gartner´s ed thompson´s keynote the life and times of crm
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The Life and Times
of CRM 1982-2020
Ed ThompsonVP & Distinguished Analyst
Agenda
What have we learned?
What’s happening today?
Where are we heading?
Agenda
What have we learned?
What’s happening today?
Where are we heading?
Customer
Relationship
Management
1982
Customer Relationship Marketing
The initial research was done by Leonard Berry at Texas A&M (Berry, L. 1982) Berry, Leonard (1983). Relationship Marketing. American Marketing Association, Chicago and Jagdish Sheth at Emory, both of whom were the initial users of the term "Relationship Marketing", and by marketing theorist Theodore Levitt at Harvard (Levitt, T. 1983) who broadened the scope of marketing, from individual transactions to personalizing the consumer-producer relationship.
1980 1985 1990 1995
Siebel founded
Leonard Berry, Jagdish Sheth Relationship Marketing
articles and books
The Loyalty Effect by Fred
Reichheld
Brock founded
Andersen, PriceWaterhouse, KPMG,
Coopers, Ernst & Young CRM practices founded
Pegasystems founded
Act!founded
Firepond founded
Goldmine founded
The One to One Future by Peppers &
Rogers
Vantive founded
Maximizerfounded
Profs Christopher,
Payne, Ballantyne on Relationship
Marketing
Lehtinen, Gronroos, Crosby, Relationship
Marketing articles
2000 2005 20101995
CRM new license
spending drops 38%
Oracle acquires
SiebelSAP CRM launched
salesforce.com founded
CRM application
spending flat year on year
Customer Experience book frenzy Social
CRMhype starts
Amdocs acquires Clarify
Microsoft CRM
launched
RightNow founded
Siebel buys Scopus
BAAN buys Aurum
CRM at the Speed of
Light by Paul Green berg
Initiate, Siperian, Biz360, Chordiant,
Sterling Commerce,
Jigsaw, Scoutlabs, Cast Iron, Sybase
acquired
MDM heats up
SugarCRM founded
The Eight Building Blocks of CRM
1. CRM Vision
2. CRM Strategy
3. Valued CustomerExperience
4. OrganizationalCollaboration
8. CRM Metrics
7. CRM Technology
6. CRM Information
5. CRM Processes
0% 20% 40% 60% 80% 100%
Customer-centric vision
Customer-centric metrics
AverageDifficultyRating*
* 1 = easy, 4 = extremely difficult
(No. of Responses = 59-62)
2.0
Customer experience
CRM strategy 2.2
2.3
Organizational restructuring 2.7
Customer process re-engineering 2.6
Customer-centric data mgmt. 2.2
Technology infrastructure 2.1
2.8
To What Extent Is Deployment Challenging Your Enterprise?
Not Considered
Easy Difficult Very DifficultExtremely
Difficult
A Hierarchy of CRM Performance Metrics
Operational
Process
CustomerStrategic
Corporate
Stakeholder Focus
Employees Efficiency
Management Effectiveness
Executives Feedback on Strategy
Shareholders Bottom-Line Results
Level
Risk / Reward
Reward
Risk
eCommerce
MarketingCustomer
Service
MDM
PRM
SFA
Pricing
Field Service
Inside Sales
Analytics
Top-10 Technology Failings in Sales Technology Rollouts (20 Percent)
1. Enabling too Many Functions (20 Percent)
2. Dirty Data (18 Percent)
3. Poor System Management and Development Tools (15 Percent)
4. Insufficient Effort on Back-End Integration (13 Percent)
5. Poor Application Architecture Selection (11 Percent)
6. Performance and Reliability Needs of Hardware Are Underestimated (8%)
7. Poor Synchronization Tools Deployed (6 Percent)
8. Integration With Other Front-Office Applications Is Ignored (4 Percent)
9. Forgetting About Internationalization (3 Percent)
10. Over-Relying on Telecommunications (2 Percent)
Top-10 Management Failings in Sales Technology Rollouts (80 Percent)1. Projects Initiated With Unclear Goals, Metrics and Expectations (25%)
3. Poorly Defined or Flawed Sales Processes (15 Percent)
2. Lack of Commitment From Senior Executives, Sales Management and Channel Partners (13 Percent)
4. Lack of Strong End-User Salesperson Buy-In (12 Percent)
5. Focusing on Management Needs, With Not Enough Emphasis on Salespeople and Customers (10 Percent)
6. Making Do With Inadequate Resources for Development and Deployment (8 Percent)
7. Insufficient and Irrelevant Training (7 Percent)
8. Making Poor Software Vendor or ESP Selections (5 Percent)
