Embed Size (px)
Citation preview
CRM MARKET BENCHMARK REPORTHow organizations are leveraging current IT trends and preparing for future developments JANUARY 2014
WHITEPAPER
1) EXECUTIVE SUMMARY
This research report examines and benchmarks the current state of Customer Relationship Management (CRM) platforms through detailed primary research, interviews and surveys. In particular, we wanted to understand and benchmark how companies are currently using sales enablement technologies such as Sales Force Automation (SFA) and Marketing Automation (MA), what impact ‘mega’ IT trends (Mobility, Cloud Computing, Social Media, and Big Data) are having on their business and finally what they plan to do in the future. This primary research has discovered that the CRM solutions space is very mature and approaching a commodity market and that the Marketing Automation software space is very immature and fragmented so companies are turning their attention toward solutions that help them automate and optimiza-tion marketing teams and investments. In conclusion we recommend that organizations need to be reviewing their current SFA and MA usage, determining their total cost of ownership, ROI and begin planning today to implement robust and integrated marketing automation in order to drive marketing productivity in the future.
2) THE STATE OF THE CRM MARKETPLACE
The traditional CRM marketplace, and in particular SFA systems, has matured to the point where now it is a commodity market. The CRM solutions space is comprised primarily of SFA solutions but there are a few areas where Customer Services (CS) and Marketing Automation (MA) solutions are being used. Vendors have very similar offerings and customers are making selections primarily based on features and pricing. While Microsoft Dynamics CRM (MS CRM) and Salesforce.com (SFDC) dominate the SFA space, per leading industry analysts, controlling equal shares of the market and possess similar SFA features and functions, that is where the similarities end. Differences between Microsoft Dynamics CRM and Salesforce.com include: • Pricing: • SFDC is seen as the most expensive option• MS CRM is typically half the monthly recurring cost of SFDC• Most SFDC customers we talked to are paying at least $135/user/month average total cost for the SFDC license and any other third party add-ons. • MS CRM customers we talked to are paying about $45/user/month.• While, the pricing is quoted monthly most of the clients pay annually.• Easy integration with standard office tools:• Our surveys for this research show that 95% of respondents use Outlook and 94% use Office products such as Excel and PowerPoint on a regular basis. • MS CRM’s easily integrates into Office, in particular Outlook and Excel. This integration goes far beyond other CRM Solutions. • User Interface: In the recently released (October 2013) Microsoft Dynamics CRM 2013 from Microsoft, users interact with a new command bar, thus making the tool more intuitive and easier to interact with. • Also in the release of CRM 2013, Microsoft has integrated marketing automation tools, eliminating the need for multiple disparate tools that have never communicated with each other and thus have reporting of the ROI on marketing exceptionally difficult.
Other data we found in our survey include:• The majority of companies have gone through multiple CRM Implementation projects and understand the challenges and impacts. Most are on at least the second try at CRM.• Most organizations are relatively satisfied with their current SFA platforms. The people we talked with have invested to get their CRM setup to support the business and it seems to be working for them. Our survey results show that 80% of respondents are satisfied with their CRM choice and that 81% have seen productivity gains from its use. • When organizations do switch SFA platforms, many do so based on price and projected cost savings over three to five years.
1
�������31+27+31+1143.50%KIND OF
4.3%IT SLOWSUS DOWN
DOES YOUR SFA SYSTEM MAKE YOUR SALES TEAMS MORE PRODUCTIVE?
DO YOU PREFER CLOUD OVER ON-PREMISE APPS?
39.1%YES
13%NO
30.4% 30.4%28.3% 10.9%
CLOU
D/SA
AS
DON'
T CAR
E
ON P
REM
ISE
UNKN
OWN
OF MARKETING DEPARTMENTS HAVE EMAIL MARKETING TOOLS AND THE MAJORITIES ARE NOT CONNECTED TO A CRM PLATFORM.
80%
3) TRENDS IMPACTING TODAY’S SFA DECISION
The greatest disruptor in today’s SFA marketplace is in the way users interface with IT sys-tems. No longer are users anchored to a cube/desk in order to complete essential tasks.
