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Bill Band: Why CRM vendors will be turning to the dark side in 2013

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28th Jan 2013
Contributor MyCustomer.com
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MyCustomer.com caught up with Forrester analyst Bill Band to discuss the CRM trends emerging over the next 12 months.

Last year, we witnessed brands increasingly turn to customer experience to give them that much desired competitive edge. And as the term continues to top the latest 'buzz word' list, there seem to be no signs of interest in customer experience management waning. But with so many rushing to rebrand themselves as experience-driven, organisations are failing to achieve what they set out to do most: differentiate themselves from others in the marketplace.  

Speaking to MyCustomer.com, Forrester’s Bill Band reafirms this as being a key theme we'll continue to see in the CRM industry throughout 2013. “This trend of competing in the age of the customer and differentiating on customer experience continues to be a top need for our clients,” he says. “That challenge to interact with customers through new channels, new devices and social channels continues to get more complicated, which we call the world of digital disruption.”

Strategy

And it’s not just businesses deploying CRM solutions that are aligning themselves with customer experience but, as MyCustomer.com previously reported, also the CRM vendors themselves. “From a tech point of view, this is the long-term dark side of customer experience right now,” says Band.

“All the vendors are rushing to orient themselves to that theme – SAP CRM already did that two years ago followed by Oracle, which last year jumped onto the bandwagon and re-branded all their solutions under the customer experience theme. There was this thrust towards social, which continues to be the core for Salesforce.com but we see the other vendors moving to capitalise on the customer experience trend.”

And the Forrester analyst isn’t the only one in the industry to have reported on this pattern. Social CRM expert Paul Greenberg recently wrote about this trend of CRM, EFM and customer service technology vendors now claiming to be focused on customer experience and called them into account.

He asked: “What are the things that six or eight weeks ago or a year ago when they were social CRM vendors, EFM companies, that morphed, changed them from a CRM caterpillar to customer experience butterfly?  What was it, besides jumping on a trend that made them transform themselves? Even more importantly, what have they done that makes what I see they offer as different than it was when they were something else?”

Customer experience alignment isn’t the only trend Band is witnessing in the vendor space this year. “We’re seeing consolidation in the greater CRM tech space as a focus on the CRM tech ecosystem, which means that there's a growing recognition that clients need to manage a greater range of customer facing technologies than traditionally people have thought about,” he explains.

“So it's not just marketing, sales and service but ecommerce and order management and contract management. That’s affecting the vendor side because you see continued consolidation as companies like Oracle acquire ecommerce vendors and social CRM vendors; Salesforce.com acquired Buddy Media and Radian6; and we’re seeing some BPM-centric solutions like Pegasystems and KANA making acquisitions to beef up their capabilities.

“So the bigger vendors are responding to this end-to-end customer experience need of their clients by adding more and more solutions to their portfolio. And that makes it complicated from a buyer point of view as they're no longer clear on who owns what anymore and how all these solutions connect together.”

Technology

Turning to technology, Band outlines the three core tech trends likely to emerge in 2013 as being social, mobile and analytics/big data. He explains that Forrester’s interpretation of social is more focused on social customer engagement rather than social CRM, in the sense that it has now become mainstream with most clients now well into the experimental stage of engaging customers through social channels.

“On the mobile side of things, mobile has become red hot in terms of CRM,” he adds. “Most of my clients are very interested in leveraging mobile tech beyond smartphones to tablets and a lot of those questions revolve around the mobile offering, such as vendor support for iPad and so on.”

Finally, in terms of analytics and Big Data, Band highlights SAP as one vendor doing interesting things in the CRM space: “They’re repositioning a lot of their CRM offer going forward to leverage HANA’s Big Data capabilities. They also acquired and have launched social solutions such as SAP 360 Customer, so I’m really watching what they do next.

“By most of the analyst accounts, SAP has the biggest market share in the CRM space right now. A lot of people don't know that but they’re bigger than Salesforce.com and Oracle. I read some reports recently from other analysts in the market place and cross checked them with IDC and others, which confirmed that SAP is the biggest and Oracle's share has been declining less number of years; Salesforce.com has been growing very rapidly.”

People

But Band is keen to explain that technology is just one side of CRM. In a recent blogpost outlining his top CRM trends for 2013, he reiterated that if brands want to gain that competitive advantage they must effectively manage the four key areas of CRM – strategy, process, people and technology.

“There are a lot of things going on in tech right now but you really can't solve this customer experience problem without dealing with the people side of things. The tech vendor claims are certainly an enabler for customer experience but without the right kind of insights and strategies for what kind of experience a company wants to deliver, and some idea about how they're going to impact and change the the culture, companies aren't going to get there with technology alone.”

Band predicts that over the next 12 months, customer experience disciplines will cut costs and boost profits as companies begin to “systematically hunt down” and eliminate customer experience problems. But in order to do so, the analayst advises that six disciplines must be considered: customer understanding, measurement, governance, strategy, design and culture.

He also says we'll see VOC programs drive action and demonstrate results with successful programs driving customer retention and growth metrics.

Processes

In terms of processes, Band advises that untamed processes will get more attention as organisations increasingly move from isolated BPM projects towards cross-functional transformation initiatives to support the invisible and untamed customer management processes that are critical to delivering an exceptional customer experience.

Organisations will also increasingly adopt agile project management and software development methodologies to help them become more nimble and implement more flexible business management approaches.

So, with this in mind, what recommendations does Band give to busineses looking to implement these trends? “We continue to reinforce that you first have to start with the right CRM strategy and that means doing some good solid work around understanding what kind of experience you want to deliver to the customer and what business capabilities you need to deliver that experience,” he concludes.

“Once you've got that clear, only then can you move on to examining the technology landscape and see what different vendors fit into plugging the hole that you have.”

Bill Band is a VP and principal analyst at Forrester, serving application development and delivery professionals. 

Replies (1)

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Hideki
By hideki hashimura
29th Jan 2013 09:21

-- Hideki Erigh Hashimura CMO - REDK Software Engineering Twitter: @hh_crmetrics

Quoting: “By most of the analyst accounts, SAP has the biggest market share in the CRM space right now. A lot of people don't know that but they’re bigger than Salesforce.com and Oracle. I read some reports recently from other analysts in the market place and cross checked them with IDC and others, which confirmed that SAP is the biggest and Oracle's share has been declining less number of years; Salesforce.com has been growing very rapidly.” 
 

Question: I suppose that is at an enterprise level, any insight on mid-market, I'm still to come accross a succesful SAP implementation that fulfills the 3 trends you mention on the article, most implementations I've seen are becoming outdated.

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