM.

(From Financial Director)

Byline: Tom Berry is deputy editor of Financial Director.

"We want this! And that! We demand a share in this, and most of that, some of this, and all of that! Less of that, and more of this, and plenty of this! And another thing - we want it now! We want it yesterday, and we want more tomorrow! And the demands will all be changed then, so stay awake!"

Scots comedian Billy Connolly's words, with expletives tastefully removed, are a rich interpretation of the pressures that customers put on suppliers in a fast-moving, technology-driven world. To meet this demand, IT vendors created a beast in the 1990s called customer relationship management (CRM) software that would revolutionise the way businesses dealt with customers.

Any member of staff could access the CRM system to view all information held about a particular customer, such as whether he had any complaints and how many times he had been called, and so better manage the customer experience and expectations. The problem was that CRM was a huge letdown for many businesses.

But CRM is now sexy again, according to Microsoft, at least, which has thrown some of its huge bank balance at developing a new CRM system that is to be marketed this year at small-to-medium enterprises. In Microsoft terms, that means any company with up to 500 users of IT which needs to get better information about its customers to make more sales. But will CRM work the second time round?

Jeff Young, Microsoft general manager of emerging solutions, says CRM had been flawed in the past, even though the premise for its implementation was right. "The Harvard Business Review says it is six-to-seven times more expensive to acquire a new customer than it is to keep an existing one," Young says. "CRM solutions didn't get deployed in the past because they were too complex, required too much customisation and people just didn't use them - there was a cultural problem."