> SALES PITCH
Alys Woodward, research manager, IDC Ed Thompson, VP, Gartner
ment capability. According to Ed Thompson, social media CRM spend is set to explode over the next few years and, with current growth rates of between 50 to 100pc per annum, spending in this area will hit US$1bn worldwide in 2011. “The USA and Canada are leading the field here, with the UK and the rest of Europe following close behind,” he says. “It’s still a relatively experimental area, but our research indicates that most of the spend is coming from the marketing function who are using it for things such as campaign monitoring and event and ideas management.”
Another important trend affecting CRM is mobile web access. While this won’t necessarily sell more CRM packages, it will enable companies to get more benefits from their existing sys- tems.
The notion of remote sales staff having real-time access to
CRM-related data while out on the road as opposed to down- loading information on weekly visits to the office can only be beneficial in driving sales and ensuring customer satisfaction, while having access to the latest pricing or component availabil- ity information might just be the difference between winning and losing a sale. However, the main challenge here is getting personnel on board in the first place, according to Woodward, and getting them to input their information at the earliest possible opportunity. “As is the case with all systems, adoption is vital and it is important for top management to sell the benefits of the system to its users if they want to maximise its effectiveness,” she explains.
CRM in the cloud
CRM was arguably the first business application to run on the cloud, although way back in the salad days of the mid to late Noughties it was commonly referred to as ‘Software-as-a-Service’ (SaaS). Therefore, much of the current hype related to cloud com- puting is old hat to a lot of CRM users as they have actually been operating in the cloud for some time. As with other software systems though, the benefits of running CRM in the cloud are substantial. Chief among these is the rela- tively low front-end investment required to get started as there is no need to invest in costly IT hardware and software tools, some-
58 Marketing Age Volume 4 Issue 4 2010
thing that makes it particularly appealing for SMEs and start-ups. All a company needs to do is sign up to an online provider and
off they go. It also shifts the balance of power somewhat away from the IT department back to the ‘business’ end of the organi- sation, which will undoubtedly appeal to some. However, when the issue of integrating it with other functions rears its head, that balance will shift back again. And, while there is minimal upfront IT investment required, the cost is ongoing, so choosing the right service provider and vendor stack is vital. Cloud-based CRM systems accounted for approximately a quarter of the total CRM market worldwide last year, according to Gartner, a figure which is set to reach 50pc by 2020 as sales growth continues to outstrip ‘traditional’ systems. “One of the key considerations for companies looking to invest in cloud-based CRM is how the total cost measures against that of non-cloud solutions,” Thompson says. “This obviously varies depending on the size of the organisation in question, but our research indicates that, for companies of less than 50 employees, it can take up to 10 years before ongoing spend in cloud-based systems matches that of the upfront IT investment required for non-cloud systems. This timescale is reduced to seven years for companies with more than 50 employees.” However, he also points out there are also privacy issues that must be considered before investing in cloud-based solutions, with government departmental right of access to data varying sig- nificantly between jurisdictions.
Strategic role for CRM CRM will continue to play a pivotal role in successful customer and sales management strategies for the future. However, like most other systems, the full benefits of CRM will only be realised if it truly reflects the needs of the organisation and its customer base and is adopted by all relevant stakeholders and users from the outset.
By building closer links with both customers and suppliers, it can help to increase sales, reduce waste and, therefore, protect margins. It can also play a key role in managing, measuring and monitoring activity in that brave new world that is the social web, a phenomenon that is set to completely transform the client-cus- tomer relationship forever.
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