Mobility: Ubiquitous 24/7 access to the internet (for business and personal purposes) and more powerful/capable mobile devices have allowed users to move the office to their home, car or the corner coffee shop. Our survey shows that with near unanimity, companies have mobility plans. That everyone has a plan is about all that the respondents have in common regarding mobility. 23% of respondents say their mobility pro-gram is “bring your own device”, and this aligns itself with the same numbers who say they are not provid-ing mobility devices for their employees. While saving on CAPEX and potentially improving employee moral by allowing employees to use a compute device of
their own choosing, BYOD companies will want to regularly monitor the employee satisfac-tion and ensure internal services are being delivered consistently across diverse platforms.
Cloud Computing: With a more mobile workforce, Cloud services become even more im-portant. The centralization of applications and information in the cloud provides anytime, anywhere access and enables the seamless device shifting with minimal productivity loss. Interestingly enough, 30% of survey respondents still either preferred on premise applica-tions, or had no opinion. The remaining 70% was nearly evenly distributed by those who wanted applications in the cloud and by those who didn’t care. These results when paired with what we’ve noted as an enthusiasm users have for mobile devices, leads us to believe that users are not concerned so much with whether applications are on premise or in the cloud. They are more concerned with their user experience and how whether or not they can access their applications.
Social Media: “The Facebook effect”: Organizational leaders look at social media and ask the question, “Why can’t our SFA user interface be more like Facebook or LinkedIn?” or other social media sites. Social media has made the sharing of and the collaborating on ideas easier, and SFA, in the form of Chatter and Yammer, has adopted social media formats. Having a social media strategy is now quite common according to our survey results, as 82% of respondents said they have a strategy. Still, 53% of respondents are in early stages of their strategy. Collaboration tool use is varied, though the most commonly used tools are Lync, SharePoint and Yammer. And yet, 33% of those surveyed are not using any collaboration tools. As organizations embrace all the aspects that entail being a mobile enabled entity,
2
�������31+27+31+1143.50%KIND OF
4.3%IT SLOWSUS DOWN
DOES YOUR SFA SYSTEM MAKE YOUR SALES TEAMS MORE PRODUCTIVE?
DO YOU PREFER CLOUD OVER ON-PREMISE APPS?
39.1%YES
13%NO
30.4% 30.4%28.3% 10.9%
CLOU
D/SA
AS
DON'
T CAR
E
ON P
REM
ISE
UNKN
OWN
OF MARKETING PLATFORMS ARE EITHER NOT INTEGRATED OR THEY ARE LOOSELY INTEGRATED WITH A CRM/SFA SYSTEM.
72%
40%JUST PHONE
31.20%PHONE AND TABLET
22.2%
6.7%NONE
JUST TABLET
OTHER
DO YOU PROVIDE MOBILE DEVICES FOR YOUR TEAM?
COLLABORATION TOOL USE
WHAT IS YOUR MOBILITY STANDARD?
6.5% 39.1% 19.6% 23.9% 6.5% 4.3%
ANDR
OID
OTHE
R
WIN
DOW
S
APPL
E
BLAC
KBER
RY
BRIN
G YO
UR O
WN
DEVI
CE (B
YOD)
30+17+11+7+2+33
30.4%LYNC32.6%
NO
17.4%SHAREPOINT
10.9%6.5%CHATTER
2.2%
YAMMER
40%JUST PHONE
31.20%PHONE AND TABLET
22.2%
6.7%NONE
JUST TABLET
OTHER
DO YOU PROVIDE MOBILE DEVICES FOR YOUR TEAM?
COLLABORATION TOOL USE
WHAT IS YOUR MOBILITY STANDARD?
6.5% 39.1% 19.6% 23.9% 6.5% 4.3%
ANDR
OID
OTHE
R
WIN
DOW
S
APPL
E
BLAC
KBER
RY
BRIN
G YO
UR O
WN
DEVI
CE (B
YOD)
30+17+11+7+2+33
30.4%LYNC32.6%
NO
17.4%SHAREPOINT
10.9%6.5%CHATTER
2.2%
YAMMER
there is an expectation that those same organizations will all embrace collaboration tools in higher numbers. The use of collaboration tools will become a necessity as fewer employees will be in an office environment, but there will still be a need to bridge the distances between employees and thus create a virtual face to face collaboration.
