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The More CRM Changes, the More It Stays the Same
A new Gartner study finds the state of CRM in 2000 can predict its look in 2020.
Posted Mar 12, 2009
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Looking into CRM's crystal ball, there seems to have been many changes since the turn of the century -- new economic conditions, technologies, world leaders, and major technology players. While a new Gartner study finds that some things have changed, the basic ideas, goals, and challenges of CRM will remain unchanged through at least 2020.

Ed Thompson, vice president and distinguished analyst at Gartner, says that this may partially speak to those who believe CRM to be at heart a philosophy and strategy before a technology. "If you look back 10 years, it's surprising when you look at typical goals because it is not a whole heap different today," he says. "There will always be a fairly standard set of goals."

While the goals will generally stay the same, there is a pattern depending on the economy, Thompson says. In good times, the aims will be on long-term payback, including experience, loyalty, and advocacy. Right now, as it was back during the recessionary time between 2001 and 2003, the goals shift toward how to reduce cost in service, marketing, and sales. "It's always the same mix of goals, but the priorities shift with the economy," he says.

While goals may not shift much, the technology landscape for CRM has evolved. According to the study, "Looking at CRM in 200 Foretells Its Future in 2020," CRM application pricing in 2000 reached a peak of $3,000 per licensed user. In 2009, the research finds companies are paying between $1,000 and $1,500 per licensed user.

Thompson expects process-based pricing prodded along by services-oriented architecture and software-as-a-service (SaaS) to further change pricing. By 2012, SaaS will be the delivery model du jour for approximately 50 percent of all field sales applications, compared to less than 1 percent in 2000.

Looking at all CRM applications, increased adoption will be slower but steady nonetheless. By 2012, SaaS will be the delivery model for 25 percent of applications, and by 2020 that will rise to 40 percent. The report predicts that as competition for SaaS CRM heats up, pricing will drop from $800 per user per year in 2009 to approximately $500 by 2020. "Even 10 years ago we were looking at on-demand applications and talking about it," Thompson recalls. "Companies are now delivering different pricing models, from usage-based, per-seat, and [per-user, per-month] models ... even utility-based pricing."

The last 10 years may have been the rising age of SaaS, but Thompson says we can expect social CRM to take over the conversation for at least the next decade. His research finds that the ratio of operational, analytical, and social CRM in packaged applications will shift from 90:9:1 in 2009 to 70:20:10 by 2020. "The equivalent of the SaaS conversation in 2000 is now the social computing topic," he says. "We're talking a lot now about social CRM."

One of the most important lessons to take away from this report, Thompson stresses, is that it takes a look back at history to best recognize future patterns in the CRM space. "The technology may change a lot, but the goals will generally be the same," he says, adding that SaaS itself provides a telling example. "We talked about [SaaS] 10 years ago and it has remained a huge topic, but we should be looking at social CRM now. It may seem like many companies are just dabbling in it and not taking it seriously, but 10 years from now it will be a big part of what CRM means."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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To contact the editors, please email editor@destinationCRM.com
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