What Will Happen to CRM Over the Next Five Years?

By Geoffrey James

Yes, we know. In terms of sales, five years in the future might as well be five centuries. While you might be focused on making your quarterly and yearly numbers, your CRM system is probably going to be in place for at least half a decade, maybe longer, according to ISM, a consulting and analyst firm that specializes in helping companies select and implement CRM technologies. ISM recently identified eight key trends in CRM. Here’s a summary.

1. More CRM consolidation and mergers. The recent acquisition of PeopleSoft by Oracle will encourage consolidation among CRM vendors. Medium-size CRM vendors will find acquisitions and the new technology and customers that they bring necessary to survive in an increasingly competitive CRM market. Not everyone will become part of a megavendor. Small CRM vendors in well-defined niche markets probably will survive.

2. More CRM focus on SMBs. Larger companies, many of which already have CRM systems, are scaling back their IT purchases. By contrast, companies with less than $500 million in annual revenue or 20 to 150 employees, known as the SMB market, are more willing to spend money on CRM. CRM vendors are actively building applications that target these companies with easy-to-implement solutions that offer a quick ROI.

3. More CRM for vertical industries. Customizing a CRM system is a lot easier if you already have a running example of how it should look. CRM vendors thus are focusing on vertical industry niches, providing CRM customizations that are preconfigured to serve the needs of customers in an individual industry. For example, Salesnet offers three vertical versions of its hosted-CRM application – telecommunications, commercial lending and advertising.

4. More CRM analytical tools. Analytical tools predict the monetary value and profitability of a particular customer, profile customers based on their behavior, predict customer purchases based on past purchase information and other data, and help determine cross-selling opportunities. Marketers are just beginning to figure out how to use analytics programs to tailor marketing and sales messages.

5. More wireless CRM offerings. Wireless CRM allows business decisions and sales research to be conducted in real time. Add some fancy applications such as the real-time analytics discussed in trend #4 and you’re talking about putting a lot of power in the hands of your road warriors. Mobile solutions are going to be particularly common in financial services, manufacturing and professional services – industries where sales reps need access to real-time information while they’re in the field.

6. More hosted CRM offerings. CRM software vendors increasingly are offering solutions across the Web, bypassing the traditional problems and high prices associated with own-your-own software and hardware. While companies used to be hesitant to let outside companies run their important applications, in the past few years both large and small companies have become more comfortable with hosted applications.

7. More customer survey management tools. CRM vendors now provide the ability to access or create customer survey templates and analyze customer survey responses. The ability to manage customer or prospect survey projects and receive feedback on company services or products can lead to a better understanding of the needs and desires of customers and prospects.

8. More compensation management tools. Some CRM vendors provide the ability to access and track information about employee compensation. In some of these applications, sales managers can view and change the compensation information of each sales rep, such as hourly rates, salary, overtime, commission, benefits, work locations, sick days and vacation days.