Big Data: Big data is the product of mobility. The increased mobility has created a set of structured data that is filled demographic data, geo-graphic locations, and time stamped. The structure allows for insights to be gleaned and for organizations to do a better job of meeting the needs of their users. The idea that marketers could one day proactively cam-paign to consumers based on the individual consumer’s preferences and location was the stuff of science fiction. And yet today, a simple example of this happens with your smartphone, which has apps that will capture your demographics and preferences, another app noting your geographic location (ostensibly for the consumer’s weather and GPS needs),a nd each app tracking the time. Smart marketer have used the in-tersection of social media into mobility and tied these apps together. For instance, a mobile consumer of moderate income, is known to work in coffee shops because of their free wifi. While walking down Main Street, mid-morning on a Tuesday, the consumer is faced with a choice of three coffee shops within blocks of each other. “Bing” is the sounds a proactive alert as the consumer receives a message from one of the coffee shop’s Facebook or Twitter page. The message is an offer for discounted coffee and muffins for customers on that very Tuesday. How convenient for the consumer, and quite a competitive advantage for the coffee shop. The shop not only has a new customer, but now a trove of new consumer information to mine and learn how to direct their efforts.
4) BUILDING TOWARD THE FUTURE
Marketing Automation (Optimization & Productivity) platforms are the next iteration of development on CRM. Typically, marketing tools have not interfaced well with CRM, thus leading to a duplication of data inputs, errors, and a slow response to sales needs. This poor in-terface also means marketing has a difficult time showing a return on its efforts and business impact beyond simple clicks, opens, and likes. The survey results show that most organiza-tions have not implemented a marketing optimization plan, and marketing communication is a point of contention.
Here is what marketers told us about challenges they face today:• The average marketing department use 12 to 15 different tools.• 80% of marketing departments have email marketing tools and the majorities are not connected to a CRM platform.• 72% of marketing platforms are either not integrated or they are loosely integrated with a CRM/SFA system.
3
IS YOUR MARKETING PLATFORM INTEGRATED INTO YOUR CRM/SFA SYSTEM?
MARKETING'S ABILITY TO TRACK LEADS
CAN YOUR MARKETING TEAMS PROVIDE ROI REPORTING?
42.2%
46.7%
28.9%
24.4%
35.6%
11.1%
11.1%
37%
34.8%
28.3%
LOOSELY INTEGRATED
NO
YES37+35+28+7+2+33
LOOSELY INTEGRATED
YES - EASILY
YES - THEY RUN A REPORT
UNKNOWN42+36+11+11 NO
YES - EASILY
YES - WITH LOTS OF MANUAL EFFORT
40%JUST PHONE
31.20%PHONE AND TABLET
22.2%
6.7%NONE
JUST TABLET
OTHER
DO YOU PROVIDE MOBILE DEVICES FOR YOUR TEAM?
COLLABORATION TOOL USE
WHAT IS YOUR MOBILITY STANDARD?
6.5% 39.1% 19.6% 23.9% 6.5% 4.3%
ANDR
OID
OTHE
R
WIN
DOW
S
APPL
E
BLAC
KBER
RY
BRIN
G YO
UR O
WN
DEVI
CE (B
YOD)
30+17+11+7+2+33
30.4%LYNC32.6%
NO
17.4%SHAREPOINT
10.9%6.5%CHATTER
2.2%
YAMMER
• 42% say it is difficult to track leads once they leave marketing and go to sales.
• And 71% either cannot provide an ROI report on projects, or can only do so with difficulty.
5) What Your Organization Should ConsiderA recent analyst study cited the CMO’s biggest challenges as reducing costs, decreasing time to market, generating leads, managing budgets better, and measuring performance. But how is a marketing leader supposed to manage these high-level objectives when marketing invest-ments are scattered across a variety of point solutions, and new channels and cadences are disrupting the rhythm they once managed?
It’s becoming clear that the old ways of measuring marketing effectiveness, such as TV ad-vertising budgets, day after recalls, and audience response systems, are inadequate in today’s world of multiple distribution channels, filled with multi-tasking distracted consumers who have a general distrust in advertising. And yet, customers are expecting more from you. They are expecting the promise of your brand to match the experience they have with you. And that positive customer experience is what will drive companies to be more successful than others. But these positive customer experiences don’t just magically happen. The positive results have to be planned for.
4
IS YOUR MARKETING PLATFORM INTEGRATED INTO YOUR CRM/SFA SYSTEM?
MARKETING'S ABILITY TO TRACK LEADS
CAN YOUR MARKETING TEAMS PROVIDE ROI REPORTING?
42.2%
46.7%
28.9%
24.4%
35.6%
11.1%
11.1%
37%
34.8%
28.3%
LOOSELY INTEGRATED
NO
YES37+35+28+7+2+33
LOOSELY INTEGRATED
YES - EASILY
YES - THEY RUN A REPORT
UNKNOWN42+36+11+11 NO
YES - EASILY
YES - WITH LOTS OF MANUAL EFFORT
IS YOUR MARKETING PLATFORM INTEGRATED INTO YOUR CRM/SFA SYSTEM?
