Recent studies predict the global CRM market will double within six years, and suggest explosive growth in CRM adoption across every segment -- especially on-demand CRM.
by Joshua Weinberger, with reporting by Demir Barlas and Jean Thilmany
Good news for CRM vendors: CRM software investment, adoption, and product revenues are all set to rise, according to a recent report from market analysis firm Datamonitor.
Though Datamonitor estimates the 2006 global CRM software market was worth just under $3.6 billion in license revenue alone, the research firm's analysis finds the market hasn't yet matured. In fact, less than half of U.S. companies -- 42 percent -- are using CRM, according to new research from the consulting firm KensingtonHouse. Datamonitor predicts a compound annual growth rate of approximately 10.5 percent through 2012, nearly doubling in size to $6.6 billion.
Datamonitor attributes that predicted growth to increasing deployment of CRM in new vertical sectors, such as healthcare and life sciences, as well as to a high degree of flexibility in deployment that will bring smaller-size end users on board.
Even more notable, in terms of current and future growth, is the fact that CRM's "market fertility" -- the percentage of companies deploying, upgrading, or actively considering a CRM purchase -- stands at 38 percent, according to the KensingtonHouse report.
The market-fertility figure is the metric KensingtonHouse chose to highlight, as it reveals a record number of companies deploying or planning to deploy CRM. "This is significantly above what I've seen historically, which has been 18 to 25 percent fertility," says Thomas Moriarty, the consultancy's president.
According to KensingtonHouse, the main reason for the current wave of CRM popularity is the maturity of the on-demand delivery model and functionality set. Fifty-five percent of respondents expressed a preference for on-demand, with a mere 14 percent nominating on-premise and 31 percent undecided. Though 87 percent of survey respondents were either small or midsize businesses (SMBs), Moriarty says that the preference for on-demand extends to the enterprise segment as well. (The research canvassed 437 respondents representing a population of 20,000 companies with a degree of accuracy of plus or minus 5 percent.)
On-demand's benefits include its low cost and its simplicity, Moriarty says: The model can lower the cost of a CRM deployment by as much as 60 percent while also offering an increasingly user-friendly experience.
While on-demand can be easier to implement than on-premise, adopters of either variety should still be aware of the risks of project failure. Gartner recently predicted that, by the end of 2008, "25 percent of CRM projects will be postponed or canceled because of the CRM skill shortage in consultants and systems integrators." Moriarty suggests that figure be taken in context. "Three years ago, that number would have been 75 percent," he claims.
A recent report from the consultancy Bain & Co. revealed that companies that put more effort into CRM up front (including long-term planning, unwavering executive sponsorship, and diligent change management) get more out of the technology. Those companies that put a "major effort" into CRM reported a 4.17 satisfaction score on a five-point scale, while those putting in a "limited effort" were only able to achieve a 3.53 score.
More companies now consider CRM critical to their enterprise application portfolio, according to Datamonitor: "As the increasing number of organizations understand the importance of positive customer experiences and strong customer relationships, the market for [CRM] applications continues to expand."
The report found the CRM sector increasingly segmented by enterprise size. Whereas CRM was once primarily for large companies, Datamonitor estimates that companies with fewer than 1,000 employees made up one-third of all CRM licenses sold last year; by 2012, that sector will hold 42 percent of the market.
But Datamonitor's analysis found that many end users are cautious when considering CRM for fear of facing adoption issues. These companies reported several "adoption inhibitors," including software complexity; high total cost of ownership; and lack of strategic support for CRM installations.
On-demand software has become a credible alternative, but report author Vuk Trifkovic, a technology analyst at Datamonitor, doesn't expect it will significantly alter the CRM market in coming years. (The report estimates the present-day global on-demand CRM market to be approximately $1 billion.) Trifkovic expects to see a substantially more competitive on-demand market, with established on-demand vendors facing pressure from smaller ones -- and both competing against traditional on-premise vendors that now offer on-demand editions.
The on-demand application model -- in which the vendor hosts the CRM software on distant servers -- removes the end user's headache of daily maintenance and technical operations. Such applications will drive CRM adoption, particularly at small and midsize enterprises that have held back due to concerns about implementation issues, the report says.
"Although [the on-demand] method does address certain adoption inhibitors, CRM on-demand, alone, cannot transform the market," Trifkovic writes.
21.1.08
8.1.08
Top 25 CRM News Stories of 2007
As 2008 arrives, a look back at the most popular online stories of last year.
by Editors of CRM magazine
Heading into 2008, awash in predictions and guesses about what the year ahead is likely to bring, we thought it was a fine time to step back and take a moment to reflect on the 25 stories viewed most often by visitors here at destinationCRM.com.
It's important to note, of course, that stories posted recently haven't had the benefit of extra time to trickle through the series of tubes we call the Internet, so it's no surprise that any list such as this would skew heavily toward the first quarter of the year -- it's impossible to guess what this list will look like a few months or even a year from now. (If you've got an algorithm for accurately weighting popularity as a factor of time, we'd love to hear about it.) If history is any guide, articles eventually develop lives of their own, spiking in popularity weeks or even months after they're first written -- as companies change, products are introduced or updated, and related trends emerge.
Consider some of the major headlines from the year that aren't yet on this list:
But enough dragging out the suspense -- here are the Top 25, as of Dec. 31, 2007:
#1 - SAS Tops Gartner's BI Magic Quadrant (2/1/2007)
#2 - Verint: Can I Get a Witness? (2/12/2007)
#3 - Gartner Combines Two Magic Quadrants (2/14/2007)
#4 - Midmarket CRM Grows (2/23/2007)
#5 - Beagle Honors the Wizzes in the Biz (3/6/2007)
#6 - High-Tech Wages Are On the Upswing (1/3/2007)
#7 - Infor Is the Top Performer in Performance Management (1/22/2007)
#8 - SPSS Refreshes Its Data Mining Software (1/16/2007)
#9 - Microsoft Brings Analytics to the Desktop (2/14/2007)
#10 - A Dot KANA Solution (1/22/2007)
#11 - Omniture and Salesforce.com Take a Meeting (9/11/2007)
#12 - What's in a Lead? (1/9/2007)
#13 - Centric CRM Updates Its Offerings (3/9/2007)
#14 - An SFA Wave Hits a Crowded Beach (5/3/2007)
#15 - NetSuite Moves Up the E-Commerce Ladder (2/15/2007)
#16 - SugarCRM Adds Spice (1/29/2007)
#17 - A New Flavor of Microsoft Dynamics CRM (1/10/2007)
#18 - Business Objects Makes Baby's First BI (2/5/2007)
#19 - Siebel Continues to Fly Solo as a Leader (3/7/2007)
#20 - RightNow Delivers on Voice Commitment (2/5/2007)
#21 - Offline-Level Service Is a Must-Have in the Virtual World (1/8/2007)
#22 - Avaya Begins an Ascent (1/15/2007)
#23 - Yahoo! Is the New E-Biz Satisfaction Leader (8/14/2007)
#24 - Salesforce.com Makes a Vertical Splash (2/28/2007)
#25 - Oracle's World of Unlimited Possibilities (1/31/2007)
by Editors of CRM magazine
Heading into 2008, awash in predictions and guesses about what the year ahead is likely to bring, we thought it was a fine time to step back and take a moment to reflect on the 25 stories viewed most often by visitors here at destinationCRM.com.
It's important to note, of course, that stories posted recently haven't had the benefit of extra time to trickle through the series of tubes we call the Internet, so it's no surprise that any list such as this would skew heavily toward the first quarter of the year -- it's impossible to guess what this list will look like a few months or even a year from now. (If you've got an algorithm for accurately weighting popularity as a factor of time, we'd love to hear about it.) If history is any guide, articles eventually develop lives of their own, spiking in popularity weeks or even months after they're first written -- as companies change, products are introduced or updated, and related trends emerge.
Consider some of the major headlines from the year that aren't yet on this list:
- the business-intelligence fire sale that included Oracle acquiring Hyperion Solutions, SAP making a bid for Business Objects, and IBM snapping up Cognos;
- the late-year launches of SAP Business ByDesign, SAP CRM 2007, and Microsoft's Dynamics CRM 4.0;
- the initial public offerings for NetSuite and (after a short delay) SoundBite Communications;
- the ongoing legal battle between SAP and Oracle over alleged corporate espionage by an SAP subsidiary;
- a major restructuring and some wholesale corporate tumult at Sage Software;
- departures of key CRM executives from SAP (Shai Agassi) and Oracle (John Wookey);
- Oracle's offer to buy middleware competitor BEA Systems -- which was quickly rejected;
- CEO departures from Genesys Telecommunications Laboratories (for Nuance Communciations) and from Callidus Software (for Microsoft);
- the launch of Apple's iPhone and the mainstreaming of enterprise mobility in CRM overall;
- Salesforce.com hitting a milestone (its millionth subscriber) and launching its Platform-as-a-Service; and
- upgrades -- and new naming conventions -- for the core CRM suites of NetSuite, Concursive Corp. (formerly Centric CRM) and RightNow Technologies.
All these stories were major events in 2007, stories likely to have repercussions in the year ahead -- and none of them has yet cracked the Top 25.
