Spending on Social Software to Support Sales, Marketing and Customer Service Processes Will Exceed $1 Billion Worldwide By 2013

The customer relations management (CRM) market will enter a three year shake up in 2011, as a number of key trends take hold, according to Gartner, Inc. Sales, marketing and customer service technologies, projects and implementations will all see rapid changes over the next few years.

In order to offer sales, marketing, service and other business line managers, as well as C-level executives’ guidance with their CRM investments, Gartner has detailed its predictions for CRM in 2011 and beyond.

By 2013, spending on social software to support sales, marketing and customer service processes will exceed $1 billion worldwide.

The $1 billion prediction for spending on social CRM compares with Gartner’s forecast of more than $12 billion for overall spending on CRM software in 2012, means that social CRM will encompass approximately 8 percent of all CRM spending in 2012, up from approximate 4 percent in 2010.

Gartner recommends that buyers of social CRM should take a three-step approach to enable them to develop a social CRM strategy over the next 12 months:

1. Determine if there are any social CRM projects already under way; look in the marketing or customer service departments first.

2. Calculate the likelihood that you will be forced to start something in 2011 -- your industry and culture are the best indicators.

3. Find case studies specific to your industry that can provide examples of what is possible, and share them with other decision makers in your organization.

By 2015, one-third of spending on new CRM software will be SaaS.

In 2009, 24 percent of the CRM software market was delivered by SaaS, and this rose to more than 26 percent in 2010, up from virtually zero in 1999. By 2015, Gartner forecasts that 32 percent of the CRM software market will be delivered by SaaS.

Gartner said that buyers of CRM applications should resist the temptation to bypass the IT organization in the short term. Instead, involve IT in purchase decisions early on to avoid the most-frequently cited downstream issue of data integration, and to address potential concerns about inadequate security, scalability and privacy. IT organizations should focus on integration skills. The other limitations of SaaS remain, but are eroding over time, whereas integration skills remain problematic.

By 2015, all Tier 1 CRM ESPs will invest in their own bolt-on CRM application software.

In 2010, all Tier 1 CRM external service providers (ESPs) custom-built application functionality on projects; developed configurations or industry templates for major independent software vendors (ISVs); packaged CRM applications, such as SAP and Oracle's Siebel; and productized work done on projects for use on later bids. However, less than half of the Tier 1 ESPs developed additive stand-alone CRM applications that coexist with ISV packaged applications.

Gartner recommends that consultants and system integrators should carefully select areas of investment, start with their industry and process strengths, and avoid overinvesting in the short term. Buyers should watch for further declines in independent advice on the selection process from ESPs and take appropriate caution when evaluating ESP applications. Above all, they should avoid letting existing brand and reputation cloud their perceptions of the applications.

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

Do Social Media Results Justify Investment?

ForeSee Results, a provider of technology-driven customer satisfaction analytics, released its annual report on the state of social media effectiveness for retailers in the United States. The report shows that social media interactions are a primary influence for only about 5% of visitors to retail websites. The research indicates that, in fact, more traditional marketing techniques like promotional emails, search engine results, and even advertising influence far more visits to retail websites.

Other highlights of the report include:

-- Traditional marketing techniques like promotional emails influence not only more traffic; they deliver better-quality traffic. Some of the most satisfied site visitors arrived at the site because of previous familiarity with a brand, promotional emails, word-of-mouth, and product review websites.

-- Most customers are eager to engage with retailers, but prefer to do so via email or on retail websites, rather than on social sites. In fact, only 8% of online shoppers said that’s social media was their preferred way to interact with a retailer.

-- People are more satisfied with retailers’ presence on Facebook than they are with Facebook itself.

More information on social media can be found at www.CRMindustry.com.

Survey Reveals Key Business Benefits from Social Business Adoption

A new survey by Jive Software revealed three key findings: 1) customers are deriving quantifiable business benefits from their Social Business investments, 2) 2011 is the year of accelerated enterprise-wide adoption across most industries; and 3) Social Business is a mission-critical application.

