To make savvy investment decisions, CRM professionals need to know which customer management technology solutions have the strongest track record for delivering results. In Forrester's recent research, we found that while "Social CRM" solutions have captured the imagination of decision-makers at many organizations, it is the tried-and-true technologies that offer the most certain return on investment.
Forrester, in partnership with CustomerThink, surveyed 286 CRM professionals to understand the adoption patterns for 19 types of customer management technologies, the most significant motives for investing in these solutions, and most importantly, the business value of each technology. CRM professionals can use this information to make smart bets without taking unnecessary risk.
While "Social CRM" solutions have captured the imagination of decision-makers at many organizations, it is the tried-and-true technologies that offer the most certain return on investment.
Two-thirds of survey respondents were primarily business executives and managers, and 40 percent came from larger-sized organizations (more than 1,000 employees). Respondents represent a broad cross-section of industries, with 65 percent selling only, or primarily, to other businesses. About one-half self-identify themselves as "technology leaders" who adopt technologies that have proven effective in other industries, and/or frequently adopt new emerging technologies. The other half, consider themselves to be "technology followers."
Our detailed findings have been published in my recent research report: TechRadar™ For BP&A Professionals: The Extended CRM Application Ecosystem, Q3 2009 [1].
The Extended CRM Applications Ecosystem Is Complex
What types of solutions comprise the CRM extended application ecosystem? As you can see in this diagram, we define these as the key technologies that support the business processes of: targeting, acquiring, retaining, understanding, and collaborating with customers.
The Extended CRM Application Ecosystem
The CRM ecosystem is comprised of solutions in five core areas:
Customer targeting. This category comprises applications that support defining and developing new products/services, prioritizing the most appropriate target markets, and communicating offers to the best audiences for products/services. Three types of applications qualify for this class: product life-cycle management (PLM), enterprise marketing management (EMM), and eCommerce platforms.
Customer acquisition. This group comprises applications that support contacting customers to solicit interest in product/services (selling), configuring solutions, setting prices, quoting, contracting, and taking customer orders. The category includes six types of apps: sales force automation (SFA); partner relationship management (PRM); configure, price, and quote (CPQ); revenue and pricing management (RPM); order management, and contract life-cycle management (CLM).
Customer retention. This category includes applications that support customers "after the sale" including: scheduling installation and repairs, billing, diagnosing customer problems, and routing customer queries to answer questions and resolve problems. There are five types of applications in this group: customer service and support (CSS); field service management (FSM); contact center infrastructure; IVR/speech portals; and electronic bill presentment and payment (EBPP).
Customer understanding. This category includes applications that support collecting feedback from customers, analyzing and reporting on customer information, and maintaining up-to-date and accurate data about customers and their interactions with a company. We evaluated three types: enterprise feedback management (EFM); customer business intelligence (CBI); and customer data management (CDM).
Customer collaboration. This category includes technologies that support working collaboratively with customers and enabling customers to interact with and support each other. Two types of apps are included in this category: customer communities platforms (CCP) and customer forums (CF).
Sales, Order And Service Solutions Offer The Most Certain Benefits
What is the business value, "adjusted for uncertainty," for each of these 19 technologies? Forrester uses a number of factors to define a technology's business value-add, including: criticality to business operations, market reputation, and evidence and feedback from implementations. Taking into account all three factors: criticality, reputation, and implementation risk—you can pick the winning technologies and avoid chancy bets.
We found that:
- Selling, ordering, and servicing solutions deliver the most certain business value. Solutions that are viewed as highly critical to success, have a good market reputation among buyers, and are seen as relatively easy to implement include: eCommerce, SFA, order management, CSS, and call center infrastructure. Therefore, we found that this cluster of solutions delivers the most certain business value. What is particularly interesting is how critical these solutions are perceived to be compared to other categories (see chart below).
- Marketing and partner channel management solutions offer less assured value. Two long-standing categories of customer management applications—EMM, and PRM—are perceived to be only moderately difficult to implement. However, neither solution category is viewed as critical for business success by the respondents that we surveyed. And, their market reputation is mixed. This was true for both B2B and B2C companies. Therefore, both must be considered to have only moderate business value, adjusted for uncertainty.
- Customer insight and data management solutions are critical, but somewhat risky. CBI is considered essential for success by the companies that we surveyed, and this category has a good market reputation. However, it is also considered to difficult to implement. Similarly, CDM is viewed as critical to success, but market reputation and ease of implementation are question marks. Business value-add discounted for uncertainty is medium for these solutions. They are both very important, but deploying these solutions can be a challenge.
- Solutions that require complex integration have the most uncertainty. Three solutions categories—CPQ, field service, and CLM—are viewed as both moderately important and difficult to implement. Therefore, they offer relatively low business-value add. Another, closely related solution, pricing and revenue management is also an uncertain bet for delivering strong business value because it is hard to install within a company.
- The business value of social solutions is yet to be proven. Interest in "Social CRM" solutions is growing rapidly. But, mainstream companies are watching for evidence of success by the early adopters. Although enterprise feedback solutions, customer community platforms, and customer forums are viewed positively by the respondents in our survey, none of these three are considered "critical" to success. Therefore at this time, business value discounted for uncertainty is low.
Application Importance to Business Operations
In summary, community platforms, customer forums, and enterprise feedback management solutions—all of which enable new ways to engage and connect more closely with customers—are attracting the attention of organizations of all types. However, selling, order-taking, and customer service remain the solutions that deliver the most certain business value-add. Customer data management and business intelligence solutions are viewed as critical. They are becoming much more robust, supporting deeper customer insights and better decision-making.
Reference: TechRadar™ For BP&A Professionals: The Extended CRM Application Ecosystem, Q3 2009 [1]