That said, the articles that do currently comprise the Top 25 have been popular for a reason, and they reflect a wide range of subject matter -- from research reports to trend analysis, from vendor announcements to product launches. What's really amazing is the sheer breadth of the CRM industry reflected in this list -- 18 of the 25 headlines mention a CRM vendor by name, with only two vendors appearing more than once. We take that as a sign of how democratic the marketplace truly has become (and perhaps a sign that we're doing a fairly decent job being representative of that marketplace).But enough dragging out the suspense -- here are the Top 25, as of Dec. 31, 2007:
#1 - SAS Tops Gartner's BI Magic Quadrant (2/1/2007)
#2 - Verint: Can I Get a Witness? (2/12/2007)
#3 - Gartner Combines Two Magic Quadrants (2/14/2007)
#4 - Midmarket CRM Grows (2/23/2007)
#5 - Beagle Honors the Wizzes in the Biz (3/6/2007)
#6 - High-Tech Wages Are On the Upswing (1/3/2007)
#7 - Infor Is the Top Performer in Performance Management (1/22/2007)
#8 - SPSS Refreshes Its Data Mining Software (1/16/2007)
#9 - Microsoft Brings Analytics to the Desktop (2/14/2007)
#10 - A Dot KANA Solution (1/22/2007)
#11 - Omniture and Salesforce.com Take a Meeting (9/11/2007)
#12 - What's in a Lead? (1/9/2007)
#13 - Centric CRM Updates Its Offerings (3/9/2007)
#14 - An SFA Wave Hits a Crowded Beach (5/3/2007)
#15 - NetSuite Moves Up the E-Commerce Ladder (2/15/2007)
#16 - SugarCRM Adds Spice (1/29/2007)
#17 - A New Flavor of Microsoft Dynamics CRM (1/10/2007)
#18 - Business Objects Makes Baby's First BI (2/5/2007)
#19 - Siebel Continues to Fly Solo as a Leader (3/7/2007)
#20 - RightNow Delivers on Voice Commitment (2/5/2007)
#21 - Offline-Level Service Is a Must-Have in the Virtual World (1/8/2007)
#22 - Avaya Begins an Ascent (1/15/2007)
#23 - Yahoo! Is the New E-Biz Satisfaction Leader (8/14/2007)
#24 - Salesforce.com Makes a Vertical Splash (2/28/2007)
#25 - Oracle's World of Unlimited Possibilities (1/31/2007)
7.12.07
Omniture Set to Acquire Visual Sciences
The pool of Web analytics providers continues to shrink.
The Web marketing technology space continued its trend toward consolidation last week, with Omniture announcing plans to acquire Visual Sciences for $394 million.
The move solidifies Orem, Utah-based Omniture's spot atop the shrinking list Web analytics players, and means other marketing-software vendors will look to integrate their products with Omniture before turning to other integrations, says Bill Gassman, research director at industry research firm Gartner.
Boasting a client list that includes eBay, General Motors, Microsoft, and Sony, Omniture's SiteCatalyst product helps electronically measure Web-site traffic, visitor activity, advertising effectiveness, and e-commerce transactions. Other products give customers access to business data in real time. San Diego-based Visual Sciences offers Internet-based businesses a tracking service that measures and analyzes Web-site activity. The data it collects can help improve marketing, e-commerce, and customer support, according to company statements. (Until May of this year, Visual Sciences was known as WebSideStory, which acquired the Visual Sciences name and technology in February 2006.)
Companies that operate on the Web -- and that includes just about every company in business today -- rely on analytics tools, Gassman says. Tools such as Omniture's look for Web trends that are vital to planning targeted marketing campaigns. "The more your business depends on online channels, the more you need analytics because that's the way you understand your business," Gassman says.
But smaller companies need not pay costly software-as-a-service (SaaS) fees to access those tools, he says. Instead, companies with fewer than than 5 million page views per month can use Google Analytics for free. Since its introduction a few years ago, the Google product has fractured the Web analytics market: Large companies and those with an entirely online presence -- think eBay -- now use products such as Omniture's, while smaller players turn to Google Analytics.
As the number of Web analytics providers (all following the SaaS model) that cater to big businesses continues to shrink, companies looking to analyze and track visitor activity on their Web sites have fewer software options to choose from. But the remaining analytics providers increasingly boast a broader solution set that covers more tracking, analysis, and Web marketing bases than in the past, Gassman adds.
"And here we have number one buying number two," he says. "What that means is [that] vendors of other online marketing programs will make the effort to integrate their products with Omniture first. They'll pick up other Web analytics platforms later." Examples of online marketing applications that can be integrated with Web analytics software include targeted email programs and marketing planning software. Those applications use Web analytics information to populate their own applications.
Josh James, Omniture's chief executive officer, says his company's fit with Visual Sciences is a natural one. The companies' combined analytics and tracking technologies will offer a stepped-up set of solutions that can meet customers' expanding needs, he says.
"We're facing a very significant opportunity defined by the rapid growth of online advertising and online business in general," James says. "This acquisition enables Omniture to accelerate our investments in advanced solutions that drive customer success as well as create further opportunities to cross-sell our growing portfolio of products to a combined customer base of more than 4,000 customers."
At least one other marketing-technology executive agrees that consolidation is a good thing for the industry. Luis Rivera, chief executive officer of marketing software provider J.L. Halsey, says Omniture's move is indicative of what he calls the "vitality" of the marketing sector, including his own company's recent spate of acquisitions (Lyris Technologies, EmailLabs, ClickTracks, and Hot Banana). "Technology today makes it easier than ever for marketers to acquire customers and drive increased ROI through more relevant, behavior-based marketing programs," Rivera says, in a written statement. "But every technology tool at a marketer's disposal -- Web analytics, content management, and email marketing, to name a few -- is made more valuable when it works in concert with all the others. That's what this wave of consolidation is all about."
CRM Is Up Down Under
New research shows Australia leading the adoption of CRM software in the rapidly expanding Asia-Pacific market.
by Colin Beasty
CRM software revenue in the Asia-Pacific region will grow at a compound annual growth rate (CAGR) of 16.8 percent from 2006 to 2011, according to a new study recently released by Gartner. The firm's research, which highlights the region's expanding importance for CRM vendors, found Australia leading the way in CRM, claiming 42.8 percent of Asia-Pac's CRM market in 2006.
The Asia-Pacific region's strong uptake of CRM is being fueled by growth across all subsegments, Gartner's findings show -- with marketing, in particular, laying claim to 23.5 percent of CRM software revenue. And unlike the United States or Europe / Middle East / Africa (EMEA) -- regions that are experiencing explosive growth in software-as-a-service (SaaS) -- the Asia-Pacific market has, to date, been relatively old-school, driven by traditional deployments of installed software, says Denise Ganly, an analyst and research director of enterprise applications with Gartner. "The [Asia-Pacific] market is relatively immature compared to North America and EMEA," she says. "SaaS and on-demand hasn't taken off in the same way, and in many Asian countries this will not likely change due to the cultural barriers associated with such a deployment model."
Despite the so-called immaturity, Gartner expects market consolidation and burgeoning on-demand use to stimulate CRM expansion overall in the region. Australia in particular will experience continued growth -- especially organic growth -- thanks in part to what Gartner sees as the country's strong IT infrastructure and partner channels for CRM vendors, as well as the availability of integration and support services.
"The Australian market will continue to grow as end users extend their applications beyond ERP, but the market will also experience growth because of the continued adoption of on-demand solutions, as well as CRM solutions for self-service customer support of campaign management," Ganly writes in the report. "Even in Australia the CRM market is relatively immature, with a lot of potential for organic growth. Companies across the Asia-Pacific region are focusing on analyzing customer data and trying to gain the whole view of the customer, rather than embarking on [automation] for their sales force."
Recent research by Gartner also highlighted the growth of business intelligence (BI) software in the Asia-Pacific region. The BI market grew 16 percent in 2005 to reach $491.8 million in 2006, with Japan accounting for more than half of that overall growth. India was listed as the fastest-growing BI market, with software revenues for BI platforms reaching $16.4 million in 2006, up from $12.1 million the previous year. In many ways, CRM and BI software are growing hand-in-hand, Bhavish Sood, a principal analyst with Gartner, writes in the report. This sort of software is "nice to have" as businesses in the Asia-Pacific region continue to develop beyond basics such as ERP and accounting software, he says.
by Colin Beasty
CRM software revenue in the Asia-Pacific region will grow at a compound annual growth rate (CAGR) of 16.8 percent from 2006 to 2011, according to a new study recently released by Gartner. The firm's research, which highlights the region's expanding importance for CRM vendors, found Australia leading the way in CRM, claiming 42.8 percent of Asia-Pac's CRM market in 2006.
The Asia-Pacific region's strong uptake of CRM is being fueled by growth across all subsegments, Gartner's findings show -- with marketing, in particular, laying claim to 23.5 percent of CRM software revenue. And unlike the United States or Europe / Middle East / Africa (EMEA) -- regions that are experiencing explosive growth in software-as-a-service (SaaS) -- the Asia-Pacific market has, to date, been relatively old-school, driven by traditional deployments of installed software, says Denise Ganly, an analyst and research director of enterprise applications with Gartner. "The [Asia-Pacific] market is relatively immature compared to North America and EMEA," she says. "SaaS and on-demand hasn't taken off in the same way, and in many Asian countries this will not likely change due to the cultural barriers associated with such a deployment model."
Despite the so-called immaturity, Gartner expects market consolidation and burgeoning on-demand use to stimulate CRM expansion overall in the region. Australia in particular will experience continued growth -- especially organic growth -- thanks in part to what Gartner sees as the country's strong IT infrastructure and partner channels for CRM vendors, as well as the availability of integration and support services.
"The Australian market will continue to grow as end users extend their applications beyond ERP, but the market will also experience growth because of the continued adoption of on-demand solutions, as well as CRM solutions for self-service customer support of campaign management," Ganly writes in the report. "Even in Australia the CRM market is relatively immature, with a lot of potential for organic growth. Companies across the Asia-Pacific region are focusing on analyzing customer data and trying to gain the whole view of the customer, rather than embarking on [automation] for their sales force."
Recent research by Gartner also highlighted the growth of business intelligence (BI) software in the Asia-Pacific region. The BI market grew 16 percent in 2005 to reach $491.8 million in 2006, with Japan accounting for more than half of that overall growth. India was listed as the fastest-growing BI market, with software revenues for BI platforms reaching $16.4 million in 2006, up from $12.1 million the previous year. In many ways, CRM and BI software are growing hand-in-hand, Bhavish Sood, a principal analyst with Gartner, writes in the report. This sort of software is "nice to have" as businesses in the Asia-Pacific region continue to develop beyond basics such as ERP and accounting software, he says.
