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This presentation is built based on research

and insights developed by Gartner analysts!

On behalf of Ivan Maglić, Regional Director

Gartner Adriatic / Calisto

Janet Naidenova, Marketing Partner

CRM Expo 2011, Sofia, 20.10.2011

How Customer Trends Impact CRM Technologies and the Vendor Landscape

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CRM Trends

Sales

Marketing

Customer Service

CRM Trends and interest change...

During 2010. changes in growth of three categories of CRM applications were changing due to:

•rapid rise in use of social networks;

•enterprises re-evaluating use of smartphones and tablets;

•increase in access to information for customers – "shift of power";

Social CRM is the hottest area of interest in customer service and marketing departments, followed by related areas like digital marketing and e-commerce.

CRM Trends and interest change...

• Majority of spending on CRM is still concentrated in: traditional sales force automation (SFA), campaign management and customer care in contact center.

• Software as a Service (SaaS) delivery represented approximately 26% of all CRM application spending in 2010.

• In sales applications, almost 50% was delivered via SaaS

• Mobile applications are priorities for sales in 2011 – interest has swung from the BlackBerry to the iPhone to Android, to the iPad and other tablets.

• In the short term, the Chief Marketing Officer (CMO) is under pressure to support improved digital marketing and need for social media tools.

• Social or community customer service became the hottest topic in customer service department in 2010. The interest is not uniform, but sectors such as high-tech, media, travel, telecommunications, retail and education are leading the way.

CRM Vision and Strategy

Putting the CRM Pieces Together to Generate Success

As the World Gets Smaller, Customer-Centric Strategies Get Larger

Communications

Convergence of Corporate Systems and Data

CollaborativePlatforms

LocationTechnology

SecurityMobile Devices• Ubiquitous

computing• Devices for life• Portable

computing power

• Convergence of communication

• Broadband, Wi-Fi and WiMAX

• Always accessible or online

• Real-time data• Unified view of the customer• Complete transaction history• Noncorporate data (satisfaction)

• Outside four walls

• Extend out to customer, back to suppliers

• Tagging• Proximity

monitoring

• Biometrics• Profiling

or access

The challenge in customer-centric strategies will move from giving customer-facing employees better tools, to putting the tools directly in the hands of customers.

CRM Applications Remain Fragmented:More Than 50 Submarkets

Sales

Field Service

Self-Service

E-Learning

WFO

Trouble Ticketing/Case Mgmt.

Analyzing

Managing

Monitoring

Communicating

Finding

Forming

Rewarding

Norming

Performing

Information &Infrastructure

Customer Data Integration

Information Mgmt.

BPM

App. Architecture

Application Infrastructure

Customer ServiceRFID/Telematics

Warranty Mgmt.

Parts Planning

Wireless Mobility

Contracts

Product Life Cycle

E-Commerce

Fraud Detection

Product Information Mgmt.

RFID

Inventory

Logistics

Analytics

Business Intelligence

Performance Mgmt.

Personal Productivity

Customer Value Analysis

Interactive Data Mining

In-Line, Event-Driven

Dashboards/KPIs

Marketing

Segmentation/Event Triggers

MRM

E-Marketing

Field Marketing

Promotions Mgmt.

CRM Application Value Chain

Field Sales

Inside Sales

Partner Management

Order ManagementConfiguration

Social Networking

Pricing

E-Commerce

Knowledge Management

Location-Based

The CRM market is too fragmented to start with a tools discussion. Strategy drives the decisions on tools and technologies.

Traditional Business Components of CRM

E-CRM

MarketingInfo. Systems

Field Sales

Telesales

Telemarketing

Customer ServiceDistribution& Logistics

Manufacturing

R&D

HumanResources

Finance

E-ERP

Customer-Centric ProcessesCustomer-Centric Processes

Extended CRM Enterprise

Integration WithBack-Office Functions

Integration AmongFront-Office Functions

Customer Insightand Understanding

E-Business

Partner Relationship Management

Supplier

Areas Covered Within CRMAreas Covered Within CRM

Acronym KeyCRM = customer relationship managementERP = enterprise resource planningSCM = supply chain management

