How Customer Trends Impact
CRM Technologies and the
Vendor Landscape
CRM Expo 2011, Sofia, 20.10.2011
On behalf of Ivan Maglić, Regional Director
Gartner Adriatic / Calisto
Janet Naidenova, Marketing Partner
This presentation is built based on research
and insights developed by Gartner analysts!
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CRM Trends
Sales
Marketing
Customer Service
CRM Trends and interest change...
During 2010. changes in
growth of three categories of
CRM applications were
changing due to:
• rapid rise in use of social
networks;
• enterprises re-evaluating
use of smartphones and
tablets;
• increase in access to
information for customers
– "shift of power";
Social CRM is the hottest area of interest in customer service and marketing
departments, followed by related areas like digital marketing and e-commerce.
CRM Trends and interest change...
• Majority of spending on CRM is still concentrated in: traditional sales force
automation (SFA), campaign management and customer care in contact
center.
• Software as a Service (SaaS) delivery represented approximately 26% of all
CRM application spending in 2010.
• In sales applications, almost 50% was delivered via SaaS
• Mobile applications are priorities for sales in 2011 – interest has swung from
the BlackBerry to the iPhone to Android, to the iPad and other tablets.
• In the short term, the Chief Marketing Officer (CMO) is under pressure to
support improved digital marketing and need for social media tools.
• Social or community customer service became the hottest topic in customer
service department in 2010. The interest is not uniform, but sectors such as
high-tech, media, travel, telecommunications, retail and education are leading
the way.
CRM Vision and Strategy
Putting the CRM Pieces Together to
Generate Success
As the World Gets Smaller,
Customer-Centric Strategies Get Larger
Mobile Devices
Communications
• Ubiquitous
computing
• Devices for life
• Portable
computing power
• Convergence of
communication
• Broadband, Wi-Fi
and WiMAX
• Always accessible
or online
Security
• Biometrics
• Profiling
or access
Convergence of
Corporate Systems
and Data
Collaborative
Platforms
• Outside
four walls
• Extend out
to customer,
back to
suppliers
Location
Technology
• Tagging
• Proximity
monitoring
•
•
•
•
Real-time data
Unified view of the customer
Complete transaction history
Noncorporate data (satisfaction)
The challenge in customer-centric strategies will move from giving customer-facing
employees better tools, to putting the tools directly in the hands of customers.
CRM Applications Remain Fragmented:
More Than 50 Submarkets
Segmentation/Event Triggers
MRM
E-Marketing
Field Marketing
Field Sales
Marketing
Sales
Promotions Mgmt.
Location-Based
Business Intelligence
Performance Mgmt.
Personal Productivity
Customer Value Analysis
Interactive Data Mining
Order Management
Configuration
Social Networking
Pricing
Analytics
In-Line, Event-Driven
Dashboards/KPIs
RFID/Telematics
Warranty Mgmt.
Parts Planning
Wireless Mobility
Contracts
Product Life Cycle
E-Commerce
Inside Sales
Partner Management
CRM
Application
Value Chain
Self-Service
Analyzing
Finding
Knowledge Management
Customer
Service
E-Learning
Communicating
Forming
WFO
Field Service
Rewarding
Norming
Performing
Trouble Ticketing/Case Mgmt.
Managing
Monitoring
Fraud Detection
Product Information Mgmt.
RFID
Inventory
Logistics
E-Commerce
Information &
Infrastructure
The CRM market is too fragmented to start with a tools discussion.
Strategy drives the decisions on tools and technologies.
Customer Data Integration
Information Mgmt.
BPM
App. Architecture
Application Infrastructure
Traditional Business Components of CRM
Integration Among
Front-Office Functions
More-Effective Customer Interactions
Customer-Satisfying Behaviors
Greater Customer Access
E-ERP
Business
Organized
Around
Customer
Field Sales
E-Business
Retail Sales
Telemarketing
E-CRM
Customer-Centric Processes
Telesales
Finance
Partner Relationship Management
Supplier
Customer Service
Extended
Distribution CRM Enterprise
& Logistics
Integration With
Back-Office Functions
Acronym Key
CRM = customer relationship management
ERP = enterprise resource planning
SCM = supply chain management
R&D
Field Service
Human
Resources
Manufacturing Customer Insight
Marketing
Info. Systems
Database
Marketing
and Understanding
Areas Covered Within CRM
The Reality of Customer-Centric Strategies
Integration Among
Front-Office Functions
More-Effective Customer Interactions
Customer-Satisfying Behaviors
Greater Customer Access
E-ERP
Business
Organized
Around
Customer
Field Sales
E-Business
Retail Sales
Telemarketing
E-CRM
Customer-Centric Processes
Telesales
Finance
Partner Relationship Management
Supplier
Customer Service
Extended
Distribution CRM Enterprise
& Logistics
Integration With
Back-Office Functions
The old designations of operational systems, ERP,
SCM and CRM should be replaced by the concept of
customer-centric strategies and other related
strategies that will focus on process issues.