The survey was based on responses from 500 individuals, representing more than 300 companies worldwide. A large percentage of the participating companies have more than 10,000 employees.

Key Finding #1: Social Business Drives Breakthrough Business Results

The first key finding revealed that customers are adopting social in the enterprise to change the way they do business and generate material breakthroughs in revenue, cost-savings and innovation. The business benefits from Social Business adoption extend across three key audiences: employees, customers and the social web.

Top Employee Engagement Benefits:

-- 39 percent increase in employee connectedness;

-- 32 percent more ideas generated and captured;

-- 30 percent increase in employee satisfaction;

-- 27 percent less email;

-- 32 percent reduction in time to find answers; and

-- 37 percent increase in project collaboration and productivity.

Top Customer Engagement Benefits:

-- 42 percent more communication with customers;

-- 31 percent increase in customer retention;

-- 34 percent higher brand awareness;

-- 28 percent decrease in support call volume;

-- 34 percent more feedback and ideas from customers; and

-- 27 percent increase in new customer sales.

Key Finding #2: Social Business Software Adoption is Pervasive

The survey also found that Social Business software is being adopted at a large scale across a broad range of industries. Eighty-three percent of participants reported that they are implementing enterprise-wide Social Business initiatives. This is indicative of the pervasive use of Social Business software to fundamentally change different business processes, from the way employees collaborate to the way companies engage with their customers.

The survey further showed that Social Business is adopted across many industries. From the respondents surveyed, over 35 industries were represented. The top ten industries are:

1. High tech (software/hardware, computer services);

2. Financial services;

3. Communications / Telecommunications;

4. Healthcare;

5. Media / Marketing / Advertising;

6. Retail / Wholesale;

7. Education;

8. Consumer goods;

9. Government; and

10. Insurance.

Key Finding #3: Social Business is Mission-Critical

The last finding showed that Social Business is a mission-critical initiative that requires a tight partnership between IT and business to be successful. IT needs to be closely involved to ensure that the Social Business system has the right scalability, security and corporate governance standards required by the enterprise. 

More information on Social Media can be found at www.CRMindustry.com.

Cloud Computing Dominates IT Priority List for 2011

Investing in cloud computing – primarily private clouds – is a top priority for IT organizations for 2011, according to two online polls Unisys Corporation conducted on the Unisys.com website in recent weeks.

The latest Unisys poll, completed on January 24, asked people to name their organization’s biggest priority for IT investment in 2011. Of the 262 respondents to the poll, 44 percent indicated that cloud computing would be their top priority. By contrast, 24 percent named support for mobile/end-user devices as their primary IT investment focus.

In addition, 17 percent of respondents cited cybersecurity as their top IT investment priority for 2011, while 15 percent said cost-cutting would be their top priority in the new year.

An earlier poll in December 2010, which drew 88 responses, asked about intentions to implement cloud computing. Eighty percent of the respondents said their organization was planning some kind of cloud, with 45 percent – the largest group – citing a private cloud. Fifteen percent said their company was focusing on a public cloud. Another 21 percent cited a focus on a hybrid cloud, which blends public and private elements.

More information on Cloud Computing can be found at www.CRMindustry.com.

Zappos.com Tops in Customer Service

In a survey of 9,200 shoppers, Zappos.com took top honors in the sixth annual NRF Foundation/American Express Customers’ Choice survey, conducted by BIGresearch. Continuing to impress shoppers with their stellar service, Amazon.com (#2), LL Bean (#3), Overstock.com (#4), Lands’ End (#5), JC Penney (#6), Kohl’s (#7), QVC (#8) and Nordstrom (#9) round out the remainder of the list.

