I’ve just published a new podcast for Business Process & Applications professionals:  “The Top Six Ways to Get Value From Your CRM Deployment”.

In my podcast, I highlight the top six ways that organizations can get extra value from their CRM deployments, and spotlight four pitfalls and how to avoid them.

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Although millions of people remain out of work, the economy has clearly thawed and organizations are returning to investing customer-facing business process with a vengeance. Client inquiries and advisory work on CRM topics is going through the roof here at Forrester. Our most recent forecast for global IT purchases of business software anticipates a healthy 9.7% increase in 2010, after brutal decline of 8.0% in 2009. And, Social CRM is all the rage in the blogosphere.

If you are watching the Olympics, you know that the figure skaters spend years practicing to hone their fundamental skills before trying advanced patterns. And, they never stop practicing their elementary figures. My latest report on the key trends driving CRM technology adoption spotlights flawless execution will continue to separate successful CRM initiatives from losers.

We surveyed 58 business and IT professionals to identify the best practices for getting more value from CRM technology projects. These five fundamentals were the key to success before the economic meltdown -- and they remain so today:

A hot topic of debate among customer management and business process thought leaders right now is ascertaining the business value of "social CRM." Social technologies are proliferating rapidly and three-quarters of US online adults now use social technologies in some form. Cutting through all the hype, my clients are challenged to make hard decisions about the level of investment they should make in Social Computing technologies like blogs, wikis, forums, customer feedback tools, social networking sites, and customer community platforms. And, they want to know how these new capabilities should be, and can be, integrated with their transactional CRM systems.

We have just published a summary of our most research and define the seven steps to success for strategizing, selecting, and deploying social CRM solutions:

As 2009 draws to a close, what are the key trends that customer management professionals need to pay attention to as they finalize their plans for next year?

Trend 1: Companies Return To Investing In Their Most Important Asset—Customers

Even in a recession, the fundamental business needs that drive the need for effective and efficient customer-facing business processes have not changed. Beginning in mid-2009, I have seen a strong up-tick in investment dollars being released by organizations intent on improving their customer management capabilities to capitalize on the economic up-turn.

What are their key priorities? My most recent research shows that both BtoB and BtoC enterprises spotlight improved customer loyalty as their top goal. But, BtoB companies are also intent on capturing new customers, while BtoC companies obsess about improving the customer experience.

Trend 2: Social CRM Hype Reaches A Crescendo

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.

Despite the current economic downturn, the need for organizations to create differentiation through unique customer experiences, strive for deeper insight into customer needs and behaviors, and serve customers cost-effectively has not disappeared. The need for “CRM” is not going away.

However, when I surveyed 133 organizations, using at least one of 24 different CRM technology solutions, I found that the risk of a spectacular project failure is still high. These companies reported over 200 problems, comprised of 27 risk areas in four categories. Thirty-three percent of the problems were related to technology; 27% spotlighted inadequate business processes; 22% were related to “people” challenges; and 18% comprised CRM strategy and deployment issues.

Consider these statements as they portray your organization. A “Yes” or “No” answer will spotlight the hazards before they sink your program.

Technology

1. “The CRM solution we have chosen is mature and well-proven in use at other organizations with requirements similar to our company.”

2. “The CRM solution we have chosen is flexible and can be easily adapted to meet unanticipated requirements in the future.”

3. “The CRM solution we have chosen does not have any major functionality deficiency gaps relative to our requirements.’

Major CRM applications vendors will be making an all-out effort in 2009 to persuade customers to move onto the latest release of their applications. Vendors have invested heavily during the past 18 months to improve their UIs, and have re-architected their solutions to make it easier to migrate to new versions. In the coming year, they will be pressing hard for a payback on this investment. Expect that you will get a lot of calls from software salesman during the next six months.

Oracle is pushing aggressively to get its customers to up-grade to Oracle CRM 8.1. SAP is in the midst of an determined campaign to get its customers to accept its much improved SAP CRM 2007 product and will soon be introducing SAP CRM 7. Microsoft has made great strides with Microsoft CRM 4.0 and will release CRM 5.0 this year. And, the CRM software-as-a-services (SaaS) players (salesforce.com, Oracle CRM On Demand, and RightNow) continue to tout their quarterly up-grades.

But in a down economy, businesses are tightening IT expenditures leaving CRM professionals in a real quandary. They wonder: Do the benefits of upgrading CRM apps outweigh the costs? To answer this question, my colleague Pete Marston has defined a process for evaluating the CRM up-grade decision. You must evaluate carefully the benefits that may accrue from up-grading:

In light of the recent sudden and dramatic deterioration of the economic climate, what are the key trends driving customer management strategies and the adoption of CRM technologies now? Locking in customer loyalty through deeper engagement and differentiated experiences will continue as critical priorities, but six key trends will drive CRM decision-making in 2009.

Trend 1: The Emergence Of The Social Consumer
Social technology adoption has increased tremendously during the past 12 months. Three in four US online adults now use social tools to connect with each other compared with 56% in 2007. This new trend – which goes by a number of names - CRM 2.0, Social CRM, and Collaborative CRM - is forcing CRM professionals to look for innovative ways to engage with these new "social consumers." In 2009, CRM leaders will be looking to enrich the customer experience through community-based interactions, and architecting solutions that are flexible and foster strong intra-organization and customer collaboration.

CRM professionals constantly tell me that poor customer data integration and management is one of the biggest barriers to getting value from their CRM initiatives. In a recent Forrester survey of over 1,000 North American and European decision-makers, 44% said that data management was a “critical” or “important” priority for 2008. A constant diet of poor quality data is a sure way starve your CRM applications and dim your customer intelligence.

In recent research note, my colleague at Forrester, Ray Wang, points out the right approach to customer data management is elusive. Over the past two decades, CRM professionals have explored a variety of approaches to managing customer master data across the enterprise.

Initial efforts focused on the development of data warehouses that would deliver "real-time" access to customer data. However, data warehouses failed on the "real-time" access, and end users compensated by deploying myriad purpose-built data marts.

Another theory was that CRM applications themselves would provide companies with a 360-degree view of the customer. Instead, multiple instances, disparate enterprise ERP systems, and poor data integration left enterprises with at best a 90-degree view and at worst "yet another view."

Most executives say that customer experience is very important to their business, but very few really understand how it affects their bottom lines. With the current recession on everyone’s mind, you may be tempted to abandon your customer experience efforts because you are not sure your company will be rewarded with stronger customer loyalty.

To better understand the link between customer experience and customer loyalty, my colleague at Forrester, Bruce Temkin, used feedback from nearly 5,000 consumers and examined the correlation between how they rated a firm's customer experience and two measures of loyalty: 1) their willingness to buy another product from the firm, and 2) their reluctance to switch business away from the firm. His analysis covered 112 firms across nine industries. Here's what he found:

• A firm's Customer Experience Index correlates to customer loyalty. Although a company's Customer Experience Index (CxPi) has more of a connection with consumers' repurchase plans than it does to their reluctance to switch providers, there's at least a medium degree of correlation in both of these loyalty measures across all of the industries.