R&D
Field Service
Human
Resources
Manufacturing
Customer Insight
Marketing
Info. Systems
Database
Marketing
and Understanding
Areas Covered Within CRM
The Eight Building Blocks of CRM
1. CRM Vision
2. CRM Strategy
3. Valued Customer
Experience
4. Organizational
Collaboration
5. CRM Processes
6. CRM Information
7. CRM Technology
8. CRM Metrics
The Eight Building Blocks of CRM:
Much-Loved, but Apparently Forgotten
Building a market position against competitors with
defined value propositions based on requirements,
personified by the
brand and
communicated.
1. CRM vision
Turning the customer base into an asset via
delivery of customer value propositions.
Provides objectives and
how resources will be
used in interaction.
Constantly ensuring
2. CRM strategy
that the propositions
have value to
customers and the
enterprise, achieve the
market position, and
3. Valued customer
4. Organizational
are delivered
experience
collaboration
consistently.
Managing customer
life cycle processes
and processes in
analysis and planning
that build customer
knowledge.
5. CRM processes
6. CRM information
7. CRM technology
8. CRM metrics
Involving data
and Information
management, customer-facing
applications, and supporting IT infrastructure and architecture.
Involving the changing
of culture, structures
and behaviors to ensure
that staff, partners and
suppliers work together
to deliver what is
promised.
Ensuring that the right
data is collected and
the right information
goes to the right place.
Involving internal
and external
measures of CRM
success and failure.
Customer-Centric Generational
Framework
First
Second
Third
Fourth
Fifth
CRM Vision
None
Initial
productivity
and visibility
Function or
channel
effectiveness
Intracompany
integration
Value-networkenabled
CRM Strategy
None
Company-level
CRM program
Value-based
collaboration for
mutual benefit
Understanding
and focus across
lines of business
Understanding
of wider scope;
collaboration
Isolated projects; More "joined up"
initiated from the thinking, but still
bottom up
silo-oriented
Valued Customer
Experience
Unknown
concept;
designs itself
Unknown
concept;
designs itself
Organizational
Collaboration
Inward focus;
silo
structures
First signs of
customercentricity; silos
Changing culture Customer-centric; Shared customerand incentives;
reorganized by
centricity;
silos
segment
goal alignment
CRM Processes
Inward focus;
silo-oriented
Start optimizing
for efficiency;
silo-oriented
Optimization at
Company-level
silo level for cost optimization for
and value reasons cost and value
CRM Information
Basic and
fragmented
Team-based;
fragmented;
minimal insight
Shared info. at
silo level; insight
developing
Shared info. and
insight across
the company
Shared info. and
insight beyond
the company
CRM Technology
Very
fragmented;
weak
functionality
Fragmented;
limited
functionality
and focus
Strong
functionality
within silos
Strong
functionality
with companylevel integration
Strong
functionality;
integrated beyond
the company
Few metrics;
inward focus
Fragmented and
limited metrics;
operational focus
CRM Metrics
Most organizations today:
Understanding
and focus at
silo level
End-to-end
process
optimization
Focus on silo
Company- and Shared objectives
efficiency; lacks customer-focused
and balanced
customer focus balanced hierarchy metrics; aligned
Which technology trends will dominate and shape the
CRM application environment to 2014?
How will CRM technology platforms, architectures,
delivery methods and applications evolve to embrace
these trends?
How will the CRM application vendor landscape evolve
in response to the new architectures
and technologies?
2011: CIO Business Priorities
Reimagining IT: The 2011 CIO Agenda
1 January 2011, ID: G00210688
2011: CIO Technology Priorities
Reimagining IT: The 2011 CIO Agenda
1 January 2011; ID: G00210688
What's Hot in 2011:
CRM Priorities in Recovery
Sales
Mobility — tablets/
smartphones
SaaS SFA
Customer Service
Marketing
Social CRM/community
Social media for marketing
SaaS CSS
Digital marketing
E-Commerce/Web 2.0/B2B
Web self-service
Loyalty management
Lead management
Knowledge management for
service resolution
Lead management
Social CRM sales
Mobile support
Marketing resource mgmt.