MARKETING'S ABILITY TO TRACK LEADS
CAN YOUR MARKETING TEAMS PROVIDE ROI REPORTING?
42.2%
46.7%
28.9%
24.4%
35.6%
11.1%
11.1%
37%
34.8%
28.3%
LOOSELY INTEGRATED
NO
YES37+35+28+7+2+33
LOOSELY INTEGRATED
YES - EASILY
YES - THEY RUN A REPORT
UNKNOWN42+36+11+11 NO
YES - EASILY
YES - WITH LOTS OF MANUAL EFFORT
What you see above is an evolution in how marketing addresses the needs of the business. Historically, marketers were focused on creating awareness of their brand and product. This typically entailed the use of broadcast media such as television, radio, and print advertising. And while this “spray and pray” methodology doesn’t appear sophisticated by today’s stan-dards, it was quite effective during an era when the channels of communication were limited. Customer engagement was low, mainly because the vehicles for engagement didn’t exist. As new technologies became available, marketers looked for better ways to measure awareness. Marketers began asking if awareness of a brand was enough to drive sales. What marketers found was that customers want to be engaged and have their needs listened to. During this time is when we see a growing use of customer focus groups, special events for customers, and toll free customer service hot lines. Engaged customers tend to be more loyal to a brand, and thus marketers today are focused on converting these engaged customers into new sales by engaging these customers through new channels such as social media, using new ways to cre-ate awareness such as email and the internet, and delivering all this on new mobile platforms such smart phones and tablets. The challenge most marketers are facing is one of limited monetary resources and multiple channels where customers can be engaged, and yet also distracted by competitors. It is commonly accepted that it costs five times as much money to gain a new customers as it does to create a sale from an existing customer, and marketers need be smarter and use better tools in order to focus their limited resources in ways that lead to the best bang for the buck.
In the future, instead of viewing marketing programs as a cost that is expensed each quarter, marketing will be challenged to put budget money into projects that will produce a measur-able result, much the same way money is placed into an investment plan. Marketing will need to show an ROMI, or a Return on Marketing Investment. In order to do this, marketing orga-nizations will need to invest in marketing automation.
Here is what analysts say about marketing automation:Marketing Automation is becoming mission-critical for enterprises to drive top-line revenue growth and increase brand engagement with customers. By 2017, CMO spending on technol-ogy will exceed that of the CIO:• 2011 marketing IT budgets as % of revenue was 3X that of CIO.• 2012 IT budgets expected to grow 4.7%; marketing budgets 9%
© 2013 Hitachi Solutions America, Ltd. All rights reserved. 5
Cre
dit:
Mic
roso
ft
• 30% of marketing technology bought directly by BDM; marketing also influences over 50% of all spending.
Once marketing automation is achieved, companies can focus their efforts on promot-ing their brand promise and thus a positive customer experience, to those customers and through those channels that make the most sense. By leveraging a ROMI models and using real time analytics, companies can nimbly address the needs of their customer and make budget changes as needed. So much guess work and inefficiencies are eliminated and thus marketers become proactive in addressing the market needs instead of reactive and ad-dressing potential market failures.
As was noted earlier, the Sales Force Automation market has reached the point of maturity such that the market is now considered commoditized. Within most SFA systems is a wealth of customer information, and yet marketing departments who are tasked with engaging custom-ers are rarely connected into these databases. Now that there are multiple channels in which to engage a customer, as well as those same customers to become distracted by competitors, it is no longer good enough for marketing departments to just create leads for sales. Market-ing today must also put efforts into converting those leads into sales, and in order to do that, marketing must get smarter in how they are engaging customer because marketing only has limited resources. Using 12 to 15 disparate tools that do not work with each other nor are they integrated with CRM, is not the way of working smarter. Instead, using marketing planning through a marketing automation system pulls everything together. If you have not already done so, begin your planning for how your organization can use mar-keting automation, today. All the major CRM platforms are bringing integrated marketing automation into the CRM suite. More and more marketing functionality like email market-ing, project management and social listening are being integrated into CRM. This integration provides marketing departments the powerful insights and effective communication tools that had only recently been an “I wish we had this” idea. Today, CRM customers with inte-grated marketing management capabilities will have a distinct advantage over their competi-tors because they will be smarter in how they engage their customers, how they are able to measure that engagement, whether the engagement was cost effective, and whether there is a new better channel in which to engage their customers. And these companies will not have to wait weeks or months to get this data, nor will they need to hire expensive consultants to pour through reams of data. Instead these agile marketers will have this data in real time and in a ready to use format.
