I took a peek at the US technology spending numbers for 1Q08. Not to worry, it’s ahead about 7% from last year at this time. Overall, analysts predict annual information communications technology spending will expand around 4% year-to-year, down from 2007. Not a great performance, but, as you may have heard, we are in a slowdown.

I argued last month that this downturn differs from previous economic cycles. In the New Economy, companies can’t afford to reduce technology spending on customer service. So it’s good to see a few validating signs of this trend: Hewlett-Packard is planning to open a new call center in New Mexico, Southwest Airlines is fighting to save its customer service operations, and Vonage is focusing on customer delight and retention through better designed products.

Motivating these corporate actions is the bottom-line knowledge among CEOs that spending on technology and better service is really chump change.

Think upgrading hardware and software is expensive? Try replacing a customer!

Customers are expensive. Very expensive. Buying a speech recognition application to offload calls or slick agent desktop software to improve response quality and timeliness is a bargain compared to the lost revenue stream and cost of sales associated with “purchasing” new customers. And satisfied repeat customers, as Reichheld reminds us, are much more profitable than rookie customers, whose spending patterns are variable.

Final thought: I read an interview in which Jeff Bezos, Amazon CEO, said that he is more afraid of customers than competitors. Why? Because they are the only ones who will give him money.