Price optimization
Real-time decisioning
Marketing perf. measurement
Sales performance mgmt.
Feedback management
Predictive analytics
Configure, price, quote
Multichannel service BPM
Inbound marketing
Sales incentive comp.
Web chat for service
Partner, distributed and field
marketing
Forecasting and pipeline
Workforce optimization
Mobile marketing
Sales training
Unified communications
and collaboration
Text mining
Multichannel selling
VOIP and presence
Sales effectiveness content
Web analytics & advert mgmt.
Event-triggered marketing
Integrated marketing mgmt.
Cross-CRM
Master data management
Business process mgmt.
Customer-centric Web
How will CRM technology platforms, architectures,
delivery methods and applications evolve to embrace
these trends?
Top 5 Technology Trends for CRM
Social and
Interaction
BPM and
SOA
Cloud and
SaaS
ECommerce
and Mobile
BI and
Analytics
1. Social and Interaction:
More Than "Spare-Time Activity"
Listen and Learn
Evaluate and Shop
Changing Business and Opinions
Giffgaff is a mobile phone service in the United
Kingdom. It operates as a mobile virtual network operator
using the O2 network and launched on 25 November
2009.
Giffgaff differs from conventional mobile phone operators
in that the users of the service may also participate in
certain aspects of the company's operation, e.g. sales,
customer service and marketing. In return for this activity,
the user receives remuneration.
Customer service
The customer service works by relying on members of the
network to provide answers to questions raised by others, and
the company's small customer service team provides support
for those issues that cannot be dealt with in this way, for
example credit card issues. A forum on the website has an
active community to answer routine issues, and integration
with facebook and twitter was introduced in October 2010.
Participate and Communicate
Play and Interact
Share and Broadcast
Social and Interaction:
Digital Marketing Focus
Digital Advertising
Digital Video
Digital Signage
Digital Branding
In-Game Advertising
Podcasts
Social Monitoring
Ideation Management
Social Campaigns
Social Engineering
Forums
Word of Mouth
Social Event Networking
Reputation Management
Digital Branding
Addressable
Advertising
Social
Marketing
Contextual
Marketing
Transactional
Marketing
Search Marketing
(SEO)
Mobile Marketing
Digital
Recommendation
Engines
Digital Analytics
Event-Triggered/
Inbound
Augmented Reality
Marketing
E-Mail Marketing
Digital Campaigns
E-Commerce
Product Reviews
Gift Registry
Cross-Selling,
Upselling
Loyalty Marketing
2. E-Commerce and Mobile:
iPad, Android, and the rest…
• iPhone/iPad (and others):
applications are easy, simple
and fun.
• B2C and B2B customers are
hungry for these innovations.
• Consumer-driven impact
on enterprises.
By 2015, companies will generate 50% of Web sales
via their social presence and mobile applications.
•
•
•
•
E-commerce continues to grow; B2B and B2C.
Website style, innovation and ease of use drives adoption.
Mobile accelerates the trend.
Do you need an app store?
2. E-Commerce and Mobile:
Context-Aware Computing
By 2015, context will be as influential to mobile consumer services and relationships as
search engines are to the Web.
Organization
s
Providers
Users
Context-Aware
3. Business Intelligence and Analytics:
Data Sources Will Shift
From
Demographic
Data
• Income
• Gender
• Socioeconomic
status
Response
of
Choice
Customer
• Name
• Marital status
Geographic
Country
Region
Address
Climate
Marketing and
Service Mix
Unique
Four
"Ps"
Personal
•
•
•
•
New
Media
Chosen
To
Psychographic
Data
Purchase
Decision
Custom
Segmentation
Developed
Database
Updated
Behavioral
Data
Collected
Those responsible for the "customer" will need to shift from collecting
personal data about individual customers toward collecting more
complete and more relevant data around online persons and
interactions: the analytics to make sense of this data will be a hot area
for many years to come.
