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CRM Growth Continues
Yesterday I was on the other side of the interview table. A public relations representative for an enterprise feedback management (survey) vendor asked me whether I saw growth potential in that and in the broader CRM markets. Although some industry insiders feel that CRM has maxed out, I think there is significant opportunity for growth. And not just among organizations that have never implemented CRM technology. Many companies that already have a packaged or homegrown system in place plan to update that technology in the near future.
A recent forecast from Forrester Research concurs.
The Forrester forecast predicts moderate growth in the CRM industry through 2010. The forecast expects new license sales to reach $2.8 billion by 2010, which translates to about 25 percent of total vendor revenues, down from 37 percent in 2003. Forrester anticipates that overall CRM spending will remain steady, with services taking an increasing share of vendors' revenue.
Forrester also expects the share of CRM revenues generated by software-as-a-service companies to rise to 22 percent by 2010, reaching $2.4 billion. Additionally, it predicts that the EMEA market will become increasingly significant, with new license sales rising from 34 percent in 2003 to 38 percent by 2010.
Another area the forecast covered is customers' expectations. Forrester predicts that organizations will be more loyal to their current vendors, but that they will also expect more support from those providers. The forecast suggests that CRM vendors will get "cozier" with current clients, as well as develop new offerings and increase their focus on innovation.
Interestingly, in recent conversations I had with executives at Sage and ClientLogic, they reported similar expectations from their customers. Sage's Dave Batt said that its customers prefer a vendor that can handle end-to-end processes, and are expecting their vendors or integration partners to help guide them into such areas as mobile CRM. Trends are similar in the contact center market. "We're seeing the need from customers for solutions that handle more complex requirements with more flexibility," Amit Shankardass, senior vice president of solution planning at ClientLogic, told me recently. "We're also seeing customers looking for a single vendor that offers multiple types of services, from customer service to sales to collections, etc."
I agree very much so to Rajnish Mehra comment as CRM is a term used and abused especially in the new market segments that are broadening every year. Because of the expansion of business in fields across the board and technology being an increasingly important tool to be utilized it would only make sense to implement a CRM program that would embarrass defined repeatable methods that would increase awareness and stronger partnerships with your customer. A strategy focused on aligning yourself to your customer is one of the strongest philosophies I live by in my organization. Keeping it as simple as that, knowing when to tune in to the needs, and identify key goals to meet and exceed your customers expectations is necessary to maintain and retain.
I sincerely believe that CRM is a much abused and misused term in today's business world. It indeed not only has to be a part of the overall strategy of a firm, whether B2B/B2C, but also the overall mindset of everyone in the firm. All organisational functions must have customer orientation and not just the marketing function! Of course CRM technology does act as a facilitator for the marketing function to become more efficient and effective. But it certainly cannot be seen as a panacea for the basic problem of lack of customer orientation, that afflicts firms even in present day cut-throat global competition!
Hector, I agree with you 100 percent: CRM is indeed a strategy, supported by various related technologies. In fact, I believe that the growth in technology sales that Forrester is predicting is in direct relation to an increase in the number of companies looking for ways to improve and capitalize on their customer relationships. Many companies are becoming more customer-aware, and are acting on that awareness. We've seen an increasing number of companies create customer strategies first, then find the technologies to best support them, if necessary; versus the approach more common in the past, where companies considered CRM technology as a magic bullet.
Why does everybody focus CRM as technology implementation as opposed to see the technology as a tool for a complete CRM strategy...? what would you do with a good tech platform and no one capable to exploit the information from it? or exploit it as information alone but no R&D derived from it for the benefit of your clients?