Forrester Predicts 2004 CRM Trends

By Heather Baldwin

To find out about the major CRM trends for 2004 check out a new report from Forrester Research called “IT Trends 2004: Customer Relationship Management.” The report, by Forrester vice president, research director Erin Kinikin and director John Ragsdale, is one in a series of 50 new reports from Forrester that reveal this year’s top IT trends and technology predictions across a number of industries.

Most significantly, the report states that while attracting, retaining and servicing customers continues to be a major priority for companies today, organizations won’t be laying out big dollars to accomplish it. Instead, “most companies will focus on improving customer experience and better leveraging existing tools and technology with select CRM purchases where they can have the biggest strategic impact,” say the authors. The numbers support this prediction: CRM licensed revenues were down approximately 20% in 2003 and are expected to grow only 5% to 10% through 2005, say Kinikin and Ragsdale.

As part of that drive to leverage existing tools, almost all department will be called on to use every interaction with customers as an opportunity to up-sell and cross-sell. To help make this happen, vendors will begin offering “better integrated guided selling and cross-selling engines as part of call center and Web self-service packages,” say the authors. Companies also will start tying bonuses to the successful use of these engines to encourage a sales mentality throughout the organization.

Many of the trends projected by Forrester are being driven by companies’ ongoing efforts to contain costs. For example, cost-cutting initiatives are prompting companies to “re-evaluate what pieces of CRM they need to own in-house,” say the authors. This in turn has more organizations taking a hard look at hosted CRM options. As licensed CRM vendors then move into the hosting space, hosted products will become “more feature rich and more central to operations, requiring greater integration and customization,” predict Kinikin and Ragsdale.

For a complete copy of the report, visit