•
•
•
•
•
•
•
•
Lifestyle
Personality
Attitude
Belief
Reputation
Actions
Implicit behavior
Explicit behavior
Behavioral
• Brand loyalty
• Product use
• Personalongevity
3. Business Intelligence and Analytics:
Social CRM and MDM and Data
Social Networks
Upstream/Operational
Systems
Marketing Systems
Analysis and Campaign
Management
Channels
Call Center
Trusted External
Data Sources
Branches
Internet
Marketing and Data
Mining Database(s)
MDM Hub
Downstream/Analytical
Business
Applications
Voice of the
Customer
Business
Rules
Engine
An accurate, consistent and
timely view is key to improved
business processes and
decision making
Data Warehouse
and Data Marts
BI and Performance
Management
4. Cloud and SaaS:
The Role of SaaS With Cloud Computing
PaaS
Business Services
V-Cloud
Information Services
Application Services
IaaS
App. Infrastructure Services
System Infrastructure Services
Vendor names are samples; this is not an exhaustive list.
Cloud
Enablers
Mgmt. and Security
SaaS
4. Cloud and SaaS:
Integrating SaaS Into Existing Applications
SaaS Provider A
SaaS Provider B
Customer
Data
Sales Force Automation
Opportunity
Incentive Compensation
Two-Way Data
Synchronization
Sales
Forecast
Customer
Data
Opportunity Info.
Quote Info.
(Web Service)
Enterprise Firewall
Browse and
Search Products
Product
Quoting
(one-way data
integration)
Performance
Management
SaaS
ERP On-Premises
Sales
Configuration
Best-of-Breed On-Premises
Custom Application
Order
Management
Account
Receivables
75% of large-enterprise SaaS deployments will have at least five integration
or interoperable points to on-premises applications.
Customer
Master
Data
5. BPM (Business Process Management)
and SOA: Gartner's Pace Layers
Facebook, Twitter, YouTube, Communities, Portal, etc.
People are talking about us; what do we do?
Sentiment
Analysis Service
iPhone
App
Open Innovation
Submission Box
Droid
App
Product Review
Service
Facebook
Presence
Recommendation
Engine
Systems of Innovation
Customer Service
Processes & Systems
R&D & Product Development
Systems & Processes
Configurator
Systems of Differentiation
Customer
Product
Supplier
Systems of Record
Order
How will the CRM application vendor landscape evolve
in response to the new architectures
and technologies?
Megavendors Continue to Dominate
1999
2011
2002
H
Megasuite
Vendors
Megasuite
Vendors
No-Man's
Land
Breadth
Focused
Vendors
L
L
Depth
H
L
Depth
Ecosystem
H
L
Depth
• Megavendors continue to extend their functional footprints into the "front office"
• End-to-end process integration being their differentiator
• Analytics, performance management, compliance being their lead reasons to buy
H
Sales, Marketing and Customer Service
• E-commerce, Customer Experience Suite and Project Northstar
drive a focus on marketing.
• Acquisition focus: Unica, Coremetrics and SPSS.
• Microsoft Dynamics CRM: sound technology for multiple delivery
models — SaaS, on-premises, partner-hosted; current version 5.0.
• SFA or customer service play first; CRM suite plays second.
• App platform; needs better segmentation messaging as there is
confusion in the installed base regarding most appropriate choice.
• Legacy CRM applications covered by Applications Unlimited.
• Oracle Fusion Applications announced for sales and marketing.
• Siebel CRM — campaign management, loyalty management
and analytics are now the primary revenue drivers.
• SAP CRM 7.0 doubled live end users in the past 18 months.
• First 7.1 innovation pack delivered for flexible upgrades.
• Largely considered as an enterprise apps play, not a stand-alone.
• Momentum gaining in marketing.
And…
Cool Vendors Will Continue to Emerge
2007
• 5square.com*
• Accept Software
• Eloqua
• Enkata
• Exploria*
• Hitwise
• Infonis
• InsideView
• KXEN
• Landslide
• Loyalty Lab
• NearbyNow*
• OpenQ*
• PowerReviews
• RLPTechnologies*
• Swivel*
• TOA Technologies
• Vistaar
• XpertUniverse
*Industry specialists
2008
• Advizor Solutions
• Aggregate Knowledge
• Cvent
• EveryScape
• The Fizzback Group
• GetAbby
• LandSonar
• Lemonade
• Orchestra Networks
• Saepio Technologies
• SalesCentric
• SupportSpace
• TopQuadrant
• Vitrium Systems
• Xmonic
• Ydilo
• Zoomix
2009
2010
Sales
Sales
• Cloud9 Analytics
• Artesian Solutions
• Digby
• Jigsaw
• Makana Solutions
• Prolifiq
• Silent Edge
Marketing and Analytics
Marketing and Analytics
• Thunderhead
• dna13
• Balihoo
• MuseWorx
• NextStage Evolution
• Pontis
• Siri
• Visible Measures
Customer Service
Customer Service
• Transera
• NexJ Systems
• QuickSeach
• Helpstream
• The Selfservice Company
• Reimage
• Synthetix
• Vi-Clone
Case study
PHOTOBOX
Gartner EMEA CRM Excellence Award 2010
PhotoBox won the Gartner EMEA
CRM Excellence Award 2010 in the
customer experience management
category. Founded in 2000,
PhotoBox aimed to help its
customers transition to digital
photography by providing an online
service they could use to create
personalized merchandise using
their own images.