CRM Remains a Fertile Market
New research points to explosive growth in CRM adoption across every segment -- especially on-demand CRM.
by Demir Barlas
Forty-two percent of U.S. companies are using CRM, according to new market research from the consulting firm KensingtonHouse, and the percentage just keeps on growing. Even more notable, in terms of current and future growth, is the fact that CRM's "market fertility" -- the percentage of companies deploying, upgrading, or actively considering a CRM purchase -- stands at 38 percent, according to the report.
The market-fertility figure is the metric KensingtonHouse chose to highlight, as it reveals a record number of companies deploying or planning to deploy CRM. "This is significantly above what I've seen historically, which has been 18 to 25 percent fertility," says Thomas Moriarty, the consultancy's president.
According to the survey, the main reason for the current wave of CRM popularity is the maturity of the on-demand delivery model and functionality set. Fifty-five percent of respondents expressed a preference for on-demand, with a mere 14 percent nominating on-premise and 31 percent undecided. Eighty-seven percent of survey respondents were either small or midsize businesses (SMBs), but Moriarty says that the preference for on demand extended to the enterprise segment as well. The research, sponsored by Microsoft CRM partner T.H.G. Sales Automation, canvassed 437 respondents representing a population of 20,000 companies with a degree of accuracy of plus or minus 5 percent.
On demand is succeeding because of both its low cost and its simplicity, Moriarty says, adding that KensingtonHouse estimates the model can lower the cost of a CRM deployment by as much as 60 percent while also offering an increasingly user-friendly experience. "Customization is so easy now that you don't have to be a bits-and-bytes guy to go in and create all kinds of different fields, reports, and dashboards," he says.
While on-demand initiatives may be easier to implement than on-premise ones, adopters of either variety should still be aware of the significant risks of project failure. Gartner recently predicted that, by the end of 2008, "25 percent of CRM projects will be postponed or canceled because of the CRM skill shortage in consultants and systems integrators." While this sounds like an inordinately high number to industry outsiders, Moriarty emphasizes that it has to be taken in context. "Three years ago, that number would have been 75 percent," he claims.
The good news is not only that the ecosystem of CRM consultants and systems integrators has matured through continued CRM implementation success, but also that CRM adopters can control their own fates by making CRM an institutional priority. The recent Management Tools and Trends 2007 report from management consultancy Bain & Co. revealed that companies that put more effort into CRM up front (including long-term planning, unwavering executive sponsorship, and diligent change management) get more out of the technology. In the Bain survey, those companies who put a "major effort" into CRM reported a 4.17 satisfaction score on a five-point scale, while those putting in a "limited effort" were only able to achieve a 3.53 score.
That data point alone should convince any CRM adopter aiming to maximize return on investment to enter into the implementation prepared and willing to put in some heavy lifting. "You have to maintain the quality of data and make sure to load a good set of business rules that specify how the system is going to be used," Moriarty counsels. "You have to do the work."
by Demir Barlas
Forty-two percent of U.S. companies are using CRM, according to new market research from the consulting firm KensingtonHouse, and the percentage just keeps on growing. Even more notable, in terms of current and future growth, is the fact that CRM's "market fertility" -- the percentage of companies deploying, upgrading, or actively considering a CRM purchase -- stands at 38 percent, according to the report.
The market-fertility figure is the metric KensingtonHouse chose to highlight, as it reveals a record number of companies deploying or planning to deploy CRM. "This is significantly above what I've seen historically, which has been 18 to 25 percent fertility," says Thomas Moriarty, the consultancy's president.
According to the survey, the main reason for the current wave of CRM popularity is the maturity of the on-demand delivery model and functionality set. Fifty-five percent of respondents expressed a preference for on-demand, with a mere 14 percent nominating on-premise and 31 percent undecided. Eighty-seven percent of survey respondents were either small or midsize businesses (SMBs), but Moriarty says that the preference for on demand extended to the enterprise segment as well. The research, sponsored by Microsoft CRM partner T.H.G. Sales Automation, canvassed 437 respondents representing a population of 20,000 companies with a degree of accuracy of plus or minus 5 percent.
On demand is succeeding because of both its low cost and its simplicity, Moriarty says, adding that KensingtonHouse estimates the model can lower the cost of a CRM deployment by as much as 60 percent while also offering an increasingly user-friendly experience. "Customization is so easy now that you don't have to be a bits-and-bytes guy to go in and create all kinds of different fields, reports, and dashboards," he says.
While on-demand initiatives may be easier to implement than on-premise ones, adopters of either variety should still be aware of the significant risks of project failure. Gartner recently predicted that, by the end of 2008, "25 percent of CRM projects will be postponed or canceled because of the CRM skill shortage in consultants and systems integrators." While this sounds like an inordinately high number to industry outsiders, Moriarty emphasizes that it has to be taken in context. "Three years ago, that number would have been 75 percent," he claims.
The good news is not only that the ecosystem of CRM consultants and systems integrators has matured through continued CRM implementation success, but also that CRM adopters can control their own fates by making CRM an institutional priority. The recent Management Tools and Trends 2007 report from management consultancy Bain & Co. revealed that companies that put more effort into CRM up front (including long-term planning, unwavering executive sponsorship, and diligent change management) get more out of the technology. In the Bain survey, those companies who put a "major effort" into CRM reported a 4.17 satisfaction score on a five-point scale, while those putting in a "limited effort" were only able to achieve a 3.53 score.
That data point alone should convince any CRM adopter aiming to maximize return on investment to enter into the implementation prepared and willing to put in some heavy lifting. "You have to maintain the quality of data and make sure to load a good set of business rules that specify how the system is going to be used," Moriarty counsels. "You have to do the work."
Market Focus: Technology -- The Simple Truth about Complex Manufacturing
Tech firms need CRM as much as any other company--and sometimes even more.
by Marshall Lager
There's a long-standing (and wrong-headed) belief that CRM technology can be a cure-all for a company's operational woes. There's an equally long-standing (and equally wrong-headed) perception that high-tech manufacturers and vendors don't need CRM. Not only is the 360-degree view of customers, partners, and processes important in the technology vertical; it's made tricky by the complexity of the business models and by the roots of those misperceptions.
In the first place, every business needs CRM, even if only to manage customers' account histories and communications -- CRM grew from contact management, after all. Why, then, the idea that tech businesses don't need it? "It's not as much a process vertical [as] financial services," says Tim Hickernell, senior research analyst, applications, Info-Tech Research Group. The focus is on the products themselves -- and since tech salespeople are often former engineers, they're less likely to be relationship-driven.
This is a dangerous reduction of the situation. Even in the tech world, says Diane Albano, vice president of Americas operations at Progress Software, "People are still selling to people, trying to solve a problem." Progress promotes sales effectiveness of businesses across many verticals, and Albano says the key is communicating. "If you can get that message across to your team, you'll have happier customers and more motivated workers."
Using and contributing to the CRM system, remembering that business is about the customer and not the product, are basic elements that haven't become as ingrained among tech firms as they have elsewhere. Fortunately, fixing issues around adoption and technique among techies requires largely the same effort as it does in other verticals. "You must make it mandatory -- it's not up for debate. But do it in a gentle, prodding way, not with yelling," Albano says. "Show how you're enabling salespeople in order to make them understand why it's necessary."
Beyond adoption, Hickernell notes where tech companies are different from others in terms of CRM. "Selecting the right CRM components is more important," he says. "Channel management and knowledge management are important considerations. There's a very complex value chain -- relationships are at least B2B2C," he says, and often reflexive, where two manufacturers sell each other their products. "Work is spread across the value chain, involving original equipment manufacturers, original design manufacturers, and even different divisions of a single company selling to itself as an internal customer." This means careful tracking of channels, and a firm grasp on information at all stages with knowledge management.
This becomes apparent in engineering-to-order processes. "We maintain virtually no finished goods in stock. Almost all orders we take require engineers to be involved before production begins," says Phil Shields, senior analyst at K&L Microwave, a manufacturer that uses CRM software from IFS. "They may be involved in the quoting process, determining if we can even build a product to the customer's specs, providing technical data or preliminary drawings. After we receive an order, engineers will design the new product; even for repeat orders, engineers many times need to check the documentation provided by the customer to make sure there are no changes since the last time."
Prior to implementing sales-and-marketing functionality, K&L was generating quotes with the IFS ERP system. "This required us to create a customer, sales part, and inventory part just to create a quote," Shields says. "Integration with our ERP system was one of the big reasons we selected IFS's CRM system." Requiring zero programming or customization, all customers, sales parts, customer orders, and invoices are now available within the CRM system. "The IFS CRM system has given us one place to put information, both customer-furnished and K&L documents, so that everyone in the company can access it," Shields says.
Knowledge management and dissemination also comes into its own in high technology. "The expectation for self-service, especially Web self-service, is much higher in this vertical," Hickernell says. "The customer is much more savvy, and more is expected of the vendor. If an error message is programmed into a piece of technology, the customer expects there to be a knowledgebase article for dealing with it."
by Marshall Lager
There's a long-standing (and wrong-headed) belief that CRM technology can be a cure-all for a company's operational woes. There's an equally long-standing (and equally wrong-headed) perception that high-tech manufacturers and vendors don't need CRM. Not only is the 360-degree view of customers, partners, and processes important in the technology vertical; it's made tricky by the complexity of the business models and by the roots of those misperceptions.
In the first place, every business needs CRM, even if only to manage customers' account histories and communications -- CRM grew from contact management, after all. Why, then, the idea that tech businesses don't need it? "It's not as much a process vertical [as] financial services," says Tim Hickernell, senior research analyst, applications, Info-Tech Research Group. The focus is on the products themselves -- and since tech salespeople are often former engineers, they're less likely to be relationship-driven.