More-Effective Customer InteractionsMore-Effective Customer Interactions

Customer-Satisfying BehaviorsCustomer-Satisfying Behaviors

Greater Customer AccessGreater Customer Access

Retail Sales

BusinessOrganized

AroundCustomer

DatabaseMarketing

Field Service

E-CRM

MarketingInfo. Systems

Field Sales

Field Service

Telesales

Telemarketing

Customer ServiceDistribution& Logistics

Manufacturing

R&D

Finance

E-ERP

Customer-Centric ProcessesCustomer-Centric Processes

Extended CRM Enterprise

Integration WithBack-Office Functions

Integration AmongFront-Office Functions

E-Business

Partner Relationship Management

Supplier

Areas Covered Within CRMAreas Covered Within CRM

More-Effective Customer InteractionsMore-Effective Customer Interactions

Customer-Satisfying BehaviorsCustomer-Satisfying Behaviors

Greater Customer AccessGreater Customer Access

Retail Sales

BusinessOrganized

AroundCustomer

DatabaseMarketing

The Reality of Customer-Centric Strategies

HumanResources

Customer Insightand UnderstandingThe old designations of operational systems, ERP,

SCM and CRM should be replaced by the concept of customer-centric strategies and other related strategies that will focus on process issues.

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

The Eight Building Blocks of CRM: Much-Loved, but Apparently Forgotten

1. CRM vision

2. CRM strategy

8. CRM metrics

7. CRM technology

6. CRM information

5. CRM processes

3. Valued customerexperience

4. Organizationalcollaboration

Involving dataand Informationmanagement, customer-facing applications, and supporting IT infrastructure and architecture.

Building a market position against competitors with defined value propositions based on requirements, personified by the brand and communicated.

Constantly ensuring that the propositions have value to customers and the enterprise, achieve the market position, and are delivered consistently.

Managing customer life cycle processes and processes in analysis and planning that build customer knowledge.

Involving internaland external

measures of CRM success and failure.

Turning the customer base into an asset via delivery of customer value propositions.

Provides objectives and how resources will be

used in interaction.

Involving the changing of culture, structures

and behaviors to ensure that staff, partners and

suppliers work together to deliver what is

promised.

Ensuring that the right data is collected and the right information

goes to the right place.

Customer-Centric Generational Framework

Most organizations today:

First Second Third Fourth FifthFunction or

channeleffectiveness

More "joined up"thinking, but still

silo-oriented

Optimization atsilo level for cost and value reasons

Shared info. at silo level; insight

developing

Focus on silo efficiency; lacks customer focus

Changing culture and incentives;

silos

Understanding and focus at

silo level

Strongfunctionalitywithin silos

Value-network-enabled

Value-based collaboration formutual benefit

End-to-endprocess

optimization

Shared info. andinsight beyondthe company

Shared objectivesand balanced

metrics; aligned

Shared customer-centricity;

goal alignment

Understanding of wider scope;collaboration

Strong functionality;

integrated beyondthe company

Initial productivity

and visibility

Isolated projects;initiated from the

bottom up

Start optimizing for efficiency; silo-oriented

Team-based;fragmented;

minimal insight

Fragmented andlimited metrics;

operational focus

First signs of customer-

centricity; silos

Unknownconcept;

designs itself

Fragmented;limited

functionalityand focus

None

None

Inward focus;silo-oriented

Basic andfragmented

Few metrics;inward focus

Inward focus;silo

structures

Unknownconcept;

designs itself

Very fragmented;

weakfunctionality

Intracompanyintegration

Company-leveloptimization for cost and value

Shared info. andinsight acrossthe company

Company- andcustomer-focusedbalanced hierarchy

Customer-centric;reorganized by

segment

Understandingand focus acrosslines of business

Strong functionality

with company-level integration

Company-levelCRM program

CRM Vision

CRM Strategy

CRM Processes

CRM Information

CRM Metrics

OrganizationalCollaboration

Valued CustomerExperience

CRM Technology

Which technology trends will dominate and shape the CRM application environment to 2014? 

How will CRM technology platforms, architectures, delivery methods and applications evolve to embrace these trends? 

How will the CRM application vendor landscape evolve in response to the new architectures and technologies?

2011: CIO Business Priorities

Reimagining IT: The 2011 CIO Agenda

 1 January 2011, ID: G00210688

2011: CIO Technology Priorities

Reimagining IT: The 2011 CIO Agenda

 1 January 2011; ID: G00210688

What's Hot in 2011:CRM Priorities in Recovery

Sales Customer Service Marketing

Master data management

Partner, distributed and field marketingSales incentive comp. Web chat for service

E-Commerce/Web 2.0/B2B Loyalty managementWeb self-service

SaaS SFA Digital marketingSaaS CSS

Event-triggered marketingSales training Text mining

Marketing perf. measurementPrice optimization Real-time decisioning

Cross-CRM

Mobile marketingForecasting and pipeline Workforce optimization

Lead managementLead management Knowledge management for service resolution

Social media for marketingMobility — tablets/smartphones Social CRM/community

Predictive analyticsSales performance mgmt. Feedback management

Marketing resource mgmt.Social CRM sales Mobile support

Web analytics & advert mgmt.Sales effectiveness content Unified communications and collaboration

Multichannel selling VOIP and presence Integrated marketing mgmt.