9. Overstandardizing (3 Percent)
10. Overly Besotted by Features, Functions or "Cool" Technology (2%)
Functionality24%
TechnicalArchitecture16%
Costs15%
Services20%
Viability18%
Vision7%
Upward Trend for Weightings
CRM Application Selection Criteria Weightings 2000-2010
Downward Trend for Weightings
Average Percentage CRM Spend by TCO Category and Trend
Systems Integrators 27%
Internal Staff 16%
Software Licenses16%
Software Maintenance 6%
Hardware 7%
Other 19%
Software Vendor Professional Services
4%
Telecommunications 5%
1971
November 15th 1971
1981
August 12th 1981
1991
August 6th 1991
2001
January 10th 2001
April 23rd 2005
August 19th 2004
August 2003
February 4th 2004
March 21st 2006
Rate of Change
① What matters most
② Which CRM is most risky
③ How much it costs
④ The rate of change is accelerating
What you should have heard
Agenda
What have we learned?
What’s happening today?
Where are we heading?
2010
Traditional CRMDriven by the Organization
CEOs Are Focused Back On Customers
Source: Gartner CEO and Senior Business Executive Survey, 2010: Anticipating the Post-Recession Landscape
CEO Concerns 2010 vs. 2009
Start 2009
1. Cutting operating costs
2. Increasing revenues
3. Preserving cash
4. Sourcing fresh capital
5. Liquidating assets
Start 20101. Retaining customers and
enhancing existing relationships
2. Maintaining competitive advantage
3. Attracting new customers
4. Attracting and retaining skilled workers/talent
5. Reducing costs via better efficiency
#1 Technology CEOs see as
adding strategic value?
Gartner 2010 CEO & Business Executive Survey
More Advanced CRM
CIO Business Priorities 2010
Source: Gartner EXP WW CIO Survey 2010; N = 1,600
Expanding current customer relation ships
Targeting customers and markets more effectively
Attracting and retaining new customers
Creating new products or services (innovation)
Worldwide IT Spending:Will Increase 1.3% in 2010
Source: Gartner EXP WW CIO Survey 2010; N = 1,600
Primary Business Objectives From CRM Projects For 2010
0 10 20 30 40
Reduce operations costs
Increase campaign response rates
Improve lead quality and conversion
Acquire new customers
Enhance cross-sell/upsell opportunities
Increase customer loyalty
Increase customer retention
Increase sales revenues
Increase customer satisfaction
Percentage of Responses
Loyalty/Satisfaction
Cost Reduction
Revenue
Source: Gartner CRM Summit Pre-conference Survey August 2009, n = 198, Three responses permitted
Reduce cost of service
50
Reduce cost of sales
Sales Customer Service Marketing
Predictive analytics
Anonymous personas marketing
Marketing resource mgmt
Event-triggered marketing
Social media and reputation marketing
Web analytics & Advert mgmt
Marketing perf. measurement
What's Hot in 2010:CRM Priorities After Recession
Inbound marketing
Mobile marketing
Lead management
Partner, distributed and field marketing
Sales analytics
Web 2.0 E-commerce
Incentive compensation
Proposal generation
Mobile Web 2.0
Forecasting and pipeline
SaaS SFA
Pricing management
Open source SFA
Lead management
Sales performance mgt
Digital marketing
Master Data Management Business Process Mgmt WOA Customer-Centric Web
Inside sales Webchat
Loyalty management
Social CRM sales
Workforce optimization
Feedback management
Contact center outsourcing
Webchat for service
Web self-service
Knowledge management for service resolution
SaaS CSS
Social CRM / community
Composite service desktop
VOIP and Presence
Text mining
Real time decisioning
Cross-CRM
Multichannel Service BPM
1.6%
1.5%
1.2%
3.1%
7.3%4.2%
12.5%
16.2%
20.2%30%
2.6%
SAP
Oracle
salesforce.com
AmdocsMicrosoft
SAS
SPSS
Cegedim
ATG
Other Vendors
Market Size $9.316 Billion, +1%
1. Siebel – 4,500k2. Sage – 3,100k3. FrontRange – 2,000k4. Salesforce.com – 1,900k5. Microsoft – 950k6. Amdocs – 600k7. SAP – 500k
8. SuperOffice – 250k9. Oracle – 160k10. PeopleSoft – 150k
Top 10 1H2010Live User Seat Estimate
Worldwide CRM Software License and Maintenance Revenue: Market Share, 2009
(2008 comparisons)
(10.5%)(6.3%)
(22.3%)
(16.0%)
RightNow
2010
New CRMDriven by the Customer
My World!