This is a dangerous reduction of the situation. Even in the tech world, says Diane Albano, vice president of Americas operations at Progress Software, "People are still selling to people, trying to solve a problem." Progress promotes sales effectiveness of businesses across many verticals, and Albano says the key is communicating. "If you can get that message across to your team, you'll have happier customers and more motivated workers."
Using and contributing to the CRM system, remembering that business is about the customer and not the product, are basic elements that haven't become as ingrained among tech firms as they have elsewhere. Fortunately, fixing issues around adoption and technique among techies requires largely the same effort as it does in other verticals. "You must make it mandatory -- it's not up for debate. But do it in a gentle, prodding way, not with yelling," Albano says. "Show how you're enabling salespeople in order to make them understand why it's necessary."
Beyond adoption, Hickernell notes where tech companies are different from others in terms of CRM. "Selecting the right CRM components is more important," he says. "Channel management and knowledge management are important considerations. There's a very complex value chain -- relationships are at least B2B2C," he says, and often reflexive, where two manufacturers sell each other their products. "Work is spread across the value chain, involving original equipment manufacturers, original design manufacturers, and even different divisions of a single company selling to itself as an internal customer." This means careful tracking of channels, and a firm grasp on information at all stages with knowledge management.
This becomes apparent in engineering-to-order processes. "We maintain virtually no finished goods in stock. Almost all orders we take require engineers to be involved before production begins," says Phil Shields, senior analyst at K&L Microwave, a manufacturer that uses CRM software from IFS. "They may be involved in the quoting process, determining if we can even build a product to the customer's specs, providing technical data or preliminary drawings. After we receive an order, engineers will design the new product; even for repeat orders, engineers many times need to check the documentation provided by the customer to make sure there are no changes since the last time."
Prior to implementing sales-and-marketing functionality, K&L was generating quotes with the IFS ERP system. "This required us to create a customer, sales part, and inventory part just to create a quote," Shields says. "Integration with our ERP system was one of the big reasons we selected IFS's CRM system." Requiring zero programming or customization, all customers, sales parts, customer orders, and invoices are now available within the CRM system. "The IFS CRM system has given us one place to put information, both customer-furnished and K&L documents, so that everyone in the company can access it," Shields says.
Knowledge management and dissemination also comes into its own in high technology. "The expectation for self-service, especially Web self-service, is much higher in this vertical," Hickernell says. "The customer is much more savvy, and more is expected of the vendor. If an error message is programmed into a piece of technology, the customer expects there to be a knowledgebase article for dealing with it."
Advertising is low on marketing budget list, survey shows
www.dmi-news.com
Advertising accounts for just under 15 per cent of marketing spend on average and marketers plan to spend less in the future - so says a marketing trends survey from the Chartered Institute of Marketing (CIM), based in the UK.
The other marketing activities attracting significant budget include lead generation (12 per cent), CRM (12 per cent) direct mail (11 per cent), field marketing (11 per cent) and internal marketing (seven per cent).
The survey found that marketers plan to increase their spend on online marketing in the current sales year by an average of 3.6 per cent, CRM by two per cent and public relations by 1.5 per cent. However, they plan to reduce their spend on advertising by 0.2 per cent.
Although marketers who were surveyed plan to spend more on online marketing, digital communication was used by only one in 12 companies at least 'a fair amount'.
Geoff Hurst, marketing director at the CIM, said: "It's interesting to note that a significant majority of marketers are still not making use of the full spectrum of technologies available to help them communicate with customers. In fact, the numbers answering 'not at all' when asked how regularly they used podcasts, corporate blogs, mobile marketing and viral marketing, have actually increased since the survey was last conducted in autumn 2006.
"While traditional marketing techniques will remain important tools for marketers in the future, it will be interesting to see how these figures change when we carry out our next survey."
Advertising accounts for just under 15 per cent of marketing spend on average and marketers plan to spend less in the future - so says a marketing trends survey from the Chartered Institute of Marketing (CIM), based in the UK.
The other marketing activities attracting significant budget include lead generation (12 per cent), CRM (12 per cent) direct mail (11 per cent), field marketing (11 per cent) and internal marketing (seven per cent).
The survey found that marketers plan to increase their spend on online marketing in the current sales year by an average of 3.6 per cent, CRM by two per cent and public relations by 1.5 per cent. However, they plan to reduce their spend on advertising by 0.2 per cent.
Although marketers who were surveyed plan to spend more on online marketing, digital communication was used by only one in 12 companies at least 'a fair amount'.
Geoff Hurst, marketing director at the CIM, said: "It's interesting to note that a significant majority of marketers are still not making use of the full spectrum of technologies available to help them communicate with customers. In fact, the numbers answering 'not at all' when asked how regularly they used podcasts, corporate blogs, mobile marketing and viral marketing, have actually increased since the survey was last conducted in autumn 2006.
"While traditional marketing techniques will remain important tools for marketers in the future, it will be interesting to see how these figures change when we carry out our next survey."
Toolkit Tutorial: Getting Value From SFA Applications
The develop, education, assess and learn (DEAL) approach will help sales organizations achieve the elusive business value they seek in their sales force automation (SFA) deployments. There is no guarantee of a return on investment (ROI) for IT projects, but the DEAL approach will better prepare your sales organization to define expectations, adopt realistic measures and achieve tangible benefits.
Key Findings
Key Findings
- Developing and continually measuring meaningful sales metrics tied to business goals are key to showing value in SFA deployments.
- Setting realistic expectations and gaining consensus on the needs of sales management and salespeople are critical to securing, buying and pursuing attainable business goals.
Recommendations
- Develop meaningful sales metrics tied to business goals (rather than to sales activity); this is key to showing value in SFA.
- Continually measure, interpret and take action based on sales metrics; this makes these metrics "meaningful."
- Create reporting processes to assess achievement against metric goals that are nonintrusive and don't burden salespeople.
- Establish a feedback loop technically, via a community site, or organizationally, through sales support, and use the data collected to tweak the metrics, processes and SFA system.
ANALYSIS
Context
The DEAL approach is a process that will improve the ability of a sales organization to capture and continually improve the value (for example, through increased sales, lead conversion rates and shorter sales cycles) attained from SFA deployment.
The top question Gartner receives about SFA is: How do you measure ROI for SFA? Even in cases where user adoption approaches 100%, sales organizations struggle with understanding the value delivered by their SFA to the sales organization. Sales executives often say they have improved visibility, or more accurate sales forecasts, but they cannot translate these "soft" benefits into real revenue or margin improvement. The primary difficulty in determining value is that there are many parameters besides the technology that will determine performance. Devising the right sales process, developing optimal sales territories, creating the correct incentive compensation plans, or just having good products or services to sell have significant, if not decisive, impact on sales performance and outcomes. However, the variability in nontechnical factors should not excuse organizations from measuring the success of an SFA deployment. The Gartner DEAL approach, when followed, will improve the ability of sales organizations to benefit from an SFA deployment.
Assumption: The Gartner DEAL approach focuses on the deployment of SFA. The assumption is that a sales organization already has implemented a sales methodology and has developed territories and compensation plans to pursue business goals. The DEAL approach is designed to provide insight into the effectiveness of sales strategies to enable you to make refinements.
Develop
The "develop" phase of the DEAL approach is the most critical and should not be circumvented. In this phase, your sales organization will determine the sales metrics to be tracked and measured during the life cycle of the deployment. The metrics are not for management only but also for salespeople. The intent of the metrics is to provide insight for all system users, to determine whether they are receiving value that is meaningful to them (such as increased close rates for salespeople). Each industry has specific metrics they consider most important; however, some basic metrics tend to be common. For sales management, metrics may include lead conversion rate, confidence levels in forecast pipelines/pipeline health, opportunity funnel velocity (the time it takes for a sales opportunity to move from qualification to close), opportunity close rates and new salesperson ramp-up time (the time it takes a salesperson to be as a effective as comparable performers).
These metrics are not meant to replace analytical reporting on sales performance, where managers gain forecast insight into such issues through win/loss reports, or specific territory performance. The sales management metrics for the SFA project are intended to focus more on the effective use of technology. For salespeople, metrics may include sales content effectiveness (which sales content has been proved most effective in winning new deals), lead quality/source conversion (which lead sources have proved most valuable for sales opportunities), sales methodology effectiveness and activity-based forecast collaboration (helps salespeople measure how well their committed forecast maps to committed sales activities). This is not an exhaustive list of metrics but provides a general guideline to determine the type of metrics your sales organization should consider.
In general, sales objectives and associated metrics tend to be focused on:
- Acquiring new customers more effectively
- Cross-selling
- Improving margins per sale
- Reducing costs of sales
- Retaining or reducing the churn of established customers
- Selling more frequently
- Upselling
Top-line financial metrics must be supported by operational sales metrics, which are more difficult to select and monitor effectively. (See Note 1 for examples of sample metrics that enterprises have used to gauge performance in their sales initiatives.) A key issue in SFA projects for field sales is user adoption. These performance metrics can be augmented by measuring activity and operational metrics, such as the number of people accessing the total functionality of the system and system adoption rates. Sales organizations should develop and distribute activity metrics, in addition to performance metrics, to salespeople to enable them to thoroughly understand their sales results, as well as why these results are occurring.
Education
Education is critical to the success to any SFA project. Most SFA training is focused on how to use the application, such as explaining the mouse clicks to create an opportunity, or the menu item needed to associate a contact with an opportunity. These are important elements in the successful use of the SFA application, but if this is all you do, then you will be destined to poor adoption, or to obtaining subpar value from the technology.
Ideally, the SFA application would be rolled out at an annual sales meeting, with a launch theme that reflects the value statement and metrics. However, if the timing does not work, e-learning and smaller, regional training groups will work as well. The goal is to create shared ownership of the application, not a top-down management mandate of forced adoption. Before you show the application during sales training, explain the value each person should receive and how he or she will be able to measure that value while using the SFA tool. Once you have buy-in for the value, you can proceed to teaching the mechanics of using the application.
