5 Reasons Customer Relationship Management Is Still Hot

Customer relationship management (CRM) technologies may not be making headlines — but they haven’t gone away. In fact, according to Gartner, demand for CRM is growing. To provide integrated customer experiences, businesses are focusing on technologies that enable targeted customer interactions in multichannel environments. 

CRM Growth

The findings appear in a new report Market Trends: CRM Digital Initiatives Focus on Sales, Marketing, Support and E-Commerce. In it, Gartner notes that it expects CRM spending to remain steady after three years of substantial investment driven by five established and emerging areas of technology. Those areas include:

  • Social
  • Mobile
  • Big Data
  • Cloud
  • Internet of Things

Gartner estimates investment in CRM will reach $23.9 billion this year, with cloud-based technologies accounting for 49 percent of that. Currently, software as a service (SaaS) or cloud-based CRM deployments  represent more than 40 percent of all CRM deployments, and are likely to reach 50 percent in 2015 as more and more enterprises look for agile technologies to respond to business challenges.

"Unsurprisingly, high-tech, banking, insurance, securities, telecommunications, pharmaceutical, consumer goods, IT manufacturing and IT services vertical industries will continue to be the largest spenders on CRM as they have the widest use of different types of CRM applications and technologies," said Ed Thompson, vice president at Gartner.

It is also notable, Gartner states, that all these industries are increasing their investment in emerging economies, which will drive growth even further as new and developing enterprises cut costs by moving directly to the cloud rather than investing in on-premises systems.

CRM Needs

But what exactly are enterprises doing with these technologies? According to Gartner, workers that are dealing directly with customers are looking for a combination of all, or some of those technologies.

Customer support and services (CSS) in conjunction with IT managers, are looking at the targeted use of big data analytics, peer-to-peer communities, and emerging customer engagement centres - - the next generation of customer service contact centres - - for critical processes and technologies.

The principal focus of CSS now, Gartner says,  is the creation of differentiated cross-channel customer experience while at the same time, developing new capabilities for customer self-service.

E-commerce is also a growth area in the CRM space. Last month, we saw in our mini-series on the disconnect between e-commerce and content management,  that CEO’s and Chief Marketing Officers (CMOs) are looking at many different ways of improving customer experience, especially in online retail stores.

Marketing technologies are also hot properties with IT investments there being driven largely by CMOs and the marketing organization with little involvement from IT.

The problems created by a lack of communication between marketing and IT departments has been well covered in the past, but according to Gartner, with the ongoing development of CRM, Chief Information Officers (CIOs) and CMOs  will have to start working together to get the best out of emerging technologies.

CMOs are under increasing pressure to achieve business growth, cut costs and improve transparency, which is pushing them to invest in marketing technologies across the board. With IT involvement, these investments are just about pointless. 

Five Drivers of CRM

1. Social

Marketing departments are being forced to monitor everything that happens across social networks to see what customers are saying about products. The result is that they are currently looking for technologies that can listen and observe literally hundreds of networks, including tweets, Facebook and LinkedIn discussions to monitor enterprise progress and prospect for new business leads and opportunities.

2. Mobile

According to Gartner, smartphones and tablets are facing change quicker than even social networks are,  with more than half the connections to the internet in 2014  expected to be made through smartphones 

Smartphones have already overtaken PCs as the most common tool for accessing social networks, while Bring-Your-Own-Device (BYOD) polices are going to push this trend. Tablets, however, are causing the most disruption as sales departments and board directors purchase them and then demand support.

3. Big Data

Running in parallel to this is that more and more marketing departments and customer facing staff are looking for big data analytics to give them insights into all the data and customer information available. However, while there are now technologies to provide churn analysis, product and service recommendations direct to the customer, and/or sales prompts for salespeople, there is still a significant skills shortage around big data applications.

4. Cloud computing

This driver is a decade old now in CRM, having started back in the late 1990s with the rise of application service providers. Gartner points out that for cloud providers, the  technologies that are easiest to adapt for the cloud have already moved to the cloud. The technology that remain will be difficult to adapt to a cloud delivery model, so a complete move to the cloud still has some way to go.

5. Internet of Things

As more and more objects are connected to the Internet with the arrival of cheap sensors,  industries like automotive, construction, healthcare and hospitality will change dramatically. At the very forefront of this shift will be marketing and sales departments, which will have to promote sell and support the new services.

How far these drivers push the development of CRM technology is not clear yet, but as more and more users are offered access to CRM  in the cloud, the development of new components is inevitable.

The Internet of Things will also push CRM development, especially around analytics, big data and the ability to digest the huge amount of information that will become available to marketers.

Ultimately this is about improving customer experience, and as this is something that is an endless, ongoing process, the development of CRM technologies has a long way to go yet. 

Title image by Olivier Le Moal (Shutterstock).