Technology has made it a lot easier for companies to communicate with their clients and it’s also given them a lot more avenues for doing so. All of this means that the marketing discipline involving talking to clients, customer relationship management (CRM), has had to evolve at a rapid pace.
In fact, research company Gartner reckons that there’s even a space for CRM in emerging technology fields such as the Internet of Things. Loosely defined, the Internet of Things refers to the growing number of everyday objects that are now being shipped with sensors and are capable of connecting to the internet.
According to Gartner, as cars, buildings, bodies and chairs are connected to the internet and as the price of sensors and communications drops down toward US$1, the automotive, construction, healthcare and hospitality industries, among many others, will be transformed. At the forefront of this shift will be sales, marketing and customer service departments in promoting, selling and supporting the new services.
It actually reckons that the Internet of Things will become so important that it’ll form the fifth arm of the nexus of forces, which currently includes social, mobile, big data and the cloud.
Each of the existing forces are at different stages in their life cycle:
Social: In the sales, marketing and customer service departments, marketing is being forced to monitor, communicate and engage in social commerce business with several hundred public social networks. Customer service has to respond to tweets and Facebook and LinkedIn discussions, as new service channels and sales are now using social media as a source of new leads and intelligence on prospects.
Mobile: Smartphones, tablets and mobile apps are forcing change at an even faster rate than social networks. Connections to the internet via smartphones will exceed PC users by the end of 2014 and smartphones have already overtaken PCs as the most common tool for accessing social networks in most countries. Bring your own device (BYOD) policies are springing up around the globe as IT departments are forced to support a proliferation of devices. It is tablets, however, that are causing the most disruption as sales departments and board directors purchase them and then demand support.
Big Data: The marketing department has been most impacted by the explosion in customer information available to businesses during the past five years. Predictive analytic models for churn analysis, product and service recommendations direct to the customer, and/or sales prompts for salespeople are all becoming more sophisticated. Thus, the data is available and the tools are emerging, but the problem is the lack of skills and resources to use the tools.
Cloud: This driver is a decade old now in CRM, having started back in the late 1990s with the rise of application service providers. In many ways, the low-hanging fruit for cloud adoption has already been picked. The remaining areas of CRM application functionality will be ever harder to adopt in a cloud delivery model, so the switch to cloud will steadily slow.
While the potential for new technologies in CRM is exciting Gartner expects market growth in the space to stay moderate in 2014, following three strong years of investment. CRM software revenue is forecast to reach US$23.9-billion in 2014, with cloud revenue accounting for 49%. SaaS — or cloud-based — CRM deployments currently represent more than 40% of all CRM deployments, and looks set to reach 50% during 2015.
“CRM will be at the heart of digital initiatives in coming years”, says Joanne Correia, research vice president at Gartner. “This is one technology area that will definitely get funding as digital business is crucial to remaining competitive.”
“Hot areas for CRM investment include mobility, social media and technologies, web analytics and e-commerce,” she adds, pointing out that “these drivers are spurring a critical need for more traditional operational CRM as CRM continues to top software investment priorities. This further validates businesses’ focus on enhancing customer experience and consistent investment in CRM software, especially in CSS, marketing and sales software”.