September 11, 2008
By Lauren McKay,

The CRM Social Hour

WASHINGTON -- As the annual Gartner CRM Summit came to a close at the Gaylord National Hotel here this week, a few things seemed fairly obvious in terms of trends and overall conference themes. For one thing, the focus remains on the customer experience. But the industry seems to be have a particular kind of customer in mind: The all-powerful, connected, and social consumer is becoming top of mind for CRM vendors and businesses alike. It was hard to enter a conference session that didn't address to some degree the evolving idea of social CRM or social networking as a business process.

To drive this point home, Sharon Mertz, research director of CRM for Gartner's software market research team, presented the results of a survey taken among attendees. When asked the three most significant reasons for adoption of CRM, attendees responded with the following primary rationales:

the customer experience,
customer retention, and
revenue-driven investment decisions.

Survey results also showed that CRM decision-making is now coming much more frequently from the line-of-business level than it had in the past. Only 20 percent of respondents said that their technology departments were driving CRM decisions, reflecting what Mertz called a more collaborative approach to CRM, in which business users are shaping the requirements.

Gartner also asked attendees about the kind of CRM software they're buying. The majority -- 58 percent -- answered best-of-breed solutions, while 19 percent -- a growing number -- said outsourced or software-as-a-service (SaaS) products. Lastly, the survey asked respondents to gauge any changes in their CRM budgets, in order to measure any impact from the state of the economy. Surprisingly, 90 percent said that their budgets for CRM have either remained the same or increased over the past year. "This is great news for CRM," Mertz says.

Gartner Research Director Scott Nelson -- who on Tuesday presented on the social trends impacting the CRM industry -- says that he had many attendees approach him with similar views after his session, "[They say,] 'We've been looking for a way to change the focus of our CRM strategy.... We've attacked key points, but as we're moving into a generational view of CRM, we want to expand our thinking. What should we be anticipating?' " Nelson shares. "Social trends seemed to strike a nerve." He adds that much of the activity isn't specifically technology-related, but will one day feed into the technological situations. Citing social networking as an example, Nelson says that it's crucial that business management begin to grasp the value of social networking -- it's not going away anytime soon.

Gene Alvarez, Gartner research vice president, presented specifically on the implications of social networking for the future of business. "Social software is changing the way things are happening," he told attendees. "Getting all this to work together will change the way we do our vision and strategy. Those that get it right will be the next new leaders." Alvarez pointed out that today's consumer is "me"-centric. They want -- and now expect -- companies to cater to the "all about me" approach. As and example, Alvarez pointed to Affinia Hotels, which allows guests to choose specific details about their rooms -- from the type of pillow they'd like to rest on to the type of snack they'd like waiting for them. Not only does this personalize the customer experience, he said, but it provides excellent upsell opportunities.

"The Web is now the primary face of the organization," Alvarez points out. "People are looking at you and you don't even know it. They are evaluating you on their first experience." This makes it increasingly important to focus on the customer experience every time, everywhere. Ed Thompson, a Gartner vice president and distinguished analyst, wrapped up the keynote, reminding attendess of his seven categories to improve the customer experience. It's not too late, he reminded the crowd, to begin using the customer experience as a differentiator for your business.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

Free

for qualified subscribers

Subscribe Now Current Issue Past Issues

E-Commerce Can Save Your Business -- or Sink It

17 Sep 2009

Gartner CRM Summit '09, Day 2: Analyst Gene Alvarez emphasizes the strategic importance of expanding e-commerce with the power of Web 2.0 technologies.

How to Survive the Customer-Specific Web

17 Sep 2009

Gartner CRM Summit '09, Day 1: CRM analyst Michael Maoz says not only are consumers losing trust in corporations, but they are managing more aspects of the relationship.

CRM Market Grows for Fifth Straight Year

23 Jul 2009

Software-as-a-service, analytics, and customer retention technologies help lead the way, according to a new Gartner report — and SAP retains the market-share crown.

Marketers Pounce on Social Networking, But Users Shy Away

26 Nov 2008

An IDC survey indicates that few users pay attention to advertising on social networking sites; more than half say they find ads there "annoying."

No Leaders Yet in Gartner's Social Software Magic Quadrant

24 Nov 2008

Magic Quadrant for Social Software '08: New report shows an immature and clustered marketplace for collaborative and social tools.

Virtual Spenders

01 Nov 2008

Personas, avatars, and social communities will drive spending in 10 years.

Gather the Tools for Customer Engagement

01 Nov 2008

Social media is changing the face of CRM. Are you prepared?