The analyst team here at Freeform Dynamics frequently gets asked for comment by journalists. This usually takes place over the phone, but occasionally a request comes in over email.
The following is my response to one such email request. It might be interesting in its own right (it pretty much sums up my views of the CRM market), but it also serves to illustrate the level of exchange we have with journalists, even though all that gets usually gets printed is a one or two line quote – if that!
Of course not all journalists are the same. Some are only after a sound bite to substantiate an angle or argument they have already made their mind up on. The more senior guys tend to be looking for genuine input to shape their thinking, however, especially when writing more in-depth feature pieces. The other way requests vary is in the level questions are pitched at. While the one below is very generic and high level, most are more news oriented, typically looking for comment on developments, announcements or events relating to a specific vendor or solution.
Anyway, this is pretty typical of the kind of response I would give to an incoming journalist request asking a bunch of open questions at a more generic level. It’s not exhaustive as the idea is simply to provide some interesting angles and the relevant background/context to help them write something meaningful. Enjoy…
RESPONSE TO PRESS INQUIRY ON CRM MARKET DYNAMICS
Tell me what the key trends are that have developed in the enterprise CRM space over the last couple of years?
Most people think of organisations reacting to the recession by cutting costs, but another common response has been to get smarter about sales effectiveness. In a market where there are fewer deals going down, it is necessary to win a higher proportion of those deals simply to stand still in terms of revenue and margin. This has led more progressive organisations to put a greater emphasis on analytics, segmentation, planning and best practice workflow within the sales operation as a way of improving targeting and win rates.
We have also seen a greater emphasis on closing the loop between sales and service, and bridging the gap across sales channels, as organisations have done everything they can to protect and exploit their existing customer base, and make sure that no opportunity has escaped the net.
There has then been a continuing trend towards SaaS based deployment, with Salesforce.com being joined by others, most notably Microsoft and its army of partners, to provide more options with regard to hosted solutions.
What major developments/shifts in direction do you see the enterprise CRM marketplace taking in the next year or two?
While there has been a lot of talk about CRM systems helping organisations deal with social networks in a B2C and B2B context, there has been little action to date. Solutions are still immature and large CRM incumbents are slow in their thinking in this area at the moment. They will catch up, but a lot of the innovation and best practice is likely to come from smaller web based players and specialist point solution providers. We anticipate this whole area really heating up, however, as organisations look to a) monitor and manage discussions taking place in social networks around their brand and products, and b) use social networks as an outreach and engagement channel to drive incremental business. We caution here against organisations viewing social media as a separate, discrete channel, however – it is imperative that it is thought of as an integral part of a multi-channel strategy.
With the coming of age of smart phones and the emergence of new mobile form factors such as the iPad (and its inevitable followers), the mobile dimension to CRM is going to be another area that really heats up. This will manifest itself in two ways – a) Mobile access to CRM systems by sales and service teams to the next level (i.e. much richer functionality), and b) the use of CRM systems to facilitate outreach and engagement to customers via their mobile devices, again in both a sales and service context. Mobile advertising and other forms of promotion (especially interactive campaigns) will be a big part of this, and a lot of what we have seen with the iPhone has set the scene here.
As an evolution of the analytics and planning activity that we were discussing above, we anticipate more organisations looking to embed business intelligence in the sales and service process itself, rather than treating it as a separate periodic activity. The imperative here is for suppliers to step up to the mark with best practice, whether enabled through the core R&D activities of CRM vendors, the efforts of their partners (e.g. to build industry templates), or the enabling of customer/user communities to help themselves, e.g. through social media and similar.
Beyond these developments, a hope rather than a prediction is that we see the needs of small businesses catered for more effectively by the CRM supplier community. Salesforce.com is too complex and costly for most smaller entities and Microsoft seems to be following with offerings that are also more suitable to the mid-market and above. Sage seems to be making some reasonable efforts, as are some of the smaller Web based SaaS players, but the space is massively underserved at the moment despite a clear need (the vast majority of smaller companies have no structured CRM solutions in place at all right now).
How are/will CRM products change to adjust to these changes/trends?
Continued evolution of analytics/BI capability, encapsulation of best practice in solutions as much as possible, mechanisms to manage and exploit social networks, and the next level of functionality around mobile. As part of the latter, there is a clear need to move beyond Web interfaces on mobile devices to properly designed mobile extensions to the application.
As part of some of the above, we also see a need for the CRM supplier community to tune into and even partner with social media companies, mobile operators and others in the industry ecosystem. And as we mentioned, there is a clear opportunity in the small business space for suppliers who step up with affordable and accessible solutions.
Dale is a co-founder of Freeform Dynamics, and today runs the company. As part of this, he oversees the organisation’s industry coverage and research agenda, which tracks technology trends and developments, along with IT-related buying behaviour among mainstream enterprises, SMBs and public sector organisations.