Customer Management Spending Will Increase 16% in 2008

A new AMR Research report finds that customer management application spending will increase 16% in 2008 to nearly $2,200 per employee. Mid-market companies (<$1B in revenue) will see the greatest spending increase at nearly 22%.

This year's report reveals a number of industry positives: 2008 will see the largest average planned increase in CRM budgets to date, and the appeal of software-as-a-service (SaaS) is growing and impacting the industry average for upgrade rates (65% of companies now upgrade at least once a year, with 25% upgrading even more frequently).

But these positives are counterbalanced balanced by a set of somewhat alarming data points:

CRM failure rates remain far too high: 29% of companies reported an implementation failure that kept them from going live with the software versus 31% last year and just 18% in 2005.

User adoption remains a challenge, with 33% to 47% of customer management applications facing serious adoption issues.

Unused seats of CRM remain a challenge, with 25% of all licenses undeployed.

More information can be found at www.CRMindustry.com.

Retailers Getting Better at Email Marketing

The lack of any substantial data on the email marketing practices of retailers prompted Silverpop to undertake its first sweeping study of retail email marketing in 2005. Now in 2007, Silverpop has conducted the study again, and this revised evaluation helps marketers understand the changes email has undergone during the past two years.

With more email clients blocking images, the popular postcard-style layout has fallen from favor among emailers. In 2005, it was the format of 44 percent of the emails reviewed by Silverpop. This year, styles were more varied. While 26 percent of emails were postcard-style, 30% were designed like letters or newsletters, and 19 percent featured a single pane of text and art to top with rows or columns below.

While the layouts of retailers' emails have changed, the incentives to buy have largely remained the same. In both 2005 and 2007, three out of 10 retailers offer percent off sales; 11 percent offer free or discounted shipping.

List growth continues to plague all email marketers, and including a registration box or link on the home page is a valuable method of adding to a company's database. Yet U.K. retailers are nearly twice as likely as U.S. companies to bury opt-in requests within their Web sites.

A key change Silverpop found is a dramatic increase in the number of companies requesting nothing more than an email address to register. In 2005, nearly four out of 10 retailers asked for name and physical address along with an email address, and 24 percent required more detailed information – typically telephone numbers, personal interests and demographic information. Only 37 percent requested just an email address, compared to 61 percent in 2007.

Just as email marketers are making it easier to opt into campaigns, they're making it easier to opt out. In 2007, nearly six out of 10 companies sent recipients wishing to opt-out to pre-populated Web forms. Only 30 percent of companies did so in 2005. Yet a growing number of marketers have come to recognize that there are ways to keep consumers from saying goodbye forever by offering them choices. This year 32 percent of email opt-out links led to a preference center allowing registrants to make changes to their subscriptions. In 2005, only 12 percent did.

More information can be found at http://www.crmindustry.com/.

Global Enterprise Spend on CRM Application Licenses will hit $6.6 billion by 2012; Oracle and SAP Leading Solution Providers

Retaining clients, maintaining good relationships and growing customer numbers is crucial to business. In working towards this, independent market analyst Datamonitor estimates global enterprise spend on CRM application licenses will hit US$6.6 billion by year end 2012. Clearly, for vendors operating in this space, the stakes for the license revenues alone are high. However, Datamonitor’s new report which assesses the strengths and weaknesses of leading CRM vendors “Decision Matrix: Selecting a CRM Vendor,” suggests that despite numerous players operating in this highly competitive space, just two names might be on many IT decision-makers’ shortlists.

Although it says the CRM applications market is very competitive and there are plenty of players who can challenge the current leaders in specific circumstances, Datamonitor considers Oracle and SAP as the leading solution providers deserving a place on most procurement shortlists. According to Datamonitor, both vendors provide complete solutions replete with functionality, integrate CRM with new communication technologies and offer full flexibility of deployment options, from conventional on-premise, through to variations of hosted and on-demand solutions.

Nevertheless, Datamonitor believes Oracle should be considered the clear leader in the CRM application market. Having augmented its CRM product line through the acquisition of Siebel and PeopleSoft, Oracle now commands a strong portfolio of CRM solutions. Datamonitor’s analysis reveals that Oracle Siebel CRM sets quality standards in terms of technology and execution, although Oracle E-Business Suite CRM and Oracle PeopleSoft Enterprise CRM may be more suitable, depending on the functional requirements, specific sector demands and the deployment environment required.

Currently the principal challengers to the leaders, including Chordiant, Infor and Salesforce.com, all offer very good solutions but lack certain elements to compete consistently with the leading duo. More importantly, this group of the market will become more competitive if Microsoft’s forthcoming Microsoft Dynamics CRM 4.0 release is a success or if vendors such as RightNow Technologies and Consona improve their standing.

