Guest Blogger William Band: Six Trends That Will Drive CRM Decision-Making in 2009

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What are the key developments driving CRM strategies and the adoption of enabling technologies now? According to Forrester's latest research, locking-in customer loyalty through deeper engagement and differentiated experiences will continue as critical priorities. Six trends will drive CRM decision-making in 2009.

In light of the recent sudden and dramatic deterioration of the economic climate, what are the key developments driving CRM strategies and the adoption of enabling technologies now? I recently recorded a podcast summing-up my take on the situation, based on Forrester's latest research. Here's what I know: Locking-in customer loyalty through deeper engagement and differentiated experiences will continue as critical priorities. Six trends will drive CRM decision-making in 2009. Trend 1: The Emergence of the Social Consumer
Social technology adoption has increased tremendously during the past 12 months. Three in four U.S. online adults now use social tools to connect with each other compared with 56 percent in 2007. This new trend -- which goes by a number of names, including CRM 2.0, Social CRM, and Collaborative CRM -- is forcing CRM professionals to look for innovative ways to engage with these new "social consumers." In 2009 CRM leaders will be looking to enrich the customer experience through community-based interactions, and architecting solutions that are flexible and foster strong intra-organization and customer collaboration.

Trend 2: The Imperative That CRM Strategies Deliver Business Value
I recently conducted a survey with business and IT managers about the pitfalls that trip-up CRM projects. I examined 133 separate projects. Nearly 20 percent of those surveyed reported troubles with their CRM strategy. Problems cited were: poor deployment approaches (40 percent); difficulties in defining business requirements (23 percent); inability to gain organizational alignment on objectives (18 percent); and concerns about cost (18 percent). During tough economic times, CRM professionals will be retooling their strategies with a focus on spotlighting the biggest opportunities for quick wins.

Trend 3: The Requirement to Fully Cost-Justify CRM Investments
CRM professionals tell me that during this economic downturn they need bullet-proof financial arguments to get funding for the technologies the need to deliver value to the customer and back to the customer. In 2009 every business case must answer four critical questions: What are the business benefits? What is the impact on IT or project costs? Is future flexibility increased or decreased? How will risks be mitigated?

Trend 4: The Necessity to Reduce the Risk of CRM Initiatives
CRM professionals cannot afford failed CRM projects, particularly in down markets when business survival may be at stake. There are plenty of risks to worry about. In the survey of CRM professionals mentioned above, more than 200 individual problems were reported. Thirty-three percent of the problems related to technology, 27 percent to business processes, 22 percent to people, and 18 percent to CRM strategy. In 2009 "risk-proofing" projects will near the top of the priority list for CRM professionals.

Trend 5: The Need to Get More Value From Customer Information
CRM professionals tell me that poor customer data management is one of the biggest barriers to getting value from their CRM programs. In a recent Forrester survey of more than 1,000 North American and European decision-makers, 44 percent said that a master data management initiative was a critical or important priority for 2008. But, the right approach to customer data management is elusive. In 2009 I expect CRM professionals will continue to focus intently on how enterprises collect, distribute, and use customer data to create value.

Trend 6: The Battle to Redefine Vendor Pricing and Licensing Arrangements
Forrester interviewed 25 clients of leading enterprise applications providers and surveyed 215 business process and applications professionals about their software licensing and pricing experiences. According to these users, software licensing and pricing continues to be marred by complexity, soaring maintenance costs, and a lack of flexibility and alignment with business goals. With resources increasingly scarce, but key vendors pushing hard for upgrades for their products, CRM professionals will have to sharpen their negotiating skills to get more value from their vendor relationships in the coming year.

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William Band is Vice President & Principal Analyst at Forrester Research, where he serves Business Process & Applications professionals.

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