The top 10 list includes:

1.) Zappos.com

2.) Amazon.com

3.) LL Bean

4.) Overstock.com

5.) Lands’ End

6.) JC Penney

7.) Kohl’s

8.) QVC

9.) Nordstrom

10.) Newegg

More information on customer service and support can be found at www.CRMindustry.com.

U.S. Companies Say Offshoring has not Cost Domestic Jobs

The sixth annual study on corporations’ offshoring trends was released by the Center for International Business Education and Research’s (CIBER) Offshoring Research Network (ORN) at Duke University’s Fuqua School of Business and The Conference Board.

The study is part of ongoing research into the effects of offshoring trends on American competitiveness and reflects the sentiments of business managers as regional economies around the world continue to recover from the global recession and economic upheaval in Europe and Asia.

In addition, survey respondents are broadening the range of factors that influence their selection of an offshore location to include the location of the best service provider and the quality of infrastructure, e.g., telecommunications, power and transportation. In spite of placing a high priority on cost savings and labor arbitrage, the survey finds average achieved cost savings offshore have declined for functions at many companies. For example, IT services and software development have experienced consistent declines over the past five years while average achieved savings have increased for administrative and innovative functions.

According to the researchers, survey participants have lower expectations than previous respondents for average cost savings in several offshoring functions. Contact center, information technology and software development offshoring have seen the largest declines among all offshoring functions as companies new to offshoring discover a number of hidden costs involved, including expenses for training, staff recruitment and retention, and government and vendor relations.

As companies expand offshoring activities by increasing scale or by offshoring more diverse and complex functions, most firms see a decline in the overall efficiency of their offshoring processes as measured by average cost savings across offshored functions. This may be partially attributed to a loss of managerial control as offshoring operations are expanded, requiring companies to improve coordination and management of their global sourcing.

Key findings include:

-- Most companies say offshoring of jobs has not resulted in higher unemployment domestically

-- The desire to cut costs is not the primary motivator for companies moving some job functions to overseas locations

-- Firms shifting jobs overseas may be responding to a shortage of skilled domestic employees

-- Manufacturers and high-tech/telecommunication companies are less likely to use captive offshore operations -- owned by the company and located on foreign soil -- and are moving increasingly toward the use of third-party providers of offshore labor

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

Web-based Email Shows Signs of Decline in the U.S. While Mobile Email Usage on the Rise

comScore, Inc, a leader in measuring the digital world, released results from a study on U.S. consumers’ evolving email behaviors using data from its comScore Media Metrix and MobiLens services. The study found that in November 2010, the number of visitors to web-based email sites declined 6 percent compared to the previous year, while email engagement declined at an even greater rate. During the same time period, the number of users accessing email via their mobile devices grew by 36 percent as an increasingly complex digital environment influenced consumers’ communication habits.

An analysis of web-based email trends revealed that fewer Americans visited web-based email destinations and spent less time doing so versus last year. In November 2010, more than 153 million people visited web-based email providers, decreasing 6 percent from the previous year. In terms of engagement, overall time spent in the email category declined 9 percent, while total pages viewed dropped 15 percent. Despite such declines, however, it should be noted that email remains one of the most popular activities on the web, reaching more than 70 percent of the U.S online population each month.

While web-based email has witnessed a decline over the past year, email usage via mobile devices has experienced significant growth, driven largely by increased smartphone adoption. In November 2010, 70.1 million mobile users (30 percent of all mobile subscribers) accessed email on their mobile, an increase of 36 percent from the previous year. Daily usage of email showed an even greater increase growing 40 percent as 43.5 million users turned to their mobile devices on a nearly daily basis for their email communication needs.

Accessing mobile email increased by double-digits across all age segments. Younger age groups showed a higher probability of accessing email from their mobile devices compared to older segments. Persons age 25-34 were 60 percent more likely to access email than an average mobile user, with those between the ages of 18-24 being 46 percent more likely to do so, representing the two age segments with the highest propensity. Overall, males were 14 percent more likely to be users of mobile email.

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