The evolving CRM strategies now demand CRM application solutions that can provide well-rounded suites covering all CRM modules, present a single analytical view of customers across multiple customer interaction channels and that can be rapidly deployed in a variety of deployment methods.

More information can be found at www.CRMindustry.com.

Online Personalization Increases Conversion Rates

According to a recent report by the Aberdeen Group, companies that actively personalize the online experience with established business processes demonstrate an improvement in online conversion rates, average order value, and revenue per visit. The survey showed that 88% of Best-in-Class companies agree that they will recognize a return on their investment in personalization technologies, and 76% agree that the economic gains from personalization will outweigh the costs of implementation.

Increasing overall sales, both online and offline, was identified as a top pressure by 60% of leading companies and the primary reason for personalizing the online experience. Best-in-Class companies indicated that they deploy personalization tactics across multiple areas of their web site functionality, such as email (76%), cross-sell/up-sell (50%), newsletters (40%), homepages (31%) and site search results (29%). These efforts contributed to the 91% of Best-in-Class companies who demonstrated improvement in online conversion rates.

By utilizing segmentation and unique user profiles and applying key technologies to them, such as predictive analysis and personalized recommendations, companies can create an online experience that is unobtrusive to the consumer yet ultimately moves them towards checkout more efficiently.

More information can be found at www.CRMindustry.com.

Online Retailers Improve Web Sites, Customer Service to Remain Competitive

As today's shoppers become more discriminating about their interactions online, the stakes are being raised for retailers to provide a consistently positive, more sophisticated experience. According to a Shop.org study conducted by Forrester Research, Inc., top priorities include fixing Web site design and performance issues, improving the efficiency of online marketing, and enhancing cross-channel integration.

Fixing product detail pages will top retailers' Web site to-do lists for the next 12 months. According to the survey, 88 percent of retailers plan to focus on improving content presented on product detail pages, with 80 percent adding alternative images, 72 percent incorporating lifestyle photography, and 63 percent integrating customer ratings and reviews. Retailers are also focusing on their homepages, integrating top sellers and "what's new" sections, and making their Web sites more sophisticated, with dropdown menus and rollover lists in navigational areas.

To differentiate themselves from competitors, online retailers are also making customer service a priority, with 33 percent of companies planning to invest more in live chat and 53 percent planning to enhance their guest checkout process within the next year.

In 2006, online retailers continued to allocate the majority (51 percent) of their marketing dollars toward online customer acquisition tactics and an additional 24 percent to online customer retention programs. Paid search continued to be the most effective marketing tactic for customer acquisition, and email marketing retained its position as the most effective — and budget-friendly — tool for customer retention. According to the survey, retailers find that emails about new products are more successful than simple transactional and sale messages. Seventy-three percent of retailers email customers about new products, and 51 percent rated the method as very effective. While Web 2.0 and Social Computing continue to receive a great deal of attention among senior marketing executives, the survey results indicated that these tools are very much in their infancy as marketing tools for retailers.

More information can be found at www.CRMindustry.com.

Enterprises To Extend Investment in Collaboration and Communication Technologies

According to research commissioned by Avanade Inc., a global IT consultancy, less than half of U.S. and Canadian enterprises surveyed are satisfied with the impact of current collaborative and communication technologies including email, intranets and video conferencing. However, nearly all of these companies see significant benefits in the new wave of collaboration and communication technologies and, over the next two years, plan to invest in such technologies as enterprise search tools, virtual workspaces, and voice over IP (VoIP).

According to the study, U.S. and Canadian respondents associate digital collaboration first and foremost with email and Intranets. Video conferencing and extranets also were cited as collaboration tools, but enterprise search and presence were missing altogether in the collective response. Avanade defines digital collaboration as the convergence of traditional collaboration technologies--such as email and portals--with emerging unified communications technologies—such as presence and VoIP--to provide access to data and voice services anywhere, anytime on any device.

In the next two years, these companies expect to extend their existing investments in collaboration and communication technologies as well as make new investments to integrate existing investments with the emerging digital collaboration technologies. Among the U.S. companies surveyed:

80 percent will have implemented VoIP in two years, up from 50 percent who say they have VoIP implemented today

79 percent will have implemented enterprise search tools, compared to 59 percent who say they have enterprise search implemented today.

68 percent will have implemented virtual workspaces, compared to 48 percent who say they already use the technology.

Similarly, the digital collaboration technologies to be adopted most aggressively in Canada in two years are enterprise search, virtual workspaces, video conferencing and VoIP.