My Way!
Consumerisation
of IT
Social
Computing
Socially Connected
Digitally Enabled
Peter F. Drucker
“In a few hundred years, when the history of our time is written from a long-term perspective, it is likely the most important event historians will see is not technology, but the unprecedented change in the human condition. For the first time, people have choices.”
If it is Digital –
it is Discoverable!
Privacy is Dead!
- Get Used to It!
Control is an Illusion!
- Get Over It!
What do People
REALLY Want?
Value
Matters
Trust
Matters
Reputation
Matters
The “Collective”
You Cannot
Control the
Collective
Don’t under-
estimate the
Collective
The Collective can change the
course of History
The Facebook Generation
“There’s just so much to DO! You can
never get bored when you’re on
facebook!
….our generation has a constant need
for stimulation and the stimulus need to
be ever-changing…
We have grown up multi-tasking!”
Rishi Iyengar
① Ignore It
② Assume it is wrong, so ignore it
③ Make it fit your model
④ Fail to act on it
The Four Mistakes
"We are entering the period of the open-source brand, where in order for people to feel it is relevant to them, they have to have a part in creating it."
Mark Kingdon, former CEO of Ad agency Organic
① CEOs care more about CRM
② CIOs are lining up with CEOs
③ Consumers are driving technology
R&D not defense
④ The customers are taking control
What you should have heard
Agenda
What have we learned?
What’s happening today?
Where are we heading?
Three Viewpoints
The future customer
The future business
The future IT
Three Viewpoints
The future customer
The future business
The future IT
2015
Expert Power
Cu
sto
mer
Bu
sin
ess
Coercive Power
Positional Power
Referent Power
Reward Power
20oo2010
More Powerful
Source: Five bases of power
Modernized But Not Westernized
“Modern societies thus have much in common. But do they necessarily merge into homogeneity? The argument that they do rests on the assumption that modern society must approximate a single type, the Western type... This, however, is a totally false identification.”
The Clash of Civilizations – Samuel P. Huntington, 1996
ab·stract (b-strkt, bstrkt)adj.1. Considered apart from concrete existence
in·stru·ment·ed (-mnt) tr.v.1. To provide or equip with instruments.
skep·ti·cal (skep-ti-kuhl)adj.1. Inclined to skepticism; having doubt
Customers Will BeMore…
Primary
Secondary
Tertiary
Quaternary
Customer Jobs Will Be More Quaternary
Source: Jean Fourastié: Die große Hoffnung des 20. Jahrhunderts.("The Great Hope of the 20th Century") Köln-Deutz 1954
Extraction of raw
materials
Manufacture
Services
Information generation, information
sharing, consultation,
education and R&D
Source: Maslow’s Hierarchy of Needs
Customer Needs Will be Higher Level
Instrumentation: Personal Metrics
Heart
resting heart rate // maximum heart rate // ejection fraction
Lungs
lung capacity
Body and Nutrition
body mass index // lean body mass // body fat percentage // basal
metabolic rate // glycemic index
Vital Statistics
height // weight // age // birth weight // birth length
Vital Signs
body temperature // pulse // blood pressure // respiratory rate
Senses
visual acuity // auditory acuity
Blood
glucose level // blood-alcohol level // hemoglobin level // HDL level // LDL
level // liver enzyme level
Women Only
estrogen levels // menstrual cycle
Men Only
testosterone levels // sperm count
Living
caloric intake // hours of sleep // exercise duration // exercise intensity //
lactate threshold // steps taken in day // mood // medication taken // hours
worked // cigarettes smokedSource: Wired
Nike+
Geotag Map ofSanFranciscoSource: Geotaggers world Atlas
Edelman Trust Barometer 2010: Trust
0
10
20
30
40
50
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Trust in Business 2001 to 2010
U.S. U.K./France/Germany
Edelman Trust Barometer 2010: Reputation
45
47
48
58
64
72
75
79
83
83
Financial returns
Top leadership
Innovator
Prices fairly
Good corporate citizen
Treats employees well
Communicates frequently
High quality products and services
Company I can trust
Transparent and honest practices
How important are these factors to corporate reputation?
