TRENDS AND PREDICTIONS IN CRM
By Liz Roche

I’m very excited about three new ideas that have reached "trend" status this year: sell-side commerce (though e-commerce is back in style, I’m talking about multi-channel commerce), customer data integration and consent management. These trends are developed by looking at a number of different things including customer expectations and demands, enterprise business strategy, technology market direction, CRM vendor product roadmaps and goals. Understanding these CRM trends will enable your organization to "future proof" itself relative to changes in the CRM market.

TREND: Overall CRM. During 2005-06, CRM business strategy in which the customer is the design point becomes mainstreamed as "customer lifecycle management" (CLCM) essentially balancing the duality between the internal view (profit realized) and the external view (value delivered). What does this mean to you? The ability to solidify your customer segmentation strategy, as it will drive your CRM implementation. Not all customers will be treated the same so each customer’s experience must be optimized. "Optimized" does not necessarily mean "maximized".

TREND: CRM Technology. During 2005-06, balanced CRM technology environments will become de facto standard best-practice CRM technology designs, with organizations finally augmenting operational CRM investments with analytics and collaboration. What does this mean to you? Build business cases for CRM analytics, as CRM vendors will increasingly augment their out-of-the-box CRM functionality with analytics--which has been sorely missing from 50-60 percent of all commercial CRM applications.

TREND: CRM Applications. During 2005-06, basic horizontal CRM functionality such as sales, service and marketing, delivered by ERP vendors, will reach functional parity with that delivered by CRM specialists, and will be differentiated based on technology ecosystem completeness, vertical process depth and fit with enterprise architecture strategies. What does this means to you? If you have an ERP application implemented in your environment such as SAP, Oracle etc., you should definitely shortlist their CRM modules.

TREND:CRM Patterns. During 2005-06, organizations will begin creating relationship treatments by describing and encapsulating customer profiles, behaviors and preferences into reusable, value-based customer relationship patterns. These patterns will contain scenario-specific customer lifecycle treatments, the associated business processes and the enabling technology to instrument the relationship. What does this mean to you? Again, segmentation is everything. Begin to think about value metrics beyond pure profitability and plan for product and brand management to be augmented with customer segment management.

TREND: Marketing. During 2005-06, enterprise marketing management (EMM) coalesces around three domains: marketing resource management (MRM), campaign management and lead management. Concomitantly, cross-channel integration enables customer marketing beyond the engage stage, and throughout every stage of the Engage/Transact/Fulfill/Service customer lifecycle. Through 2006-07, the marketing function will be repositioned as the "air traffic controller" of customer engagement interactions, optimizing inbound and outbound marketing opportunities. By 2008, marketing organizations will evolve from channel to segment specific, to manage always-on marketing campaigns as customer-specific customer dialogs. What does this mean to you? As you select marketing technology, look beyond pure campaign management and include MRM and lead management.

TREND: Customer Data Integration. During 2005-2006, enterprises will experience "dueling customer master files" as proliferating in-production business applications create and consume customer information such as CRM and ERP. Through 2006, innovative organizations will adopt Customer Data Integration (CDI) as a strategic imperative to resolve data primacy and accuracy issues related to the customer "system of record." What does this mean to you? Assess your data quality issues around customer master data now. While perhaps not requiring technology intervention, this assessment will give you a good foundation as you approach the segmentation and profiling exercises suggested in the above trends.

TREND:Consent Management. During 2005-06, the proliferation of legislated customer privacy and contact requirements, such as Do Not Call, will stress organizations’ ability to operationalize customer privacy preferences across all business units. Through 2007, organizations will institutionalize customer preference management and coalesce CRM preferences, customer privacy and information security disciplines. What does this mean to you? Think beyond opt-in/opt-out and begin to manage all consent-related business processes together.

TREND: E-commerce. During 2005-06, outdated dot.com-era e-commerce engines will be overhauled and integrated into enterprise CRM initiatives to enable a consistent multi-channel customer experience, fully exploitable integrated channel systems, lower interaction costs and increased channel productivity and interoperateability. Through 2007, e-commerce product and brand managers will become organizationally integrated into traditional channel management structures and participate in shared revenue targets and compensation strategies. What does this mean to you? Embark on a "dot.com makeover" that integrates the e-channel with traditional selling and marketing channels.

TREND: Hybrid Channels. Despite traditional selling channels such as direct sales, telesales and VARss driving more than 95 percent of revenue in almost every industry, during 2005-06 there will be a consistent increase in the amount of revenue the e-channel drives, though traditional channels will remain the focus of CRM investments. Through 2007, combined (i.e., hybrid) go-to-market systems, not the e-channel in isolation, will be the dominant driver of growth, relationship quality, self-service and selling effectiveness. What does this mean to you? See above - it’s not just "online" vs. "offline" - think about "all-line" commerce.

Liz Roche, a META Group analyst, has 15 years of IT experience managing strategic enterprise technology and business programs, and has worked in the field of CRM for the past 10 years.