Other key value-added tasks during the "educate" phase:
- As you hire new salespeople, first reinforce the value proposition of the SFA application before teaching them how to use the system. The one-on-one or peer-to-peer training approach is optimal for bringing a new salesperson up to speed on the SFA system and goals.
- Build case studies into the learning modules to simulate the steps, stages and effective use vs. required use.
- For e-learning, include just-in-time learning nuggets that require five minutes or less and will address an immediate problem.
- Have a hot line to sales support for help prominently showing (for example, at the top) at all times in the application.
- Offer e-learning capabilities within easy reach (not buried within the help function) so that training can be accessible to those who wish to help themselves.
- Validate system usability with a select group of achievers.
Assess
Once the metrics are determined, you must put in reporting dashboards to collect the data, to report and review on it a weekly, monthly or no-less frequently than quarterly. The frequency of the reports will depend on the velocity of the business. Specific metrics may have different update cycles. The ultimate test of the metrics you have defined is whether you can assess the progress of the metrics against sales goals, such as revenue, market share or earnings. To demonstrate the value of SFA application, metric reports must show the association between organizational and personal objectives.
The quandary surrounding the "assess" phase is capturing experiences, which can be an art in itself, because you do not want to overburden salespeople with tasks such as entering large amounts of data into opportunity management systems, recording forecasts, or fulfilling administrative tasks. Thus, the key is limiting the demands placed on salespeople, while still capturing the relevant sales experiences and insights that lead to good sales activities and processes. This requires setting up an architecture that may rely on a single database or a set of federated databases, typically capable of handling alphanumeric and text data types, to incorporate data points, feeds and perspectives from different systems.
- The system should have analysis tools to capture insights on lead quality, pipeline health, documentation quality, presentation resonance, proposal resonance and best practices on the most propitious timing and context for applying sales resources to an audience in a sales cycle.
- The system should be set up to support taking the insights captured in the analyses stage and translating key findings into effective guidance that is communicated via key systems (such as proposal generators, presentation Web sites, opportunity management systems and sales team Web sites), or is introduced in initial training and continuing education programs, and if serious or significant enough, then delivered orally in team meetings.
The "assess" phase is not just a management activity; it is imperative that salespeople have a view into their personal metrics to determine the value of the sales force application and how they compare to other salespeople using the system. The view into the metrics should be provided as part of the SFA system user interface. For example, if only 5% of sales content produced is effective in closing sales, then this will be readily apparent to all concerned. This will enable the organization to take the information and move to the next phase – "learn" to take action.
Learn
After assessing progress against the defined metrics, its important for the sales organization to be oriented toward becoming a learning organization that can effectively discover key trends and facts from information and can take corrective actions to improve practices and outcomes. For example, if the lead conversion rate is 40% below goal, and the two or three lead sources are the main cause of the problem, then the sales organization can make the appropriate adjustments to their lead source investment and can begin improving conversion rate. Ultimately, this will improve the quality of leads, which will, in turn, improve salesperson "stickiness" of the application and will increase value. The bottom line is that SFA is a continual deployment process that must be adjusted and tweaked as values for key metrics are reported.
A key element of continuous learning is interviewing and surveying sales teams. This could include having technical or marketing or sales support personnel listening to or attending sales calls to witness approaches to selling. In addition, consider one-on-one interviews with overachievers who are willing to share the secrets of their success by sales support (preferably sales operations personnel or business analysts) or marketing resources. Finally, have team managers, or first- or second-line management, polling selling personnel on what does and doesn't work. IT should have resources dedicated to detecting problems with technology and capturing requirements from a technical perspective. For example, "This interface is confusing, and all I want to do is get to my last five favorite presentations."
Key Facts
- Most sales force applications fail to show measurable ROI.
- A major cause of poor ROI is limited or no investment in evaluating metrics for success.
- Metrics and reporting that result in no actions probably need redesign.
Note 1 - Same Sales Metrics
- Amount of recurring revenue
- Close rate
- Days sales outstanding
- Margin
- Number of cross-sells
- Number of new customers
- Number of open opportunities
- Number of proposals given
- Number of prospects
- Number of retained customers
- Number of sales calls
- Number of sales calls made
- Number of sales call per opportunity
- Number of upsells
- Profit by customer
- Renewal rate
- Revenue by channel
- Sales cycle duration
- Sales stage duration
- Time to close by channel
- Competitive knockouts
- Deal margin
- Wallet share
B2B marketers ignoring customer databases
Business-to-business marketers have "plenty of room for improvement" when it comes to using customer and prospect databases for direct marketing purposes, new research claims..
An online survey conducted by marketing communications agency Godfrey found that B2B marketers could make their direct marketing campaigns more effective by combining web 2.0 technologies with customer and prospect databases.
Lynne DeMers, strategic direct marketing team leader at Godfrey, said: " Direct marketing is not about sending 20,000 mailers to a rented list and hoping for a two per cent return."It is about creating a programme and a system of messages, offers, information capture, measurement and refinement."
It is a direct communications 'roadmap' of continuous cultivation that provides more targeted information and leads prospects to the point where the sales channel can take over."
The poll found that 80 percent of B2B marketers maintain a sales lead or inquiry database, but only 55 percent use it regularly for direct marketing. In addition, only 40 percent of B2B marketers regularly engage their inquiry database via email or an e-newsletter.
Only 60 percent use their customer database for targeted direct marketing, and only 40 percent regularly update customers with new offers.
While mass direct marketing techniques typically yield response rates ranging from 0.5 to two percent, targeted direct marketing technologies are considerably more effective, according to Godfrey.
B2B marketers can realise 40 percent open rates, 10 to 20 percent click rates and opt-out rates of less than one per cent with segmented email marketing and e-newsletter campaigns.
SaaS CRM Market in Asia Estimated to Grow 68% in 2007
Market expected to grow to US$460 million by 2010
Singapore – December 7, 2007 – Springboard Research, a leading innovator in the IT Market Research industry, today announced results from its latest research covering the Software-as-a-Service (SaaS) Customer Relationship Management (CRM) market in Asia (excluding Japan). Springboard estimates that the SaaS CRM market will grow at a compound annual growth rate (CAGR) of 61% between 2006 and 2010. Springboard pegged the SaaS CRM market in Asia at US$69 million in 2006, and expects it to reach US$460 million by 2010.
Australia, Singapore, Hong Kong, Korea, India, and China are the key SaaS CRM markets in Asia Pacific. Of these, Australia remains the top market, accounting for 35% of all SaaS CRM sales generated in the region.
“SaaS CRM has gained acceptance in Asia’s business mainstream and the coming year will see higher adoption rates as larger enterprises opt for SaaS CRM,” said Balaka Baruah Aggarwal, Senior Manager for Emerging Software for Springboard Research. “At the same time, the market is set to witness unprecedented growth in the SME sector as a spate of new initiatives by vendors such as SAP, Microsoft, and Oracle promote their CRM offerings,” added Ms. Aggarwal.
Increased adoption among larger enterprises will be the turning point in the uptake of SaaS CRM and will bring the model a legitimacy that it did not have when it was mainly used by small and medium enterprises (SMEs). Already, leading vendors like Salesforce.com, who had traditionally targeted the SME market, are now eyeing larger enterprises. As traditional software players step up their activities by offering proprietary SaaS CRM applications, large enterprises will be lured to the market, creating an entirely new base of customers who had previously been fence sitters. Springboard Research also forecasts that the SaaS CRM market is set for consolidation as the number of players increase and bigger players make serious forays into the marketplace.
Springboard currently estimates that SaaS CRM represents the largest segment of SaaS application expenditures in Asia at 45%, followed by collaboration, ERP/PLM/SCM applications, and human resource applications. Within the SaaS CRM segment in Asia, Salesforce.com has captured a very dominant position in the market. Other prominent vendors in the region include RightNow, Oracle, and Netsuite.
“Springboard Research believes that a substantial portion of the growth in Asia Pacific’s SaaS CRM market will come from the SME segment. We expect SMEs in Asia Pacific to go for simpler CRM solutions that are not too complex,” said Ms. Aggarwal. “This will drive CRM vendors, especially the traditional licensed software companies, to sell stripped-down versions of on-premise offerings or to develop SME-specific applications for distribution via the SaaS model.”
About This Study
Software-as-a-Service (SaaS) is a disruptive innovation that has the potential to transform the software industry. Many new players are entering the SaaS market, while established software companies are scrambling to compete against these new entrants by developing SaaS products themselves.
While SaaS has received a lot of press and hype, detailed information on the size, scale and characteristics of the market is still relatively limited. Springboard Research is helping to change this with its Asia Pacific SaaS Market Canvas, an ongoing research service through which users can access detailed and continuing research focused on SaaS in Asia.
About Springboard Research
Springboard Research’s core values are integrity and insight. Led by a team of dynamic industry experts, Springboard Research provides its customers with high value IT market research that helps them identify new market opportunities, growth engines and innovative ways to go to market. As a result, Springboard’s clients lead rather than follow market trends. Not bound by legacy, Springboard’s cutting-edge research model leverages its offshore research centers, the Internet, and an increased use of technology as engines of innovation to deliver unique research value. Provided as an alternative to traditional IT market research, Springboard’s reports deliver data and knowledge in a more usable and interactive format for our clients. Springboard Research works with the largest IT companies in the world in the software, services, hardware, and telecommunications sectors.
Founded in 2004, Springboard Research serves the needs of its clients globally through offices in the United States, Australia, Singapore and Japan as well as global research centers in India, Pakistan, and Morocco. Springboard has been acknowledged as an emerging leader in the global IT market research industry and was recently named a “Rising Star” by Outsell, the leading research and advisory firm for the information industry.