Inbound marketingConfigure, price, quote Multichannel service BPM

Business process mgmt. Customer-centric Web

How will CRM technology platforms, architectures, delivery methods and applications evolve to embrace these trends? 

Top 5 Technology Trends for CRM

1. Social and Interaction: More Than "Spare-Time Activity"

Listen and Learn

Participate and Communicate

Play and InteractShare and Broadcast

Evaluate and ShopChanging Business and Opinions

Customer serviceThe customer service works by relying on members of the network to provide answers to questions raised by others, and the company's small customer service team provides support for those issues that cannot be dealt with in this way, for example credit card issues. A forum on the website has an active community to answer routine issues, and integration with facebook and twitter was introduced in October 2010.

Giffgaff is a mobile phone service in the United Kingdom. It operates as a mobile virtual network operator using the O2 network and launched on 25 November 2009.Giffgaff differs from conventional mobile phone operators in that the users of the service may also participate in certain aspects of the company's operation, e.g. sales, customer service and marketing. In return for this activity, the user receives remuneration.

Social and Interaction:Digital Marketing Focus

Digital Advertising

Digital Video

Digital Signage

Digital Branding

In-Game Advertising

Podcasts

Search Marketing (SEO)

Mobile Marketing

Digital Recommendation Engines

Digital Analytics

Event-Triggered/Inbound

Augmented Reality Marketing

E-Mail Marketing

Digital Campaigns

E-Commerce

Product Reviews

Gift Registry

Cross-Selling, Upselling

Loyalty Marketing

Social Monitoring

Ideation Management

Social Campaigns

Social Engineering

Forums

Word of Mouth

Social Event Networking

Reputation Management

Digital Branding

AddressableAdvertising

SocialMarketing

TransactionalMarketing

ContextualMarketing

• E-commerce continues to grow; B2B and B2C.• Website style, innovation and ease of use drives adoption.• Mobile accelerates the trend.• Do you need an app store?

2. E-Commerce and Mobile: iPad, Android, and the rest…

• iPhone/iPad (and others): applications are easy, simple and fun.

• B2C and B2B customers are hungry for these innovations.

• Consumer-driven impact on enterprises.

By 2015, companies will generate 50% of Web sales via their social presence and mobile applications.

2. E-Commerce and Mobile: Context-Aware Computing

Context-Aware

OrganizationsProviders

Users

By 2015, context will be as influential to mobile consumer services and relationships as search engines are to the Web.

3. Business Intelligence and Analytics: Data Sources Will Shift

New MediaChosen

BehavioralData

CollectedDatabase Updated

CustomSegmentation

Developed

Unique Four"Ps"

PurchaseDecision

Marketing and Service Mix

Responseof

Choice

From DemographicData•Income•Gender•Socioeconomicstatus

Personal• Name• Marital status

Geographic• Country• Region• Address• Climate

To PsychographicData•Lifestyle•Personality•Attitude•Belief•Reputation•Actions •Implicit behavior•Explicit behavior

Behavioral• Brand loyalty• Product use• Personalongevity

Customer

Those responsible for the "customer" will need to shift from collecting personal data about individual customers toward collecting more complete and more relevant data around online persons and interactions: the analytics to make sense of this data will be a hot area for many years to come.

3. Business Intelligence and Analytics: Social CRM and MDM and Data

Upstream/OperationalSystems

Social Networks

Trusted External Data Sources

Voice of the Customer

Call Center Branches Internet

MDM Hub

Business Rules

Engine

Business Applications

Channels

An accurate, consistent and timely view is key to improved

business processes and decision making

Marketing Systems

Marketing and Data Mining Database(s)

Analysis and Campaign Management

Data Warehouse and Data Marts

BI and Performance Management

Downstream/Analytical

Information Services

4. Cloud and SaaS:The Role of SaaS With Cloud Computing

Vendor names are samples; this is not an exhaustive list.