Though most U.S. and Canadian enterprises are not fully satisfied with their collaboration and communication technologies, their planned investment in this area signifies a growing awareness of the impact digital collaboration has on key performance factors. Chief among these is employee productivity. The research shows that 95 percent of U.S. and 98 percent of Canadian respondents see productivity as a key reason for further investment. Another important factor cited by 88 percent of U.S. and 95 percent of Canadian respondents is information management.


More information can be found at www.CRMIndustry.com

U.S. Mobile Advertising Revenue Set to Soar

According to the Kelsey Group, U.S. mobile advertising represents a promising future market opportunity that has remained largely out of reach for many years. Often-cited statistics about how many more mobile phones there are versus computers suggest we are on the verge of a market transformation akin to the early days of the Internet’s growth. While forecasters and pundits have touted the potential of mobile advertising for years, the U.S. market failed to materialize. This is about change. US mobile search advertising revenues are projected to reach $1.4 billion in 2012, up from $33.2 million in 2007, according to The Kelsey Group.

In addition, over the next five years, there will be tremendous innovation and investment in mobile platforms. Apple just sold its 1 millionth IPhone – as other manufacturers produce similar devices more people will rely on their phones to do activities many have now reserved for their computers. Better devices, improved mobile applications and a continually growing audience – no wonder the compound growth rate will reach 112% by 2012.

More information can be found at www.CRMindustry.com.

Worldwide CRM Software Market Will Grow 14 Percent in 2007; Software as a Service (Saas) Fuels Growth

As enterprises continue to invest in front-office applications, worldwide CRM software revenue is forecast to exceed $7.4 billion 2007, up 14 percent from $6.5 billion in 2006, according to a new report from technology research firm, Gartner, Inc.

The strong performance of the CRM software market is being fueled by growth across all subsegments and the explosive growth of software as a service (SaaS) solutions within the sales subsegment. In 2006, SaaS represented 12 percent of total CRM software revenue, and it is on track to reach nearly 14 percent in 2007. By year-end 2007, SaaS is forecast to represent more than $1 billion in CRM software revenue, growing at more than double the rate of the total CRM software market.

In addition, the report shows that the worldwide CRM software market will experience healthy growth through 2007; however growth will slow in the next 12 to 18 months because of the downstream impact of economic conditions, but also because the market size overall will increase. The market is forecast to grow to more than $11.4 billion in total software revenue by 2011.

More information can be found at www.CRMindustry.com.

Social Networking Application Market Growing Quickly and Expanding Into the Enterprise

It looks as if the social networking application market is here to stay – in a big way. According to a new study by IDC, this market will grow from $46.8 million in 2006 to $428.3 million by 2009, establishing social networking as a new communications tool used for many purposes other than just consumer socializing.

In fact, there are three social networking segments emerging, IDC's research indicates. These include: self-service applications used by groups and marketing campaign teams; brand applications that focus on persistent customer engagement; and enterprise applications that provide more effective ways of working with customers, partners, and other external parties.

It can easily be seen that these social networking tools will be instrumental to an organization’s marketing team; they will use them to gather valuable customer input on products and services, establish brand identity, promote and educate, and this just names a few of the options.

And, according to IDC, as the market develops, social networking functionality will be built into core communication platforms like email and instant messaging (IM) applications. It looks like we are about to get even more connected than ever.

More information can be found at www.CRMindustry.com.

Traditional Media Still Key Influencer for 2008 Election

It seems as if everyone has their own social networking page or blog today; in fact, for politicians, they are an absolute necessity to win, at least from what you hear. The ‘Obama Girl’ video on YouTube and Bill and Hillary’s Soprano’s spoof created quite a media stir and generated great coverage for both candidates.

However, a recent study from Nucleus Research revealed that social networking, blog and political parties’ Web sites are affecting voter opinion far less than the recent buzz would suggest.

According to the survey, conducted in June 2007, 72 percent of respondents report that mainstream media (MSM) such as newspapers and magazines are their primary sources for political information. More than 56 percent of respondents also cite these mediums as the sources that they trust the most when seeking to gain political knowledge.

Less than 5 percent of respondents turn to YouTube as a source of information, and only 19 percent use candidates’ Web sites. In addition, only 14 percent utilize political parties’ Web sites. The survey also found that 18 percent of respondents gather their information from alternative news programs, such as the Daily Show with Jon Stewart.

However, it is important to note that although these new media vehicles are not yet as mainstream as traditional media, they still play a valuable role in defining the candidate and what they stand for. Just as companies use these tools to promote a product or service, individuals are now using them to promote their own personal brands – themselves.

More information can be found at www.CRMindustry.com