For more information regarding Springboard Research, please visit www.springboardresearch.com
Media Contacts
Chris Perrine, COO & EVP of Sales & Marketing
Springboard Research
65-6325-9716
cperrine@springboardresearch.com
Balaka Baruah Aggarwal, Senior Manager- Emerging Software
Springboard Research
91-11-40518249
baggarwal@springboardresearch.com
Singapore – December 7, 2007 – Springboard Research, a leading innovator in the IT Market Research industry, today announced results from its latest research covering the Software-as-a-Service (SaaS) Customer Relationship Management (CRM) market in Asia (excluding Japan). Springboard estimates that the SaaS CRM market will grow at a compound annual growth rate (CAGR) of 61% between 2006 and 2010. Springboard pegged the SaaS CRM market in Asia at US$69 million in 2006, and expects it to reach US$460 million by 2010.
Australia, Singapore, Hong Kong, Korea, India, and China are the key SaaS CRM markets in Asia Pacific. Of these, Australia remains the top market, accounting for 35% of all SaaS CRM sales generated in the region.
“SaaS CRM has gained acceptance in Asia’s business mainstream and the coming year will see higher adoption rates as larger enterprises opt for SaaS CRM,” said Balaka Baruah Aggarwal, Senior Manager for Emerging Software for Springboard Research. “At the same time, the market is set to witness unprecedented growth in the SME sector as a spate of new initiatives by vendors such as SAP, Microsoft, and Oracle promote their CRM offerings,” added Ms. Aggarwal.
Increased adoption among larger enterprises will be the turning point in the uptake of SaaS CRM and will bring the model a legitimacy that it did not have when it was mainly used by small and medium enterprises (SMEs). Already, leading vendors like Salesforce.com, who had traditionally targeted the SME market, are now eyeing larger enterprises. As traditional software players step up their activities by offering proprietary SaaS CRM applications, large enterprises will be lured to the market, creating an entirely new base of customers who had previously been fence sitters. Springboard Research also forecasts that the SaaS CRM market is set for consolidation as the number of players increase and bigger players make serious forays into the marketplace.
Springboard currently estimates that SaaS CRM represents the largest segment of SaaS application expenditures in Asia at 45%, followed by collaboration, ERP/PLM/SCM applications, and human resource applications. Within the SaaS CRM segment in Asia, Salesforce.com has captured a very dominant position in the market. Other prominent vendors in the region include RightNow, Oracle, and Netsuite.
“Springboard Research believes that a substantial portion of the growth in Asia Pacific’s SaaS CRM market will come from the SME segment. We expect SMEs in Asia Pacific to go for simpler CRM solutions that are not too complex,” said Ms. Aggarwal. “This will drive CRM vendors, especially the traditional licensed software companies, to sell stripped-down versions of on-premise offerings or to develop SME-specific applications for distribution via the SaaS model.”
About This Study
Software-as-a-Service (SaaS) is a disruptive innovation that has the potential to transform the software industry. Many new players are entering the SaaS market, while established software companies are scrambling to compete against these new entrants by developing SaaS products themselves.
While SaaS has received a lot of press and hype, detailed information on the size, scale and characteristics of the market is still relatively limited. Springboard Research is helping to change this with its Asia Pacific SaaS Market Canvas, an ongoing research service through which users can access detailed and continuing research focused on SaaS in Asia.
About Springboard Research
Springboard Research’s core values are integrity and insight. Led by a team of dynamic industry experts, Springboard Research provides its customers with high value IT market research that helps them identify new market opportunities, growth engines and innovative ways to go to market. As a result, Springboard’s clients lead rather than follow market trends. Not bound by legacy, Springboard’s cutting-edge research model leverages its offshore research centers, the Internet, and an increased use of technology as engines of innovation to deliver unique research value. Provided as an alternative to traditional IT market research, Springboard’s reports deliver data and knowledge in a more usable and interactive format for our clients. Springboard Research works with the largest IT companies in the world in the software, services, hardware, and telecommunications sectors.
Founded in 2004, Springboard Research serves the needs of its clients globally through offices in the United States, Australia, Singapore and Japan as well as global research centers in India, Pakistan, and Morocco. Springboard has been acknowledged as an emerging leader in the global IT market research industry and was recently named a “Rising Star” by Outsell, the leading research and advisory firm for the information industry.
For more information regarding Springboard Research, please visit www.springboardresearch.com
Media Contacts
Chris Perrine, COO & EVP of Sales & Marketing
Springboard Research
65-6325-9716
cperrine@springboardresearch.com
Balaka Baruah Aggarwal, Senior Manager- Emerging Software
Springboard Research
91-11-40518249
baggarwal@springboardresearch.com
22.11.07
Google takes hosted site search worldwide - Nov 22 2007 - iTnews
Google has announced the international availability of its Custom Search platform allowing companies to add Google's search technology to their websites.
Aimed primarily at small businesses, Google reckons that it takes only three steps and few minutes to sign up and deploy the service.
The platform allows users to integrate search into personal and community sites and blogs, and developers can use the Google Custom Search APIs to allow searching from within their applications.
"For many organisations, a website is their window to the world and significant investment goes into attracting customers to the site," said Robert Whiteside, UK and Ireland enterprise manager at Google Enterprise.
"Keeping visitors on a site once they arrive, however, is a challenge and the absence of a search facility can be a major cause of a lack of website 'stickiness'.
"By improving the ease, speed and accuracy with which users can find what they need, businesses can ensure that their website justifies the investment."
Google has released two versions of the platform. Custom Search is a free ad-supported engine, and Business Edition is a paid-for service which offers more customisation and support.
Both versions provide site search hosted by Google, eliminating the need for a business to install and maintain its own technology, and reporting features provide insights into visitor behaviour.
The Business Edition also caters for full customisation of search results, email and phone support and a choice about whether to include ads or not.Google Custom Search Business Edition starts at around £50 per year for searching up to 5,000 pages, and extends to approximately £1,125 per year for up to 300,000 pages.
Larger volumes of pages are supported through Google's enterprise sales group.
Aimed primarily at small businesses, Google reckons that it takes only three steps and few minutes to sign up and deploy the service.
The platform allows users to integrate search into personal and community sites and blogs, and developers can use the Google Custom Search APIs to allow searching from within their applications.
"For many organisations, a website is their window to the world and significant investment goes into attracting customers to the site," said Robert Whiteside, UK and Ireland enterprise manager at Google Enterprise.
"Keeping visitors on a site once they arrive, however, is a challenge and the absence of a search facility can be a major cause of a lack of website 'stickiness'.
"By improving the ease, speed and accuracy with which users can find what they need, businesses can ensure that their website justifies the investment."
Google has released two versions of the platform. Custom Search is a free ad-supported engine, and Business Edition is a paid-for service which offers more customisation and support.
Both versions provide site search hosted by Google, eliminating the need for a business to install and maintain its own technology, and reporting features provide insights into visitor behaviour.
The Business Edition also caters for full customisation of search results, email and phone support and a choice about whether to include ads or not.Google Custom Search Business Edition starts at around £50 per year for searching up to 5,000 pages, and extends to approximately £1,125 per year for up to 300,000 pages.
Larger volumes of pages are supported through Google's enterprise sales group.
21.11.07
Market Focus: Technology -- The Simple Truth about Complex Manufacturing
Tech firms need CRM as much as any other company--and sometimes even more.
by Marshall Lager
There's a long-standing (and wrong-headed) belief that CRM technology can be a cure-all for a company's operational woes. There's an equally long-standing (and equally wrong-headed) perception that high-tech manufacturers and vendors don't need CRM. Not only is the 360-degree view of customers, partners, and processes important in the technology vertical; it's made tricky by the complexity of the business models and by the roots of those misperceptions.
by Marshall Lager
There's a long-standing (and wrong-headed) belief that CRM technology can be a cure-all for a company's operational woes. There's an equally long-standing (and equally wrong-headed) perception that high-tech manufacturers and vendors don't need CRM. Not only is the 360-degree view of customers, partners, and processes important in the technology vertical; it's made tricky by the complexity of the business models and by the roots of those misperceptions.
In the first place, every business needs CRM, even if only to manage customers' account histories and communications -- CRM grew from contact management, after all. Why, then, the idea that tech businesses don't need it? "It's not as much a process vertical [as] financial services," says Tim Hickernell, senior research analyst, applications, Info-Tech Research Group. The focus is on the products themselves -- and since tech salespeople are often former engineers, they're less likely to be relationship-driven.
This is a dangerous reduction of the situation. Even in the tech world, says Diane Albano, vice president of Americas operations at Progress Software, "People are still selling to people, trying to solve a problem." Progress promotes sales effectiveness of businesses across many verticals, and Albano says the key is communicating. "If you can get that message across to your team, you'll have happier customers and more motivated workers." Using and contributing to the CRM system, remembering that business is about the customer and not the product, are basic elements that haven't become as ingrained among tech firms as they have elsewhere. Fortunately, fixing issues around adoption and technique among techies requires largely the same effort as it does in other verticals. "You must make it mandatory -- it's not up for debate. But do it in a gentle, prodding way, not with yelling," Albano says. "Show how you're enabling salespeople in order to make them understand why it's necessary." Beyond adoption, Hickernell notes where tech companies are different from others in terms of CRM. "Selecting the right CRM components is more important," he says. "Channel management and knowledge management are important considerations. There's a very complex value chain -- relationships are at least B2B2C," he says, and often reflexive, where two manufacturers sell each other their products. "Work is spread across the value chain, involving original equipment manufacturers, original design manufacturers, and even different divisions of a single company selling to itself as an internal customer." This means careful tracking of channels, and a firm grasp on information at all stages with knowledge management. This becomes apparent in engineering-to-order processes. "We maintain virtually no finished goods in stock. Almost all orders we take require engineers to be involved before production begins," says Phil Shields, senior analyst at K&L Microwave, a manufacturer that uses CRM software from IFS. "They may be involved in the quoting process, determining if we can even build a product to the customer's specs, providing technical data or preliminary drawings. After we receive an order, engineers will design the new product; even for repeat orders, engineers many times need to check the documentation provided by the customer to make sure there are no changes since the last time." Prior to implementing sales-and-marketing functionality, K&L was generating quotes with the IFS ERP system. "This required us to create a customer, sales part, and inventory part just to create a quote," Shields says. "Integration with our ERP system was one of the big reasons we selected IFS's CRM system." Requiring zero programming or customization, all customers, sales parts, customer orders, and invoices are now available within the CRM system. "The IFS CRM system has given us one place to put information, both customer-furnished and K&L documents, so that everyone in the company can access it," Shields says. Knowledge management and dissemination also comes into its own in high technology. "The expectation for self-service, especially Web self-service, is much higher in this vertical," Hickernell says. "The customer is much more savvy, and more is expected of the vendor. If an error message is programmed into a piece of technology, the customer expects there to be a knowledgebase article for dealing with it."