System Infrastructure Services

Business Services

Application Services

App. Infrastructure Services

CloudEnablers M

gmt.

and

Sec

urityV-Cloud

IaaS

PaaS

SaaS

4. Cloud and SaaS:Integrating SaaS Into Existing Applications

Sales Force Automation

Opportunity

CustomerData

Browse and Search Products

(one-way dataintegration)

Product

Opportunity Info.Quote Info.

(Web Service)

Quoting

Order Management

AccountReceivables

Sales Configuration

Enterprise Firewall

CustomerMasterData

Performance Management

SaaS Provider A SaaS Provider B

Incentive Compensation

CustomerData

Two-Way Data SynchronizationSales

Forecast

SaaS

ERP On-Premises

Best-of-Breed On-Premises

Custom Application

75% of large-enterprise SaaS deployments will have at least five integration

or interoperable points to on-premises applications.

Systems of Record

Systems of Differentiation

Systems of Innovation

SentimentAnalysis Service

Open Innovation Submission Box

Product Review Service

RecommendationEngine

iPhone App

Droid App

Facebook Presence

Customer ServiceProcesses & Systems

ConfiguratorR&D & Product Development

Systems & Processes

Customer Product Supplier Order

5. BPM (Business Process Management) and SOA: Gartner's Pace Layers

Facebook, Twitter, YouTube, Communities, Portal, etc.

People are talking about us; what do we do?

How will the CRM application vendor landscape evolve in response to the new architectures and technologies?

L

H

Breadth

1999 2002MegasuiteVendors

FocusedVendors

2011MegasuiteVendors

Ecosystem

No-Man's Land

L HDepth L HDepth L HDepth

Megavendors Continue to Dominate

• Megavendors continue to extend their functional footprints into the "front office"

• End-to-end process integration being their differentiator

• Analytics, performance management, compliance being their lead reasons to buy

Sales, Marketing and Customer Service

• Microsoft Dynamics CRM: sound technology for multiple delivery models — SaaS, on-premises, partner-hosted; current version 5.0.

• SFA or customer service play first; CRM suite plays second.

• App platform; needs better segmentation messaging as there is confusion in the installed base regarding most appropriate choice.

• Legacy CRM applications covered by Applications Unlimited.

• Oracle Fusion Applications announced for sales and marketing.

• Siebel CRM — campaign management, loyalty managementand analytics are now the primary revenue drivers.

• SAP CRM 7.0 doubled live end users in the past 18 months.

• First 7.1 innovation pack delivered for flexible upgrades.

• Largely considered as an enterprise apps play, not a stand-alone.

• Momentum gaining in marketing.

• E-commerce, Customer Experience Suite and Project Northstar drive a focus on marketing.

• Acquisition focus: Unica, Coremetrics and SPSS.

2007

• 5square.com*

• Accept Software

• Eloqua

• Enkata

• Exploria*

• Hitwise

• Infonis

• InsideView

• KXEN

• Landslide

• Loyalty Lab

• NearbyNow*

• OpenQ*

• PowerReviews

• RLPTechnologies*

• Swivel*

• TOA Technologies

• Vistaar

• XpertUniverse

And…Cool Vendors Will Continue to Emerge

2008

• Advizor Solutions

• Aggregate Knowledge

• Cvent

• EveryScape

• The Fizzback Group

• GetAbby

• LandSonar

• Lemonade

• Orchestra Networks

• Saepio Technologies

• SalesCentric

• SupportSpace

• TopQuadrant

• Vitrium Systems

• Xmonic

• Ydilo

• Zoomix

*Industry specialists

2009

Sales

• Cloud9 Analytics

• Digby

• Makana Solutions

• Silent Edge

Marketing and Analytics

• dna13

• MuseWorx

• Pontis

• Visible Measures

Customer Service

• NexJ Systems

• Helpstream

• Reimage

• Vi-Clone

2010

Sales

• Artesian Solutions

• Jigsaw

• Prolifiq

Marketing and Analytics

• Thunderhead

• Balihoo

• NextStage Evolution

• Siri

Customer Service

• Transera

• QuickSeach

• The Selfservice Company

• Synthetix

Case study

PHOTOBOX

Gartner EMEA CRM Excellence Award 2010

In 2006, PhotoBox merged with its French equivalent, Photoways, to create a European market leader with 32% market share. Spurred by the merger and other planned expansions, PhotoBox migrated to a single Web platform that went live in early 2008. The migration included the launch of a new website.

However, insufficient customer input into the site planning led to poor customer feedback for the new site. PhotoBox acted quickly to turn the situation around and put the customer at the center of the business.

PhotoBox now has more than 11 million members.