In 2006, PhotoBox merged with its French equivalent, Photoways, to create a European
market leader with 32% market share. Spurred by the merger and other planned
expansions, PhotoBox migrated to a single Web platform that went live in early 2008. The
migration included the launch of a new website.
However, insufficient customer input into the site planning led to poor customer feedback
for the new site. PhotoBox acted quickly to turn the situation around and put the customer
at the center of the business.
PhotoBox now has more than 11 million members.
Case study: Photobox
Key Findings
•It is impossible to provide exceptional customer service without
understanding customer wants and needs.
•Don't underestimate the time and effort needed to set up analytics
applications that can sort, validate and present customer information in an
easy-to-digest format.
•Change management starts with improved employee cross-department
collaboration — in this case, they were facilitated by "huddle meetings."
Case study: Photobox
The Challenge
• Customers felt confused and disoriented by the new website.
• Consumer activity on the new site declined by about 30%, compared with the
prior year.
• In the week post-launch, Web issues drove an unprecedented and unforecast
29% increase in inquiries (about 6,000 more contacts within a month of the
migration).
• The customer service operation became swamped.
• Customers using the new website became frustrated because they couldn't
get through to customer support.
• PhotoBox had difficulty managing customers with multiple accounts. The
company could link the accounts only if the inquiry included the incident
number.
Case study: Photobox
Approach
•PhotoBox developed a customer experience strategy aimed at providing "spotless" customer
experiences, thus reducing costs and increasing sales revenue.
•The initial strategy had four goals and three principles.
Goals:
•Reduce inbound contacts.
•Reduce the number of customer contacts received as a percentage of the number of
dispatched orders.
•Increase customer advocacy and acquisitions via a "refer a friend" incentive.
•Increase sales among existing customers
Principles:
•Engage and listen — Consolidate customer data, make better use of customer surveys, cocreate products with customers, and use additional beta and focus groups to test new ideas.
•Learn and act — Institute a 30-minute post order "cooling off" period to allow customers to
self-help with regards to any required order amends, simplify photo uploads and increase
communications with customers.
•Be accountable — Have one unifying metric for the team and weekly "huddles" to discuss
issues and answers.
Case study: Photobox
Results - PhotoBox's results from 2008 to 2009 included:
• Customer base grew by 44.5%
• Market share increased to 37.4% (from 32%)
• 40% customer growth per year
• Increased overall sales among existing customers by 15% (not including new
customers)
• £240,000 in savings in cost-to-serve in 2009
• Customer care operational efficiencies enabled the company to reallocate two to three
FTEs to other areas of the business.
• Consistent, branded customer experience delivered in nine languages
In 2009, the "refer a friend" program delivered:
• 24% increase in new customers registered via refer a friend
• 45% increase (£260,184) in new referred customers placing their first order
• 15% increase in sales from existing customers
• £260,184 in new orders
• 57,432 new registrations
• 39,534 first orders placed
• 81,092 unique people who referred a friend
Related Gartner Research
•
How to Profit From Social CRM (G00206168)
•
What's 'Hot' in CRM Applications in 2011 (G00211657 )
•
Essential SaaS Overview and 2010 Guide to SaaS Research
(G00200890)
•
Reimagining IT: The 2011 CIO Agenda (G00210688)
•
Case Study: Digital Photo Personal Publisher Improves Its
Reputation With Customer Experience Management (G00212893 )
•
Predicts 2011: CRM Enters a Three-Year Shake-Up (G00208813)
Find them at: www.gartner.com
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Gartner Adriatic /Calisto
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Fax: +385 1 6171 431
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Gartner Adriatic/Calisto
[email protected]
Mobile: +385 98 4416 896
Tel: +385 1 6176 416
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Fax: +359 2 971 14 02
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Mr. Awi Lifshitz
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Mobile: +359 87 7677113
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Mrs. Nataša Glavović
Mobile: +43 664 8851 2035
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Mobile: +385 98 678 972
Mr. Ivan Maglić
Regional Manager
[email protected]
Mobile: +385 98 416 896
Gartner
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