CRM Remains a Fertile Market
New research points to explosive growth in CRM adoption across every segment -- especially on-demand CRM.
by Demir Barlas
Forty-two percent of U.S. companies are using CRM, according to new market research from the consulting firm KensingtonHouse, and the percentage just keeps on growing. Even more notable, in terms of current and future growth, is the fact that CRM's "market fertility" -- the percentage of companies deploying, upgrading, or actively considering a CRM purchase -- stands at 38 percent, according to the report.
by Demir Barlas
Forty-two percent of U.S. companies are using CRM, according to new market research from the consulting firm KensingtonHouse, and the percentage just keeps on growing. Even more notable, in terms of current and future growth, is the fact that CRM's "market fertility" -- the percentage of companies deploying, upgrading, or actively considering a CRM purchase -- stands at 38 percent, according to the report.
The market-fertility figure is the metric KensingtonHouse chose to highlight, as it reveals a record number of companies deploying or planning to deploy CRM. "This is significantly above what I've seen historically, which has been 18 to 25 percent fertility," says Thomas Moriarty, the consultancy's president.
According to the survey, the main reason for the current wave of CRM popularity is the maturity of the on-demand delivery model and functionality set. Fifty-five percent of respondents expressed a preference for on-demand, with a mere 14 percent nominating on-premise and 31 percent undecided. Eighty-seven percent of survey respondents were either small or midsize businesses (SMBs), but Moriarty says that the preference for on demand extended to the enterprise segment as well. The research, sponsored by Microsoft CRM partner T.H.G. Sales Automation, canvassed 437 respondents representing a population of 20,000 companies with a degree of accuracy of plus or minus 5 percent.
On demand is succeeding because of both its low cost and its simplicity, Moriarty says, adding that KensingtonHouse estimates the model can lower the cost of a CRM deployment by as much as 60 percent while also offering an increasingly user-friendly experience. "Customization is so easy now that you don't have to be a bits-and-bytes guy to go in and create all kinds of different fields, reports, and dashboards," he says.
While on-demand initiatives may be easier to implement than on-premise ones, adopters of either variety should still be aware of the significant risks of project failure. Gartner recently predicted that, by the end of 2008, "25 percent of CRM projects will be postponed or canceled because of the CRM skill shortage in consultants and systems integrators." While this sounds like an inordinately high number to industry outsiders, Moriarty emphasizes that it has to be taken in context. "Three years ago, that number would have been 75 percent," he claims.
The good news is not only that the ecosystem of CRM consultants and systems integrators has matured through continued CRM implementation success, but also that CRM adopters can control their own fates by making CRM an institutional priority. The recent Management Tools and Trends 2007 report from management consultancy Bain & Co. revealed that companies that put more effort into CRM up front (including long-term planning, unwavering executive sponsorship, and diligent change management) get more out of the technology. In the Bain survey, those companies who put a "major effort" into CRM reported a 4.17 satisfaction score on a five-point scale, while those putting in a "limited effort" were only able to achieve a 3.53 score.
That data point alone should convince any CRM adopter aiming to maximize return on investment to enter into the implementation prepared and willing to put in some heavy lifting. "You have to maintain the quality of data and make sure to load a good set of business rules that specify how the system is going to be used," Moriarty counsels. "You have to do the work."
12.11.07
Best Practices in Campaign Management: Tips & Tricks
by Salesforce.com Marketing Blog
Naming Conventions.
Add custom fields to campaigns that align to key metrics.
Use the active flag on campaigns with purpose.
Create a section on your campaigns for follow up.
Now that we’ve covered the basics of how campaign management works in Salesforce how do you get the most bang for your buck? Here are some suggestions to get you started:
Naming Conventions.
A must-have for any organization running a lot of campaigns. The campaign name is what appears in search so you want it to be unique and easy to identify. Campaign names should be structured in a consistent manner so they are easy to decipher by people outside of marketing. For example: Program - Tactic - Audience - Quarter
Add custom fields to campaigns that align to key metrics.
You may want to know how your programs perform by offer or by tactic (email, web promo, etc). Add these as custom fields to your campaign so you can report on them later. If these metrics are key to decision making in your organization be sure to make them required fields.
Use the active flag on campaigns with purpose.
There are 2 reasons why campaigns need to be active. The first reason, is so you can run the super secret “Campaign Call Down” report. The second reason is so your sales team can find the campaign name from the lookup on leads and contacts and manually add the campaign to the campaign history. If you have thousands of active campaigns, this look-up view for your sales reps gets pretty muddy and decreases the likely hood they will use it, so try and keep your active flags up to date. (Tip: In the Winter ‘08 release you will be able to run the campaign call down report on both active and inactive campaigns removing the necessity to have campaigns active for reporting purposes only)
Create a section on your campaigns for follow up.
This is a great way to communicate to your sales reps or inside sales teams what the appropriate follow up is for each particular campaign. This section could contain key messages, any email templates that should be used for follow up, etc. This way an inside sales person can simply click in to the campaign, and easily identify what their next steps should be.
Standardize your member status values.
Reporting across campaign membership can be difficult without consistency. Maintaining standard values will allow you to compare the performance of your programs against each other. Some example status values are:
- For web promotions set the default value to “Responded”
- For events and webinars set the default value to “Registered” with additional values for “Registered – attended” and “Cancelled”.
- For email marketing set the default value to “Responded”
If you don’t have it already, install the “Campaign Membership” web link from AppExchange. This web-integration link on the campaign detail page pulls up the “Campaign Call Down report I referred to earlier and allows you to see all of the campaign members (both leads and contacts) in one report. If you don’t have this already, install the link off the AppExchange here:
https://www.salesforce.com/appexchange/detail_overview.jsp?NavCode__c=&id=a0330000000j5OdAAI
26.10.07
13 Reasons People Will Open Your Direct Mail
by Jessica Tsai
DMA07: At the Direct Marketing Association's annual conference, the secrets to reaching consumers in the real world.
CHICAGO -- No matter how quickly technology is pushing us toward a digital world, marketers continue to actively rely on direct mail. In fact, advertising spend on direct mail is second only to the money spent on television, according to a presentation by Robert Coen of Insider's Report here this week at DMA07, the Direct Marketing Association's annual conference. Customers, too, continue to enjoy receiving mail, according to experts at the conference. One of those experts, Nancy Harhut, managing director of relationship marketing at Hill, Holiday, a Boston-based communications agency, shared with attendees 13 tips for improving your direct mail campaign.
Studies of human psychology have uncovered various ways people act in automatic ways, Harhut told the audience. For instance, she said, if faced with an entryway on the left and right side, most people have a tendency to go right. Similarly, people have learned how to automatically recognize and respond to what they think is junk mail. Therefore by leveraging the reflexive impulses of human behavior, marketers can optimize their direct mail campaigns.
Here are Harhut's 13 tips about those reflexive impulses, how they can affect campaigns, and what you can do about them:
1. People respect authority: Make your mailings look professional, serious, and official -- whether through key phrases such as "important information enclosed," delivery by respected carriers like Western Union or FedEx, or even the use of high-quality envelopes.
2. People respect authority figures: Unsure of what to do, people tend to trust those who seem to know. Have quotes from famous figures endorsing your product, or simply have a famous client's name on the outside of the envelope -- both result in increased response rates.
3. People are naturally curious: Present your campaign in a unique way and customers will be attracted by its original presentation -- and, thus, interested in what's within.
4. People make very deliberate assumptions: The people that Harhut calls "gatekeepers" are those who filter each mailing before it reaches the intended recipient. They, like most people, can immediately recognize what seems to be junk mail. Marketers have to get past that barrier to entry by appearing important and relevant.
6. People are drawn to attractive keywords: The most enticing word to consumers is "free." Other words that make consumers feel like they're being introduced to something new include "introducing," "announcing," "finally," "now," etc.
7. When people say "no," it can really mean "tell me more": People often reject an offer because it doesn't solve their problems, but if after they say "no" you come back with a different approach, they may become interested.
8. People respond to compliance triggers: People have been trained to view certain things as signifying an automatic "yes," Harhut says. Coupons are often understood to provide savings whether or not the amount saved is specified. People like to understand why they are being asked to do something, but they don't always bother to listen to what comes after the word "because." Studies have shown that by simply hearing "because" after a request is often enough to stimulate a "yes," she says.
9. People are most interested in themselves: Present your campaign in terms of how the customer will benefit, not in terms of how you are helping them:
10. People make decisions based on both rational and emotional reasons: Appeal to the emotional and they may justify it with the rationality of your offer. They are also more likely to respond when trying to avoid pain, and the nuance is critical; as an example, "Are you losing customers?" is more effective than "Are you getting enough customers?"
11. People feel obligated: Give people a complimentary gift along with the message and many will feel obliged to give something in return.
12. People want what they can't have: People are often charged into action when they think something is "for a limited-time only," "expires soon," or is for just "the first 1,000 customers." In fact, when a limit is imposed on an offer, customers who were already inclined to buy are often compelled to buy more.
13. People do what people who are like them do: People are more likely to think they're missing out than revel in the fact that they are the maverick. Along with a campaign, present an extensive list of customers who have aligned with your company. Regardless of whether those clients are influential individually, the sheer volume can be enough to be convincing.