PhotoBox won the Gartner EMEA CRM Excellence Award 2010 in the customer experience management category. Founded in 2000, PhotoBox aimed to help its customers transition to digital photography by providing an online service they could use to create personalized merchandise using their own images.

PhotoBox won the Gartner EMEA CRM Excellence Award 2010 in the customer experience management category. Founded in 2000, PhotoBox aimed to help its customers transition to digital photography by providing an online service they could use to create personalized merchandise using their own images.

Case study: Photobox

Key Findings

•It is impossible to provide exceptional customer service without understanding customer wants and needs.

•Don't underestimate the time and effort needed to set up analytics applications that can sort, validate and present customer information in an easy-to-digest format.

•Change management starts with improved employee cross-department collaboration — in this case, they were facilitated by "huddle meetings."

Case study: Photobox

The Challenge

•Customers felt confused and disoriented by the new website.

•Consumer activity on the new site declined by about 30%, compared with the prior year.

•In the week post-launch, Web issues drove an unprecedented and unforecast 29% increase in inquiries (about 6,000 more contacts within a month of the migration).

•The customer service operation became swamped.

•Customers using the new website became frustrated because they couldn't get through to customer support.

•PhotoBox had difficulty managing customers with multiple accounts. The company could link the accounts only if the inquiry included the incident number.

Case study: Photobox Approach •PhotoBox developed a customer experience strategy aimed at providing "spotless" customer experiences, thus reducing costs and increasing sales revenue. •The initial strategy had four goals and three principles.

Goals: •Reduce inbound contacts. •Reduce the number of customer contacts received as a percentage of the number of dispatched orders. •Increase customer advocacy and acquisitions via a "refer a friend" incentive. •Increase sales among existing customers

Principles: •Engage and listen — Consolidate customer data, make better use of customer surveys, co-create products with customers, and use additional beta and focus groups to test new ideas. •Learn and act — Institute a 30-minute post order "cooling off" period to allow customers to self-help with regards to any required order amends, simplify photo uploads and increase communications with customers. •Be accountable — Have one unifying metric for the team and weekly "huddles" to discuss issues and answers.

Case study: PhotoboxResults - PhotoBox's results from 2008 to 2009 included: •Customer base grew by 44.5% •Market share increased to 37.4% (from 32%) •40% customer growth per year •Increased overall sales among existing customers by 15% (not including new customers) •£240,000 in savings in cost-to-serve in 2009 •Customer care operational efficiencies enabled the company to reallocate two to three FTEs to other areas of the business. •Consistent, branded customer experience delivered in nine languages

In 2009, the "refer a friend" program delivered: •24% increase in new customers registered via refer a friend •45% increase (£260,184) in new referred customers placing their first order •15% increase in sales from existing customers •£260,184 in new orders •57,432 new registrations •39,534 first orders placed •81,092 unique people who referred a friend

Related Gartner Research

• How to Profit From Social CRM (G00206168)

• What's 'Hot' in CRM Applications in 2011 (G00211657 )

• Essential SaaS Overview and 2010 Guide to SaaS Research(G00200890)

• Reimagining IT: The 2011 CIO Agenda (G00210688)

• Case Study: Digital Photo Personal Publisher Improves Its Reputation With Customer Experience Management (G00212893 )

• Predicts 2011: CRM Enters a Three-Year Shake-Up (G00208813)

Find them at: www.gartner.com

Executive Programs team

Mr. Boris VrabecExecutive PartnerGartner Adriatic/Calistoboris.vrabec@gartner.comMobile: +385 98 4416 896Tel: +385 1 6176 416

Mr. Awi LifshitzExecutive Client Manager

(EXP)Gartner AustriaAwi.Lifshitz@gartner.comMobile: +43 664 8851 2035Tel: +43 1 5332 3500

Gartner Adriatic – contacts

Gartner Adriatic /Calisto

Koranska 1b/I

10000 Zagreb

Tel: +385 1 6171 431

Fax: +385 1 6171 431

Mr. Ivan Maglić

Regional Manager

ivan.maglic@gartner.com

Mobile: +385 98 416 896

Mrs. Nataša Glavović

Sales and Marketing Executive

natasa.glavovic@gartner.com

Mobile: +385 98 678 972

Calisto Adriatic / Gartner Bulgaria

6, Hubavka Str. 1111 SofiaTel: +359 2 971 14 01

Fax: +359 2 971 14 02

Alexander Zahariev

Country Manager

alex.zahariev@gartner.com

Mobile: +359 87 7677113

Gartner

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