Women less trusting when taking testosterone
New research suggests women become less trusting, less open, more vigilant, and more skeptical and cynical if they are given the male hormone testosterone.
Source: Proceedings of the National Academy of Sciences of the United States of America (PNAS) - Dr Jack van Honk
Customers Care More About the Customer Experience Than in the PastThose discontinuing business with a company after a negative customer experience climbed from 68% in 2006 to 86% in 2009
60% of consumers will always or often pay more for a better customer experience. 82% of consumers with a bad experience told others about it, up from 67% in 2006
69% of consumers switched providers in at least one industry sector because of poor service in the last year, 89 percent tell their friends about their bad experiences, and 25 percent use social media
40% of loyal customers said that they are willing to pay 10% or more to continue purchasing from companies delivering great experiences, in contrast with 9% of dissatisfied customers. 52% of dissatisfied customers expect discounts of 5% or more to continue doing business
87% of people felt they had a right to a better contact center experience if they regularly spend money with a company
Sources: Customer Experience Impact Report, 2009 by Harris Interactive for RightNow, Sept. 2009; 2009 4th Annual Customer Service Survey, Accenture, Nov. 12th 2009; 2009 Customer Experience Consumer Study, Strativity Group, Aug. 4th 2009, Consumers Unforgiving When it comes to Customer Care, YouGov for Teleperformance, Oct. 2009
SPA 1: In 2015 75% of consumers will tell their friends about their bad experiences using social media up from 25% in 2010
Three Viewpoints
The future customer view
The future business
The future IT
New Era Leaders: The 8% of Firms that are both Digital Market and Customer Insight Leaders
Source: The Path Forward: New Models for Customer-Focused LeadershipThe IBV 2009 Global CRM Study. Survey 478 CRM Executives in 66 countries, May 2009
Worst and Best Advertising Channels For Driving Web Purchase Consideration
52
34
16
8
8
0
-3
-21
-26
-31
-38
-50 -40 -30 -20 -10 0 10 20 30 40 50 60
Customer Email
TV/Newspaper Advert
Targeted Personalised Direct Mail
Sponsored Search Engine Link
Advert on/with Bill or Statement / 3rd party inserts
Loose Insert in Magazine
Customer Mobile Text
Untargeted Direct Mail
Social Networking Advert
Unsolicited Email
Unsolicited Mobile Text
Source: Effectiveness of different types of advertising in driving web visits and online purchase consideration, Response One, 2008
Radical Changes of Approach
Customer service: No human service / extreme self-service / proactive service
Marketing: Assume the customer is always wrong
Sales: Throw in the towel – stop trying to force sales people to adopt sales force automation
Best Time/Cost
Best Productat BestTime/Cost
Best Time/CostPlus High Touch
The Majority Claim to Be Customer Intimate
Operational Efficiency
High Touch and Best Product
BestProduct
MiddleGround
ProductLeadership
BestHigh Touch
Source: The Discipline of Market Leaders, 1995, Michael Treacy and Fred Wiersema
CustomerIntimacy (57%)
SPA 2: Less than 40% of organizations will aim to excel at customer intimacy in 2015 down from almost 60% in 2010
Three Viewpoints
The future customer view
The future business
The future IT
Beyond Email
Source: Graphical representation of a series of world-wide Gartner studies into the Next Generation Communications Consumer through 2008
Importance
Chat
Blog
VoIP
Social Network
Mobile Voice & SMS
Fixed Voice
Age10 24
Mobile Overtakes the PC by 2013
0
1
World PopulationInternet Users2000 2009
3
5
4
2
6
7
361% growth 00-09
24.5% of world on WWW
74.5% of NA on WWW
450m on Facebook
2013
Billions