DMA07: At the Direct Marketing Association's annual conference, the secrets to reaching consumers in the real world.
CHICAGO -- No matter how quickly technology is pushing us toward a digital world, marketers continue to actively rely on direct mail. In fact, advertising spend on direct mail is second only to the money spent on television, according to a presentation by Robert Coen of Insider's Report here this week at DMA07, the Direct Marketing Association's annual conference. Customers, too, continue to enjoy receiving mail, according to experts at the conference. One of those experts, Nancy Harhut, managing director of relationship marketing at Hill, Holiday, a Boston-based communications agency, shared with attendees 13 tips for improving your direct mail campaign.
Studies of human psychology have uncovered various ways people act in automatic ways, Harhut told the audience. For instance, she said, if faced with an entryway on the left and right side, most people have a tendency to go right. Similarly, people have learned how to automatically recognize and respond to what they think is junk mail. Therefore by leveraging the reflexive impulses of human behavior, marketers can optimize their direct mail campaigns.
Here are Harhut's 13 tips about those reflexive impulses, how they can affect campaigns, and what you can do about them:
1. People respect authority: Make your mailings look professional, serious, and official -- whether through key phrases such as "important information enclosed," delivery by respected carriers like Western Union or FedEx, or even the use of high-quality envelopes.
2. People respect authority figures: Unsure of what to do, people tend to trust those who seem to know. Have quotes from famous figures endorsing your product, or simply have a famous client's name on the outside of the envelope -- both result in increased response rates.
3. People are naturally curious: Present your campaign in a unique way and customers will be attracted by its original presentation -- and, thus, interested in what's within.
4. People make very deliberate assumptions: The people that Harhut calls "gatekeepers" are those who filter each mailing before it reaches the intended recipient. They, like most people, can immediately recognize what seems to be junk mail. Marketers have to get past that barrier to entry by appearing important and relevant.
- Make the mailing personalized.
- If the mailing is a fulfillment request, be sure to note that clearly on the envelope.
- Have an official-sounding sender or title, such as "Doctor John Smith," or even "From the
- Office of the Director of Marketing."
6. People are drawn to attractive keywords: The most enticing word to consumers is "free." Other words that make consumers feel like they're being introduced to something new include "introducing," "announcing," "finally," "now," etc.
7. When people say "no," it can really mean "tell me more": People often reject an offer because it doesn't solve their problems, but if after they say "no" you come back with a different approach, they may become interested.
8. People respond to compliance triggers: People have been trained to view certain things as signifying an automatic "yes," Harhut says. Coupons are often understood to provide savings whether or not the amount saved is specified. People like to understand why they are being asked to do something, but they don't always bother to listen to what comes after the word "because." Studies have shown that by simply hearing "because" after a request is often enough to stimulate a "yes," she says.
9. People are most interested in themselves: Present your campaign in terms of how the customer will benefit, not in terms of how you are helping them:
- Tell them how to succeed.
- Present them with an offer.
- Flatter them.
- Deliver good news.
- Make them feel superior.
- Tell them something that seems as if it were exclusively meant for them.
10. People make decisions based on both rational and emotional reasons: Appeal to the emotional and they may justify it with the rationality of your offer. They are also more likely to respond when trying to avoid pain, and the nuance is critical; as an example, "Are you losing customers?" is more effective than "Are you getting enough customers?"
11. People feel obligated: Give people a complimentary gift along with the message and many will feel obliged to give something in return.
12. People want what they can't have: People are often charged into action when they think something is "for a limited-time only," "expires soon," or is for just "the first 1,000 customers." In fact, when a limit is imposed on an offer, customers who were already inclined to buy are often compelled to buy more.
13. People do what people who are like them do: People are more likely to think they're missing out than revel in the fact that they are the maverick. Along with a campaign, present an extensive list of customers who have aligned with your company. Regardless of whether those clients are influential individually, the sheer volume can be enough to be convincing.
Honda chooses services model for database
by Ben Woodhead
HONDA Australia's motorcycle and outboard motor business will introduce its first fully fledged customer relationship management system under a contract with Salesforce.com.
The hosted system will replace Honda Australia Motorcycles and Power Equipment's existing Lotus Notes customer database and will be integrated with other technology such as its voice over internet protocol phone system.
The unit's IT manager, Craig Bassett, said the $350 million a year concern would install Salesforce for 40 users in December and eventually increase the number using the platform to 50.
"The major reason for looking at Salesforce was to be able to understand our customers better," Mr Bassett said.
"We had disparate, decentralised databases of customer information all over the company and Salesforce is an opportunity to centralise that.
"We'll be better able to serve our customers and market to them. There's no point trying to market an off-road mini-bike to a 60-year-old.
"We want to understand what a customer may be interested in depending on age, where they live, what their interests are, and we haven't be able to do that."
Mr Bassett said the unit looked at a number of customer relationship management alternatives over the past two years and it had not started out with a clear preference for either a hosted or on-premises system.
However, he said, many big-name vendors quickly priced themselves out of the equation and that a hosted system offered the best value for money.
"When we did a matrix of the costs involved in in-house versus outsourced system, Salesforce came out on top," he said.
"Not in all areas, but in most."
The unit awarded Salesforce. com the contract in July and has been working through requirements testing and proofs of concept for the past two months ahead of the December production rollout.
Integrator Sqware Peg is handling installation of the system.
HONDA Australia's motorcycle and outboard motor business will introduce its first fully fledged customer relationship management system under a contract with Salesforce.com.
The hosted system will replace Honda Australia Motorcycles and Power Equipment's existing Lotus Notes customer database and will be integrated with other technology such as its voice over internet protocol phone system.
The unit's IT manager, Craig Bassett, said the $350 million a year concern would install Salesforce for 40 users in December and eventually increase the number using the platform to 50.
"The major reason for looking at Salesforce was to be able to understand our customers better," Mr Bassett said.
"We had disparate, decentralised databases of customer information all over the company and Salesforce is an opportunity to centralise that.
"We'll be better able to serve our customers and market to them. There's no point trying to market an off-road mini-bike to a 60-year-old.
"We want to understand what a customer may be interested in depending on age, where they live, what their interests are, and we haven't be able to do that."
Mr Bassett said the unit looked at a number of customer relationship management alternatives over the past two years and it had not started out with a clear preference for either a hosted or on-premises system.
However, he said, many big-name vendors quickly priced themselves out of the equation and that a hosted system offered the best value for money.
"When we did a matrix of the costs involved in in-house versus outsourced system, Salesforce came out on top," he said.
"Not in all areas, but in most."
The unit awarded Salesforce. com the contract in July and has been working through requirements testing and proofs of concept for the past two months ahead of the December production rollout.
Integrator Sqware Peg is handling installation of the system.
''Everything Will Be Digital,'' Says Microsoft CEO
by Jessica Tsai
The Association of National Advertisers' "Masters of Marketing" Conference reveals insights about how to handle the industry's future: brand focus and maverick creativity will light the way.
PHOENIX -- The overall theme of this year's Association of National Advertisers (ANA) conference, bringing together 1,200 marketers and advertisers, centered on transformation. In the Web 2.0 era, technological advancements have forced the role of the marketer to change -- fast. One presenter after another regaled the audience with examples of how, with each new development, consumers have been ready for the next innovation and what they've come to expect from marketing -- and marketers.In the conference's first session, Microsoft Chief Executive Officer Steve Ballmer envisioned a future in which, while watching the PGA championship game, he could communicate to his colleague, Microsoft founder Bill Gates simply by saying to the TV, "Hey, Bill, did you see that shot?" Voice recognition technology would pick that message up, GPS would locate Gates, and the Internet telephony wired into the system would connect a call and convey Ballmer's message. Bill would then respond, "Yeah, and did you notice it was a Nike ball?" Gates's reponse would trigger an interactive shopping interface to pop up on both their screens, allowing either of them, in real time, to purchase a set of similar golf balls through the TV.
Soon, according to Ballmer, "everything will be digital," and, in that world, there is no limit to innovation. Technology will provide boundless possibilities and the only thing marketers need to focus on is human talent. Customer insight will be bursting at the seams -- and the more marketers understand about manipulating that information, the more targeted, relevant, and effective their messages will be.
When technology becomes ubiquitous, the differentiator will be creativity. According to many of the ANA presenters, a strong, innovative, and creative strategy is, and will be, key to the future of brand success. Therefore, companies have to move past the handicap of being "overanalytical," said Bob Lachky, senior vice president of Anheuser-Busch, the St. Louis-based maker of Budweiser and other beers. "At some point you just have to go, 'Make room for creativity.... Nurture your mavericks.' "
And yet, amid all the changes in delivery media, companies must stay true to their brand, Lachky says. Focus on the meaning of the brand everyday, he told the audience, because if companies can't grasp that core message, marketers certainly can't expect consumers to. "Create your own characters," he added, and don't lose sight of them. For example, when you employ a celebrity to deliver your message, that star "must be subservient to your brand," he said.
Even for corporations with a strong identity, such as McDonald's, it is essential never to forget the premise of the brand. McDonald's has been experiencing a revival of late, with healthier food choices and increased focus on nutritional content, according to Mary Dillon, the company's chief marketing officer. The Oak Brook, Ill.-based fast-food chain currently serves an estimated 52 million customers daily worldwide and recently announced that it expects to surpass analyst predictions for third-quarter earnings (to be released on October 19), according to USAToday.com. But the company has suffered its share of bad times. "We took our eyes off the fries, so to speak," Dillon said, adding that the company had failed to execute on the basics, such as customer service, that were essential to the McDonald's brand.
Companies that have stayed true to their brand include Milwaukee-based motorcycle retailer Harley-Davidson, said Chuck Brymer, chief executive officer of DDB, a New York City-based advertising agency. The Harley-Davidson brand embodies the concept of personal freedom -- and by staying true to that central concept, the company has developed a following that "lives and breathes Harley," Brymer told the ANA audience.
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