6) What to do next… Here are some next steps an organization can take today to prepare themselves for the future needs of their CRM and Marketing systems:
1. Assess your current SFA platform and usage. Now that the market has commoditized, get a true sense of what the SFA is costing your organization. If you are paying more than $75/user/month, you are probably paying too much.2. Assess how your users are interfacing with your CRM platform. Are the users using mobile devices regularly? 3. Given the chance to use a social media platform within the CRM, would the user collaborate more?4. Are you and your CRM platform ready for marketing automation? How does your marketing department communicate with sales today? 5. Can leads be turned in minutes instead of days or weeks? 6. Review the various channels in which your organization engages customers today. What are the costs associated with these channels?
6
THE AVERAGE MARKETING DEPARTMENT USES
DIFFERENT TOOLS.
12 TO 15
7. Collect data on incremental revenue and margin revenue from these channels, as well as the costs, and create a ROMI model.8. Figure out if you can get a Return on Marketing Investments report that tells you where you most effective and productive marketing dollars are spent. How long and how much effort is required to generate this information? Can you get it real time?9. Assess and make sure your organization is cost effectively positioned well with SFA to capitalize on the growing mobile and marketing feature sets being implemented by the current CRM Platform leaders.
ABOUT HITACHI SOLUTIONS LTD.Hitachi Solutions, Ltd., headquartered in Tokyo, Japan, is a core member of Information & Telecommunication Systems Company of Hitachi Group and a recognized leader in deliver-ing proven business and IT strategies and solutions to companies across many industries. The company provides value-driven services throughout the IT life cycle from systems planning to systems integration, operation and maintenance. Hitachi Solutions delivers products and services of superior value to customers worldwide through key subsidiaries in the North America, Europe, China and India. The flagship company in the Hitachi Group’s information and communication system solutions business, Hitachi Solutions also offers solutions for social innovation such as smart cities. For more information on Hitachi Solutions, please visit: http://www.hitachi-solutions.com.
ABOUT HITACHI, LTD.Hitachi, Ltd. (TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 326,000 employees worldwide. The company’s consolidated revenues for fiscal 2012 (ended March 31, 2013) totaled 9,041 billion yen ($96.1 billion). Hitachi is focusing more than ever on the Social Innovation Business, which includes infrastructure systems, information & telecommunication systems, power systems, construction machinery, high functional material & components, automotive systems and others. For more informa-tion on Hitachi, please visit the company’s website at http://www.hitachi.com.
About the AuthorsChristopher Stiehl, President of Stiehl Consulting. Chris works with various sized companies throughout the United States, pro-ducing marketing programs that drive customer interest, sales, and positive ROI. His organization, Stiehl Consulting, also con-sults with companies on how they can recognize a better ROI in their marketing efforts. Chris can be reached via email: [email protected] Petrucelli, Senior Director, Hitachi Solutions America. With nearly 20 years of experience, Jon is recognized as a thought leader the CRM industry. Having consulted with thousands of customers, Jon has a proven scorecard of providing out-standing insights and customer service to his CRM customers. Jon can be reached via email: [email protected].
WHY HITACHI SOLUTIONS ? Hitachi Solutions is one of the largest, most qualified and highly experienced Mi-crosoft Dynamics consult-ing firms across the globe, capable of handling com-plex tier-one displacement projects. Our company’s caliber of expertise and commitment to custom-ers is evidenced through our consistent recognition from both Microsoft and industry analysts.
Contact a Hitachi Solutions expert to discuss how our Microsoft Dynamics Solutions can help improve your productivity.
Hitachi Solutions America, Ltd.8105 Irvine Center Drive, Suite 300Irvine, California 92618T: +1 949.242.1300 | 888.254.7242us.dynamics.hitachi-solutions.com
Hitachi Solutions EuropeCity Tower40 Basinghall StreetLondon EC2V 5DET: +44 (0) 203.640.6300
Hitachi Solutions, Ltd. Dynamics Solution Sales Dept.2-18-1, Konan,Minato-ku, Tokyo,108-8250T: +81 3.6718.5756
7