Source: InternetWorldStats.com, Point topic broadband Source: Gartner, Forecast: Mobile Devices, Worldwide, 2003-2013 (3Q09 Update)
Internet Users, Worldwide
Mobile Phones2009
Mobile Phones, InstalledWorldwide
2000 2009 2013
0.9
3.5
4.7
1.7
0.4
1.6
0.36
2.2
0.450.68
289% growth 00-09
60m Facebook mobile
Mobile data traffic doubles each year 2009 to 2014
6.8
broadband smartphone
By 2014, the various forms of video (TV, VoD, Internet, P2P) will exceed 91% of global consumer traffic
Source: Cisco VNI Forecast, 6/2010
More Video
Spending Shifts From Operational to Analytical and Social CRM
1% of spending60% of growth
29% of spending, 30% of Growth70% of spending, 10% of growth
Analytical CRM
CRM AnalyticsHistorical and Predictive
Data Mart
Data Mart
DataWarehouse
Marketing, Sales, Service, Order Fulfillment
Acronym Key: ETL = extraction, transformation and loading
Collaborative and Social CRM
External DataOperational CRM
ERP,SCM
VerticalIndustrySystems
CustomerInteractionDatabase
PartnerETL,Cleansing,Enrichment
Business Process Management tools
CommunityPortal/Extranet
VoiceIVR, CTI,ACD
Face-to-FaceInteraction
Mail/SMS
ERMS
Conference
Web Conf.
Twitter,Jigsaw
New stuff!
Mobile
Context state detection bus
2) Publish State Change
3) Analyze State Change1) Monitor/Capture State Change
4) Apply Business Rule Predict
Sense
Visualize
Analyze
Respond
Reliance on DataReliance on TechnologyReliance on the IT Department
SPA 3: IT departments willHave involvement in 65% of CRM projects in 2015 down from 85% in 2010
2020
2010 2012 2014 2016
CRM application spending grows 5%
In 2010
Social CRM
market tops $1 Billion
Initiate, Siperian, Biz360, Chordiant,
Sterling Commerce,
Jigsaw, Scoutlabs, Cast Iron, Sybase
acquired
Salesforce.com overtakes Oracle as second largest
CRM vendorMicrosoft Dynamics CRM tops
$1Bn revenues
40% of all CRM sold as
SaaS
3rd marketing application
vendor reaches $100m
revenues
CRM Apps market reaches
$11.7 Billion(up 28% on
2009)
Fred Reichheld’s next great
book
Tata, Wipro, Infosys or Cognizant become
4th largest CRM service provider in NA
Facebook reaches two
Billion members
51%
Given that the percentage of SaaS-based CRM deployments in 2009 was 22% what do you think it will be by 2020?
36%
Given that E-Commerce accounted for 8% of consumer retail sales in 2009, what % do you think it will be in 2020?
2 billion
Given that Facebook has 500m in mid-2010, what do you think this will have changed to in 2020?
Which organization do you think is most likely to enter the CRM software market by 2020 and become a competitor?
38%
Given that less than 10% of Fortune 1000 companies currently use active crowdsourcing as part of the new product or service development process, what percentage of Fortune 1000 companies will use active crowdsourcing for the same purpose in 2020?
What CRM Could Look Like in 2020
1990 2000 2010 2020
App Penetration 2% 25% 40% 90%+10%(!)
DIY vs. COTS 90:10 80:20 50:50 30:70
Hot App SFA Suites Social Mobile/IDM**
Hot Tech Laptop Single View SaaS Utility
Hot Sector Pharma Telco CPG Retail
Differentiator Viability Function Ease of Use Price
P/U/P/M* $300 $150 $75 $25
Vendor Numbers 50 800 700 500
"8BB" Most Tricky Tech Strategy Metrics Governance
Department $ IT Sales Marketing CSS
Biggest Projects $10m $500m $100m $200m
Customer-Focused Medium Low Medium High
* Price of software per user, per month. **IDM = intelligent device management
① Customers will be more abstract,
instrumented and skeptical
② Businesses will need to be more
radical in response
③ IT will be more critical, but IT
departments less so
④ CRM in 2020 is on Wednesday
What you should have heard
The Life and Times of CRM
1982-2020
Ed ThompsonVP & Distinguished Analyst
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