Customer becomes No 1 in downturn

Brad Wilson, the global general manager for Microsoft's customer relationship management business, spoke to Simon Hendery about how the global recession is driving interest in company investment on CRM, the software that helps businesses to keep track of their customers.

Has the global economic downturn meant businesses are spending less on software such as CRM?

We don't split out our revenues for CRM specifically but I can say our business is showing very strong year-on-year growth right now.

The question is why are people buying CRM in a downturn?

My perspective on this is that 50 years ago you'd value a company based on its buildings and other hard assets.

Twenty-five years ago it was more about the value of your employees, the intellectual property in their heads, and that sort of thing. About 10 years ago we started talking about this "customer-centric" thing - the idea that it is incredibly important for businesses to have a strong relationship with their customers and to understand their needs and their preferences.

What has that change of thinking meant from a business technology perspective?

What's happening now that is different from 10 years ago is that businesses have started to realise the value of a company is really the net asset value of its customer relationships. And in a downturn, if you let your existing customers walk away from you, you're going to be in a very bad situation.

What we're seeing is that businesses are making two things top priorities. One is to invest in technology that helps them retain their customers during the downturn, and the second is to set themselves up to win customers and take market share when things turn around, as they will.

So while CRM as a category got hammered six or seven years ago in the last downturn, this time around I think it's become a boardroom decision that customer management is the lifeblood of the organisation.

The sophistication of CRM software has also changed since that last downturn, hasn't it?

It's also much cheaper. The price of CRM technology has come down five- or tenfold compared to what you were paying 10 years ago. So the technology is cheaper, and it's better integrated [into other parts of the business]. You can get a lot more for your investment in this area than you could five years ago, let alone 10 or 15 years ago.

Where does Microsoft and its Dynamics business software brand sit in the CRM market?

We're focused on mid-market companies and large enterprises, and those definitions change depending on what country you're in. The top four industries [Microsoft targets] are the public sector, financial services, professional services, and manufacturing.

What have you noticed about the New Zealand market for business software?

New Zealand is unique because of the size of the country and the structure of your businesses in terms of [being dominated by] small and mid-sized businesses. But at the same time I don't find much difference in the kinds of problems businesses are facing. Trying to get a grip on your customers and understanding how best to engage with them is universal across all companies.