Important Business Value Changes Shaping CRM Trends

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01.09.09

Important Business Value Changes Shaping CRM Trends

By Jim Berkowitz

Here are several excerpts from an article by Richard Adhikari, Social Networks Among Trends in CRM for 2009:

Customer relationship management (CRM) projects in 2009 will be all about business value, and that includes adding social networks to the mix, according to a report from analyst firm Forrester Research.

An increased emphasis on business value will see enterprises focusing on customer retention and creating dynamic solutions to support customer facing processes.

That focus on business value will trickle down to hit vendors. Enterprises will demand that their CRM vendors provide clear and specific data about the business value their solutions deliver, Forrester predicts.

"During this economic downturn, customers tell us they need bulletproof financial arguments to get funding for their projects," William Band, Forrester vice president and principal analyst, said in the report.

It is not enough to ensure business value in new projects; enterprises will begin focusing on customer retention instead of customer acquisition to stay afloat, Forrester predicts. "During an economic recession, sustaining revenue growth - or forestalling revenue erosion - becomes even more critical," the company wrote.

But customers are getting harder to win and keep, Forrester said, and the solution is improved customer experience. "Good customer experience is highly correlated to customer loyalty," Forrester said.

To improve the customer experience, enterprises will integrate CRM functionalities better with their back end enterprise resource planning (ERP) and supply chain management (SCM) systems, Forrester said. They will focus more on agile and usable solutions tapping these back end systems to support customer-facing applications.

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Another way to improve customer experience will be to incorporate social networking capabilities in CRM applications, and Forrester predicts that enterprises will begin doing this in 2009.

In 2009, CRM professionals will continue to focus on how enterprises collect, distribute and use data to create value, Forrester predicts. "CRM professionals tell us that poor customer data management is one of the biggest barriers to getting value from their CRM programs," the report said.

The increasing use of SaaS is going to pose a threat to CRM vendors offering traditional on-premise solutions, as it does to vendors offering other applications. SaaS solutions reduce up-front costs for hardware and software and trim maintenance costs, providing CRM projects more business value.

Several CRM vendors offer SaaS options, Forrester said, and this will add to the pressure on vendors offering on-premise solutions. Salesforce.com, the leader in SaaS CRM, has racked up record results and its feisty CEO, Marc Benioff, has often pointed to the recession as a driver for strong growth among SaaS vendors.

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About the Author:
Jim Berkowitz is a seasoned executive with more than 30 years of professional services and project management experience related to Customer Relationship Management (CRM) and Financial Management (Accounting & ERP) software solutions for small, mid-sized and Fortune 500 companies. As a Sales Force Automation and CRM Consultant, Jim has assisted more then 100 companies with the design and implementation of custom CRM solutions.

Mr. Berkowitz is the founder and President of CRM Mastery, Inc.; a company dedicated to serving small and mid-sized enterprises (SMEs) by offering affordable tools and guidance to help them plan for and succeed with their CRM initiatives.